Managing Director, Bharat Wagon & Engineering Company Ltd. v. Modi Welding Electrodes Pvt. Ltd.
2004-08-09
body2004
DigiLaw.ai
ORDER This appeal is directed against the order dated 25.2.2004 passed by the learned Single Judge by which he has allowed the writ application being CWJC No. 4456 of 2002 filed by private respondent for payment of dues against the materials supplied to the appellant by it. 2. The question involved in this case is that in accordance with the provision contained under the Sick Industrial Companies (Special Provisions) Act, 1985, the inquiry is pending and in view of the provisions contained under section 22(1) of the Act the writ petition filed before this Court for direction for payment of money was maintainable or not. 3. To appreciate the point it is necessary to set out the provisions of Section 22(1) of the Act. "22. Suspension of legal proceedings, 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, not with standing anything contained in the Companies Act, 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 here of and no suit for the recovery of money Of 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." 4. The said section provides inter alia that no suit for recovery of the money etc. shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the appellate authority so long as the enquiry is pending before the competent authority. 5. The suit means any proceeding pending in the court of law.
shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the appellate authority so long as the enquiry is pending before the competent authority. 5. The suit means any proceeding pending in the court of law. Filing of writ application is also covered by the word 'suit' and in our view, once the proceeding is pending the claim for recovery was not maintainable in terms of section 22(1) of the Act. In that view of the matter the learned Single Judge was not right in directing for recovery of the money from the appellant 6. Accordingly, the impugned order is set aside with this observation that it will open for the writ petitioner-respondent to seek consent of the Board before moving for recovery of the amount. 7. In the result, the appeal stands allowed with the aforesaid observation.