Judgment : 1. The petitioner bank had lent monies to a sick company and had obtained guarantee from the respondent Company SIV Industries Ltd., which, inter alia, containing statements as under : "We are fully aware of the fact that you may not invoke guarantee for the loan and other facilities granted to our subsidiary industry of Mico Farm Chemicals Limited as per the BIFR Scheme because it is coming under the Sick Industrial Companies (Special Provisions) Act, 1985 and amended Sick Industrial Companies (Special Provisions) Bill 1992. Hence, the Board of Directors of SIV Industries Ltd. As per the Board resolution dated 211. 1994 as mentioned supra hereby is giving the corporate continuing guarantee on behalf of SIV Industries Ltd. for the loan and facilities granted to our subsidiary industry of Mico Farm Chemicals Ltd. as mentioned above as required by you and we further assure you that you have every right to invoke guarantee if necessary against us." That guarantee was given on 3. 1995. 2. The money was lent to Mico Farm Industries Ltd. which was at that time a sick company having been declared as such by the BIFR, and the management of which the guarantor company had taken over with the permission of the BIFR. Mico Farm Chemicals Ltd. was taken out with the purview of the BIFR in the year 1996, but the company was again declared sick in March, 1997. .3. The BIFR, by an order made by it on 3. 1999, to which order the petitioner-Bank of Madura is a party, made certain directions. Para 6(v) of the directions as given reads as under: ."The Bank of Madura Limited is granted permission to proceed to file suits in Courts of Law for recovery of their dues subject, however, that no decree etc. obtained by them from Courts would be executed without the permission of BIFR. It is the case of the petitioner that it has thereafter in the month of May, 1999 filed a suit before the Debt Recovery Tribunal impleading the borrower sick company-Mico Farm Chemicals Ltd., as also the guarantor Bank of Madura Ltd. That suit is admittedly pending." 4. Even before the BIFR made the order on 3. 1999 granting permission to the petitioner to file the suit, the petitioner had invoked the guarantee given by the respondent-SIV Industries Ltd., by issuing a notice dated 4. 1998. Even before the BIFR made the order on 3. 1999 granting permission to the petitioner to file the suit, the petitioner had invoked the guarantee given by the respondent-SIV Industries Ltd., by issuing a notice dated 4. 1998. That notice was issued about two months after Mico Farm Chemicals Ltd., was declared as sick industrial company for the second time on 2. 1998. .5. The respondent-Company in reply to the demand made by the petitioner sent a reply dated 29th September, 1999, wherein it referred to the portion of the guarantee extracted earlier, as also the fact that the suit was pending, took the stand that any winding up petition against the respondent would not be maintainable and in any event the petitioner cannot resort to multiplicity of proceedings for achieving the same object. It also disputed the claim made by the petitioner for the sum of Rs.3,33,31,048.84 as excessive and not due. It pointed out that even as per the statement of accounts issued by the petitioner on 24. 1999, the amount due to the petitioner has been shown as Rs.2,79,85,5684. 6. In that reply notice, it was also stated that the proper course for the petitioner is to await the outcome of the proceedings before the Debt Recovery Tribunal and the BIFR and not to precipitate matters. 7. Petitioner, however, has chosen to precipitate matters and has come forward with this winding up petition. .8. Learned Counsel for the petitioner contends that there has been an alarming development which compelled the petitioner to approach this Court. The development being the statement in the report of the Directors of the respondent-company for the year ended 31st March, 1999, in which, under the caption "Sick Industrial Companies (Special Provisions) Act, the following statement is made: ." Consequent to the erosion of its peak networth by more than 50% as on 31st March, 1999, the Company is a potentially sick company as defined under the provisions of the above Act." 9. Counsel submitted that this Court should not allow the respondent to take shelter under the provisions of the Sick Industrial Companies (Special Provisions) Act and before it could do so and before its networth deteriorated any further, the company should be wound up. Counsel pointed out that in the balance sheet the accumulated losses of the company are shown at the figure of Rs. Counsel pointed out that in the balance sheet the accumulated losses of the company are shown at the figure of Rs. 208.92 crores, and the loss for the year is Rs.106.49 crores. .10. The balance sheet of the respondent-company for the year ended 31st March, 1999 shows that the companys paid up capital is Rs.34.55 crores, its reserves Rs.164.67 crores. The loan funds are Rs.367.92 crores by way of secured loans, and Rs.75.59 crores by way of unsecured loans. Fixed assets are valued at Rs.417.34 crores after depreciation. The capital works in progress are Rs.41 crores. The current assets, loans and advances add upto Rs.189.72 crores, after deducting the current liabilities and provisions, the value of the current assets, loans and advances comes down to Rs.65.77 crores. 11. The amount paid to the workmen for the current year as shown in the profit and loss account by way of wages and salaries is Rs.28.52 crores. It is obvious that the company is a large company with substantial fixed assets employing large number of employees. 12. The difficulties which the respondent company had experienced in the recent past which had lead to the closure of its plant have also been set out in the report of the Directors. It refers to the order of the Supreme Court dated 30th March, 1998, by which the Company was permitted to operate its pulp plant after obtaining the permission of the Tamil Nadu Pollution Control Board. The report sets out that the company received clearance of the Pollution Control Board for re-starting the pulp plant by the letter dated 27th May, 1999 and it re-commenced the pulp plant operations from 2nd June, 1999. 