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TMI Blog2003 (9) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The judgment-debtor in these facts contends that section 22 of the SICA is attracted and the decree-holder cannot seek or proceed with the recovery of the decretal amount of Rs. 2,31,25,803 decreed on 6-9-2002. 3. Reply to the application has been filed by the decree-holder. It is contended that mere filing of an appeal under section 25 of the SICA would not attract provisions of section 22 of the Act. Reference made under section 15 has already been rejected after enquiry under section 16 of SICA. It is submitted that the present application is by only one of the judgment-debtors, while there are other judgment-debtors in respect of which no application or reference is pending and the execution is, therefore, liable to be proceeded against them and present application is liable to be dismissed. 4. The decree-holder/tenant-M/s. LG Electronics Pvt. Ltd. had instituted a suit for recovery of the security deposit given to the owner/landlord M/s. Usha India Ltd. and others towards rent, maintenance charges, hire charges for fittings and fixtures. The tenancy was brought to an end, possession handed over to Local Commissioner, the suit was decreed on 6-9-2002 for a sum of Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayed. 8. Based on the pleas raised, the following questions arise for determination : ( i )Whether section 22 of SICA would be attracted when reference under section 15 has been dismissed after enquiry under section 16 during the pendency of an appeal under section 25 of SICA? ( ii )Whether the protection of section 22 of SICA is not to be available in respect of the security deposit for the tenanted premises since the latter is not treated as an asset or property of the sick company? ( iii )Whether an application under section 22 of SICA was not barred by res judicata due to the dismissal of the appeal by the Division Bench, wherein by an affidavit the plea of applicability of section 22 of SICA, during the pendency of appeal under section 25 of SICA was raised? 9. Let us consider point ( i ) as noted above : The submission of the counsel for decree-holder is that the pendency of an enquiry under section 16 of SICA is sine qua non for the applicability of section 22. In support, he refers to the provisions and contents of section 16 of SICA itself, requiring the conduct of an enquiry upon receipt of reference or other information. He submits that in the insta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spension of legal proceedings, contracts, etc. (1) Where in respect of an industrial company, an enquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other 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." [Emphasis supplied] 12. Section 25 of SICA provides for filing an appeal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable. The first question is answered accordingly. Point (ii) ( ii )Whether the protection of section 22 of SICA is not to be available in respect of the security deposit for the tenanted premises since the latter is not treated as an asset or property of the sick company ? The submission of the decree-holder is that provisions of section 22 of SICA cannot be available in respect of security deposit for the tenanted premises since the latter is not treated as an asset or property of the sick company. This is not a case for possession of the tenanted premises. The decree that has been passed by the Court is a money decree for refund of the security deposit given for due performance of the agreement terms, maintenance and other charges. Simply because the money decree may relate to or arise from the claim for refund of the security deposit for tenanted premises, it cannot be said that the same is not in the nature of proceedings for execution, distress or like or for recovery of money or for enforcement of any security or of guarantee in respect of loans and advances granted. The submission made is negated by the express language of section 22 and has no merit. The plea o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicata as indicated in section 11 of the Code of Civil Procedure has no doubt some technical aspects for instance the rule of constructive res judicata may be said to be technical. But the basis on which the said rule rests is bounded on consideration of public policy. It is in the interest of public at large that a finality should attach to the binding decisions pronounced by Courts of competent jurisdiction, and it is also in the public interest that individuals should not be vexed twice over with the same kind of litigation." For the rule of res judicata to apply it is necessary that the decision arrived at was on merits to be binding on the parties. Further, that the decision is arrived at where in a contest both parties have an opportunity to prove their case. The Court ruled that when a writ petition was dismissed in limine on grounds of laches or alternative remedy being available, the said decision shall not operate as res judicata . The Court observed, "If a writ petition is dismissed in limine and an order is pronounced in that behalf, whether or not the dismissal would constitute a bar would depend upon the nature of the order. If the order is on the merits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been heard and finally decided. There was no decision at all on the merit of the grievance of the petitioner in the aforesaid writ petition and, therefore, to take a view that the decision in earlier proceeding operated as res judicata was absolutely erroneous, not to speak of its being uncharitable." [Emphasis supplied] 19. The Supreme Court again in Ferro Alloys Corpn. Ltd. v. Union of India AIR 1999 SC 1236 held that before any issue is said to be heard and finally decided, the Court considering it has to be shown to have expressly considered such an issue and have decided it one way or the other and such decision should have obtained finality in the hierarchy or proceedings. Then only such an issue can be said to be heard and finally decided between the parties. 20. From the legal principles enunciated in the aforesaid judicial pronouncements, for the applicability of principle of res judicata . It would be seen that the decision to operate as res judicata must be a decision on merits. It has to be by a speaking order. A dismissal in limine without a speaking order would not operate as res judicata . The Court noted that it may suggest that there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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