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TMI Blog1987 (5) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... notification No. F-17-87-79-XI-B-1, dated 15-11-1980, extended from time to time by subsequent orders, the relief so given to continue till 15-11-1987. The respondent filed a summary suit against the appellant in the Bombay High Court on its original side, as summary suit No. 124 of 1986 claiming a decree for Rs. 12,12,327.50, with interest and costs. The appellant did not contest the suit. The suit was accordingly decreed. The respondent got the decree transferred for execution to the District Judge, Ujjain on 26-9-1986 and then applied for execution of the decree. The appellant resisted execution by filing objection pleading that it was a relief undertaking under the Act, the benefits under which Act were available till 15-11-1986 at the time the objection was filed (now upto 15-11-1987) and that the decree could not therefore be executed against it in view of the bar contained in Section 5 of the Act. The respondent admitted the appellant to be a relief undertaking. However, it was contended that the District Judge had no jurisdiction to entertain any objection to the execution of the decree, validly passed by the Bombay High Court The Execution Court, it was contended, could n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s some express provisions of law in Maharashtra empowered the Court to restrain him from executing the same. Such fight cannot again be subjected to and/or regulated by any law of the State of M.P. to which the decree is sent only for execution. Any provision to suspend such right of execution of a valid decree does partake of the character of substantive law and cannot be interpreted as merely a rule of procedure within the meaning of Sec. 40 of the C.P.C. prescribing the manner of execution. It has, therefore to be held on the authority of Ramavtar's case (supra) that the provision in Section 5 of the Adhiniyam pertains to the domain of substantive law and cannot be said to relate to the realm of adjective or procedural law. The petitioner, therefore. has no locus standi to seek shelter under Section 5 of the Adhiniyam, against the execution of the decree passed by the Bombay High Court, it being a substantive law of the State of M.P. and not merely a procedural law, within the meaning of Section 40 of the C.P.C. or procedural power under Section 42 ibid governing the mode of execution. The suit in the Bombay High Court was not liable to be stayed and so is the decree therein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; "2(3) "relief undertaking" means a State industrial undertaking in respect of which a declaration under Section 3 is in force: 2(4) "State industrial undertaking" means an industrial undertaking. (a) which is started or which, or the management of which is under any law or agreement acquired or otherwise taken over by the State Government or by a Government company and is run or proposed to be run by, or under the authority of, the State Government or a Government company; or (b) to which any loan, advance, or grant has been given, or in respect of any loan whereof, a guarantee has been given, by the State Government or Government company; or (c) in respect of which a notified order under the Industries (Development-and Regulation) Act, 1951 (No. 65 of 195 1) is in operation." Declaration of a relief undertaking is provided for in Section 3 which reads as follows: "The State Government may, if it is satisfied that it is necessary or expedient so to do in the public interest, with a view to enabling the continued running or re-starting of a State industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) The Madhya Pradesh Industrial Employment (Standing Orders) 1961 (No. 26 of 1961). Now we come to the important Section with which we are vitally concerned in this appeal and that is Section 5 which reads as follows: "5. Suspension of suits or other legal proceedings against relief undertakings: As from the date specified in the notification under sub-section (1) of section 3, no suit or other legal proceedings shall be instituted or commenced or, if pending, shall be proceeded with against the industrial undertaking during the period in which it remains a relief undertaking any law, usage, custom, contract, instrument, decree, order, award, settlement of other provisions whatsoever notwithstanding." What we are called upon to decide in this case is whether proceedings taken in the Madhya Pradesh Court for execution of a decree validly obtained in the Bombay High Court has to be or can be stayed under this Section. We have already seen that the maximum period of the stay is seven years and this period will expire on 15-11-1987. Section 7 deals with suspension or modification of certain remedies, rights etc. and reads as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion would take in execution proceedings. It is not disputed that the Section bars institution of suits and starting of other proceedings. What is disputed is that expression "other legal proceedings" will not take in execution proceedings. The contention is grounded on the general principle that the execution court cannot go behind a valid decree and that the execution court cannot, therefore, refuse to execute it. It is admitted that the decree obtained from the Bombay High Court is a valid decree. That being so, law should take its course and execution should proceed. It is by virtue of the enabling provisions contained in Sections 40 & 42 