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2011 DIGILAW 635 (JHR)

Lemos Cement v. Central Coalfields

2011-07-11

DHIRUBHAI NARANBHAI PATEL

body2011
ORDER D.N. Patel, J. 1. the Court-The present petition has been preferred for getting refund of the amount, deposited by the petitioner with the respondents against purchase of the coal, which was never refunded as the petitioner is a sick industrial company and even the respondents are admitting that the petitioner is required to be refunded the amount of Rs. 9,42,671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six), but, as the petitioner is a sick industrial company, the respondents are advised not to make the payment. 2. Learned counsel for the petitioner submitted that as per Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter to be referred to as 'the Act. 1985T there cannot be a coercive recovery against the sick company. In the facts of the present case, the respondents have to make the payment of the amount, already deposited by the petitioner and Section 22 of the Act, 1985 has no applicability, at all, in refund of the amount. 3. It is further submitted by learned counsel for the petitioner that the respondents have no claim against the petitioner. In much earlier point of time i.e. on 28th/ 29th March, 2006, the respondents have accepted the fact that the petitioner's amount of Rs. 9,42,671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six) is lying with the respondents and they have no claim against the petitioner, which is at Annexure-4 to the memo of the petition. Likewise, looking to Annexure-6, this very fact has been accepted by the respondents in paragraph 5 that the petitioner's amount of Rs. 9,42.671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six) is lying with the respondents and there is no claim of the respondents with the petitioner. Even as per Annexure-6/1, in petitioner's ledger as on 11th August, 2006, the aforesaid amount is shown as amount payable to the petitioner by the respondents and, therefore, the impugned order passed by the respondents dated 29th November, 2006 by rejecting the claim of the petitioner to refund amount deposited towards lifting of the coal, deserves to be quashed and set aside. Because of pendency of any matter before the Board of Industrial and Financial Reconstruction (B.I.F.R.) or pendency of an appeal before the Appellate Authority under the Act. Because of pendency of any matter before the Board of Industrial and Financial Reconstruction (B.I.F.R.) or pendency of an appeal before the Appellate Authority under the Act. 1985 has nothing to do with the refund of the amount. It appears that the respondents have not properly appreciated Section 22 of the Act, 1985, otherwise, rest of the facts have been admitted by the respondents that the amount has already been deposited by the petitioner and the respondents have no claim against the petitioner. 4. It is further submitted by learned counsel for the petitioner that the order passed by the B.I.F.R. has also been stayed by the Appellate Authority under the Act. 1985 and the matter has been remanded to the B.I.F.R. for fresh consideration of the claim Be as it may. This pendency and disposal of the appeal and remand before the B.I.F.R. cannot take away the right of the petitioner to get refund of the aforesaid amount and unnecessarily much time has been wasted by the respondents in grant of such an admitted amount of refund and. therefore, let the amount of Rs. 9.42.671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six) be directed to be refunded with an interest. 5. It is also submitted by learned counsel for the petitioner that taller than the claim of Rs. 9,42,671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six) has been made in paragraph 15 of the memo of this petition, which is at Rs. 10.72,451/- but, the petitioner is restricting its claim only to the extent to which it is admitted by the respondents i.e. at Rs. 9,42,671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six) for getting refund with interest, otherwise already a notice was given by the petitioner at Annexure-5 for higher claim than what is admitted by the respondents. 6. I have heard learned counsel for the respondents, who has submitted that it is true that the petitioner has deposited Rs. 6. I have heard learned counsel for the respondents, who has submitted that it is true that the petitioner has deposited Rs. 9,42.671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six) for lifting the coal and the respondents are not claiming any amount from the petitioner, but, as the petitioner is a sick industrial company and as the matter is pending before B.I.F.R. as well as before the Appellate Authority under the Act, legal advise was sought and as per the legal advise, the amount was not refunded to the petitioner. These, facts have been highlighted in the impugned order passed by the General Manager (Sales and Marketing), CCL. Ranchi dated 29th November. 