9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (9) TMI 1287 - HC - Indian LawsSuit for recovery of money - Bar under Section 22 of the Sick Industrial Companies (Special Provisions) Act 1985 (SICA) - HELD THAT - The issue that a simple suit for recovery of moneys is not barred by Section 22 of SICA is clear from the judgment of the Supreme Court in the case of Raheja Universal Limited Vs. NRC Limited and Ors. 2012 (10) TMI 233 - SUPREME COURT . The ratio of this judgment of the Supreme Court in the case of Apollo International Ltd. Vs. Supriya Pharmaceuticals Ltd. 2012 (10) TMI 1275 - DELHI HIGH COURT applied in the case of Apollo International Ltd. where it was held that In the present case the suit for recovery of money is a suit for recovery of money simplicitor. Counsel for the plaintiff does not press the interim applications under Order 38 Rule 5 of Code of Civil Procedure 1908 (CPC) and Order 39 Rules 1 and 2 CPC. Accordingly in the subject suit there is no threat to the liquidation of the assets of the sick company and therefore no prior permission is required under Section 22 of SICA. Therefore looking at it from any view of the matter that earlier a similar application was dismissed the fact that petitioner had failed to comply with the repeated directions of the court to show that debt of the respondent/plaintiff was included in the scheme of rehabilitation that every suit for recovery of moneys does not require prior permission under Section 22 of SICA and the fact that now since the petitioner/defendant-company is out of BIFR and as stated in the present petition there is no merit in the petition which is therefore dismissed.
Issues:
1. Application under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) dismissed by trial court. 2. Interpretation of Section 22 of SICA regarding suits for recovery of money. 3. Requirement of prior permission under Section 22 of SICA for specific types of suits. 4. Dismissal of petition due to failure to comply with court directions and lack of merit. Issue 1: Application under Section 22 of SICA dismissed by trial court The petitioner filed a petition under Article 227 of the Constitution of India challenging the trial court's order dismissing their application under Section 22 of SICA. The trial court noted that the petitioner failed to provide documents showing the debt of the respondent was included in the rehabilitation scheme. The court referred to previous judgments and highlighted that a simple suit for recovery of money is not barred by Section 22 of SICA, as established in the case law. Issue 2: Interpretation of Section 22 of SICA regarding suits for recovery of money The judgment analyzed the Supreme Court's interpretation of Section 22 of SICA, emphasizing that the provision aims to protect sick industrial companies from actions that may hinder their revival schemes. It clarified that not every suit for recovery automatically falls under Section 22, but only those suits that may lead to the liquidation of a sick company's assets. In this case, the suit for recovery of money was deemed a straightforward claim without posing a threat to the company's assets, thus not requiring prior permission under Section 22 of SICA. Issue 3: Requirement of prior permission under Section 22 of SICA for specific types of suits The court highlighted that Section 22 of SICA necessitates prior permission for suits that could impact the company's assets or interfere with its rehabilitation scheme. It emphasized that the provision aims to prevent actions that may obstruct the company's revival process. In this case, since the suit for recovery of money did not pose a threat to the company's assets, no prior permission from the Board for Industrial and Financial Reconstruction (BIFR) was required. Issue 4: Dismissal of petition due to failure to comply with court directions and lack of merit Ultimately, the petition was dismissed due to various factors, including the petitioner's failure to demonstrate compliance with court directions regarding the inclusion of the debt in the rehabilitation scheme. The court found no merit in the petition, especially considering the petitioner's non-compliance with court orders and the lack of necessity for prior permission under Section 22 of SICA for the suit in question. Consequently, the parties were directed to bear their own costs. This comprehensive analysis of the judgment provides a detailed understanding of the legal issues addressed and the court's reasoning behind its decision.
|
