National Textiles Corpn. (M. P. ) Ltd. v. Indrajit Singh
1998-11-27
N.K.JAIN
body1998
DigiLaw.ai
JUDGMENT 1. - This revision by the petitioner/judgment debtor is directed against the order, dated 24-8-1998 passed by Additional District Judge, Indore, in Execution Case No. 6B of 1997-98, dismissing petitioner's application under section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 ('the Act'). 2. On a suit filed by the respondent against the petitioner-corporation, a decree for payment of Rs. 62,509.80 has been passed and which has been put to execution by the respondent in the Court of Additional District Judge, Indore. A warrant for attachment of the property of the petitioner- corporation was issued by the executing Court. On 24-7-1998, when the bailiff of the Court sought to execute the warrant, the concerning officer of the petitioner-corporation issued a cheque in respondent's name for the aforesaid amount and handed it over to the Court's bailiff. On 25-7-1998, an application was made on behalf of the petitioner before the executing Court under section 22 of the Act praying for stay of the execution proceedings. It was prayed that the cheque so issued may not be handed over to the respondent decree-holder for encashment. The application was resisted by the respondent. The learned Additional District Judge dismissed the application holding that in the present case, the provisions of the Act were not attracted. 3. I have heard Shri S.S. Samvatsar, the learned counsel for the petitioner and Shri S.C. Bagdiya, senior counsel with Shri Ajay Bagdiya, for the respondent. 4. It is not disputed before me that a reference under section 15 of the Act has been made by the Board of directors of the petitioner's company before the Board for Industrial and Financial Reconstruction ('BIFR') and the Board after making enquiry under section 16 of the Act, has directed for preparation of scheme under section 17. Under the circumstances, Section 22 was attracted in the case. Section 22 provides that where any such proceedings under section 16 or 17 is initiated with respect to an industrial company, no proceedings for execution, distress or the like against any of the properties of the company shall lie or be proceeded with further, except with the consent of the Board. In the instant case also the execution proceedings initiated by the respondent decree-holder against the petitioner-company could not lie or be proceeded with further, except with the consent of the Board.
In the instant case also the execution proceedings initiated by the respondent decree-holder against the petitioner-company could not lie or be proceeded with further, except with the consent of the Board. It is nobody's case that any such consent was obtained by the respondent. 5. It is, however, contended by Shri Bagdiya, the learned senior counsel for the respondent, that the Court below having issued distress warrant and the respondent thereupon having passed a cheque for payment of money to the respondent, nothing remains to be done in the execution case and the application filed by the petitioner/judgment debtor was, therefore, rendered infructuous. I am not persuaded by the agreements. 6. The executing proceedings are still pending against petitioner and the cheque issued by the petitioner-company has yet not been handed over to the respondent and encashed. Handing over of cheque by the Court to the respondent is also a part of the execution proceedings and the Court having come to know about the reference proceeding under the provisions of the Act, is now bound to keep off its hands and to stop all further execution proceedings unless consented to by the BIFR. The Court below was clearly wrong in holding that the provision of section 22 was not attracted in the case. 7. In the result, this revision petitioner succeeds and is allowed. The order impugned is set aside and it is directed that further proceedings in the said execution case shall remains suspended as envisaged by section 22. 8. There shall be no orders as to costs. *******