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2015 DIGILAW 551 (GAU)

Assam Gases v. Nagaland Pulp & Paper Company Ltd.

2015-05-12

HRISHIKESH ROY

body2015
ORDER : Heard Mr. P. Kataki, the learned counsel appearing for the petitioner (plaintiff). Also heard Mr. J. Roy, the learned counsel appearing for the M/s. Nagaland Pulp & Paper Company Ltd., who were the defendant in the Money Suit No.85/1987 (renumbered as the Money Suit No.17/2004), filed before the learned District Judge, Jorhat. 2. The Suit was filed for recovery of the transportation cost of Chlorine Gas, supplied to the defendant Paper Mill at Tuli in Mokokchung District at Nagaland. Through the judgment dated 8.2.2005 (Annexure-I), the Trial Court held that the plaintiff is entitled to recover the dues from the defendant and accordingly the suit was decreed for Rs.2,68,856.85 paise. 3. As there was no challenge to the Trial Court’s verdict, the decree was put to execution by the Decree Holder (D.H.) through the Money Execution Case No.3/2006, where an application was filed on 17.8.2006 (Annexure-II), by the Judgment Debtor (J.D.) under Section 47 read with Section 151 of the C.P.C. with a prayer that the decree should be declared as null and void. In this application, the J.D. projected that because of loss suffered by the M/s. Nagaland Pulp & Paper Company Ltd., the defendant Company was referred to the Board under the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as 'the SICA Act') and the reference was registered as Case No.601/1998. Thereafter the Board for Industrial & Financial Reconstruction (in short ‘the BIFR’) declared the J.D. as “Sick Industrial Company” under Section 3(1)(0) of the SICA Act. Because of the proceeding initiated under the SICA Act against them, the J.D. contended that the Civil Court had no jurisdiction to entertain the Money Suit, without due consent under Section 22(1) of the SICA Act and therefore prayer was made for declaring the decree to be a nullity. Furthermore, since the decreetal amount was recovered by attaching the Bank Account of the J.D., redelivery of the money by the D.H. to the applicant, was also applied. 4. Furthermore, since the decreetal amount was recovered by attaching the Bank Account of the J.D., redelivery of the money by the D.H. to the applicant, was also applied. 4. The application of the J.D. before the Executing Court was allowed through the judgment dated 11.7.2007 (Annexure-IV), wherein the learned District Judge held that the jurisdiction of the Trial Court is ousted under Section 22 of the SICA Act and accordingly the decree was declared to be null and void being without jurisdiction and consequently direction was issued to the D.H. to re-deliver the recovered amount to the defendant/J.D., within three months. 5. Assailing the legality of the direction given by the Executing Court, Mr. P. Kataki, learned counsel for the plaintiff/D.H. submits that at no stage of the suit, the defendant mentioned about the pending proceeding in respect of the defendant Company, under the SICA Act and accordingly it is submitted that both the Trial Judge and the plaintiff were unaware of the Case No.601/1998, in respect of the defendant Company. Therefore it is contended that for want of knowledge, the plaintiff could not have secured the consent of the Board and that is why the decreetal amount could be recovered by attaching the Bank Account of the J.D. 6. On the other hand, Mr. J. Roy, the learned counsel for the defendant/J.D. submits that the proceeding under the SICA Act in respect of the defendant is still continuing in the Case No.601/1998 and therefore, it is argued by the lawyer for the J.D. that since the BIFR is in seisin of the matter, the amount recovered from the defendant on the basis of a void decree, can’t be permitted to be retained by the D.H. 7. When reference on the affairs of an ailing company is made under the SICA Act, suit for recovery of money against the Company cannot be filed or continue except with the consent of the BIFR/Appellate Authority, under Section 22(1) of the SICA Act. Thus the jurisdiction of the Civil Court is ousted in terms of Section 22 of the SICA Act and if any judgment is rendered, the same would be without jurisdiction of the Court. Consequently no fault can be found with the Executing Court’s finding that the decree rendered on 8.2.2005 (Annexure-I) in the Money Suit No.17/2004 is null and void. Thus the jurisdiction of the Civil Court is ousted in terms of Section 22 of the SICA Act and if any judgment is rendered, the same would be without jurisdiction of the Court. Consequently no fault can be found with the Executing Court’s finding that the decree rendered on 8.2.2005 (Annexure-I) in the Money Suit No.17/2004 is null and void. But as regards the further direction issued for redelivering the recovered amount to the J.D., what is noticed here is that the reference under the SICA Act in respect of the defendant Company is still not finalized and the affairs of the Company is being monitored in the Case No.601/1998. In similar circumstances, the Supreme Court in Managing Director, Bhoruka Textiles Ltd. vs. Kashmiri Rice Industries reported in (2009) 7 SCC 521 , directed transfer of the money to the BIFR. Taking a cue from this judgment, I feel that instead of refunding the recovered amount to the J.D., the money should be transferred to the BIFR, which is monitoring the affairs of the defendant Company in the Case No.601/1998. 8. In light of above, the petitioner is directed to transfer the recovered amount to the BIFR within three months from today, with due intimation to the defendant Company. The D.H. is at liberty to apply for due consideration before the BIFR, which shall deal with the money in accordance with the SICA Act. It is ordered accordingly. 9. With the above order this case is disposed of by partially modifying the order dated 11.7.2007 (Annexure-IV), in the Misc. (J) Case No.116/2006, rendered by the learned District Judge, Jorhat to the extent indicated. 10. The Registry is directed to send a copy of this order to the Executing Court at Jorhat and also to the BIFR, New Delhi in connection with the pending Case No.601/1998 of the defendant Company, under the SICA Act.