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TMI Blog2000 (7) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... t the consent or the Board or the appellate authority. When the words of a legislation are clear, the Court must give effect to them as they stand and cannot demur on the ground that the Legislature must have intended otherwise. Therefore, the first respondent s suit for the enforcement of the guarantees in respect of the loans granted to the first appellant cannot be proceeded with unless consent as required by section 22 is obtained. - CIVIL APPEAL NO. 4111 OF 2000 - - - Dated:- 24-7-2000 - S.P. BHARUCHA, M.B. SHAH AND RUMA PAL, JJ. H.N. Salve, Dr. A.M. Singhvi, Anip Sachthey, Anupam Lal Das, Ms. Sandhya Rajpal, Arijit Prasad, Vikram R. Trivedi, Bharat Sangal, Ms. Asha Pathak, Anand Pandey, Rajiv K. Garg, Atul Sharma, Ms. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s belonged to the guarantors and, therefore, considering the language of section 22, the suit in respect of these properties could not be proceeded with. The attention of the learned single Judge was, on the other hand, drawn to the judgment of a Division Bench of the High Court in the case of Madalsa International Ltd. v. Central Bank of India AIR 1998 Bom. 247. It had there been held that the provisions of section 22 would not apply insofar as guarantors were concerned. In view of that judgment, the learned single Judge declined to vacate the ad interim order insofar as the guarantors properties were concerned. The order of the learned single Judge was carried in appeal, and a Division Bench, relying upon the judgment in Madalsa Int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the appellate authority." The words in the square brackets above were inserted into section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... empowers the Board to direct the preparation of a scheme adopting all or any of the measures specified in section 18. Section 18(2) states that the scheme may provide, inter alia, for "the continuation by, or against, the sick industrial company or as the case may be, the transferee company or any action or any other legal proceedings pending against the sick industrial company immediately before the date of the order made under sub-section (3) of section 17". The argument on behalf of the first respondent is that while this provision provides for the continuation of proceedings against the industrial company, there is no provision in the said Act which provides for the continuation of any held up proceeding against the guarantor of a lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... third parties or directors of an industrial company. However, in both cases it would be the guarantors, whether third parties or directors, who would be affected personally; and we see no reason to interpret the section in such a manner that apart from the properties of the industrial company, the Legislature intended to protect the personal interest of the guarantors as proceedings against guarantor and their personal property would not affect the revival of the industrial company in any manner whatsoever. In the circumstances the words of any guarantee in respect of any loans, or advance granted to the industrial company in the context will have to be read as the guarantee given by the industrial company itself and none else." 10. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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