JUDGMENT 1. - These two appeals are filed challenging the order passed by the learned Single Judge dated 3rd of September, 1997 in S.B. Company Petition No.30 of 1996, directing winding up of Rajasthan State Agro Industries Corporation Limited (hereinafter referred to as 'the Corporation') under Section 433(a), (e) and (f) of the Companies Act, 1956 (hereinafter referred to as 'the 1956 Act'). 2. Brief facts necessary for adjudication of the questions involved in the appeals are that the Corporation was incorporated as a Company under the provisions of the 1956 Act on 1st August 1969. The authorised share capital of the Corporation was earlier kept at र five crore sixty eight lac seventy three thousand four hundred (Rs, 5,68,73,400) was later on raised to र ten crore on 6.4.1992. Prior to 6.4.1992 the share capital subscribed by the Central Government as on 31.3.1992 was र 1,87,77,600/- and the share capital subscribed by the State Government was र 3,80,95,800/-. As per the balance sheet right from the year 1969-70 upto the year 1996-97, the Corporation incurred accumulated losses to the tune of र 1370.61 lac as on 31.3.1992 and gone up to र 2101.45 lac in subsequent years. Since the establishment of the Corporation from 1st August, 1%9 the Corporation was suffering losses year after year except during four years i.e. 1971-72, 1974-75, 1975-76 and 1979-80. Even in these years the profit earned was nominal. The losses were met out by obtaining short term and long term loans from the State Government as well as the Central Government.The Central Government showed its unwillingness to increase its share capital or allow any future financial assistance to the Corporation. It was in this context the Corporation was transferred to the State sector. After some time, after due deliberation, the Ministry of Agriculture, Government of India proposed for disinvestment of Central Government share holdings in the Corporation. The Government of India agreed in principle for disinvestment in favour of the State Government. The Government of India expressed its willingness to pass on its share holdings for a token consideration of र one thousand for the value of shares. In the Board of Directors meeting it was decided that the share holdings of the Central Government shall be disinvested and shall be allotted in the name of the Governor of Rajasthan and in the name of the Secretary to the Government, Department of Agriculture. In the Board of Directors meeting it was decided that the share holdings of the Central Government shall be disinvested and shall be allotted in the name of the Governor of Rajasthan and in the name of the Secretary to the Government, Department of Agriculture. After disinvestment the State Government's equity share holding was increased to 99.8% and that of Secretary to the Government, Department of Agriculture, Government of Rajasthan Jaipur 00.2%, the preference share holding of the State Government (Governor of Rajasthan) was 100%. 3. The Corporation has taken short term loan of र 12.30 crore and long term loan of र 0.334 crore from State. Interest on short term loan was mounted to र 6.04 crore and on long term loan र 0.40 crore. The liability of the Corporation was to the tune of र 19.074 crore. The Corporation was persistently pressed by the State Government to make the payment of the loans and interest accrued thereon. On various dates letters were exchanged between the State Government and the Corporation authorities for settlement of loan account. On 10.7.1995 the Corporation informed to the Chief Accounts Officer of the Directorate of Agriculture Department that the Corporation is not in a position to repay the loan and interest accrued thereon due to its adverse financial position. It was also informed that while keeping in view all the facts and circumstances the State Government has taken a decision for winding up of the Corporation and the resources which may be generated by the winding up of the Corporation along with any assistance received from the State Renewal Fund will be utilised to meet out the winding up liabilities in accordance with law. 4. A high power committee meeting was convened under the Chairmanship of the Chief Minister to discuss the alternative available to the Corporation. The meeting was attended by the Chief Minister, Minister for Medical & Health, Minister for Agriculture, Development Commissioner Rajasthan, Principal Secretary Finance, Chairman-cum-Managing Director of the Corporation, Chief Engineer of Public Works Department Rajasthan, Chief Engineer of P.H.E.D. and the Deputy Secretary of the Government Agriculture Department, and it was resolved that since the Corporation continuously incurred losses and there is no way to run it in profit and thus it needed to be wound up. On 4.10.1993 the meeting was convened under the Chairmanship of the Principal Secretary Department of Agriculture wherein after due consideration it was unanimously resolved that in view of the decision taken earlier in the high power committee meeting and in view of the fact that the Corporation is suffering losses, the Corporation should be wound up as early as