JUDGMENT - Rane M.S., J.:—The points involved in the petition herein as also in another petition, both filed by the creditors for winding up the respondent company viz. M/s. Mafatlal Engineering Industries Ltd. (hereinafter referred to as 'the Company' for brevity's sake) on the ground of inability of the company to pay debts, are as under :- (i) Whether petition filed, without obtaining prior permission under section 22(1) of the Sick Industrial Companies (Special Provisions) Act (1 of 1986) (hereinafter referred to as 'SICA' Act) from the Board for Industrial and Finance Reconstruction (BIFR in short) against the Company already declared as 'a Sick Unit' by the BIFR under SIC Act, prior to the presentation of the petition in the Court is void ab initio and liable to be dismissed as being not maintainable. (ii) Whether the petition can be kept alive by keeping it in abeyance pending the inquiry under section 16 or preparation of the Scheme under section 17 of the SIC Act. 2. Undisputedly the Company was declared as a Sick Unit under the provisions of section 17 of the SIC Act prior to the filing of the petition herein. It is also a fact that the petition has been filed without obtaining prior permission to the BIFR. It is also undisputed that till date, the said declaration continues. 3. Few relevant dates — 1. In 1987 reference was made under section 15 of SIC Act to BIFR. 2. 22nd August, 1988 BIFR declared the company as a Sick Company. 3. 27th May, 1989 the company stopped operation. 4. September 1989 ICICI, Operating Agency prepared Report. 5. 2nd February, 1993 BIFR formed opinion that the Company is not viable and recommended its winding up. 6. Petition was filed in this Court on 16th October, 1989 and accepted on 14th March, 1990, that is after the declaration as Sick Company. 7. The petition was admitted on 12th September, 1990. It is stated that the union of the employees of the Company has challenged the said order of the BIFR in the Writ Petition in which interim stay is granted and said proceedings are pending. 4. On behalf of the company, it is submitted that the Petition filed, without obtaining prior consent of the BIFR, as required under section 22(1) of the SIC Act is void ab initio and liable to be dismissed as being not maintainable. 4. On behalf of the company, it is submitted that the Petition filed, without obtaining prior consent of the BIFR, as required under section 22(1) of the SIC Act is void ab initio and liable to be dismissed as being not maintainable. In support certain decisions were referred to, which would be considered later on. 5. As against the above submission of Advocate on behalf of the Company, it is argued on behalf of the petitioners, Creditor that the petition does not warrant dismissal but has to be kept in abeyance by adjourning sine die. The learned Counsel for the petitioners highlighted that the Scheme is under the preparation and, as provided under sub-section (3) of section 22, the Proceedings against the company would remain suspended. 6. The divergent contentions of the parties can be considered and appreciated in the light of relevant statutory provisions and on the basis of judicial decisions on the point. 7. Section 22(1) and (3) of the SIC Act which are relevant read as under : Section 22 (1) : Where in respect of an industrial company, an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 23 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956, or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a Receiver in respect thereof shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority. Section 22(3): During the period of consideration of any scheme under section 18 or where any such scheme is sanctioned thereunder, for due implementation of the scheme, the Board may by order declare with respect to the sick industrial company concerned that the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force, to which such sick industrial company is a party or which may be applicable to such sick industrial company immediately before the date of such order, shall remain suspended or that all or any of the rights, privileges, obligations and liabilities accruing or arising thereunder before the said date, shall remain suspended or shall be enforceable with such adaptations and in such manner as may be specified by the Board: Provided that such declaration shall not be made for a period exceeding two years which may be extended by one year at a time so, however, that the total period shall not exceed seven years in the aggregate. 8. It is clearly implied by plain reading of above sub-section (1) that i) in respect of the Company if reference is made under the SIC Act before BIFR and ii) if such reference is pending before the Board or the Appellate Authority, then iii) no proceedings for the winding up of the industrial company or for execution, distress, etc. shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority. It would be crystal clear that making of reference and pendency thereof i.e. reference are two main conditions when consent of the Board is required for initiating winding up proceedings. The expressions appearing “shall lie or be proceeded with further” are most crucial and of vital significance. Undoubtedly expression “no proceeding shall lie” clearly envisages the initial institution of the proceedings for winding up. Whereas, expression “be proceeded with further”, it clearly provide and means that the same refers to the reference made later on or at subsequent stages of institution of the petition in the Court as is clearly spelt out from the first part of sub-section (1) of section 22 of the SIC Act. To put it clearly it talks of, in the first instance, proceedings filed before the reference to BIFR when it speaks of “shall lie”. To put it clearly it talks of, in the first instance, proceedings filed before the reference to BIFR when it speaks of “shall lie”. The second category of the proceedings contemplated are those where reference to the BIFR is made after the filing of the proceedings and therefore expression used is “be proceeded with further”. Obviously and naturally, the question of obtaining prior consent of the Board would arise, firstly for initial filing of the proceedings, for winding up as well as further continuation thereof. 