Himachal Pradesh High Court
Ashoka Alloy Steel Ltd. And Ors. vs Central Bank Of India on 28 April, 2004
Equivalent citations: II(2005)BC283, [2004]122COMPCAS777(HP)
Author: Kuldip Chand Sood
Bench: Kuldip Chand Sood
JUDGMENT
V.K. Gupta C.J.
1. The Board for Industrial and Financial Reconstruction (BIFR) had ordered and recommended the winding up of petitioner No. 1-company and forwarded its recommendation to this court in accordance with the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985. Vide judgment dated December 8, 1999, passed in Company Petition No. 3 of 1999 a learned company judge of this court in purported exercise of the powers vested in it under section 21(2) of the aforesaid Act ordered the winding up of petitioner No. 1-company and also directed the official liquidator to take over the affairs of the company. Aggrieved, the petitioner-company filed Company Appeal No. 1 of 1999 before the Division Bench of this court. This appeal is still pending disposal. It is undisputed that in the aforesaid company appeal, the Division Bench has ordered maintenance of status quo until the disposal of the appeal. Initially status quo order was passed on December 27, 1999, but on October 16, 2000, the initial ad interim order was made absolute to subsist till the final disposal of the appeal.
2. It appears that even while Company Appeal No. 1 of 1999 was pending (Company Petition No. 3 of 1999 had already stood disposed of by virtue of the order dated December 8, 1999), the respondent-bank moved an application before the learned company judge (and not before the Division Bench which was seized of the company appeal) seeking permission of the learned company judge for instituting a suit against the petitioner-company for recovery of money. Vide order dated May 18, 2000, passed by the learned company judge in Company Application No. 6 of 2000 (in the aforesaid disposed of Company Petition No. 3 of 1999), the said application of the respondent-bank was allowed and the permission was accorded to institute the suit against the petitioner-company. However, the learned judge in the said order "stipulated" that in the event of decree being passed in favour of the bank, it would not be executed, save and except with the leave of the court. For ready reference we quote hereinbelow the text of the aforesaid order. It reads thus :
"Company Application No. 6 of 2000 :
This petition for permission to institute a suit for recovery of outstanding amount against the company in liquidation. The application is allowed and the necessary permission is accorded to the applicant-bank to institute the suit against the company M/s. Ashoka Alloy Steels (P.) Ltd. (In liquidation). However, it is stipulated that in the event of decree being passed in favour of the applicant the same shall not be executed save and except with the leave of this court. Company Application No. 7 of 2000 :
Reply within two weeks.
Dasti copy on usual terms."
3. Undisputedly, the respondent-bank did file a suit (actually it was an application in terms of section under section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. This was done through the medium of O. A. No. 51 of 2000 filed before the Debts Recovery Tribunal, Chandigarh. Vide judgment dated February 13, 2003, the said suit was decreed in the sense that the aforesaid application of the bank filed under section 19 of the aforesaid 1993 Act was allowed/decreed and the defendants in the said application were directed to pay an amount of Rs. 12,73,09,001 along with pedente lite and future interest at the rate of 15 per cent. per annum with quarterly rests from December 21, 2000, till the realisation of the suit amount.
4. It is also undisputed before us that against the aforesaid decree passed on February 13, 2003, the petitioners have filed an appeal under section 20 of the aforesaid 1993 Act before the Appellate Tribunal. It is submitted that in the said appeal the next date is July 19, 2004, for taking up the application filed by the appellant therein under section 21 of the aforesaid 1993 Act.
5. In the meanwhile, on August 21, 2003, the Recovery Officer appointed under the 1993 Act passed an order against the petitioners and the petitioners filed an appeal under section 30 of the aforesaid 1993 Act before the Debts Recovery Tribunal, Chandigarh. The thrust of the petitioners' contention in the aforesaid appeal was that the execution proceedings pursuant to the passing of the decree dated February 13, 2003, could not be taken out against the petitioners because of the restraint order which had been issued by the learned single judge of this court on May 18, 2000, passed in the aforesaid Company Application No. 6 of 2000. Holding that the aforesaid restraint order passed by the learned single judge was qua M/s. Ashoka Alloy Steels Ltd. only and not against other judgment debtors, the Tribunal ordered that the decree was executable, except against M/s Ashoka Alloy Steel Ltd. only. This was done by the Tribunal vide its judgment dated December 22, 2003, passed in Appeal No. 30 of 2003. Even though under section 20 of the aforesaid 1993 Act the aforesaid judgment dated December 22, 2003, was appealable, for the reasons best known to the petitioners, but unexplained before us, the said judgment/order was not challenged in any such appeal. In law this order has thus assumed finality.
6. In this petition the main plank of the argument of the petitioners is that the respondent is bound to act upon the Reserve Bank of India guidelines, but the respondent is disputing this argument of the petitioners and submits that the Reserve Bank of India guidelines issued in the year 2003 are not applicable to the case of the petitioners.