possible. It was also decided that the Bureau of Public Enterprises to be requested to suggest a line of action with regard to retrenchment or absorption of the employees of the Corporation. The Council of Ministers in its meeting held on 21.2.1995 decided to wind up the Corporation and that the option be given to the workmen for voluntary retirement and the necessary provisions be invoked under the different statutes in regard to the employees who do not opt for voluntary retirement under the Voluntary Retirement Scheme. The Managing Director of the Corporation was authorised to initiate all legal steps for winding up of the Corporation and implementation of decisions taken in the meeting of the Council of Ministers. The said decision of the Council of Ministers was conveyed to the Managing Director of the Corporation vide letter dated 7.3.1995. 5. thereafter the meeting of the Board of Directors was convened on 15.3.1995 and it was decided that as required under Article 77(2) of the Memorandum and Articles of Association of the Corporation :the approval of the Governor of Rajasthan be obtained for winding up of the Corporation. The approval of the Governor of Rajasthan for winding up of the Corporation was received vide letter dated 10.5.1995. On receipt of the letter of approval from the Governor of Rajasthan for winding up of the Corporation, the Board of Directors decided to convene an extraordinary general meeting of the share holders. Accordingly a notice for convening the extraordinary general meeting of the Corporation was issued and the meeting could be held on 30.5.1996 wherein it was resolved for filing an application for winding up before the High Court of Rajasthan at Jaipur. The Managing Director of the Corporation was authorised to take all necessary steps and action for winding up of the Corporation and to sign all pleadings and papers. The Managing Director of the Corporation was authorised to take all necessary steps and action for winding up of the Corporation and to sign all pleadings and papers. As per the decision taken, the winding up petition was filed in the High Court on the grounds enumerated in Section 433 (a), (e) and (f) of the Companies Act, 1956 (hereinafter referred to as 'the 1956 Act'). Along with the petition the audited balance sheet of the Corporation for the year 1994-95 was enclosed disclosing accumulated losses of र 16.17 crore, loans and interest payable र 19.07 crore. As per the provisional balance sheet of the Corporation as on 31.3.1996 the accumulated loss of the Corporation was shown to the extent of र 18.74 crore and outstanding loan and interest as on 31.3.1996 was shown to be of र 20.20 crore. 6. The advertisement was issued and the present appellants have submitted their objections which, in nut shell, are to the effect that the balance sheets of the Corporation do not disclose the true and correct picture of the financial position. In any case the losses incurred by the Corporation were due to mismanagement and huge establishment expenses incurred by the Corporation. And thus if the Corporation is properly managed, its financial position can be improved and it will be viable, with the proper management, to run the Corporation and to bring it to the profit level within a short period. The resolution passed for moving the court for winding up was challenged on the ground that it was not passed in accordance with law and as provided under the Memorandum and Articles of Association of the company. That no winding up order can be passed on the grounds alleged on account of the overriding effect of the provisions of Industrial Disputes Act in general and Section 25-0 in particular. The provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as 'the 1985 Act') debars the Court from proceeding with the winding up of the Company. 7. The learned Company Judge has held that neither there is anything on record nor any challenge has been made before him that the special resolution has not been passed to wind up the Corporation in accordance with the law or in compliance with the procedural requirement. 7. The learned Company Judge has held that neither there is anything on record nor any challenge has been made before him that the special resolution has not been passed to wind up the Corporation in accordance with the law or in compliance with the procedural requirement. Once the proper resolution is passed as required under Section 433(a) of the 1956 Act, the Company becomes entitled to a winding up order. That after, having made comparative study of the existing and probable assets of the Corporation, current liabilities of the Corporation and the liability of the Corporation to pay loan and interest thereon, the court is satisfied without any doubt that the assets of the Corporation are totally insufficient to meet the existing liabilities and it is patent that in the circumstances the Corporation is not in a position to pay its debts, that Section 25-0 and the provisions' of the 1985 Act has no application to the facts of the case. Consequent on, this finding, learned Company Judge has directed winding up of the Corporation under Section 