THE HON’BLE Ms. JUSTICE G.ROHINI WRIT PETITION No.27022 OF 2010 DATED: 15.02.2011 Between : Mr. R.S.N. Raju .. Petitioner And 1. Midland Industries Limited (In liquidation), Rep. by the Official Liquidator, High Court of Andhra Pradesh, Hyderabad and another. .. Respondents THE HON’BLE Ms. JUSTICE G.ROHINI WRIT PETITION No.27022 OF 2010 ORDER : This writ petition is filed seeking a declaration that the dismissal of Appeal No.30 of 2010 by the 2nd respondent - Appellate Authority for Industrial and Financial Reconstruction by order dated 7.9.2010 is arbitrary and illegal. The facts, in brief, are as under: On a reference made by the Board of Directors of the 1st respondent company - Midland Industries Limited under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short, ‘SICA’), the matter was registered before the Board for Industrial and Financial Reconstruction (BIFR) as Case No.358 of 1999. After due enquiry, the BIFR, by order dated 15.03.2004 sanctioned the scheme of revival and rehabilitation of the said company and appointed the State Bank of India as the monitoring agency. Subsequently the BIFR vide proceedings dated 5.10.2009 while opining that the 1st respondent company was not likely to become viable on long term basis, concluded that it should be wound up under Section 20 (1) of the SICA. Aggrieved by the said recommendation of BIFR, the 1st respondent company preferred an appeal before the appellate authority – 2nd respondent herein under Section 25 of SICA and the same was numbered as Appeal No.30 of 2010. Even before the said appeal could be taken up for hearing, on the basis of the proceedings of the BIFR, dated 5.10.2009, R.C.C.No.2 of 2009 was registered for winding up and the same was heard by this Court on 14.6.2010. On the said date, as the counsel for the 1st respondent company failed to appear, this Court ordered winding up of the 1st respondent company and directed that all the assets of the company should vest with the Official Liquidator attached to this Court for the purpose of realisation and distribution among the creditors in accordance with law. Immediately thereafter the writ petitioner – Ex. Director of the 1st respondent company filed C.A.No.618 of 2010 seeking to set aside the winding-up order dated 14.6.2010 explaining the reasons for the absence of counsel on 14.6.2010. During the pendency of the said application, Appeal No.30 of 2010 came up before the 2nd respondent – Appellate Authority – on 7.9.2010 and having found that this Court had already passed an order of winding up on 14.6.2010, the 2nd respondent, by order dated 7.9.2010 dismissed the Appeal as infructuous. Aggrieved by the same, the present writ petition is filed. It is contended by the learned counsel for the petitioner that the impugned order passed by the 2nd respondent dismissing the appeal as infructuous in spite of the fact that C.A.No.618 of 2010 is pending before this Court is arbitrary and illegal. It is also contended that in view of Section 22 (1) of the SICA, all the proceedings including recommendation made by the BIFR for winding up should have been stayed pending the appeal under Section 25 and therefore the dismissal of the appeal in limini is unsustainable. I have also heard Sri M. Anil Kumar, the learned counsel for the Official Liquidator representing the 1st respondent, company in liquidation and perused the material available on record. As per Section 22 (1) of the SICA, notwithstanding anything contained in the Companies Act or any other law, no proceedings for the winding up shall be proceeded further pending an appeal under Section 25. In the instant case, the Appeal under Section 25 was presented before the 2nd respondent in November, 2009 itself. The pendency of the said Appeal was apparently not brought to the notice of this court as the respondents failed to appear in R.C.C.No.2 of 2009 and thus the winding up order came to be passed on 14.6.2010. Having regard to the admitted facts, particularly in view of the settled legal position with regard to the procedure to be followed under Section 20 (1) of SICA, C.A.No.618 of 2010 filed by the writ petitioner herein in R.C.C.No.2 of 2009 has been allowed by a separate order passed today and the winding up order dated 14.6.2010 made in R.C.C.No.2 of 2009 has been set aside. In the circumstances, the ground on which Appeal No.30 of 2010 was held to have become infructuous by the 2nd respondent – appellate authority – no longer survives and therefore the appeal requires consideration on merits. Accordingly, the impugned order dated 7.9.2010 is hereby set aside and the Appeal No.30 of 2010 is revived and the Writ Petition is disposed of directing the 2nd respondent – Appellate Authority – to consider the Appeal No.30 of 2010 on merits and pass appropriate orders in accordance with law. No costs. ______________ G. ROHINI, J. Dt. 15.02.2011 gbs