of the Civil Procedure Code that this validly obtained decree got transferred to the Court in Madhya Pradesh. It is contended that by the mere transfer of this decree in accordance with the procedural law, its validity does not disappear nor its binding force cease to exist. We find difficulty in accepting this contention. If we are to accept this submission, it would be rendering section 5 of the Act nugatory and to destroy the benefits sought to be conferred by that section. Nobody questions the validity of the decree. All that is sought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an and the guarantors. This company had been declared by the State of Rajasthan as a relief undertaking under Section 3 of the Act. Section 2 of the Act barred institution or commencement of suit or other legal proceedings against a relief undertaking. This section contains an explanation as to what "legal proceedings" are. Relying upon this section, the company and the guarantors pleaded that the suit was liable to be stayed. The question before the High Court was whether the Act had extra territorial operation. The case was heard by a Single Judge who referred it to a Division Bench in view of the conflict between the Allahabad High Court and the Punjab & Haryana High Court. The High Court referred to Section 1(2) of the Act which stated that the Act "extends to the whole of the State of Rajasthan" which was an explicit declaration of the legislature about the territorial application of the Act and held that the contention of the debtors that the suit in Delhi Court ought to be stayed was unsustainable. We are here confronted with a different situation. If what is contended before us had been contended before the Bombay High Court, same result would have followed. We have here a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uidator has been appointed, no suit or other legal proceeding shall be proceeded with or commenced against the company except by leave of the Court, and subject to such terms as the Court may impose." The Federal Court discussed this question at page 56 as follows: "That still leaves open the question whether action under Section 46 of the Indian Incometax Act is covered by the phrase "other legal proceeding." Clearly it is not a proceeding in an ordinary Court of law. But we see no reason why in British India no "legal proceeding" can be taken otherwise than in an ordinary Court of law, or why a proceeding taken elsewhere than in an ordinary Court of law, provided it be taken in a manner prescribed by law and in pursuance of law or legal enactment, cannot properly be described as a "legal proceeding." If it be considered that the effect of the Income-tax authorities putting the machinery of s. 46 of the Income-tax Act in motion for the collection of arrears of income-tax is to bring into operation all the appropriate legal enactments relating to the collection of land revenue in the Province concerned, it is, in our ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime. It is not a permanent relief. The Government are interested to see that the investments made by it and other financial institutions do not get frittered away by avoidable litigation and other legal proceedings. The bar contained in Section 5 by way of suspension of suits or other legal proceedings is thus an absolute bar but only for the period contemplated by the Act. The limited question that we have to answer is as to whether Section 5 operates even against execution of decrees obtained against the relief undertaking by its creditors outside the State of Madhya Pradesh. The learned counsel for the respondent brought to our notice decisions reported in AIR 1948 Patna 245 and AIR 1953 Mysore 37 and similar other decisions to contend that the execution court cannot, while executing decrees, adopt a procedure under any special law available in the State in which the execution court is situate, in relation to decrees obtained outside the States. For example, suppose a decree is obtained in Madras and it is transferred to Madhya Pradesh. Suppose again that in Madhya Pradesh, there is an enactment to scale down the decree amount either in instalments or to wipe out the debt of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur view, the reading of the Sections does not permit such an interpretation. The object of Section 5 is to protect the relief undertakings from all suits and legal proceedings. This protection is to end on 18-11-1987. We hold that the High Court was in error in allowing execution to proceed. Before parting with this case, we wish to observe that the powers that be will have to evolve a more acceptable procedure while dealing with sick units. We share the concern expressed in high places about the loss that Government incurs in trying to rescue sick units. Invariably, the amounts pumped in are ultimately lost. The machineries of the unit in question are as old as 1920. One can easily imagine the nature of the products that come out of a unit like this. What purpose will be served by giving life to such units by providing artificial respiration The concern for workers must be matched with the concern for modernisation also. The labour should not be left to the mercy of such sick units. The Government will have to evolve a more acceptable and intelligent policy, to help the labour and for modernisation of industry. These units like "flaring tapers brightening as they waste" with temp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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