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TMI Blog2019 (8) TMI 1903X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore it would not be hit by Section 22 (1) of the SICA. Significantly, there is no denial to the averments made in the Plaint, the contents of the Plaint have to be presumed to be correct. The final decision of the Court is only determinative of the indebtedness of the Applicant. The suit even without the permission of BIFR was maintainable on the date of filing. It is further significant to note that Plaintiff on becoming aware of the reference before BIFR, filed an application before BIFR on 23rd July, 2012, seeking its permission to execute the decree. The Defendant was provided an opportunity to file a reply to the said application, however, the same was not filed. Plaintiff was impleaded in the said proceedings before BIFR on 12th December, 2012. Defendant came out of purview of the Act on 18th September, 2014. This clearly shows the Judgment Debtor was aware of the decree passed by this court since 2012. After coming out of the purview of SICA, from 2014 to 2019 the Judgment Debtor remained silent. The conduct of the Defendant is completely laid-back and lackadaisical. There is no ground for interference. Application is dismissed. - Hon'ble Mr. Justice Sanjeev Nar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed before the High Court of Bombay seeking a summary decree against the Decree Holder and the applicant. 4. Learned counsel for the Plaintiff/Decree Holder strongly opposes the application and submits that the Judgment Debtor/Defendant was all throughout aware of the present proceedings and after appearing in the suit on few dates, it deliberately chose to stay away from the proceedings. He further submits that the negligence of the counsel cannot be a ground for seeking setting aside the judgment decree. Regarding the plea of Section 22 of SICA, he controverted the contentions of the Applicant by relying upon the judgments of this Court in Saketh India Limited v W. Diamond India Limited 2010 SCC OnLine Del 1786 and M/s Ralson Industries Ltd (now Known as Da Rubber Industries Ltd.) v. M/s Adhunik Transport Organisation Ltd 2013 SCC OnLine Del 28 and argued that a suit for recovery, like the present one is not covered by the said provision. 5. A perusal of the record reveals that pursuant to order passed in I.A. No. 22/2000, the Defendant was served with the summons by way of publication. The Defendant appeared before the court through counsel on 28th November, 2000 and 15th Feb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffidavit was granted to the Defendant, subject to payment of costs of Rupees 5,000/-. Since the directions were not complied with, costs were increased to Rupees 10,000/- and another chance for filing the said Affidavit before 24.8.2009 was permitted. 3. On 24.8.2009, the Court, keeping in perspective the plentitude of opportunities granted but not availed of by the Defendants to file the required Affidavit, as well as the Defendants failure to pay costs, dismissed both the Applications. The Court took into consideration that delay in entering appearance had not been condoned and, therefore, opined that all the averments in the Plaint were deemed to have been admitted, and decreed the Suit. This Appeal arises before us in these circumstances. 4. We are not persuaded by the arguments of learned counsel for the Appellant that the provisions of SICA should be applied to the facts of the present case. Assuming that there is a prohibition placed, and not just a moratorium, placed by Section 22 of SICA on legal proceedings against a company coming within the pale of that statute, it remained the legal duty of the Appellant to substantiate that it had qualified for that protection. For di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n lead to. In a nutshell, where the net worth of a company is reduced to a negative, and the amelioration that is sought is for reviving the company rather than winding it up, the recourse to the Act would be legitimate. There is no justifiable reason, therefore, for all legal proceedings to be immediately even held in abeyance, if not dismissed. We are mindful of the fact that Parliament has incorporated an amendment in the Section with effect from 1.2.1994 in these words - 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 . It appears to us that the phrase recovery of money must be construed ejusdem generis and accordingly recovery proceedings in the nature of execution or any other coercive enforcement that has been ordained to be not maintainable. We do not find any logic in holding legal proceedings to be not maintainable, or to be liable to be halted unless, even if the debt sought to be proved in the Plaint ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, the proceedings against the company are necessarily to be of the nature of 'execution, distress or the like'. Paras 6 and 14 of the said judgment being relevant are reproduced here-in-under: 6. Courts, however, have always been alive to the possible mischief that invocation of SICA can lead to. In a nutshell, where the net worth of a company is reduced to a negative, and the amelioration that is sought is for reviving the company rather than winding it up, the recourse to the Act would be legitimate. There is no justifiable reason, therefore, for all legal proceedings to be immediately even held in abeyance, if not dismissed. We are mindful of the fact that Parliament has incorporated an amendment in the Section with effect from 1.2.1994 in these words - 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 . It appears to us that the phrase recovery of money must be construed ejusdem generis and accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading of the provision cannot but lead to any other conclusion. If there are unique circumstances, which would justify the execution of the decree, even in the face of the registration of a Scheme under SICA, the proper recourse possible would be to obtain the permission or consent of the Board or the Appellate Authority as the case may be. Any other interpretation would completely annihilate and defeat the intendment of Parliament . 4. There being no credible admission by the petitioner of the amount in the present suit, in view of the aforesaid decision in Saketh India Ltd. (supra), no permission is required under Section 22 of SICA to continue the present suit. The ratio of the decision of the Supreme Court in the case of Raheja Universal Ltd. (supra) is that the proceedings, which are affected by Section 22 (1) of the SICA are the proceedings in the nature of execution, distress or the like, and that it was to depend upon the facts of each case as to whether the suit was hit by Section 22. In other words, all suits including that of recovery are not hit by Section 22 (1) of the SICA, but, only those suits which have the effect of execution, distress or like action against the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The expression the like has to be read ejusdem generis to the term proceedings . The words execution, distress or the like have a definite connotation. These proceedings can have the effect of nullifying or obstructing the sanctioning or implementation of the revival scheme, as contemplated under the provisions of the Act of 1985. This is what is required to be avoided for effective implementation of the scheme. The other facet of the same Section is that, no suit for recovery of money, or for enforcement of any security against the industrial company, or any guarantee in respect of any loan or advance granted to the industrial company shall lie, or be proceeded with further without the consent of the BIFR. In other words, a suit for recovery and/or for the stated kind of reliefs cannot lie or be proceeded further without the leave of the BIFR. Again, the intention is to protect the properties/assets of the sick industrial company, which is the subject matter of the scheme 9. From the reading of the aforesaid judgments, it emerges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they should have started appearing in person but they did not bother to inquire from their previous counsel as to why he stopped appearing w.e.f. 10.11.2014. If they were informed by their counsel after the decision in the suit and copy of order was not supplied, they should have gone to lawyer personally or to court to obtain copies of orders or should have taken assistance of other lawyer. But they were not serious at all. 13. The litigant owes a duty to be vigilant of his rights and is also expected to be equally vigilant about the judicial proceedings pending in the court of law against him or initiated at his instance. The litigant cannot be permitted to cast the entire blame on the Advocate. It appears that the blame is being attributed on the Advocate with a view to get the delay condoned and to avoid the decree. After filing the civil suit or written statement, the litigant cannot go off to sleep and wake up from a deep slumber after passing a long time as if the court is storage of the suits filed by such negligent litigants. Putting the entire blame upon the advocate and trying to make it out as if they were totally unaware of the nature or significance of the proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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