2002 (9) TMI 773 - HC - Companies Law

Summary

Issues:
Eviction proceedings, Stay of trial, Sick industrial company status determination

Eviction Proceedings:
The revision petitioner, a tenant, was involved in eviction proceedings initiated by the landlord. The petitioner filed a petition seeking to stay the trial of the main eviction proceedings until the Board of Industrial and Financial Reconstruction (BIFR) disposed of the application related to the petitioner's status as a sick industrial company under the Sick Industrial Company (Special Provisions) Act, 1985.

Stay of Trial:
The tenant's petition to stay the trial was contested by the landlord, who argued that such a petition was not maintainable and expressed ignorance about the tenant's financial condition. The Rent Controller and the Rent Control Appellate Authority both ruled against staying the eviction proceedings, emphasizing that the determination of the tenant's status as a sick industry should be decided by the BIFR and not the Rent Controller.

Sick Industrial Company Status Determination:
The tenant argued that the Rent Controller should not proceed with the trial as it could prejudice the determination of their status as a sick industrial company under the Special Act. The tenant relied on a Supreme Court judgment which clarified that eviction proceedings by a landlord against a sick industrial company are not automatically suspended under the Sick Industrial Company (Special Provisions) Act, emphasizing that the Act aims to prevent further financial difficulties for sick companies. The High Court dismissed the Civil Revision Petition but set aside the Rent Control Appellate Authority's observation that the Rent Controller could decide the sick industrial company status, stating that such a determination falls under the jurisdiction of the BIFR and not the Rent Controller.

This detailed analysis of the judgment outlines the issues of eviction proceedings, the stay of trial, and the determination of the tenant's status as a sick industrial company. The High Court clarified the respective roles of the Rent Controller and the BIFR in determining the sick industrial company status, emphasizing that the eviction proceedings should not be automatically stayed based on the tenant's status.