2009 (1) TMI 492 - HC - Companies Law

Court sets aside order staying suit under Sick Industrial Companies Act, allows eviction proceedings against sick company under rent control legislation.

Rohit Sidramappa Abdulpurkar Versus Laxmi Vishnu Textiles Mills

Rohit Sidramappa Abdulpurkar Versus Laxmi Vishnu Textiles Mills - [2010] 155 COMP. CAS. 86 (BOM.) Issues:Challenge to order staying suit under Sick Industrial Companies Act without prior permission.Analysis:The petitioner challenged an order staying a suit under the Sick Industrial Companies (Special Provisions) Act, 1985, without obtaining prior permission. The suit was for the recovery of rent/money against a sick company. The respondent-company had taken the suit premises on lease for storing goods but had been closed since 1992. The petitioner terminated the tenancy in 1996 due to non-use and subletting. The suit for possession was filed in 1999. Respondents contended that the suit could not proceed as the company was declared sick, and a stay was sought under section 22 of the Act.The court noted that the respondents did not provide evidence that the suit premises were part of winding-up proceedings. Referring to previous judgments, the court highlighted that section 22 of the Act does not bar eviction petitions under rent control legislation. The court cited cases like Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association and Carona Ltd. v. Parvathy Swaminathan and Sons, emphasizing that eviction proceedings against a sick company are maintainable. The court found the stay of the suit contrary to the law and set aside the impugned order.In conclusion, the court allowed the writ petition, ordering the setting aside of the order dated October 29, 2003, that stayed the suit under the Sick Industrial Companies Act. The court relied on established legal principles and previous judgments to support the petitioner's case. No costs were awarded in this matter.