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1995 DIGILAW 75 (DEL)

PREM AGGARWAL v. LALIT FABRICS

1995-01-18

JASPAL SINGH

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JASPAL SINGH ( 1 ) THE question revolves around sub section 1 of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 as amended by the Sick Industrial Companies (S. P.) Amendment Act, 1993. It runs as under: "22. Suspension of legal proceeding s contracts, etc.- (1) Where in respect of an industrial company, an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial company is pending, then, notwithstanding, anything contained in the Companies Act, 1956 (1 of 1956), or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company 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 and 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. " ( 2 ) THE plea of the defendant is that in view of the provision notice above, the suit instituted by the plaintiff under Order 37 of the Code Civil Procedure for recovery of money cannot be proceeded further except with the consent of the Board for Industrial and Financial Reconstruction and that till such consent is obtained the suit ought be stayed. ( 3 ) THE contention of the defendant has not found favour with the plaintiff. It was argued that the suit being under Order 37 of the Code of Civil Procedure and no application for leave to defend having be moved, a valuable right had accrued to the plaintiff and since only decree remains to be passed, section 22 of the Act would not come into play was further argued that since only the formality of passing of the decree remained, the case would not be covered by the words "be proceed with further" as no further "proceedings" were required to be taken. ( 4 ) A bare perusal of sub-section (1) of section 22 which alone 1 relevance to the questions raised would show that it is applicable, respect of an industrial company, where: (I) an inquiry is pending under section 16; or (ii) a scheme, referred to in section 17 is under preparation or consideration; or (iii) a sanctioned scheme is under implementation; or (iv) where an appeal relating to the industrial company is pending under section 25. For the operation of the bar imposed by section 22 one of the matters referred to therein should band pending and, during arguments it was not disputed that this condition stood satisfied. ( 5 ) THE Act, it need hardly be mentioned, is a special statute. Its object is to revive or rehabilitate such industries which have gone sick on account of economic or other related reasons. Of course, by way of a remedy or with a view to facilitate revival of the sick unit, the Act provides also for giving of financial assistance. Sub-section (1) of Section 22 of the Act has to be interpreted with this object in view and must, therefore, receive a broad construction. Any narrower construction, more especially of the word "to be proceeded with further", as suggested by the plaintiff would render the provision nugatory and defeat the remedial object sought to be achieved, that is, revival or rehabilitation of the sick industrial company. ( 6 ) ONE thing more. Except in a case of necessity, or the absolute intractability of the language used, even a draftsman s unskilfulness or ignorance of the law cannot be allowed to reduce a statute to a nullity where its main object and intention are clear. In Seaford Court Estates Ltd. v. Asher 1949-2 All E. R. 155 Denning LJ said: "when a defect appears a judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of Parliament. . . and then he must supplement the written word so as to give "force and life" to the intention of the legislature. A judge should ask himself the question how if the makers of the Act had. themselves come across this ruck in the texture of it, they would have strengthened it out? He must then do as they would have done. A judge should ask himself the question how if the makers of the Act had. themselves come across this ruck in the texture of it, they would have strengthened it out? He must then do as they would have done. A judge must not alter the material of which the Act is woven, but he can and should iron out the creases. "true, the above observations of Lord Denning were disapproved by the House of Lords in 1951 (1) E. R. 839 (HL), but the reasoning of Lord Denning was adopted by the Constitution Bench of our Supreme Court in M. Pentiah v. Muddalla Veeramallapa 1961 (2) SCR 295 and later approved in Bangalore Water Supply v. A. Rajappa, AIR 1978 SC 548 . However, unfortunately for the plaintiff, the language employed in sub-section (1) of section 22 of the Act is clear and unambiguous and thus, to borrow the words of Beg C. J. in Bangalore Water Supply v. A Rajappa (supra), it does not leave its intention "in much too nebulous or uncertain a state" leaving no chance for me to "step into the shoes of the legislature". ( 7 ) I am, therefore, clear in my mind that sub-section (1) of section 22 is attracted. To eschew the construction will lead to absurdity and make the provision nugatory. ( 8 ) FOR the reasons stated above, I allow the application and stay further proceedings. I may, however, make it clear that the plaintiff will be at liberty to seek the consent of the Board or as the case may be, the Appellate Authority.