2006 (Annexure 3). 7. Having heard learned counsel for both the sides and looking to the facts and circumstances of the case. I hereby quash and set aside the order passed by the General Manager (Sales and Marketing), CCL. Ranchi dated 29th November. 2006 at Annexure-8 mainly for the following facts and reasons: (i) It appears that the petitioner had applied for supply of coal and necessary amount of Rs. 9,42,671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six) was deposited. This money has not been refunded because the petitioner is a sick company. This fact has been admitted by the respondents. The relevant part of the letter written by the Deputy Chief Sales Manager, CCL, Ranchi dated 28th/29th March, 2006 at Annexure-4 reads as under : This refers to letter No. CIL/C4A/ 48912 dated 27/03/2006 from GM (S&M/Comml.). CIL, a copy of which is also marked to you. Earlier to this, in reply to letter No. CIL/Legal/8668 dated 27.9.2005 of Sri S. Saha, LM, CIL, we had already communicated that M/s Lemos Cements Limited was getting coal against SLC Allocation for Cement which is upto March 02. As per records available, their balance on Credit Account are for Rs. 9.42.671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six only) and we do not have any claim against them. (ii) In view of the aforesaid communication, it appears that the respondents have rejected the claim of refund the amount of Rs. As per records available, their balance on Credit Account are for Rs. 9.42.671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six only) and we do not have any claim against them. (ii) In view of the aforesaid communication, it appears that the respondents have rejected the claim of refund the amount of Rs. 9.42.671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six) even though they have no claim against the petitioner only on the ground that some appeal is pending before Appellate Authority for Industrial & Financial Reconstruction (AAIFR). New Delhi under the Act. 1985. (iii) It further appears from the facts of the case that upon application of refund of the aforesaid amount, the respondents have passed an order, which is annexed at Annexure-6 by the petitioner, which was obtained under the Right to Information Act, 2005. Paragraph 5 of Annexure-6 reads as under (5) The instant appeal was. examined and in turn, vide letter Nos. 11044-47 dated 17/12/2005 and 3319-23 dated 29/03/2006, on the basis of certification received from the Dy. CSM (CSC), we communicated to the L.M., CIL/CLM, CIL/CGM (S&M). CIL/GM (S&M/Comml.), CIL and HOD, CCL that the balance on their credit account(are for Rs. 9,42,671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six only) and CCL has no claim against this unit. CCL is only the Proforma Respondent, as such in view of above, any defense on behalf of CCL at this stage was not required rather, CIL was requested to defend as required. (Annex. V) Thus, the respondents are clearly admitted that the aforesaid amount of Rs. 9.42,671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six) is payable to the petitioner and they have no claim against the petitioner. Similar are the endorsement on page 42 of the memo of the petition as well as at Annexure-6/1, which reveals the customer's ledger as on 11th August, 2006. The aforesaid amount is shown legally payable to the petitioner. (iv) It further appears from the facts of the case that there is some misconception on the part of the respondents that as the petitioner has been declared as sick industrial unit under the provisions of the Act, 1985, the respondents should not make payment of the aforesaid amount as a refund. (iv) It further appears from the facts of the case that there is some misconception on the part of the respondents that as the petitioner has been declared as sick industrial unit under the provisions of the Act, 1985, the respondents should not make payment of the aforesaid amount as a refund. Section 22 of the Act reads as under: 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, 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) Where the management of the sick industrial company is taken over or changed [in pursuance of any scheme sanctioned under Section 18]. not withstanding anything contained in the Companies Act, 1956 (1 of 1956) or any other law or in the memorandum and articles of association of such company or any instrument having effect under the said Act or other law-- (a) it shall not be lawful for the shareholders of such company or any other person to nominate or appoint any person to be a Director of the company; (b) no resolution passed at any meeting of the shareholders of such company shall be given effect to unless approved by the Board. (3) (Where an inquiry under Section 16 is pending or any scheme referred to in Section 17 is under preparation or during the period) of consideration of any scheme under Section 18 or where