9911796707
TMI Blog2007 (9) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... wronged person, to seek redressal of his rights. Quantification of the damages, in such cases, is only a measure of retribution of the wrong in terms of money, than payment of any liquidated sum. When contractual obligations, under a lease agreement, or a negotiable instrument, are kept outside the protective umbrella of section 22(1) of the Act, the suit, filed by an individual, against a sick industrial company, a suit for damages, on account of defamation, can, by no stretch of imagination, be treated as barred under that provision. Hence, the C.R.P. is dismissed - CIVIL REVISION PETITION NO. 4088 OF 2007 - - - Dated:- 14-9-2007 - L. NARASIMHA REDDY, J. K. Venkata Ramana for the Petitioner. ORDER 1. The responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly question that arises for consideration in this civil revision petition is as to whether the suit instituted by the respondents is covered by section 22 of the Act. 5. The Parliament enacted the Act with an object of timely detection of sick and potentially sick companies, owning industrial undertakings, the speedy determination by a Board of experts, of the necessary measures, which need to be taken in respect of such companies, and the expeditious enforcement of the measures, so determined. Sick Industrial Company is defined under section 3( o ) of the Act as a company registered for not less than five years and has, at the end of any financial year, the accumulated losses equal to or exceeding its entire net worth. Sections 4 to 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken over or changed in pursuance of any scheme sanctioned under section 18, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956) or any other law or in the memorandum and articles of association of such company or any instrument having effect under the said Act or other law ( a )it shall not be lawful for the shareholders of such company or any other person to nominate or appoint any person to be a director of the company; ( b )no resolution passed at any meeting of the shareholders of such company shall be given effect to unless approved by the Board. (3) Where an inquiry under section 16 is pending or any scheme referred to in section 17 is under preparation or during the period of consideration of any scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of any right, privilege, obligation and liability suspended or modified by such declaration, and all proceedings relating thereto pending before any court, Tribunal, officer or other authority shall remain stayed or be continued subject to such declaration; and ( b )on the declaration ceasing to have effect ( i )any right, privilege, obligation or liability so remaining suspended or modified, shall become revived and enforceable as if the declaration had never been made; and ( ii )any proceeding so remaining stayed shall be proceeded with, subject to the provisions of any law which may then be in force, from the stage which had been reached when the proceedings became stayed. (5) In computing the period of limitation for the en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for some period, to ensure that the scheme formulated by the Board or the appellate authority is not hampered or hindered, in any manner. The effect of section 22 of the Act, though limited in its tenure, would certainly be adverse to the interests of many, who are otherwise entitled to institute the proceedings against the sick industrial company. Though the section is couched with a non obstante clause, it needs to be interpreted strictly and the rights, which the individuals or agencies may have against the company, cannot be trampled indiscriminately. Much would depend upon the nature of proceedings, that are instituted against the company. Broadly stated, if they do not have the effect of eroding into the assets or paid up capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontractual and tortuous liability is too well-known, to be elaborated. Breach of a contract gives rise to the entitlement, to recover liquidated damages or other consequences, agreed to by the parties. A tort, on the other hand, if committed, enables a wronged person, to seek redressal of his rights. Quantification of the damages, in such cases, is only a measure of retribution of the wrong in terms of money, than payment of any liquidated sum. When contractual obligations, under a lease agreement, or a negotiable instrument, are kept outside the protective umbrella of section 22(1) of the Act, the suit, filed by an individual, against a sick industrial company, a suit for damages, on account of defamation, can, by no stretch of imagination ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