7. After hearing the detailed arguments advanced from both the sides, we feel that in the facts and circumstances of this case our interference or intervention is not at all warranted or called for and the main reason which influences us in taking this decision is the passing of the decree by the Tribunal against the petitioners under section 19 of the 1993 Act and the pendency of the statutory appeal filed under section 20 of the 1993 Act before the Appellate Tribunal. We feel convinced and totally satisfied that it shall be open to the petitioners herein as it was always open to them to raise all pleas and urge all point before the Appellate Tribunal while assailing the decree passed by the Debt Recovery Tribunal and depending upon the merits of the petitioners contentions before the Appellate Tribunal, the Appellate Tribunal shall deal with and dispose of all such points, of course on their merits and in accordance with law, while finally taking up the appeal for consideration, hearing and disposal. When a statutory body has passed a decree and when a statutory appeal has been preferred against such a decree, in our considered opinion a writ petition under article 226 of the Constitution is not maintainable in this court. The best course of action, therefore, would be to dismiss this writ petition and to allow and permit the parties to have a proper adjudication done by the Appellate Tribunal before which the appeal under section 20 of the 1993 Act is pending.
8. The only issue which now remains to be dealt with is about the execution of the decree passed on February 13, 2003, which is the subject matter of the appeal under section 20 (supra).
9. It is admitted by the respondent that Rs. 40 lakhs had already been paid by the petitioners to the respondent. On March 22, 2004, when this writ petition came up for consideration before us, we had directed that if the petitioners pay to the respondent Rs. 2 crores, execution proceedings against the petitioners would be stayed. It is admitted by the respondent that the petitioners have indeed deposited with it the aforesaid amount of Rs. 2 crores, even though slightly belatedly. The petitioners therefore, have paid to the respondent a total sum of Rs. 2.40 crores. We are not oblivious of the fact that on the own showing of the petitioners, they always were ready to pay to the respondent Rs. 3.55 crores, as per their version of the "one-time settlement" about which however we wish to offer no comments at all. In normal course therefore, we could have insisted upon the petitioners to pay to the respondent at least Rs. 1.15 crores more, but Mr. R.L. Sood, learned senior advocate for the petitioners has submitted that at present petitioners are in dire straits and it would not be possible for them to pay any more money and that only because of the contours of our order dated April 22, 2004, the petitioners could arrange only Rs. 2 crores with great difficulty. We wish to offer no comments about this submission of Mr. Sood as well but, when we look to the contents of our order dated March 22, 2004, we feel that in the facts and circumstances of this case the least that can be done is to protect the petitioners for some time at least from the rigours of the execution, simultaneously ensuring that the appeal pending before the Appellate Tribunal is disposed of very expeditiously.
10. On the totality of the circumstances therefore, while dismissing this writ petition we issue the following directions :
(i) The appeal (or the application under section 21 of the 1993 Act) which is already fixed for July 19, 2004, before the Appellate Tribunal shall, under all circumstances be taken up on that day itself. The learned Tribunal shall take all possible steps to ensure that the appeal is itself disposed of either on July 19, 2004 itself without, on that day taking up the application for stay under section 21 and if it is not possible to dispose of the appeal on July 19, 2004, to dispose it of very soon thereafter, and in any case all steps be taken to ensure that it is disposed of, as far as possible, latest by August 31, 2004.
(ii) Till August 31, 2004, the execution of the decree impugned in the aforesaid appeal shall stay.
(iii) The parties before us undertake not to seek any adjournment in the aforesaid appeal.
(iv) If for the reasons beyond the control of the Appellate Tribunal, appeal is not disposed of by or before August 31, 2004, so far as the execution of the impugned decree is concerned, the appellants in that appeal (the petitioners before us) shall have two options available to them : either to apply to the Appellate Tribunal (or to prosecute the pending application) under section 21 of the 1993 Act for stay of the execution of the impugned decree and to obtain directions from the Appellate Tribunal which directions alone shall be applicable and operative with respect to the stay of the execution of the impugned decree, or in the alternative, to deposit, month by month, latest by tenth the day of every month, with the respondent a sum of Rs. 20 lakhs and to keep depositing the said amount every month till the disposal of the appeal. If the petitioners keep depositing the aforesaid amount of Rs. 20 lakhs per month, month by month till disposal of the appeal before the Appellate Tribunal, the execution of the impugned decree shall stay till the disposal of the appeal but, depending upon the result of the appeal, the moment the appeal is disposed of, the stay order shall ceased to operate.
(v) With a view to enabling the petitioners to raise all pleas and urge all points it shall be open to the petitioners to file a supplementary memorandum of appeal before the Appellate Tribunal within two weeks from today.
11. Before parting we wish to make it absolutely clear that we have not gone into the merits of any controversy pertaining to the subject matter of this petition and all questions are left open. If by inadvertence or otherwise we happened to make any observation in the course of this judgment, it should not be construed as any expression of opinion by us with respect to the points of controversy involved in this litigation between the parties. The petition is dismissed, but without any order as to costs.