433(a), f (e) and (f) of the 1956 Act. 8. It is submitted by the counsel for the appellants that there is conflict between the provisions of the 1956 Act and the provisions of the Industrial Disputes Act. In so far as the winding up of the Company i.e. industrial establishment is concerned and particularly in regard to Section 25-0 of the Industrial Disputes Act, the Industrial Disputes Act being a piece of beneficial legislation and special legislation regulating the relationship between the employer and the employee shall prevail, the industrial establishment cannot be dosed unless and until the proceedings under Section 25-0 of the Industrial Disputes Act are taken before the appropriate authority and order to that effect is obtained from the Authority.The question raised was considered in detail and comprehensively by the Division Bench of the Bombay High Court in the matter of (1) Bombay Metropolitan Transport Corporation Limited V. Employees of Bombay Metropolitan Transport Corporation Limited & Others (1991 Company Cases (Vol.71) 473) wherein it has been held: ".....that there is no conflict between the provisions of the two statutes and they operate in distinct and separate fields. Permission under Section 25-0 of the 1947 Act is required to be taken when an employer intends to close down an undertaking of his industrial establishment. Permission under Section 25-0 of the 1947 Act is required to be taken when an employer intends to close down an undertaking of his industrial establishment. The provision, therefore, applies when the industrial establishment, excluding the undertaking which is sought to be dosed down, is intended to be operated by the employer. It, therefore, contemplates the continued existence of the employer and of the industrial establishment, less the undertaking which is intended to be dosed down. On the other hand, an order for winding up a company commences the process of winding it up at the hands of the official liquidator and it operates eventually to dissolve the company. As and from the date of the order, the company ceases to do business. Where the company is an industrial establishment, that establishment ceases to function upon the passing of the winding up order. The winding up order is deemed to be a notice of discharge of the officers and employees of the company. The services of the employees, therefore, come to an end by operation of law. If it is found by the liquidator and by the High Court, under whose supervision he functions, that to carry on the business would be beneficial to the winding up of the company, then the liquidator may be authorised to carry on the business for this purpose until it is achieved. Such carrying on of the business of the company is subsequent to the order of winding up and subject to it. Even in such circumstances, there would be no question of permission under Section 25-0 being required to dose it down." We are in complete agreement with what has been said in the aforesaid judgment. 9. It is then argued by the learned counsel for the appellant Shri Paras Kuhad that there exists a conflict between the 1956 Act so far it relates to winding up of the Company and the 1985 Act, as Section 20 of the 1985 Act provides for the special procedure for winding up of a sick industrial company in relation to the companies to which the provisions of the 1985 Act apply and it being special legislation governing the field relating to the scheduled industries under the 1985 Act it shall prevail. The Company Court has no jurisdiction and authority to pass any order for winding up of the Company on the ground as mentioned in Section 433 of the 1956 Act in regard to sick industrial company and particularly on the ground that the Court is of the opinion that it is just and equitable that the Company should be wound up.To understand the submission made by the counsel for the appellants and to adjudicate the question raised, it would be appropriate to refer to certain provisions of the 1956 Act and the 1985 Act.Under Section 1(4) of the 1985 Act the Act is made applicable to the scheduled industries. Admittedly the Corporation is a scheduled industry and thus the 1985 Act applies to it. Sick industrial company is defined under Section 3(o) which reads as under: "(o) "sick industrial company" means an industrial company (being a company registered for not less than five years) which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth." The Corporation having suffered accumulated losses exceeding its entire net worth, it is a sick industrial company. Section 20 of the 1985 Act reads as under: "20. Winding-up of sick industrial company.-(1) Where the Board, after making inquiry under section 16 and after consideration of all the relevant facts and circumstances and after giving an opportunity of being heard to all concerned parties, is of opinion that the sick industrial company is not likely to make its net worth exceed the accumulated losses within a reasonable time while meeting all its financial obligations and that the company as a result thereof is not likely to become viable in future and that it is just and equitable that the company should be wound up, it may record and forward its opinion to the concerned High Court. 