In Brief
Madura Coats filed a winding-up petition against Modi Rubber for non-payment of debts. Though the Company Court ordered winding up, Modi Rubber appealed and simultaneously referred itself to the BIFR under the Sick Industrial Companies Act for rehabilitation. The High Court set aside the winding-up order. On appeal, the Supreme Court upheld the High Court, holding that once BIFR registration occurs, SICA provisions prevail over the Companies Act. Winding-up proceedings must halt pending BIFR's final decision. The Court affirmed that BIFR has exclusive jurisdiction over sick companies and can pursue rehabilitation even after winding-up orders. The appeal was dismissed as the parties had already settled under BIFR's approved rehabilitation scheme.
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