an/ such scheme is sanctioned there under, for due implementation of the scheme, the Board may by order declare with respect to the sick industrial company concerned that the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force, to which such sick industrial company is a party or which may be applicable to such sick industrial company immediately before the date of such order, shall remain suspended or that all or any of the rights, privileges, obligations and liabilities accruing or arising thereunder before the said date, shall remain suspended or shall be enforceable with such adaptations and in such manner as may be specified by the Board Provided that such declaration shall not be made for a period exceeding two years which may be extended by one year at a time so, however, that the total period shall not exceed seven years in the aggregate. (4) Any declaration made under sub-section (3) with respest to a sick industrial company shall have effect notwithstanding anything contained in the Companies Act, 1956 (1 of 1956) or any other law, the memorandum and articles of association of the company or any instrument having effect under the said act or other law or any agreement or any decree or order of a Court, Tribunal, officer or other authority or of any submission, settlement or standing order and, accordingly, (a) any remedy for the enforcement of any right, privilege, obligation and liability suspended or modified by such declaration, and all proceedings relating thereto pending before any Court, Tribunal, officer or other authority shall remain stayed or be continued subject to such declaration; and (b) on the declaration ceasing to have effect (i) any right, privilege, obligation or liability so remaining suspended or modified, shall become revived and enforceable as if the declaration had never been made; and (ii) any proceeding so remaining stayed shall be proceeded with, subject to the provisions of any law which may then be in force, from the stage which had been reached when the proceedings became stayed. (5) In computing the period of limitation for the enforcement of any right, privilege, obligation or liability, the period during which it or the remedy for the enforcement thereof remains suspended under this section shall be excluded. Nowhere in the aforesaid section it has been suggested that if the sick industrial unit is to be paid any amount under the law, it should not be paid. On the contrary, looking to the section of the Act, 1985. it appears that if any coercive step is to be taken against the sick industrial company, it should not be taken if any inquiry under Section 16 is pending otherwise the possibility or probability of revival may be reduced to zero. The sick industrial Act. seeks revival and. therefore.direction under Section 22 has been given. Unnecessarily, the respondents have taken shelter of this Act in the proceedings under this Act before the B.I.F.R. or Appellate Authority thereof. It ought to have been kept in mind by the respondents that even if the petitioner is a sick industrial company and if the amount is to be refunded to the sick industrial company, there is no statutory bar for not making refund to such a company. On the contrary, such payment will facilitate the petitioner's type sick industrial unit in reduction of their sickness. The respondents have added the sickness instead of reduction thereof. (v) It is admitted fact by both the parties, looking to the aforesaid communication that the respondents are not claiming any amount from the petitioner. It is also admitted that the petitioner has deposited the aforesaid amount with the respondents. In view of these admitted facts and looking to the provisions of the Act. 1985, the petitioner is entitled for refund of Rs. 9.42,671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six) 8. As a cumulative effect of the aforesaid facts and reasons, I hereby direct the respondents to make refund of Rs. 9.42.671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six) to the petitioner with a simple interest @ 8.5% per annum from the date of first communication pointed out in the memo of the petition at Annexure-4, on or from 1st April, 2006 till the date of this judgment i.e. today (11th July, 2011). 9.42.671.36 (Rupees Nine Lakhs Forty Two Thousand Six Hundred Seventy One and Paise Thirty Six) to the petitioner with a simple interest @ 8.5% per annum from the date of first communication pointed out in the memo of the petition at Annexure-4, on or from 1st April, 2006 till the date of this judgment i.e. today (11th July, 2011). I also hereby direct the respondents to make the payment of the principal amount and interest within a period of thirty days from today. If the amount is not paid within thirty days from today, from thirty first day onwards, the principal amount will be paid with simple interest @ 10% per annum. 9. The writ petition is allowed to the aforesaid extent Petition allowed.