2 The High Court shall, on the basis of the opinion of the Board, order winding up of the sick industrial company and my proceed and cause to proceed with the winding-up of the sick industrial company in accordance with the provisions-of the Companies Act, 1956. 2 The High Court shall, on the basis of the opinion of the Board, order winding up of the sick industrial company and my proceed and cause to proceed with the winding-up of the sick industrial company in accordance with the provisions-of the Companies Act, 1956. 3 For the purpose of winding-up of the sick industrial company, the High Court may appoint any officer of the operating agency, if the operating agency gives its consent, as the liquidator of the sick industrial company and the officer so appointed shall for the purpose of the winding-up of the sick industrial company be deemed to be, and have all the powers of, the official liquidator under the Companies Act, 1956. 4 Notwithstanding anything contained in sub-section (2) or sub-section (3), the Board may cause to be sold the assets of the sick industrial company in such manner as it may deem fit and forward the sale proceeds to the High Court for orders for distribution in accordance with the provisions of section 529A, and other provisions of the Companies Act, 1956." Section 433(f) of the 1956 Act reads as under: "S.433. Circumstances in which company may be wound up by Court. A company may be wound up by the Court. f. if the Court is of opinion that it is just and equitable that the company should be wound up." 10. Under Section 15 of the 1985 Act it has been provided that where the industrial company has become a sick industrial company, the Board of Directors of the Company, shall within 60 days from the date of finalisation of the duly audited accounts of the company for the financial year as at the end of which the company has become a sick industrial company, make a reference to the Board for determination of the measures which shall be adopted with respect to the company.Section 16 of the 1985 Act speaks of the inquiry into working of sick industrial companies by the Board for Industrial and Financial Reconstruction (for short "BIFR") as to whether any industrial company has become a sick industrial company. Section 17 provides for the measures to be taken by the BIFR if it is satisfied that the company has become a sick industrial company. Section 18 is in relation to preparation of the scheme with respect to such company providing for anyone or more measures mentioned therein. Section 17 provides for the measures to be taken by the BIFR if it is satisfied that the company has become a sick industrial company. Section 18 is in relation to preparation of the scheme with respect to such company providing for anyone or more measures mentioned therein. Section 20 comes into operation where the BIFR after making the inquiry under Section 16 and after consideration of all relevant facts and circumstances and after giving opportunity of being heard, reaches to the conclusion that the sick industrial company is not likely to make its net worth exceeding the accumulated losses within a reasonable time while meeting all its financial obligations and as a result thereof the company is not likely to become viable in future and that it is just and equitable the company should be wound up, the BIFR may record and forward its opinion to the concerned High Court. Sub-section (2) of Section 20 gives mandate that on receipt of the opinion of the BIFR the High Court shall order winding up of the sick industrial company and may proceed and cause to proceed with the winding up of the sick industrial company in accordance with the provisions of the 1956 Act. 11. Argument of Mr. Paras Kuhad is, that under Section 15 of the 1985 Act once the industry has become a sick industry, the Board of Directors are duty bound to make a reference to the BIFR and thereafter the BIFR has to make inquiry under Section 16 as regard to the fact whether the industrial company has become a sick industry company or not if it is so the BIFR will determine whether there is any likelihood of the company to make its net worth to exceed the accumulated losses within a reasonable time or not, which is to be while meeting its all financial obligations. If the BIFR reaches to the conclusion that it is not possible then its opinion has to be forwarded to the High Court and the High Court is duty bound to pass an order of winding up. If the BIFR reaches to the conclusion that it is not possible then its opinion has to be forwarded to the High Court and the High Court is duty bound to pass an order of winding up. This provision is a special provision regarding winding up of the sick scheduled industries, if the company or any other person desires to get winding up order, it has to approach the BIFR and not to the High Court directly particularly when the winding up is sought for under Section 433(f) of the 1956 Act. 12. What we need to see is whether there is a real and direct confliction between Section 433 of