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TMI Blog2015 (10) TMI 1523X X X X Extracts X X X X X X X X Extracts X X X X ..... lenders' in the report of the reference made to the CDR cell. It is the case of the Applicant that the company has not proposed any scheme for discharge of its outstanding claim. It is submitted that the company inter alia proposes to dispose of its assets in pursuance of the CDR scheme and also otherwise without making any payment to the Applicant and with a view to defeat the legitimate claim of the Applicant. It is submitted that the financials of the company present a dismal picture of the financial standing of the company and its ability to continue as a going concern. The Applicant has, in the premises, sought an order of provisional liquidator or at any rate, protective relief concerning the company's property and assets. 3. This court has held in a number of matters that mere existence of a CDR scheme, which is under implementation, is no answer by itself to a winding up petition. In any event, even in the face of a CDR scheme, though this Court may defer the admission of a winding up petition, nothing prevents this court from passing appropriate protective orders concerning the property of the company. In the premises, this Court, in its order dated 31 July 2015, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriods in the aggregate do not exceed fifteen years. 4. Power to prescribe Industrial relations and other facilities temporarily for relief undertaking. (1) Notwithstanding any law, usage, custom, contract, instrument, decree, order, award, submission, settlement, standing order or other provision whatsoever, the State Government may, by notification in the Official Gazette, direct that - (i) in relation to any relief undertaking and in respect of the period for which the relief undertaking continues as such under subsection (2) of section 3- (a) all or any of the laws in the Schedule to this Act or any provisions thereof shall not apply (and such relief undertaking shall be exempt therefrom), or shall, if so directed by the State Government, be applied with such modifications (which do not however affect the policy of the said laws) as may be specified in the notification ; (b) all or any of the agreements, settlements, awards or standing orders made under any of the laws in the Schedule to this Act, which may be applicable to the undertaking immediately before it was acquired or taken over by the State Government or before any loan, guarantee or other financial assist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .U. Act do not apply or apply with such modifications as may be specified in the notification. Secondly, agreements, awards etc. made under the laws specified in the schedule applicable to such undertaking immediately before its acquisition or take-over by the State Government or provision of loan, financial assistance, etc. to it by the Government, stand suspended in operation or are applied to it with such modifications as specified. In the result, the rights, liabilities, etc. vis-a-vis such undertaking are determined or are enforceable in accordance with the above two consequences and the notification. Thirdly, rights, privileges or liabilities, etc. accrued or incurred by the undertaking before its declaration as a relief undertaking remain suspended and proceedings in connection therewith stayed. These rights, liabilities, etc. revive on the notification ceasing to have force and proceedings which were stayed can then continue. 6. The submission of learned counsel for the Respondent is that this protection is even larger than SICA, since not only the proceedings, but even underlying contracts are suspended. That is not quite correct. Only those contracts, settlements, etc. w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whatsoever notwithstanding." The question in that case was, whether on a true construction of Section 5 of that Act (which was in pari materia with Section 4 of the B.R.U. Act), execution of the decree could be proceeded with against the undertaking. The M.P. Court rejected the contentions of the undertaking and allowed the execution to continue. The M.P. High Court upheld the trial Court order, holding that the determination of rights between the parties had to be in accordance with the substantive law applicable to the State of Maharashtra and once such rights were adjudicated upon as per that law, such rights could not again be subjected to and/or regulated by any law in the State of M.P. to which the decree was sent only for execution. The Supreme Court reversed the M.P. High Court order, holding that the execution in the M.P. Court had to remain stayed. This is what the Supreme Court had to say : "A close scrutiny of the above section reveals that Section 5 has a free field of operation unfettered by any limitation. The section is not happily worded. What the section intends to convey, according to us, if the words are re-arranged, would be as follows: "Notwithstanding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can question its validity, nor can refuse to execute it after the period is over. To direct execution of the decree in the teeth of Section 5 would be to encourage filing of suits in Courts outside Madhya Pradesh, secure decrees and defeat the purpose of the Act. We do not think that such an abuse is permissible in the face of Section 5 of the Act. We have, therefore, to answer this question in favour of the appellant." As the Supreme Court held in Binod Mills' case till the notification of relief undertaking operates, the proceedings for execution remain in suspended animation for the period mentioned in the notification and can continue only after such period. 8. Relying on the judgment in Binod Mills' case, our Court in Baroda Rayon Corporation's case (supra) held that State legislation of Gujarat declaring an undertaking as a relief undertaking would cover properties of the undertaking within the State of Gujarat and execution against such properties could not be proceeded with. 9. These judgments do not lay down that as long as proceedings remain stayed, no interim relief can be granted to a creditor or claimant against the undertaking declared as a relief unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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