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Issues Involved:
1. Whether the application under Order XXXIX, Rule 4, C.P.C. is barred by section 22 of SICA. 2. Whether the ex parte restraint order was obtained by wilful misrepresentation and concealment. Issue-wise Detailed Analysis: 1. Whether the application under Order XXXIX, Rule 4, C.P.C. is barred by section 22 of SICA: The primary issue addressed was whether the application under Order XXXIX, Rule 4, C.P.C. for vacating the interim restraint order is barred by section 22 of SICA. The court noted that section 22 of SICA suspends proceedings against a sick company to protect its assets during the inquiry and formulation of a rehabilitation scheme. The defendants argued that section 22 does not prevent the company from seeking enforcement of its rights, only barring proceedings against it. The plaintiffs countered that section 22 imposes a complete embargo on proceeding with the suit without BIFR's consent. The court examined the legislative intent of SICA, emphasizing its purpose to protect the asset base of a sick company from erosion. The court concluded that the bar under section 22(1) of SICA is complete, preventing any further proceedings in the suit, including applications for variation of interlocutory orders. Thus, the application under Order XXXIX, Rule 4, C.P.C. was not maintainable. 2. Whether the ex parte restraint order was obtained by wilful misrepresentation and concealment: Despite holding the application under Order XXXIX, Rule 4, C.P.C. as not maintainable, the court addressed the merits of the defendant's claim that the ex parte restraint order was obtained through wilful misrepresentation and concealment. The defendants argued that the plaintiff did not disclose the receipt of Rs. 20.94 lakhs and the pledge of shares as security. The court found that the plaintiff had filed a statement of account reflecting the receipt of Rs. 20.94 lakhs and adjusted it against the amount claimed. Regarding the non-disclosure of the pledged shares, the court noted that the plaintiff had not been able to transfer the shares due to objections raised by the defendants. The court held that the non-disclosure was not fatal to the grant of the injunction. The court also considered the defendant No. 2's affidavit, which included an undertaking not to sell or mortgage the property without the plaintiff's consent. Given the financial difficulties of the defendant No. 1 company and the protective measures under SICA, the court found no equity in favor of the defendants to vacate the restraint order. Consequently, the application for vacation of the ex parte restraint order was dismissed. Conclusion: The court dismissed the application under Order XXXIX, Rule 4, C.P.C. as barred by section 22 of SICA and found no merit in the claims of wilful misrepresentation and concealment by the plaintiff. The ex parte restraint order remained in effect.
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