the 1956 Act and Section 20 of the 1985 Act. Sub-section (a) of Section 433 of the 1956 Act provides for winding up of a company if the company by its special resolution resolved that the company may be wound up by the Court. Sub-section (b) is in relation to default made in delivering the statutory report to the Registrar or in holding the statutory meeting; sub-section (c) is for winding up by the Court if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year; sub-section (d) is for winding up by the Court if the number of members is reduced, in the case of a public company, below seven, and in the case of a private company, below two; sub-section (e) provides for winding up by the Court if the company is unable to pay its debts. The main thrust of the argument is on the basis of sub-section (f) which provides that the company can be wound up by the court if the court is of opinion that it is just and equitable that the company should be wound up. Submission of the counsel is that the same ground is provided for winding up under Section 20 of the 1985 Act and, therefore, if the Company is to be wound up it has to approach the BIFR. 13. As regards to the grounds mentioned in Section 433(a) to (e) there is no difficulty in holding that the BIFR has no jurisdiction to recommend the winding up as on those grounds, is clear from Section 20 of the 1985 Act. 13. As regards to the grounds mentioned in Section 433(a) to (e) there is no difficulty in holding that the BIFR has no jurisdiction to recommend the winding up as on those grounds, is clear from Section 20 of the 1985 Act. Under Section 20 the BIFR can only recommend the winding up to the High Court if the BIFR is of the opinion that the sick industrial company is not likely to make its net worth exceeding the accumulated losses within a reasonable time while meeting all its financial obligations and that the company as a result thereof is not likely to become viable in future and that it is just and equitable that the company should be wound up. Thus the BIFR has to reach to the conclusion after hearing the parties that the sick industrial company is not in a position to make its net worth more than accumulated losses within a reasonable time after meeting its all financial obligations and because of the company is not likely to become viable in future. The opinion of the BIFR on this point would not suffice or make a ground for making recommendation for winding up but the BIFR has to further arrive at the conclusion that it is just and equitable that the company should be wound up, so both the requirements are to be fulfilled before the opinion is sent to the High Court for winding up; firstly that the company is not likely to make its net worth exceeding the accumulated losses within a reasonable span of time after meeting all its financial obligations and because of this the company is not likely to become viable in future and secondly that in the opinion of the BIFR it is just and equitable that the company should be wound up.There may be a case where first part is satisfied but the BIFR may reach to the conclusion that it is not just and equitable that the company should be wound up then the BIFR cannot send its opinion for winding up to the High Court. Therefore unless and until both the conditions laid down in Section 20 are fulfilled the BIFR does not get an authority or jurisdiction to recommend the matter for winding up to the High Court. Therefore unless and until both the conditions laid down in Section 20 are fulfilled the BIFR does not get an authority or jurisdiction to recommend the matter for winding up to the High Court. Whereas Section 433(f) of the 1956 Act provides that the company may be wound up if the court is of the opinion that it is just and equitable. The condition that the company is not likely to make its net worth exceeding the accumulated losses within a reasonable time and that the company as a result thereof is not likely to become viable in future, has not to be necessarily decided while exercising the powers by the Court for passing a winding up order on the ground that it is just and equitable. Under Section 433(f) of the 1956 Act there may be a case that although there is a possibility of company becoming in near future viable but yet the court is of the opinion that it is just and equitable to pass an order of winding up then that power can be exercised by the Court under Section 433(f). There may also be a case that the financial condition of the company is good but yet for some reason the court feels that it is not just and equitable that the company should continue its business or there is deadlock in the management of the Company, loss of confidence of minority share holders in the probity of the Board of Directors, oppression of minority share holders etc. then the court in exercise of its discretion can declare the company to be wound up. Section 20 of the 1985 Act and Section 433 (f) of the 1956 Act operate in distinct and separate fields. There is neither overlapping nor their field of operation is the same. The company may directly approach to the High Court if the winding up is