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SUPREME COURT OF INDIA
J.B. PARDIWALA, SANDEEP MEHTA, JJ.
Fertilizer Corporation Of India Limited & Ors. - Appellants
Versus
M/S Coromandal Sacks Private Limited – Respondents
Civil Appeal Nos. 5366-5367 of 2024
Decided on : 26-04-2024
| Table of Content |
|---|
| 1. background information on the case. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10) |
| 2. appeal process and judicial decisions taken in the earlier courts. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19) |
| 3. arguments presented by original defendants and their context. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29) |
| 4. rebuttal by the original plaintiff. (Para 30 , 31 , 32 , 33 , 34 , 35 , 36) |
| 5. court analysis on the legislative framework. (Para 39 , 46 , 47 , 48 , 49 , 50 , 51) |
| 6. interpretation of interest applicable during sick company status. (Para 62 , 88) |
| 7. interpretation and implications of section 22 of the 1985 act. (Para 102 , 103 , 106 , 108 , 110) |
| 8. final decisions and implications. (Para 142 , 143 , 144 , 145 , 146) |
JUDGMENT :
J.B. PARDIWALA, J.:
| INDEX |
| A. FACTUAL MATRIX |
| i. Case of the original plaintiff before the trial court |
| ii. Case of the original defendants before the trial court |
| iii. Appeals before the High Court |
| B. SUBMISSIONS ON BEHALF OF THE APPELLANTS/ORIGINAL DEFENDANTS |
| C. SUBMISSIONS ON BEHALF OF THE RESPONDENT/ORIGINAL PLAINTIFF |
| D. ANALYSIS |
| i. Proceedings in respect of FCIL before the BIFR |
| ii. Issues for Determination |
| iii. Overview of Industrial Sickness and the Legislative Scheme of the 1985 Act |
| iv. ISSUE NO. 1: Whether the suspension of legal proceedings as envisaged under Section 22 (1) of the 1985 Act would extend to a civil suit for recovery of money even if the debt sought to be proved in the plaint has not been admitted by the sick industrial company? If so, whether the decree in favour of the original plaintiff could be said to be coram non-judice? |
| v. ISSUE NO. 2: Whether the High Court was correct in granting 24% Compound Interest on the Principal Decretal Amount in favour of the original Plaintiff? a. Concept of Interest |
| E. CONCLUSION |
A. FACTUAL MATRIX
1. Since the issues raised in both the captioned appeals are the same; the parties are also the same and the challenge is also to the self-same impugned common judgment and order passed by the High Court, those were taken up for hearing analogously and are being disposed of by this common judgment and order.
2. The appellants herein are the original defendants and the respondent herein is the original plaintiff.
3. The present appeals arise from the impugned common judgment and order dated 10.06.2022 (“impugned judgment”) passed by the High Court of Telangana at Hyderabad partly allowing the Appeal Suit No. 808 of 2002 and Appeal Suit No. 913 of 2004 respectively preferred by the original defendants and the original plaintiff respectively against the judgment and decree dated 19.09.2001 passed by the Senior Civil Judge, Peddapalli in O.S. No. 37 of 1996 decreeing the suit partly in favour of the original plaintiff.
4. M/s Coromandal Sacks Private Limited, that is, the original plaintiff, is a company registered under the Companies Act, 1956 established with the assistance of the Andhra Pradesh Industrial Development Corporation Limited (“APIDC”) and is engaged in the manufacturing of High Density Poly Ethylene (“HDPE”) bags.
5. Fertilizer Corporation of India Ltd. (“FCIL”), that is, the defendant company, is a Public Sector Undertaking (“PSU”) of the Government of India established for the manufacturing of fertilisers and are operating under the administrative control of the Ministry of Chemicals and Fertilizers, Government of India.
6. The original defendants required HDPE bags for the purpose of packaging and supply of fertiliser to their customers. They had been placing orders for the same with the original plaintiff since 1986-87 onwards. The terms and conditions including the technical specifications of the bags and terms of payment were specified in the notices inviting tender (“NIT”) issued from time to time and the purchase orders issued in pursuance thereof. As per the terms of the NIT, the original defendants we
The suspension of legal proceedings under Section 22(1) of the Sick Industrial Companies Act applies only to ongoing proceedings that would threaten the rehabilitation of sick companies, not to mere ....
The Sick Industrial Companies (Special Provisions) Act, 1985 prevails over prior agreements, enforcing conditions under Section 25F for retrenchment, thus nullifying conflicting claims based on earli....
On approval of a scheme by BIFR under Sick Industrial Companies (Special Provisions) Act, 1985, unsecured creditors has option not to accept scaling down value of its dues and to wait till rehabilita....
The Supreme Court clarified the meaning of 'suit' and 'proceeding' under S.22(1) of SICA, affirming that the protection does not extend to guarantors for loans to a sick industrial company.
The court established that any ongoing proceedings under SICA abate once secured creditors representing 3/4ths of the debt initiate recovery actions under SARFAESI Act, emphasizing statutory definiti....
The court held that a reference under the Sick Industrial Companies Act abates when secured creditors, representing three-fourths of the debt, act under the SARFAESI Act, affirming that jurisdictiona....
The question of limitation in a suit involving a sick industrial company is a mixed question of law and fact, requiring a full trial to resolve.
The scheme sanctioned by the State Government under the SICA has over-riding effect, and a court executing a decree cannot go behind the decree.
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