Calcutta High Court (Appellete Side)
M/S. Duncans Industries Limited vs Biswajit Roy & Anr on 28 August, 2009
Author: Kalidas Mukherjee
Bench: Kalidas Mukherjee
IN THE HIGH COURT AT CALCUTTA
Civil Revisional Jurisdiction
PRESENT:
THE HON'BLE MR JUSTICE KALIDAS MUKHERJEE
C.O. NO. 2295 OF 2009
M/S. Duncans Industries Limited
Vs.
Biswajit Roy & Anr.
For the petitioners: Mr. Anindya Kumar Mitra,
Mr. Subhransu Ganguly
Mr. Saptangshu Basu
Mr. P.K. Mitra.
For the O.P. : Mr. Gaurab Kumar Basu.
HEARD ON: 11.8.2009, 17.8.2009 & 18.8.2009.
JUDGMENT ON: 28.8.2009.
KALIDAS MUKHERJEE, J.:
1. This is an application under Article 227 of the Constitution of India assailing the order dated April 13, 2009 passed by the State Consumer Disputes Redressal Commission, West Bengal in case No. RC/ 2009/13 and the order dated June 19, 2009 passed by the same Forum in Execution Case No. 106/2008. The petitioner is a sick industrial company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 and has been registered before the Board for Industrial and Financial Reconstruction (hereinafter referred to as the "BIFR"). The petitioner carries on business for manufacture and sale of fertilizer, cultivation, process and sale of tea. The petitioner has been declared as sick industrial company under the provisions of SICA by the order dated February 21, 2007 of the BIFR. The Decree holder/O.P. herein got a decree from the District Consumer Disputes Redressal Forum for the recovery of the sum of Rupees one lakh together with interest. The decree holder/O.P. herein put the decree in execution wherein the Judgment Debtor/petitioner herein appeared and prayed for instalments for payment of the decreetal dues. The Executing Forum after hearing both sides allowed the prayer for instalments. The DHR/O.P. herein being aggrieved filed a revisional application before the State Consumer Disputes Redressal Commission where the application was allowed and the order of the Executing Forum granting instalments was set aside on the ground that the Executing Court could not go behind the decree. The judgment debtor/petitioner herein preferred appeal before the National Consumer Disputes Redressal Commission where the appeal was dismissed. Now the judgment debtor i.e. the petitioner herein has filed the instant application under Article 227 of the Constitution of India praying for quashing of the execution proceeding pending before the learned Executing Forum.
2. Mr. Mitra appearing on behalf of the petitioner submits that under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) without the consent of the board (BIFR) no recovery proceeding is maintainable and no money can be recovered from a sick industry. Mr. Mitra further submits that under Section 25(3) of the Consumer Protection Act any claim for money is to be recovered as arrears of land revenue by collector by initiating a proceeding. Mr. Mitra contends that in the instant case the claim is for money and it is governed by Section 25(3) of the Consumer Protection Act and the Executing Forum has no jurisdiction to issue warrant of arrest for the recovery of the money.
3. Mr. Basu appearing on behalf of the O.Ps. submits that when the contention of the Judgment Debtor regarding instalments was turned down by the National Consumer Disputes Redressal Commission, the said order attained its finality under Section 24 of the Consumer Protection Act and it cannot be reopened in this application under Article 227 of the Constitution of India. Mr. Basu in this connection has referred to the provisions contained in Section 23 and submits that appeal would lie to the Honb'le Apex Court against the decision of the National Consumer Disputes Redressal Commission. Mr. Basu contends that the application under Article 227 of the Constitution of India is not maintainable. Mr. Basu has referred to and cited a decision reported in AIR 1997 Delhi 182 [Ravi Kant and other Vs. National Consumer Disputes Redressal Commission and others] and submits that the definition of person as occurring in Section 2(m) of the Consumer Protection Act will include company. Mr. Basu contends that there was a direction from the AAIFR upon the JDR to submit a rehabilitation Scheme before the BIFR and it is not known what scheme has been formulated and under such circumstances there is no scope of interference within the scope or ambit of Article 227 of the Constitution of India. As regards the provision contained in Section 22(1) SICA, Mr. Basu submits that the JDR can approach the BIFR for suspension of order for realization of money. Mr. Basu has referred to and cited a decision reported in 2001 Company Cases page 401 [Deepak Insulated Cable Corporation Ltd. Vs. Union of India and others] and submits that the claim for realization of money is maintainable and the provision contained in Section 22(1) SICA is not attracted. Mr. Basu submits that penal action under Section 27 of the Consumer Protection Act can well be initiated and a complaint in this regard is not a suit. Mr. Basu has referred to and cited the decisions reported in (2007) 136 Company Cases 739 (Madras) [S. Ragavachari Vs. V. S. Narayanan and Another]; 2007 CPJ 353 (NC) [Mahesh Chandra Sharma Vs. Modern Threads (India) Ltd.]; 2008(5) SCC 339 [Bihar Finance Service House Construction Cooperative Society Ltd. Vs. Gautam Goswami and others]; AIR 2000 SC 926 [M/S. BSI Ltd. and another Vs. Gift Holdings Pvt. Ltd. and another];and SC (Suppl.) 2003(2) CHN 179 [State of Karnataka Vs. Vishwabharathi House Building Coop. Society and Others].