sought for on the ground that the winding up of the company is necessary on just and equitable ground. There is neither overlapping nor their field of operation is the same. The company may directly approach to the High Court if the winding up is sought for on the ground that the winding up of the company is necessary on just and equitable ground. Whereas if the ground is that the company is scheduled sick industrial company and not likely to become viable in future because it is not in a position to make its net worth exceeding the accumulated losses within the reasonable time and that it would be just and equitable that the company should be wound up then the winding up proceedings are to be taken up as provided under the 1985 Act. There being no conflict between two Acts and they operate in different fields the submission of the learned counsel for the appellant is rejected. 14. It is then submitted by the learned counsel for the appellants that the Company having moved an application on 23.2.1993 under Section 15 of the 1985 Act the provisions of Section 22 are attracted and the learned Company Judge should not have proceeded with the winding up petition and passed an order in the case. Section 22 of the 1985 Act provides that where an inquiy 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 25 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 against any of the properties of the industrial company etc. shall be taken up. Merely on making of an application under Section 15 it cannot be said that inquiry under Section 16 is pending. If the inquiry under Section 16 is pending then of course the provisions of Section 22 shall be attracted and the court shall have no jurisdiction to proceed with the matter in winding up. 15. shall be taken up. Merely on making of an application under Section 15 it cannot be said that inquiry under Section 16 is pending. If the inquiry under Section 16 is pending then of course the provisions of Section 22 shall be attracted and the court shall have no jurisdiction to proceed with the matter in winding up. 15. In the present case as mentioned in 26th Annual Report and Statement of Accounts for the year 1994-95 page 113 of the paper book, in the year 1989-90 the Corporation has come under the definition of sick industrial company on account of amendment in Section 3(1)(o) of the 1985 Act but due to the accounts for the year 1990-91, 1991-92 and 1992-93 were unaudited the reference of the Corporation dated 23.2.1993 was not considered by the BIRR. Thus it is dear that although the application was moved on 23.2.1993 by the Corporation under Section 15 of the 1985 Act it was not registered, rather no steps were taken under Section 16 of the 1985 Act.We are not concerned in this case whether the BIFR acted in accordance with law in refusing to act under Section 16 or not, because the accounts of the company for the years 1990-91, 1991- 92 and 1992-93 were not audited. The facts remain that the BIFR had not taken the proceedings under Section 16 of the 1985 Act. Clause (5) of Regulation 19 of the BIFR Regulations, 1987 provides that on an application moved under Section 15(1), if on scrutiny, the reference is found to be in order it shall be registered, assigned a serial number and submitted to the Chairman for assigning it to a Bench. Simultaneously, remaining information/documents required, if any, shall be called for from the informant. Clause (6) of Regulation 19 of the 1987 Regulations speaks that if on scrutiny the reference is not found to be in order, the Secretary or as the case may be, the Registrar may by order decline to register the reference and shall communicate the same to the informant. Clause (7) is a deeming provision that a reference declined to be registered shall be deemed not to have been made. Thus, if the reference is declined to be registered, it shall be taken that it has not been made. Clause (7) is a deeming provision that a reference declined to be registered shall be deemed not to have been made. Thus, if the reference is declined to be registered, it shall be taken that it has not been made. The learned counsel for the appellant was unable to show us that at any point of time the reference made by the Corporation on 23.2.1993 was registered. Registration of the reference and calling for the information and documents from informant is a sine qua non for coming into operation of the provisions of Section 22 of the 1985 Act.In (2) Real Value Appliances Limited V. Canara Bank and Others, ( AIR 1998 SC 2064 para 29) the Apex Court has held that there can, therefore, be no difficulty in holding that after the amendment to Regulation 19 w.e.f. 24.3.1994, once the reference is registered and when once it is mandatory simultaneously to call for information/documents from the informant and such a direction is given, then inquiry under Section 16(1) must-for the purposes of Section 22-be deemed to have commenced. Section 22 and the prohibitions contained in it s shall immediately come into play. In the absence of registration of the reference' and calling for the information, Section 22 of the 1985 Act is not attracted. The Company Court had rightly proceeded with the winding up proceedings and passed an appropriate order. 