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2016 (8) TMI 1597 - DELHI HIGH COURTMoney Suit - Jurisdictional objection of the respondent under Section 16 of Arbitration and Conciliation Act, 1996, was upheld - arbitral proceedings were suspended on the ground that the same are hit by Section 22(1) of the Sick Industrial Companies Act, 1985 - HELD THAT:- From the entire gamut of the present case, it appears to the Court that the PATHEJA BROS. FORGINGS & STAMPING VERSUS ICICI. LTD. [2000 (7) TMI 852 - SUPREME COURT] case has been rightly interpreted by the Division Bench of this Court in OM PRAKASH PARASRAMPURIA AND ORS VERSUS UNION OF INDIA AND ORS [2016 (3) TMI 1476 - DELHI HIGH COURT] to hold that "the judgment of the Supreme Court in Paramjit Singh Patheja's case cannot be interpreted to conclude that each and every kind of action is contemplated to be included in the term 'suit' because the Supreme Court was dealing with a specific issue i.e. whether an award was a decree or an order within the meaning of Section 9(2) of the Insolvency Act." Admittedly, in the present case, the parties are at a pre-award stage. Let alone a confirmed decree, even an arbitral award has not come into existence. The appellant is an unsecured creditor who has no charge on the assets. The continuance of proceedings do not entail any likelihood of distress or execution against the assets of the sick company, at this stage, thereby resulting in any interference with the BIFR scheme - In the present case, however, the institution of the arbitral proceedings required no prior permission of BIFR as at that stage no reference was pending. The Arbitral proceedings are thus not vitiated by any inherent lack of jurisdiction of the vice of coram non judice. With regard to the continuance of the proceedings in the present case, the same is to be governed by the law laid down in the Larger Bench judgment of Raheja Universal Ltd. [2012 (10) TMI 233 - SUPREME COURT], which prescribes the additional requirement of "interfering with the formulation, consideration, finalisation or implementation of the scheme." The pre-arbitration proceedings were not covered by Section 22(1) of SICA and such proceedings cannot be treated as a suit. The award which is yet to attain finality cannot be called as decree. The plea of Section 22(1) of SICA can only be raised in arbitration matters once the award becomes a decree and the same could only be raised at the stage of enforcement of a decree. Appeal allowed.
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