4. Mr. Mitra contends that provision of Section 27 is not attracted here because the claim in the instant case is for money which is recoverable only by initiating a proceeding by the collector as arrears of land revenue. Mr. Mitra submits that the execution proceeding which is pending before the Executing Court is not at all maintainable without obtaining the consent of the board (BIFR). Mr. Mitra in this connection has referred to and cited a decision in AIR 1998 Cal 218 [Tyre Corporation of India Ltd. Vs. Debendra Nath Banerjee and another]. It is contended that Directors of the company are not personally liable and in this connection Mr. Mitra has referred to and cited a decision reported in III (2003) CPJ 352 [Sunder Singh Rana Vs. Govind Ram]
5. From the papers on record it appears that the decree was put into execution and the learned Executing Court allowed the prayer for instalments which was set aside by the State Consumer Disputes Redressal Commission. The appeal was preferred before the National Consumer Disputes Redressal Commission and the appeal was dismissed. So, the question as to whether the Executing Forum can grant instalments has already been decided and it reached finality. No appeal appears to have been preferred against the order of the National Consumer Disputes Redressal Commission before the Hon'ble Apex Court. In the decision of the Hon'ble Apex Court reported in 2008(5) SCC 339 (Supra) it has been held as follows :-
".....When claim of parties had been adjudicated upon and has attained finality, it is not open for any party to go behind the said orders and seek to take away and/or truncate the effect threof."
In the instant case the decision on the question of granting instalments by the Executing Forum attained finality and it cannot be re-opened in the instant application under Article 227 of the Constitution of India.
6. Under Section 25 of the Consumer Protection Act for non-compliance of the order of the Forum or the Commission as may be, the action lies under Section 25(3) which reads as follows:-
"(3) Where any amount is due from any person under an order made by a District Forum, State Commission or the National Commission, as the case may be, the person entitled to the amount may make an application to the District Forum, the State Commission or the National Commission, as the case may be, and such District Forum or the State Commission or the National Commission may issue a certificate for the said amount to the Collector of the District (by whatever name called) and the Collector shall proceed to recover the amount in the same manner as arrears of land revenue.]"
Section 27 of the Consumer Protection Act also deals with the penalty for non-compliance of the order of the Forum or Commission as the case may be.
7. It shows that for the non-compliance of the order of Forum or Commission, execution proceeding is maintainable. But the main question urged in this application is whether the execution proceeding pending before the Executing Forum will proceed or not in view of the provision contained in Section 22(1)SICA Mr. Basu has referred to the case of State of Karnataka Vs. Vishwabharathi House Building Coop. Society and Others [2003(2) CHN 179] (Supra) and submits that Section 22(1) SICA is not attracted in the facts of the instant case. Mr. Basu has referred to the observation of the Hon'ble Apex Court made in paragraphs 55 to 59 of the aforesaid decision. The Hon'ble Apex Court in the said case observed as follows:-
"55. .................The High Court, therefore, was not correct to hold that in each and every case the order passed by the District Forum/ State Commission / National Commission are required to be sent to the civil courts for execution thereof."
Here in the instant case the decree has been put into execution in the District Forum itself as Executing Forum. Mr. Mitra contends that no order under Section 25 was passed by the Executing Forum.
8. Mr. Mitra on this point has submitted that the points as raised in the aforesaid decision were different and the Karnataka case as mentioned by Mr. Basu was referred to in the said decision of the Hon'ble Apex Court and moreover after passing of the aforesaid judgment, Section 25 has been amended and substituted substantially. I find that on the point of maintainability of the execution proceeding without obtaining the consent of BIFR, the aforesaid decision does not come in support of the contention of Mr. Basu. I have already pointed out that the main question in this application is whether the execution proceeding itself is maintainable or not in view of Section 22(1) of SICA. Section 22 of SICA deals with suspension of legal proceedings, contracts etc.