16. The learned counsel for the appellants has submitted before us that the special resolution to wind up the Company passed on 30.5.1996 was not in accordance with law as the Governor's approval should have been obtained after the resolution to that effect was passed by the Corporation on 30.5.1996 and not before. The meeting called for taking decision was not in conformity of relevant provisions of the 1956 Act, and thus decision taken in that meeting could not be given effect to. The record reveals. that the meeting of the Board of Directors was called on 15.3.1995 wherein it was decided that the approval be obtained in accordance with the Article 77(6) of the Memorandum and Articles of Association of the Company from the Governor of Rajasthan. Governor's approval was convened on 10.5.1995. The record reveals. that the meeting of the Board of Directors was called on 15.3.1995 wherein it was decided that the approval be obtained in accordance with the Article 77(6) of the Memorandum and Articles of Association of the Company from the Governor of Rajasthan. Governor's approval was convened on 10.5.1995. After the receipt of the approval by the Governor, extraordinary general meeting of the share holders was called on 26.9.1995 in pursuance of notices issued on 19.8.1995 for said purpose along with explanatory statement as required under Section 173 of the 1956 Act. Extraordinary general meeting could not be held on 26.9.1995 and it was adjourned for want of quorum to 4.10.1995 and 30.10.1995. In the extraordinary general meeting dated 30.5.1996 it was resolved that the application for winding up of the Corporation be filed before the High Court. On the face of the statement recorded by the learned Company Judge that no challenge has been made before him that the special resolution has not been passed in accordance with law, it would not be appropriate for us to permit the argument to be advanced that the extraordinary general meeting was not called in accordance with the 1956 Act, and thus the resolution passed for filing winding up of the company could not be acted upon. Even if we permit such argument, the record reveals that the provisions of the 1956 Act have been followed by issuing the notice to the share holders and sufficient compliance has been made in calling the extraordinary general meeting. That apart, none of the share holders of the creditors have challenged the legality of the meeting and the resolution passed therein. Section 172(3) of the 1956 Act declares that the accidental omission to give notice to, or the non-receipt of notice by, any member or other person to whom it should be given shall not invalidate the proceedings at the meeting. Even if it is said that the proper notice has not been given to the members before the extraordinary general meeting was called, the resolution passed in that meeting is saved and protected by virtue of sub- section (3) of Section 172 of the 1956 Act. 17. Submission as regards the approval of the Governor being taken prior to the resolution for winding up was passed and therefore, resolution was bad in law and without any substance. 17. Submission as regards the approval of the Governor being taken prior to the resolution for winding up was passed and therefore, resolution was bad in law and without any substance. Article 77 of the Memorandum and Articles of Association of the Company provides that the Board of Directors shall not exercise any power to do any act in respect of winding up of the Corporation without the prior approval of the Governor. Thus, the requirement of taking the approval, is prior to take any action in respect of winding up of the Corporation, the approval is not required for the resolution of winding up already passed. Approval is for initiation of the proceedings in regard to winding up of the Corporation and not for the decision already arrived at in extraordinary general meeting to go for a winding up. Thus, in our opinion, in view of the special resolution passed on 30.5.1996 there is no legal impediment, for the Corporation to be wound up by the Court. Section 433(a) of the 1956 Act permits the Court to pass an order of winding up if the Company has, by special resolution, resolved that the Company may be wound up. The resolution being in accordance with law the Corporation is liable to be wound up under Section 433(a) of the 1956 Act. 18. The other ground as on the basis of which the winding up order is sought for is as contained in sub-section (e) of Section 433, which provides that if the company is unable to pay its debts the company may be wound up by the Court. Section 433 (f) provides that if the court is of the opinion that it is just and equitable that the company should be wound up, the company may be wound up by the Court.The audited balance sheets of the Corporation filed along with the petition and submitted by the respondents in this court clearly reveals that the company is running in loss and has incurred huge deficit. The loan is mounting and the Corporation position is not such to pay the