1987 (5) TMI 368 - SC - Indian Laws

Whether on a true construction of Section 5 of the Madhya Pradesh Sahayata Upkram (Vishesh Upbandh) Adhiniyam 1978 Act execution of the exparte decree obtained by the respondent against the petitioner at Bombay can be instituted commenced or proceeded with by the respondent against the petitioner even though the petitioner s textile undertaking is admittedly a State Relief Undertaking under the Act? Whether Section 5 of the aforesaid Act is substantive law or procedural law? Held that - High Court completely overlooked the purpose of the Act and the limited period of operation of Section 5 to held that there was no bar against execution of the decree after considering the effect of Section 5 quoted above on the general law governing decrees and their execution as provided in the Civil Procedure Code. A contention was raised that Section 5 cannot apply to post notification liabilities but the reading of the Sections does not permit such an interpretation. The object of Section 5 is to protect the relief undertakings from all suits and legal proceedings. This protection is to end on 18-11-1987. We hold that the High Court was in error in allowing execution to proceed. Set aside the order of the High court and allow this appeal.

Summary

Issues Involved:
1. Construction and interpretation of Section 5 of the Madhya Pradesh Sahayata Upkram (Vishesh Upbandh) Adhiniyam, 1978.
2. Whether Section 5 of the Act is substantive law or procedural law.
3. Applicability of Section 5 to execution proceedings of a decree obtained outside Madhya Pradesh.

Issue-wise Detailed Analysis:

1. Construction and Interpretation of Section 5 of the Act:
The primary issue was whether execution of the ex-parte decree obtained by the respondent against the appellant in the Bombay High Court could be stayed under Section 5 of the Act, given that the appellant's textile undertaking was a State Relief Undertaking. The Supreme Court held that Section 5 of the Act, which suspends suits or other legal proceedings against relief undertakings, applies to execution proceedings as well. The Court emphasized that the section's purpose is to protect relief undertakings from litigation during their period of relief status. The inclusion of the term "decree" in Section 5 indicated that even validly obtained decrees could not be executed during the relief period.

2. Whether Section 5 of the Act is Substantive Law or Procedural Law:
The High Court had previously held that Section 5 was substantive law, meaning it governed the rights and liabilities of the parties and was not merely procedural. The Supreme Court, however, found it unnecessary to delve deeply into this distinction for the case's resolution. The Court focused on the clear wording and intent of Section 5, which is to suspend legal proceedings, including execution of decrees, against relief undertakings during the specified period.

3. Applicability of Section 5 to Execution Proceedings of a Decree Obtained Outside Madhya Pradesh:
The Supreme Court rejected the contention that execution proceedings of a decree obtained outside Madhya Pradesh could not be stayed under Section 5. The Court stated that accepting such a contention would render Section 5 nugatory and defeat the Act's purpose. The Court clarified that the section suspends the execution of decrees for the specified period, regardless of where the decree was obtained. The Court also noted that the bar under Section 5 is absolute for the duration of the relief period, ensuring that relief undertakings are not burdened by litigation and execution proceedings during this time.

Conclusion:
The Supreme Court set aside the High Court's order allowing execution to proceed, emphasizing the Act's intent to protect relief undertakings from litigation during the relief period. The appeal was allowed with no order as to costs.