9. The sub-section (1) of section 22, thus as noticed above, makes clear distinction of the two stages of the institution of the winding up proceedings i.e. prior to the reference and after the reference. It thus clearly means, that, if in a given case as in the instant case, where the reference was already made to the BIFR and declaration made as a sick Company by the Board, then the prior consent of the Board for the institution is imperative and mandatory in view of expression “shall lie” appearing in the statute. 10. I may usefully refer to certain decisions which lend support to the view as expressed by me above. 11. First is the decision of the Supreme Court in the case of (Gram Panchayat and another v. Shree Vallabh Glass Works Ltd. and others)1, reported in 1990(3) Bom.C.R. 109 which arose directly on the interpretation and meaning of sub-section (1) of section 22 of SIC Act. The facts in the said case disclose that the Petitioner Gram Panchayat adopted proceedings under section 129 of Bombay Village Panchayat Act against the Respondent Company for the recovery of property taxes due from the Company, which was declared as a Sick Company by the Board under the provisions of SIC Act. The Company challenged the same in Writ Petition claiming protection under section 22 of SIC Act (as in the instant case) in the High Court. The High Court accepted the Petition and restrained the Gram Panchayat from recovering the property taxes without the consent of the Board. The matter was carried to the Apex Court, which confirmed the decision of the High Court reiterating and reaffirming that the proceedings adopted without prior consent of the Board were not maintainable. The High Court accepted the Petition and restrained the Gram Panchayat from recovering the property taxes without the consent of the Board. The matter was carried to the Apex Court, which confirmed the decision of the High Court reiterating and reaffirming that the proceedings adopted without prior consent of the Board were not maintainable. The observations appearing in para 11 of the said judgment are eloquent, which bring out the legal position luminously clear : “It may be against the principles of equity if the creditors are not allowed to recover their dues from the Company, but such creditors may approach the Board for permission to proceed against the Company for the recovery of their dues/outstandings/overdues or arrears by whatever name it is called. The Board at its discretion may accord its approval for proceeding against the company. If the approval is not granted, the remedy is not extinguished. It is only postponed. Sub-section (5) of section 22 provides for exclusion of the period during which the remedy is suspended while computing the period of limitation for recovering the dues.” 12. I may also refer to 3 more decisions, directly on the point — two of this Court and one of Gujarat High Court. 13. In the case of (M/s. Ramniklal and Co. and others v. The Walkare Flour Mills Co. Ltd.)2, reported in A.I.R. 1992 Bom. 207, my brother Judge Dhanuka, has to consider a case where the Company was declared as a Sick Company under SIC Act after the filing of the petition seeking winding up and it is rightly held in that case that the winding up petition was not required to be dismissed and it was ordered that the proceedings be kept in abeyance, which is in consonance with the expression “be proceeded with further” appearing in sub-section (1) of section 22 of SIC Act. 14. The second decision is as rendered by my brother Judge Shri Jhunjhunuwala in the case of (In the matter of C.J. Gelatine Products Ltd. Karamchand Thapar And Bros. Ltd.)3, reported in 1992 Mh.L.J. 800; directly on the point. The facts were the same as in the case in hand. The Company was declared as sick company prior to the filing of the winding up Petition and where Company claimed protection under section 22(1) of the SIC Act, the claim of Company was accepted and the Petition was dismissed. 15. The facts were the same as in the case in hand. The Company was declared as sick company prior to the filing of the winding up Petition and where Company claimed protection under section 22(1) of the SIC Act, the claim of Company was accepted and the Petition was dismissed. 15. Next is the Division Bench decision of the Gujarat High Court in the case of (M/s. Teasteels Ltd. v. Radhaben)4, reported in A.I.R. 1988 Guj. 213 construing the meaning of section 22(1) of the SIC Act, the Bench accepted the claim of the Company, raised in identical manner as in the case before this Court, and held that the petition for winding up filed without prior consent of the Board was not maintainable and consequently proceeded to dismiss the same. 16. In view of the clear provisions of law, noticed above, considered in the various decisions referred to above, and ratio laid down therein, in my view the facts and circumstances as obtained in the matter herein, the same would squarely apply in this case. Consequently, it is held that the Petition herein is not maintainable as being filed without prior consent of the B.I.F.R. Board. 17. Hence, the following order : Petition is dismissed. However, there shall be no order as to costs. Petition dismissed. -----