PRASHANT INDIA LTD Vs. INDIAN RENEWAL ENERGY DEVELOPMENT AGENCY LTD
LAWS(DR)-2004-12-4
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on December 02,2004

Appellant
VERSUS
Respondents

JUDGEMENT

K.S.Kumaran, - (1.) RESPONDENT-Indian Renewal Energy Development Agency Ltd. (hereinafter referred to as 'the RESPONDENT herein') filed O.A. 16/2001 before the Debts Recovery Tribunal-I, Delhi (hereinafter referred to as 'the DRT') against the appellants (being defendants 1 to 6, hereinafter referred to as 'the Appellants-defendants') for the recovery of Rs. 3,66,59,941/- with interest and costs. The learned Presiding Officer of the DRT, by the impugned final order dated 5.2.2002, accordingly directed the appellants-defendants to pay the said amount jointly and severally with interest and costs. Aggrieved, the appellants-defendants have preferred the appeal, and this application under Section 21 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 'the Act') seeking waiver of the deposit to be made in terms of the said Section 21 urging that the 1st appellant-defendant has been sick since 1998, and its financial resources are too weak to deposit 75% of the amount decreed, as required under Section 21 of the Act, that the O.A. against the other appellants could not have been filed against them in their capacity as guarantors as they are protected by Section 22 of the Sick Industrial Companies (Special Provisions) Act (hereinafter referred to as 'SICA') since the BIFR has not given any liberty to the respondent herein to proceed against them, and, therefore, the institution of the O.A. itself (before the DRT) is improper.
(2.) The respondent herein has filed a reply opposing the application urging that the BIFR, by its order dated 8.9.2000, has granted permission to all its creditors, including the respondent herein, to file/pursue the suits for the recovery of the dues, subject to the condition that no Court-receiver should be appointed in respect of the operational units and/or decrees, if any, granted shall not be executed without the prior approval of the BIFR. The respondent herein has farther urged that no protection of Section 22 of SICA is available to the appellants 2 to 6, and, therefore, the contention that the institution of the O.A. itself is improper qua appellants 2 to 6 is frivolous. I have heard the Counsel for both the sides, and perused the records.
(3.) THE learned Counsel for the appellants-defendants points out that by order dated 8.9.2000 the BIFR had permitted the filing/pursuing of the suits for the recovery of the dues, and that the O.A. 16/2001 was filed on 12.1.2001. He also points out that the BIFR had also directed that no court-receiver should be appointed, the decrees, if granted, shall not be executed except with the prior approval of the BIFR. He also points out that, as is seen from the paragraph 3 of the order of the BIFR, permission was sought for to file suit for the recovery against the company only (1st appellant-defendant only). He also points out that the permission was granted by the BIFR only with regard to the 1st defendant-company. He contends that in view of the provisions contained in Section 22 of SICA, the bar of instituting or continuing a suit is in respect of guarantors also, and unless and otherwise the respondent herein had obtained the specific leave of the BIFR to proceed against the guarantors, namely., the appellants-defendants 2 to 6, the institution of the O.A. itself before the DRT is not proper. Section 22 of the SICA reads as follows ;- "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 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 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." THE learned Counsel for the appellants-defendant also relies upon the decision of the Hon'ble Supreme Court in Patheja Bros. Forgings and Stampings and Anr. v. ICICI Ltd. and Ors., 2000(6) SCC 545, wherein it was held as follows :- "We have analysed the relevant words in Section 22 and found that they are clear and unambiguous and that they provide that no suit for the enforcement of a guarantee in respect of any loan or advance granted to the industrial company concerned will lie or can be proceeded with without the consent of the Board or the appellate authority. When the words of legislation are clear, the Court must give effect to them as they stand and cannot demur on the ground that the legislature must have intended otherwise." But, the learned Counsel for the respondent herein, on the other hand, contends that the order dated 8.9.2000 in Case No. 342/98 before BIFR relied upon by the appellants-defendants shows that the permission was granted to file the suit for recovery against the 1st appellant-company, and, therefore, there is no need to get a separate permission to file the suit against the guarantors, namely, the appellants-defendants 2 to 6. But, the learned Counsel for the appellants-defendants contends that a fresh Reference has been made on behalf of the 1st defendant-appellant-company, bearing Case 116/2003, and that the same is pending, which is also not disputed by the respondent.;


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