loans. The Corporation's financial position has been scrutinised by the high power committee presided over by the Chief Minister and the other Ministers and Officers as mentioned here in above, and they have reached to the conclusion that there was no way in which the Company can run in profit. The Corporation's financial position has been scrutinised by the high power committee presided over by the Chief Minister and the other Ministers and Officers as mentioned here in above, and they have reached to the conclusion that there was no way in which the Company can run in profit. Normally the courts do not go beyond the audited balance sheets unless and until a grave discrepancy in maintaining the accounts is brought to the notice of the court. The Auditor's report has been scrutinised by the Comptroller and Auditor Geneal of India wherein no objections have been taken to challenge the profit and loss figures or any other figures given in the audited balance sheets. Under Section 617 of the 1956 Act "Government Company" means any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government, and partly by one or more State Governments. The 98% of the share capital of the Corporation is held by the Government of Rajasthan and thus the Corporation is a Government Company within the meaning of Section 617 of the 1956 Act. Section 619 provides that the auditor of a Government company shall be appointed by the Central Government on the advice of the Comptroller and Auditor General of India. The Comptroller and Auditor General of India has a power to direct the manner in which the Company's account shall be audited by the Auditor appointed. He can give such instructions in regard to any matter relating to the performance of his functions as such. Clause (b) of sub-section (3) of Section 619 authorises the Comptroller and Auditor General to conduct a supplementary or test audit of the Company's account. When the Corporation's accounts are being audited by the Auditor appointed by the Comptroller and Auditor General of India, there is no manner of doubt that the audited accounts and the Auditor's report reflects true financial position of the Corporation. We are satisfied with the figures mentioned in the audited balance sheets and reached to the conclusion that considering the financial position of the Corporation and the loan amount due from the Corporation with interest, the Corporation is unable to pay its debts and is liable to be wound up under sub-section (e) of Section 433 of the 1956 Act. 19. 19. In the Corporation in all 495 employees were working out of which initially 178 employees opted for the benefit under the voluntary retirement scheme as they must have considered that with the piling of the accumulated losses of the Corporation it would not be possible for it to continue with its working. The employees who have taken voluntary retirement, have been offered substantial benefits under the Scheme and they have been paid approximately र five crore by the Corporation in the form of benefits under the voluntary retirement scheme. Simultaneously with the volunary retirement scheme the State Government in keeping the interest of the workers, also absorbed 101 employees of the Corporation in the various Organisations and Departments of the State Government, 12 employees attained the age of superannuation or had expired. In this way about 60% of the employees of the Corporation have accepted the benefit under the voluntary retirement scheme or accepted the absorption made in other Organisations. In all these years of its running, the Corporation has not made profits except for four years and losses are mounting up every year apart from the loan amount due and the interest payable thereon. There cannot be any doubt that the workers' interest has to be safeguarded and it has to be seen that, if possible, the Companies should be allowed to run and not to close down. But at the same time when the Company is not running in profit and incurring the huge losses there is no point to continue to pour good money into bad assets, the workers will end up losing their jobs anyway. Running of the Corporation will result in incurring further losses. If the Corporation is not wound up and is not sold at the right time, its value could drop. It would not be in interest of any of the parties. It would have been good if the cause for company's setback was timely detected and preventive, ameliorative remedial and other measures were taken in right time, but it appears to us that it is too late in the day, ground realities show that running of the Corporation would not be in the long run, would be in the interest of the tax payers, company or the workers. The steps have been taken to provide relief to the employees to take the voluntary retirement and also some of the workers have been absorbed in other Organisations.We agree with the view of the learned Company Judge that it is just and equitable that the Corporation should be wound up under Section 433(f) of the 1956 Act. 20. For the aforesaid reasons the appeals are dismissed. However, there shall be no order as to costs.Spl. Appeals Dismissed *******