TMI Blog1999 (11) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... construction ( BIFR ) proceedings. 2. The case in brief for disposal of both the applications is as follows : The defendant company filed Application No. 4003 of 1998 under section 22 to stay the further proceedings in the suit pending disposal of BIFR proceedings. The plaintiff company is primarily running a newspaper industry and not engaged in the business of extending finance either under a hire purchase or lease transaction. The plaintiff is not a regular non-banking finance company. The transaction entered into between the parties is only a loan transaction and not a lease transaction as stated in the plaint. The plaintiff company approached the defendant company with an offer to extend the loan of Rs. 50 lakhs in 1993. Althoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to resort to independent action totally disregardful of the pending enquiry, the entire exercise under the said provision should be rendered nugatory by the time the BIFR is able to evolve a scheme of revival or rehabilitation. The defendant company is still confident of revival since it has the infrastructure and the manpower. The action of the plaintiff company at this stage would only cripple and hamper the revival of the defendant company. Hence, the petition for stay. 4. The applicant/plaintiff company filed Application No. 4002 of 1998 under Order XII Rule 6 of the Code of Civil Procedure to pass an interim decree based upon the communication sent by the defendant dated 3-6-1996 that the hire purchase instalments to the extent o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt decreed a suit in C.S. No. 211 of 1996 filed by the plaintiff against another company for the same relief while the said company was declared a sick unit by BIFR. There is no bar in proceeding with the suit and to pass a decree and judgment accordingly. If the proceedings are stayed, the plaintiff will be subjected to great difficulty and loss which cannot be compensated. 6. The defendant filed counter affidavit in application No. 4002 of 1998 and denied the various allegations. They reiterated the averments made in Application No. 4003 of 1998 and, as such, it is unnecessary to reproduce the same. 7. Heard the learned counsel of both sides. 8. The points that arise for consideration are (1) Whether the proceedings in C.S. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r using or utilising or alienating the leased equipments and also claimed the relief of the recovery of money of Rs. 49 lakhs and odd. The question is whether section 22 can be invoked and further proceedings can be stayed. 11. The learned counsel for the defendant relied on BLU Star Ltd. v. Hindustan Photo Films Mfg. Co. Ltd. [1997] 3 LW 306 wherein it is observed as follows : "Even on the plain language of section 22 of the Sick Industrial Companies Act, there can be no doubt whatsoever that an application like the one filed by the applicant herein for injunction as also for directing furnishing of security, cannot be maintained against a sick industrial company regarding which proceedings are pending before the Board. Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly indicate that it has no application to the case on hand. In order to appreciate the contention of the parties, I am of the view that it is just and necessary that section 22(1) has to be extracted which reads as follows : "Where in respect of an industrial company, an inquiry under section 16 is pending of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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