9911796707
TMI Blog2010 (7) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the petitioner. 2. Shri Piyush Bhatnagar, learned counsel for the respondents. 3. Many a grounds have been raised by the petitioner in this petition under article 226 of the Constitution wherein the challenge is to an order dated 16-11-2009, whereby in a proceeding drawn under the provisions of the Madhya Pradesh Lok Dhan Shodhya Rashion Ki Vasuli Adhiniyam, 1987, at the instance of respondent No. 1 for recovery of Rs. 25,00,000 along with interest Rs. 37,68,033 total Rs. 62,68,033 the Naib Tahsildar, Bairagarh, Bhopal turned down the objection raised by the petitioner for stay of proceedings in lieu of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (referred to as "the SICA, 1985"). 4. The petitioner, however, has confined its challenge only to the extent that the proceedings under Adhiniyam 1987 to remain suspended till enquiry is pending under the SICA, 1985 as per section 22 of the SICA, 1985. 5. The facts relevant for the present are that financial assistance of Rs. 25 lakhs was extended by the respondent to the petitioner to set up its industrial unit for manufacturing of dye intermediates at village Raipur Nayakhera, District S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he registration of reference the petitioner-company became entitled for protection as available under section 22 of the SICA, 1985, whereunder no suit for recovery of money or for the enforcement of loans or advance granted to the industrial company shall lie or be proceeded further. 8. It is contended that since the proceedings initiated against the petitioner under the Adhiniyam, 1987 in pursuance to R.R.C. issued by respondents was after 25-9-2002 (proceedings under the Adhiniyam, 1987 were initiated on 27-7-2009), the same would not lie as per the stipulations under section 22 of the SICA, 1985. It is accordingly contended that the proceedings as drawn against the petitioner are liable to be set aside because of the bar created under section 22 of the SICA, 1985. 9. Learned counsel appearing for the respondents vehemently opposing the plea raised by the petitioner on the ground that it is as per the terms contained in the indemnity bond that the recovery proceedings were initiated against the petitioner as per the Adhiniyam, 1987 and the bar as stipulated under section 22 does not get attracted in such matters. Reliance is placed on the judgment in Dy. CTO v. Corromandal Ph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme, the Board may by order declare with respect to the sick industrial company concerned that the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force, to which such sick industrial company is a party or which may be applicable to such sick industrial company immediately before the date of such order, shall remain suspended or that all or any of the rights, privileges, obligations and liabilities accruing or arising thereunder before the said date, shall remain suspended or shall be enforceable with such adaptations and in such manner as may be specified by the Board : Provided that such declaration shall not be made for a period exceeding two years which may be extended by one year at a time so, however, that the total period shall not exceed seven years in the aggregate. (4) Any declaration made under sub-section (3) with respect to a sick industrial company shall have effect notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other law, the memorandum and articles of association of the company or any instrument having effect under the said Act or other l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany for the financial year make a reference to the Board for determination of the measures which shall be adopted with respect to the company. Section 16 obliges the Board to make such enquiry as it may deem fit for determining whether any industrial company had become a sick industrial company in accordance with the procedure prescribed therein. The Explanation to sub-section (3) of section 16 was inserted by Act No. 12 of 1994 which provides : 'Explanation. For the purposes of this sub-section, an inquiry shall be deemed to have commenced upon the receipt by the Board of any reference or information or upon its own knowledge reduced to writing by the Board.' It follows, therefore, that from the date of submission of the reference under section 15, an enquiry shall be deemed to have been commenced for the purposes of section 22 of the Act. This court dealt with this aspect of the matter in Real Value Appliances Ltd. v. Canara Bank [1998] 93 Comp. Cas. 26 ; [1998] 5 SCC 554 and held as under (page 37) : 'In our view, when section 16(1) says that the BIFR can conduct the inquiry "in such manner as it may deem fit", the said words are intended only to convey that a wide discr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any loans or advance granted to the industrial company,shall lie or be proceeded with except with the consent of the Board or the Appellate Authority under the said Act. For our purposes, therefore, the relevant words are : 'no suit ... for the enforcement ... of any guarantee in respect of any loans or advance granted to the industrial company' shall lie without the consent of the Board or the Appellate Authority. The words are crystal clear. There is no ambiguity therein. It must, therefore, be held that no suit for the enforcement of a guarantee in respect of a loan or advance granted to the concerned industrial company will lie or can be proceeded with without the sanction of the Board or the Appellate Authority under the said Act. It is not possible to read the relevant words in section 22 as meaning that only a suit against the industrial company will not lie without such consent. There is no requirement in section 22, as analysed above, that, to be covered thereby, a suit for the enforcement of a guarantee in respect of a loan or advance to the industrial company should be against the industrial company". (p. 23) 13. Though the respondents have placed reliance on the j ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
