TaxTMI 
TaxTMI 
2000 (2) TMI 719
X X X X Extracts X X X X
X X X X Extracts X X X X
....o made by such companies was not found favour with the trial courts nor with the revisional courts nor even with the High Courts before which the companies approached. All these appeals have been filed by special leave against the orders passed by the High Courts by which the aforesaid plea was discountenanced. 2. It is sufficient to set out the facts from one of these appeals in this batch. Answers given to the questions raised in that appeal would apply to all the connected appeals now being heard along with that appeal. Facts in Criminal Appeal No. 847 of 1999 are the following : Cheques issued by the appellant therein were dishonoured by the drawee bank on 27-12-1996 on the ground of insufficiency of amount in the account concerned, and the payee thereof issued a notice on 2-1-1997, demanding payment of the amount covered by such cheques. As the drawer of the cheques failed to make the payment as per demand, within 15 days of receipt of the notice, a complaint was filed on 29-1-1997 against the company and its directors for the offence under section 138 of the Negotiable Instruments Act ('NI Act'). The magistrate before whom the complaint was filed issued process against ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... locking up of investible funds of banks and financial institutions are of serious concern to the Government and the society at large. 'A need has, therefore, been felt to enact in public interest a legislation to provide for timely detection of sickness in industrial companies and for expeditious determination by a body of experts of the preventive, ameliorative, remedial and other measures that would need to be adopted with respect to such companies and for enforcement of the measures considered appropriate with utmost practicable despatch.' A sick industrial company is a company which has 'at the end of any financial year accumulated losses equal to or exceeding its entire net worth.' [vide section 3(1) of SICA] 8. Section 15 enables the board of directors of a company which has become sick to make reference to the BIFR for determination of measures which shall be adopted with respect to the company. (The Central Government or the Reserve Bank or the State Government concerned may also make the reference to the BIFR for the same purpose if it has sufficient reasons to believe that a company has become sick.) Once a reference is made it is open to BIFR to conduct an inquiry fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thereto pending before any court. . . shall remain stayed.' 11. As the arguments based on section 22(1) of SICA were endeavoured to be fortified with the help of section 22A of SICA the said provision is extracted below : "22A. Direction not to dispose of assets.-The Board may, if it is of opinion that any direction is necessary in the interest of the sick industrial company or creditors or shareholders or in the public interest, by order in writing, direct the sick industrial company not to dispose of, except with the consent of the Board, any of its assets- (a )during the period of preparation or consideration of the scheme under section 18; and (b)during the period beginning with the recording of opinion by the Board for winding up of the company under sub-section (1) of section 20 and up to commencement of the proceedings relating to the winding up before the concerned High Court." 12. We do not think it necessary to labour on the scope of section 22A of SICA in the present batch of appeals as the BIFR did not pass any order against any company involved herein until the expiry of the period of 15 days from the receipt of notice contemplated in clause (c) of the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he last limb thereof which reads thus: 'Except with the consent of the Board or, as the case may be, the Appellate Authority.' It means that with such consent the court would be in a position to resort to proceedings for distress against the properties of the sick industrial company. Hence the aforesaid contention has no merit at all. 16. It was next contended that the ban against maintainability of a suit for the recovery of money would encompass prosecution proceedings, also. To support the said contention reliance was sought to be made on the following meaning of the word 'suit' as given in Bouvier's Law Dictionary: "Suit is a generic term of comprehensive signification, and applies to any proceeding in a court of justice in which the plaintiff pursues, in such court, the remedy which the law affords him for the redress of any injury or the recovery of a right. . . . In its most extended sense, the word suit includes not only a civil action, but also a criminal prosecution, as, indictment, information and a conviction by a magistrate." 17. The learned counsel invited our attention to the maxim 'contemporanea expositio est optimaet fortissima in lege' (contemporaneous ex....