9. The provision contained in Section 22(1) SICA is quoted hereunder:
" (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."
10. Under Sub-section 1 of Section 22 no proceeding for execution will proceed without the consent of the Board (BIFR) or as the case may be, the appellate authority. It appears from the annexure P5 that the AAIFR directed that BIFR while considering the Company as a sick industrial company should issue direction to the company and should take into consideration the orders passed by AAIFR while formulating guidelines for enabling the company to prepare a rehabilitation scheme. Mr. Basu contends what scheme has been formulated with which cut off date is not yet known and in such unspecified circumstances there is no scope to interfere within the scope of Article 227 of the Constitution of India.
11. Mr. Mitra has referred to a decision reported in AIR 1998 Cal 218 [Tyre Corporation of India Limited Vs. Debendra Nath Bhattacharjee and another] wherein it has been held relying on the decision of the Hon'ble Apex Court reported in 1993 AIR SCW 991 as follows:
"10. As held by the Supreme Court in the aforesaid case of Maharashtra Tubes Limited Vs. State Industrial and Investment Corporation of Maharashtra Ltd., (1993 AIR SCW 991) (Supra) under Section 22(1) of the said Act notwithstanding anything contained in any 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 appointment of a Receiver in respect thereof shall lie or be proceeded with further, except with the consent of the BIFR or, as the case may be, the appellate authority. The purpose and object of this provision is clearly to await the outcome of the reference made to the BIFR for the revival and rehabilitation of the sick industrial company. The words 'or the like' which follow the words 'execution' and distress are clearly intended to convey that the properties of the sick industrial company shall not be made the subject-matter of coercive action of similar quality and characteristics till the BIFR finally disposes the reference made under Section 15 of the said Act. It was further held by the Supreme Court that the legislature has advisedly used an omnibus expression 'the like' as it could not have conceived of all possible coercive measures that may be taken against a sick undertaking.
11. In the instant case, the impugned order passed by the Executing Court issuing such prohibitory order attaching the Bank A/c. of the company certainly amounts to coercive action taken against the properties of petitioner company which is sick industrial company and against whom such coercive action could not have been taken without the consent of the Board under Section 22 of the said Act."
12. Mr. Mitra has referred to and cited the decision in the case of Sneha Dyechem Ltd. Vs. Jyoti Pathore Reported in II (2006) CPJ 195 (NC) (Supra) and submits that the National Commission has held that Section 22 SICA has no bar of hearing of complaint under Consumer Protection Act and that the complaint is maintainable. Mr. Mitra submits that the Hon'ble Apex Court has been pleased to pass an order of stay on the aforesaid order of National Commission in case of Sneha Dyechem Ltd. Vs. Jyoti Rathor In SLP No. (Civil) 8284/2006. In the case of Deepak Insulated Cable Corporation Ltd. Vs. Union of India and others (supra) it was held that Section 22(1) SICA would not be applicable in recovery proceedings. But in view of the decision reported in AIR 1998 Cal 218 (Supra) which is based on the decision of the Hon'ble Apex Court, I am unable to follow the decision of the Karnataka case in Deepak Insulated Cable Corporation Ltd.
13. Relying on the decision reported in AIR 1998 Cal 218 (supra), I think that the execution proceeding pending before the executing forum should remain stayed until and unless the consent is obtained from the Board (BIFR). The decisions cited by Mr. Bose are not applicable on the question of maintainability of the execution proceeding without obtaining the consent of the Board (BIFR). The question of taking recourse to Section 25(3) or 27 of Consumer Protection Act will arise subsequent to obtaining the consent of the Board (BIFR). It is therefore, directed that the order dated June 19, 2009 passed by the District Consumer Disputes Redressal Forum in Execution Case No. 106 of 2008 and all further proceedings thereof shall remain stayed until and unless the DHR/O.Ps. herein obtain consent from the Board (BIFR) for proceeding in the matter of realization of decreetal amount. The application under Article 227 of the Constitution of India is accordingly disposed of.
14. There will be no order as to costs.
15. Urgent Xerox certified copy, if applied for, be handed over to the parties as early as possible.
( Kalidas Mukherjee, J. )