Venkataramiah, J. - (1.) These appeals by special leave are filed against the order dated May 25, 1984 passed by the High Court of Allahabad in Civil Revision No. 136 of 1982 and the order dated February 22, 1985 in C.M.A. No. 644(M) of 1984 on the file of that Court.
(2.) The appellant, the State Bank of India, had allowed cash credit facility to M/s. Saksaria Sugar Mills Ltd., respondent No. 1 herein, on the security of the goods produced at the sugar factory belonging to respondent No. 1. Respondent No. 1 had also deposited in the Bombay office of the State Bank of India on February 2, 1962 by way of equitable mortgage the title deeds of its immovable properties to secure the amount advanced under the said cash credit facility. Respondents Nos. 2 to 5 M/s. Govind Ram and Brothers, Shri K. G. Saksaria, Shri G. L. Vaid and Shri R. K. Saksaria had agreed to be the guarantors for the repayment of any amount due from respondent No. 1 under the said cash credit account. Since there was default in repayment of the amount due under the said cash credit account the State Bank of India instituted a suit in Suit No. 18 of 1980 on the file of the Additional District Judge, Gonda for recovery of a sum of Rs. 54,89,822.99 as on March 6, 1980 against respondents Nos. 1 to 5 who were described as defendants Nos. 1 to 5 in the plaint praying for a decree in terms of O. 34, R. 4, C.P.C., and further consequential directions. In the meanwhile by virtue of an order made by the Central Government under the Sugar Undertakings (Taking Over of Management) Act, 1978 (Act No. 49 of 1978) (hereinafter referred to as 'the Act') the sugar undertaking belonging to respondent No. 1 had been taken over by the Central Government and one Raghubir Singh had been appointed as the Custodian of the said undertaking. The State Bank of India, therefore, impleaded Raghubir Singh and the Union of India also as defendants Nos. 6 and 7 in the suit. In the suit respondents Nos. 1 to 5 pleaded inter alia that the trial Court had no territorial jurisdiction to try the suit and that the suit was not maintainable and at any rate the suit was liable to be stayed in view of the provisions of the Act. The trial Court had framed two issues arising out of the above pleas. The defendants filed an application before the trial Court on September 6, 1982 requesting it to decide first the above two issues relating to its jurisdiction and its competence to proceed with the suit. After hearing the parties the trial court found that it had jurisdiction to try the suit as the properties given as security were situated within its jurisdiction and that there was no impediment to proceed with the trial notwithstanding the fact that the management of the mill of respondent No. 1 had been taken over by the Central Government under the Act. Aggrieved by the said decision of the trial court, respondent No. 1 filed a revision petition in Civil Revision No. 136 of 1982 before the High Court of Allahabad. The High Court allowed the revision petition holding that the trial of suit in so far as relief No. 1 namely the prayer for decree for Rs. 54,89,822.99 against respondents Nos. I to 5 was concerned was liable to be stayed by virtue of the provisions of the Act. The High Court, however, directed that the trial of the suit with regard to all other matters may proceed. Since the only relief prayed in the suit was in respect of the recovery of Rs. 54,89,822,99 from respondents Nos. 1 to 5 in accordance with the provisions of O. 34, R. 4, C.P.C. and that had been stayed, the State Bank of India applied to the High Court by filing an application No. C.M.A. 644(M) of 1984 for clarification as to what other matter could be tried in the suit. That Application was rejected by the High Court by its order dated February 22. 1985 holding that the provisions of O. 34, R. 4, C.P.C. were quite clear and it was for the court below to proceed in accordance with law. The High Court was of opinion that the order needed no further clarification. Aggrieved by the orders passed on revision in Civil Revision No. 130 of 1982 and the order passed in C.M.A. No. 644(M) of 1984 the State Bank of India has filed this appeal by special leave.
(3.) The only question canvassed before us by the parties relates to the question whether the trial of the suit should be stayed by reason of the provisions of the Act. There is no dispute about the territorial jurisdiction of the trial court. It is contended by respondents Nos. 1 to 5 that since the management of the sugar undertaking belonging to the respondent No. 1 had been taken over by the Central Government under the Act, the trial of the suit filed against respondent No. 1 for recovery of any amount due from the sugar undertaking was liable to be stayed. It is no doubt true that the Central Government has taken over the management of the sugar undertaking belonging to the respondent No. 1 by issuing a notification under S. 3 of the Act and has appointed a custodian under S. 5 thereof. The material part of S. 7 of the Act which is relevant for the purposes of this case reads thus: "7. Power of Central Government to make certain declarations. - (1) The Central Government may, if it is satisfied, in relation to a notified sugar undertaking that it is necessary so to do in the interests of the general public with a view to preventing the fall in the volume of production of the sugar industry, it may, by notification, declare that (a) ********** (b) 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 sugar undertaking or the person owning such undertaking is a party or which may be applicable to such sugar undertaking or person) immediately before the date of issue of the notification 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 in the notification. ********** (4) Any remedy for the enforcement of any right, privilege, obligation or liability referred to in clause (b) of sub-section (1) and suspended or modified by a notification made under that sub-section shall, in accordance with the terms of the notification, remain suspended or modified and all proceedings relating thereto pending before any Court, tribunal, officer or other authority shall accordingly remain stayed or be continued subject to such adaptations, so, however, that on the notification ceasing to have effect - (a) any right, privilege, obligation or liability so remaining suspended or modified shall become revived and enforceable as if the notification had never been made; (b) 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.";