TaxTMI 
TaxTMI 
2023 (10) TMI 1389
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....were made, others remained outstanding. The respondent/plaintiff filed a suit for recovery for an amount of Rs. 2,07,68,394/-on 28 May 1999 bearing No. CS(OS) 1252/1999. Summons to appear in this suit were served upon the appellant/defendant by way of publication and admittedly appearance was put on its behalf on 28 November 2000 and 15 February 2001. However, due to non-appearance of counsel on behalf of appellant/defendant, the suit proceeded ex parte against the appellant/defendant vide order dated 28 January 2002 and eventually judgment/decree was passed on 27 May 2009. An application bearing I.A. No. 6300/2019 under Order IX Rule 13 CPC was filed by the appellant/defendant on 25 April 2019 inter alia submitting that it was unaware of the suit proceedings and came to know about passing of the impugned judgment/decree upon receiving show cause notice dated 17 November 2018 in Execution Petition No. 61/2016. Herein, it was the appellant/defendant's submission that an inquiry had been initiated under the provisions of the Sick Industrial Companies Act, 1881 SICA in reference bearing No. 162/1998 registered with the Board of Industrial and Financial Reconstruction BIF....
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.... December, 2012. Defendant came out of purview of the Act on 18th September, 2014. This clearly shows the Judgment Debtor was aware of the decree passed by this court since 2012. After coming out of the purview of SICA, from 2014 to 2019 the Judgment Debtor remained silent. The conduct of the Defendant is completely laid-back and lackadaisical. The explanation offered by it for seeking setting aside of ex part decree smacks of gross negligence on the part of the Judgment Debtor. Thus, there is no merit in the application. The same is dismissed with cost of Rs. 25,000/-to be deposited with the Delhi High Court Staff Welfare Fund." GROUNDS OF APPEAL: 4. The impugned order is assailed in the present appeal on the reasoning that the appellant/defendant should not be penalized for the negligence of its counsel; and that the respondent/plaintiff despite being aware of the reference under the SICA did not apprise the Court of such proceedings; and that the impugned judgment/decree dated 27 May 2009 has been passed without the Court having jurisdiction. 5. Advance notice of the present appeal was issued to the respondent/plaintiff and appearance has been put. DECISION: 6. Ha....
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.... director of the company; (b) no resolution passed at any meeting of the shareholders of such company shall be given effect to unless approved by the Board. (3) (Where an inquiry under Section 16 is pending or any scheme referred to in Section 17 is under preparation or during the period) of consideration of any scheme under Section 18 or where any such scheme is sanctioned thereunder, for due implementation of the scheme, the Board may by order declare with respect to the sick industrial company concerned that the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force, to which such sick industrial company is a party or which may be applicable to such sick industrial company immediately before the date of such order, shall remain suspended or that all or any of the rights, privileges, obligations and liabilities accruing or arising thereunder before the said date, shall remain suspended or shall be enforceable with such adaptations and in such manner as may be specified by the Board: Provided that such declaration shall not be made for a period exceeding two years w....
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.... debt sought to be proved in the plaint has not been admitted. Furthermore, it was observed that there can be no logic in denying legal recourse to a party for proving its debt. The said decision was relied upon by this Court again in the decision of M/s. Ralson Industries Ltd. (now known as Da Rubber Industries Ltd) (supra), wherein it was categorically held that the proceedings that can be halted by invoking Section 22 of the SICA should be in the nature of execution, distress or the like. 9. Avoiding a long academic discussion, the aforesaid proposition of law has since been finally settled by the Supreme Court in Raheja Universal Limited (supra) wherein it was held: "77. Section 22 of SICA 1985 is very significant and of wide ramifications and application. More often than not, the jurisdiction of BIFR is being invoked, necessitated by varied actions of third parties against the sick industrial company. The proceedings, taken by way of execution, distress or the like, may have the effect of destabilising the finalisation and/or implementation of the scheme of revival under consideration of BIFR. It appears that, the legislature intended to ensure that no impediments ....