TMI Blog2015 (10) TMI 1523X X X X Extracts X X X X X X X X Extracts X X X X ..... aruwala Raman Misra i/b. Nasikwala Law Office For the Respondent : Mr. Ashish Kamat a/w/ Kunal Mehta and Ms.Shivani Parekh i/b. Crawford Bayley Co. ORDER The company application seeks appointment of provisional liquidator of the Respondent company and an interim restraint order concerning the disposal of the company's assets pending such appointment. 2 The company is said to be indebted to the Applicant (who is the original Petitioner in the Company Petition) in the sum of over ₹ 24.91 Crores. The Company has been referred to the Corporate Debt Restructuring (CDR) cell and a consortium of lenders led by Central Bank of India has proposed a CDR scheme for the company. The Applicant herein is not part of CDR lenders, but its debt of ₹ 24.91 Crores has been acknowledged in the debt profile of the company under the caption 'Non CDR lenders' in the report of the reference made to the CDR cell. It is the case of the Applicant that the company has not proposed any scheme for discharge of its outstanding claim. It is submitted that the company inter alia proposes to dispose of its assets in pursuance of the CDR scheme and also otherwise witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re that an industrial undertaking specified in the notification, whether started, acquired or otherwise taken over by the State Government, and carried on or proposed to be carried on by itself or under its authority, or to which any loan, guarantee or other financial assistance has been provided by the State Government shall, with effect from the date specified for the purpose in the notification, be conducted to serve as a measure of preventing unemployment or of unemployment relief and the undertaking shall accordingly be deemed to be a relief undertaking for the purposes of this Act. (2) A notification under sub-section (1) shall have effect for such period not exceeding twelve months as may be specified in the notification; but it shall be renewable by like notifications from time to time for further periods not exceeding twelve months at a time, so however that all the periods in the aggregate do not exceed fifteen years. 4. Power to prescribe Industrial relations and other facilities temporarily for relief undertaking. (1) Notwithstanding any law, usage, custom, contract, instrument, decree, order, award, submission, settlement, standing order or other provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Clauses Act, 1904, shall apply to the power to issue such notification. If the conditions prescribed in Sub-Section (1) of Section 3 are satisfied, the State Government is empowered to declare an industrial undertaking specified in the notification as a relief undertaking. This power exists as a temporary measure of preventing unemployment or as an unemployment relief. One of the conditions so prescribed includes acquisition or taking over of or, provision of a loan, guarantee or other financial assistance to, the undertaking by the State Government. The notification remains effective for such period not exceeding twelve months as may be specified in the notification subject to further renewals of maximum twelve months at a time, but not so as to exceed fifteen years in the aggregate. The effect of such declaration is provided for in Section 4. In the first place, laws specified in the Schedule to the B.R.U. Act do not apply or apply with such modifications as may be specified in the notification. Secondly, agreements, awards etc. made under the laws specified in the schedule applicable to such undertaking immediately before its acquisition or take-over by the State Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s any such possibility, the Court is duty bound to protect the property during the period of stay. 7. Binod Mills case (supra) was a case, where a decree was brought before a District Judge in Ujjain, M.P. for execution. This decree was passed by Bombay High Court against an undertaking declared to be a relief undertaking under the State law of M.P. The undertaking objected to the execution citing Section 5 of the M.P. Act. The Section is quoted below :- 5. Suspension of suits or other legal proceedings against relief undertakings. - As from the date specified in the notification under sub-section (1) of section 3, no suit or other legal proceedings shall be instituted or commenced or, if pending, shall be proceeded with against the industrial undertaking during the period in which it remains a relief undertaking any law, usage, custom, contract, instrument, decree, order, award, settlement or other provisions whatsoever notwithstanding. The question in that case was, whether on a true construction of Section 5 of that Act (which was in pari materia with Section 4 of the B.R.U. Act), execution of the decree could be proceeded with against the undertaking. The M.P. Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt cannot, therefore, refuse to execute it. It is admitted that the decree obtained from the Bombay High Court is a valid decree. That being so, law should take its course and execution should proceed. It is by virtue of the enabling provisions contained in Sections 40 42 of the Civil Proce- dure Code that this validly obtained decree got transferred to the Court in Madhya Pradesh. It is contended that by the mere transfer of this decree in accordance with the proce- dural law, its validity does not disappear nor its binding force cease to exist. We find difficulty in accepting this contention. If we are to accept this submission, it would be rendering section 5 of the Act nugatory and to 258 destroy the benefits sought to be conferred by that section. Nobody questions the validity of the decree. All that is sought to be done is to suspend its animation for the period mentioned in the notification. No Court in Madhya Pradesh can question its validity, nor can refuse to execute it after the period is over. To direct execution of the decree in the teeth of Section 5 would be to encourage filing of suits in Courts outside Madhya Pradesh, secure decrees and defeat the purpose of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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