2000-001-CLJ-0023-DEL Companies Act Judgements

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2000-(001)-CLJ -0023 -DEL

NATIONAL RESEARCH DEVELOPMENT CORPORATION v. J. K. B. M. LIMITED.

I.A. 4912/99 in A.A. No. 414/98, decided on October 6, 1999.

IN THE HIGH COURT OF DELHI

I. S. BAKSHI, Advocate, for the petitioner.

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Smt. NIVEDITA SHARMA, Advocate, for the respondent.

JUDGMENT

MOHD. SHAMIM, J. – This is an application by the respondent for stay of the proceedings under section 151 of the CPC on the ground that the respondent company has been registered under the Board for Industrial and Financial Reconstruction vide registration No. 47/99, dated 11.2.1999. Hence, it has been prayed that the proceedings in the present suit be stayed. It is supported by an affidavit. The application has been opposed by the counsel for the plaintiff.

2. I have’ heard the learned counsel for both the parties at sufficient length and have very carefully examined their rival contentions and have given my anxious thoughts thereto.

3. Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, is in the following words :

“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, no withstanding 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 shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority.

(2) ………”.

4. It is manifest from above that the proceedings are liable to be stayed only in those discerning few cases (a) where in respect of an industrial company and inquiry under section 16 is pending; or (b) any scheme referred to under section 17 is under preparation or a sanctioned scheme is under implementation; or (c) where an appeal under section 25 relating to an industrial company is pending.

5. Admittedly, the respondent has so far simply moved an application before the Board for Industrial and Financial Reconstruction and the said application has been registered with them. So there is no inquiry as yet pending under section 16 of the Sick Industrial Companies (Special Provisions) Act, 1985, nor is there any scheme referred to under section 17 under preparation. Similarly, there is no appeal pending under section 25 of the Sick Industrial Companies (Special Provisions) Act, 1

6. Hence, there is no question of the stay of the proceedings by this court. The application is thus premature.

7. There is another aspect of the matter. The petitioner herein has simply prayed through the present petition for an appointment of an arbitrator. The present proceedings are neither a proceeding for winding up of ‘the industrial company nor is it a proceeding for execution, distress or the like against any of the properties of the industrial company, nor the present proceedings are for appointment of a receiver in respect thereof as envisaged under section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985. Hence, the proceedings in the present case cannot be stayed. I am supported in my above view by the observations of the Supreme Court as Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association, Madras reported in (1992) 2 Comp LJ 121 (SC) : AIR 1992 SC 1439. I do not see any force in the present application. Dismissed.

A.A. No. 414/98

8. Learned counsel for the respondent prays for time to file a reply to the above petition. Let the reply be filed within six weeks from today. Rejoinder, if any, be filed within four weeks thereafter.

9. Adjourn and put up on 13 January, 2000.

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