2010 (8) TMI 1186 - HC - Indian Laws

Court Dismisses Frivolous Petition, Imposes Rs. 50,000 Cost for Misuse of Resources; Supervisory Jurisdiction Clarified.

M/s National Textile Corporation Limited Versus Sh. Kunj Behari Lal, S/o Sh. Ram Chander, Delhi

The HC dismissed the petition filed by a Government Undertaking, finding it frivolous and meritless. It clarified that Article 227's supervisory ... - Issues Involved:1. Scope and applicability of Article 227 of the Constitution of India.2. Applicability of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) in eviction proceedings.3. Legitimacy of the petition filed by the Government Undertaking.4. Imposition of costs for frivolous litigation.Issue-wise Detailed Analysis:1. Scope and Applicability of Article 227 of the Constitution of India:The judgment begins by clarifying the scope of Article 227, emphasizing that the jurisdiction of the High Court under this Article is limited. It is not intended for correcting mere errors but is to be exercised sparingly to ensure that subordinate courts remain within their authority. The court references the case of Waryam Singh and another vs. Amarnath and another, highlighting that the power of superintendence should be used only in appropriate cases. The court further reiterates that under Article 227, it does not disturb concurrent findings of fact by lower courts unless there is a jurisdictional error or a legal proposition is ignored.2. Applicability of Section 22 of SICA in Eviction Proceedings:The petitioner, a sick company, argued that Section 22 of SICA should protect it from eviction proceedings, as it would impose additional financial liability and affect its rehabilitation process. However, the court noted that Section 22(1) of SICA does not prevent suits for possession against a sick company. The trial court and first appellate court both found that the eviction proceedings did not fall under the categories automatically suspended by Section 22(1), as outlined in the Supreme Court's decision in M/s Shree Chamundi Mopeds Ltd. The court emphasized that eviction proceedings by a landlord do not constitute proceedings against the property of the sick company as contemplated under Section 22.3. Legitimacy of the Petition Filed by the Government Undertaking:The court criticized the petitioner, a Government Undertaking, for filing a meritless and frivolous petition. It highlighted that the petitioner did not initially raise the plea concerning SICA in its written statement and attempted to introduce it without amending the written statement. The court found no illegality or irrationality in the orders of the lower courts and deemed the petition as an unnecessary waste of public resources.4. Imposition of Costs for Frivolous Litigation:The judgment strongly condemned the practice of frivolous litigation by Public Sector Undertakings, noting that such actions waste public money and burden the judiciary. The court imposed a cost of Rs. 50,000 on the petitioner, directing that the amount be recovered from the salaries of the officials responsible for pursuing the litigation. The court emphasized the need for a strong message against mindless litigation and stressed the importance of using public resources judiciously.In conclusion, the petition was dismissed with costs, and the court ordered compliance with its directives regarding the recovery of costs from the responsible officials. The judgment serves as a caution against frivolous litigation and underscores the limited scope of Article 227 and Section 22 of SICA in eviction proceedings.