13. It was contended that the Company Court is primarily concerned with ensuring the recovery of the amounts due to the creditors of the company, and if it were to be prima facie shown that the companys present petition is such as to lead to the prima facie conclusion that it is not in a position to pay the creditors, winding up proceedings must be allowed to commence. It was the submission of counsel that companies, once they get into the net of BIFR, seldom come out as entities which are capable of clearing the dues to their creditors, and therefore, the Company Court should not allow the respondent-company to have an opportunity to approach the BIFR by declining to entertain this winding up petition at this point of time. .14. Winding up is a matter of grave consequence to any company. A company is an artificial legal entity whose continued existence is dependent, among other things, on an order for winding up being made by the Company Court in circumstances warranting the making of such an order. The Company Court is vested with vide discretion in the matter of winding up. Section 433 of the Companies Act which sets out the circumstances in which the company may be wound up, opens with the words "Cases in which company may b e wound up by the Court.". The wide discretion vested in the Court is for the purpose of not only keeping away petitions which patently do not warrant the making of a winding up order, but also to ensure that petitions which disclose circumstances which would not warrant the making up of a winding up order, ought not to be allowed to commence. 15. In this case, the petitioner chose to lend monies to a company which it knew to be a sick company. It obtained guarantee from the respondent company which was then in charge of that sick company and accepted a guarantee from it which guarantee indicates that the guarantee would not be invoked during the period when the company to which the money was lent continued to be sick. It was submitted at the Bar that there is only one guarantee given for the loan so extended. Reference to the guarantee in the guarantee document executed by the respondent, the relevant part of which has been extracted above, is obviously a reference to the very guarantee by placing reliance upon which this petition has been brought. The two sentences found there appear to be inconsistent, one setting out that the guarantee need not be invoked while the borrower company continues to be sick and the other stating that the bank has liberty to invoke guarantee "if necessary" against the guarantor. These clauses prima facie are capable of being construed in more ways than one. The two sentences found there appear to be inconsistent, one setting out that the guarantee need not be invoked while the borrower company continues to be sick and the other stating that the bank has liberty to invoke guarantee "if necessary" against the guarantor. These clauses prima facie are capable of being construed in more ways than one. What appears to be the intent is that the guarantee would not be invoked while the borrower company continued to be sick. Apparently the bank knew full well that the monies lent by it was for the purpose of the sick company. The guarantee apparently had been obtained to secure lenders interest in the event of the borrower company being unable to pay even after the sickness had come to an end. The primary obligation was that of the sick company to which the monies had been lent. .16. That apparently was also the view of the lender as even after invoking the guarantee in the year 1998, no steps were taken by it except to seek the permission of the BIFR to institute proceedings. After securing the permission, the proceeding instituted was an action against the borrower company-Mico Farms Chemicals Ltd., as also the guarantor before the Debt Recovery Tribunal. The order of the BIFR granting permission has imposed an express condition on the petitioner-bank which disables it from executing the decree even after it is obtained except with the leave of the BIFR. That condition again is capable of being interpreted. It is capable of being construed as a bar against the petitioner executing the decree whether against the sick company to which the monies were lent, or the guarantor which had in terms of the earlier scheme been given the management of that company, except with the leave of the BIFR. 17. In this background, the present right of the petitioner to recover monies from the respondent Company is a matter of considerable doubt. Such dispute as to rights of the parties can well properly be and more effectively agitated before the Debt Recovery Tribunal before which proceedings have already been instituted. In that background, the petition brought now by the petitioner to wind up the respondent is not in the circumstance to be regarded as a bona fide act which is meant solely to secure the interest of general body of creditors. 18. In that background, the petition brought now by the petitioner to wind up the respondent is not in the circumstance to be regarded as a bona fide act which is meant solely to secure the interest of general body of creditors. 18. Timing of the petition also discloses that the reason for approaching the Company Court now is only the fear or apprehension that the respondent-Company may invoke protection of the BIFR, as it has already indicated in the Directors report that the extent of losses suffered by it in the previous year may render it a potential candidate for being declared sick under the provisions of the Act. Such an apprehension on the part of the petitioner cannot offer the justification for the Company Court entertaining the winding up petition. 19. The object of the Sick Industrial Companies (Special Provisions) Act is, in the public interest secure timely detection of sick, and potentially sick companies owning industrial undertakings, the speedy determination by a Board of experts of the preventive, ameliorative, remedial and other measures which need to be taken with respect to such companies and the expeditious enforcement of the measures so determined and for matters connected therewith or incidental thereto. 120. Sick companies or potentially sick companies which own industrial undertakings, and which are about to seek the protection of the Act are not to be regarded as companies which are doing anything which is contrary to the public interest or public policy when they seek such protection. The Company Court is not to be regarded as/nor is the BIFR under the Special Act to be regarded as being in competition with each other in order to seize or secure jurisdiction over companies which own industrial undertakings. 121. The fact that the Directors have indicated that the respondent-company may have to be declared sick is not a ground for entertaining the winding up petition against it especially in the background of the fact that the very order of the BIFR secured by the petitioner, as also the relevant clause in the guarantee are matters which are capable of more than one construction and it cannot be said with certainty that the petitioner has a present right to enforce the guarantee as against the respondent and by coercive process, realise the monies claimed to be due to it. 122. 122. Though learned senior counsel for the petitioner made very pursuasive submissions in support of his clients cause, I do not, in the circumstances, find sufficient justification for entertaining this petition. The petition is, therefore, dismissed. 123. Witness, the Honble Thiru. Konakuppakattil Gopinathan Balakrishnan, the Chief Justice at Madras aforesaid, this 26th day of November, 1999.