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1997 DIGILAW 937 (DEL)

WEKCAST STILS LIMITED v. CEMENT CORPORATION OF INDIA

1997-11-20

K.S.GUPTA

body1997
K. S. Gupta, J. ( 1 ) CEMENT Corporation of India Limited respondent has filed this application under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, alleging that K. C. Sodhia was appointed as sole arbitrator to adjudicate the disputes relating to purchase order No. 4/81/6 (14) /81 -MMO dated June 12,1981 regarding supply of griding media and he gave his award dated June 30,1992 directing the respondent to pay Rs. 1,34,283. 00 within 30 days to the petitioner. On receipt of the notice of filing of the award, respondent filed objections under Sections 30 and33 of the Arbitration Act for setting the aforesaid award. It is alleged that the respondent is a Government Company and was REFERRED TO to BIFR under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985. By a latter dated August 8,1996, the Board has declared the respondent a sick company and IFCI has been appointed as operating agency. It is prayed that under Section 22 of the said Act proceedings in this case by stayed. Alongwith the application copy of the said letter dated August 8,1996 has also been filed. ( 2 ) IN the reply petitioner has not denied that the respondent was REFERRED TO to BIFR under Section 15 and by a letter dated August 8,1985. Board has declared the respondent a sick company and IFCI has been appointed as operating agency, as alleged. It is stated that the award is still to be made the rule of the court. Only the proceedings to execute the decree, if any, are liable to be stayed under Section 22. ( 3 ) IN support of the contention that on identical facts further proceedings were stayed under Section 22 (1) of the Act, Shri S. K. Taneja has invited my attention to a decision in Lloyd Insulations (India) Ltd. Vs. Cement Corporation of India. , 66 (1997) DLT 858. ( 4 ) PROVISIONS contained in aforesaid Section 22 (1) came to be considered by the Supreme Court in M/s. Shree Chamudi Mopeds Ltd Vs. Church of Shouth India Trust Association, Madras, AIR 1992 SC 1439 . On pages 1444-45 of the report it was held:- "in this regard, it may be mentioned that the following proceedings only are automatically suspended under Section 22 (1) of the Act. Church of Shouth India Trust Association, Madras, AIR 1992 SC 1439 . On pages 1444-45 of the report it was held:- "in this regard, it may be mentioned that the following proceedings only are automatically suspended under Section 22 (1) of the Act. : (1) Proceedings for winding up of the industrial company; (2) Proceedings for execution, distress or the like against the properties of the sick industrial company; and (3) Proceedings for the appointment of receiver. EVICTION proceedings initiated by a landlord against a tenant company would not fall in categories (1) and (3) REFERRED TO to above. The question is whether they fall in category (2 ). It has been urged by the learned counsel for the appellant company that such proceedings fall in category (2) since they are proceedings against the property of the sick industrial company. The submission is that the leasehold right of the appellant-company in the premises leased out to it is property and since the eviction proceedings would result in the appellant-company being deprived of the said property, the said proceedings would be covered by category (2 ). We are unable to agree. The second category contemplates proceedings for execution, distress or the like against any other properties of the industrial company. The words `or the like have to be construed with reference to the preceding words, namely, `for execution, distress which means that the proceedings which are contemplated in this category are proceedings whereby recovery of dues is sought to be made by way of execution, distress or similar process against the property of the company, (emphasis supplied) proceedings for eviction instituted by a landlord against a tenant who happens to be a sick industrial company, cannot in our opinion be regarded as falling in this category. " ( 5 ) INDISPUTABLY objections under Sections 30 and 33 of the Arbitration Act filed by the respondent are yet to be decided and the stage for recovery of dues by way of execution, distress or similar process against the property of the respondent has not reached so far. That being the position, in view of the ratio in M/s. Shri Chamudi Mopeds Ltd s case (Supra) proceedings in the cases cannot be stayed under aforesaid Section 22 (1 ). That being the position, in view of the ratio in M/s. Shri Chamudi Mopeds Ltd s case (Supra) proceedings in the cases cannot be stayed under aforesaid Section 22 (1 ). Said decision rendered by the Apex Court seems to have been not brought to the notice of the learned Single Judge who decided Lloyd Insulations (India) Ltd s case (supra ). Application is dismissed being misconceived. ( 6 ) LIST on March, 1998, for arguments.