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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
K.R. SHRIRAM, KAMAL KHATA, JJ.
Reliance Communication Limited - Appellant
Versus
Rajendra P. Bansal - Respondent
Interim Application No. 1161 of 2020 In First Appeal No. 1539 of 2012
Decided On : 04-01-2023
Insolvency and Bankruptcy Code, 2016 - Section 14, 9, 60(5), 231 , 14, 14(1), 3(31), 14(1)(a), 25(2)(b) - Arbitration and Conciliation Act, 1996 - Section 9 - Income Tax Act, 1961 - Section 260-A - Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Tamil Nadu Cultivating Tenants Arrears of Rent (Relief) Act, 1972 - Section 3 - Companies Act, 1956 - Operational creditor - Corporate Insolvency Resolution Process – Claiming Compensation - Bar of jurisdiction - Decision of High Court or Supreme Court on the case stated - Repeal by this Act of any enactment shall not affect - Application for initiation of corporate insolvency resolution process by operational creditor - Preliminary issue that falls for consideration in present Interim Application is whether respondent can be allowed to withdraw monies deposited by appellant pursuant to this Court’s order towards stay of execution of impugned judgment given that appellant is undergoing CIRP – Held, Court as also decision of Hon’ble Andhra Pradesh High Court also do not further case of appellant-judgment debtor - None of judgments lay down that monies deposited continue to remain asset of judgment debtor - Finding that title in money deposited does not pass to judgment creditor was made in context that any surplus amount/accretions on amount deposited in excess of decretal sum would be paid back to judgment debtor and it is only in that context that Courts have held on deposit of monies title did not pass to judgment creditor - However, judgments have in categoric terms stipulated that once monies are deposited in court, they are out of reach of either party - That being so, clearly monies that were deposited by appellant herein do not constitute asset/property of judgment debtor –Offence Punishable.
JUDGMENT :
K.R. Shriram, J.
1. The preliminary issue that falls for consideration in the present Interim Application is whether respondent can be allowed to withdraw the monies deposited by appellant pursuant to this Court’s order dated 10th December 2012 towards stay of execution of the impugned judgment given that appellant is undergoing CIRP.
2. Appellant is a company incorporated under the provisions of the Companies Act, 1956 and is, inter alia, engaged in the business of telecommunication services. Appellant is undergoing Corporate Insolvency Resolution Process (“CIRP”) under the Insolvency and Bankruptcy Code, 2016 (“IBC”) pursuant to the order dated 15th May 2018 passed by the National Company Law Tribunal, Mumbai (“NCLT”) in C.P. No.(I.B.) 1387 (MB) of 2017. Appellant is being represented in the present proceedings through its Resolution Professional.
3. Respondent in the abovementioned First Appeal, who is applicant in the Interim Application, is a former employee of appellant.
4. LIST OF DATES AND EVENTS :
| Sr. No. | Date | Particulars |
| 1. | 29th November 2001 | Respondent joined appellant as an employee pursuant to an Appointment Letter dated 29th November 2001 issued by appellant. |
| 2. | 31st October 2006 | Appellant unilaterally terminated respondent’s employment. |
| 3. | 10th February 2010 | Respondent filed Special Civil Suit No. 127/2010 (“Suit”) in the Court of Civil Judge, Senior Division, Thane (“Trial Court”), inter alia, challenging the termination of his employment by appellant. |
| 4. | 28th April 2010 | Appellant filed its written statement in the Suit. |
| 5. | March 2011 29th February 2012 | Respondent and appellant filed their respective affidavits in lieu of examination-in-chief in the Suit. |
| 6. | 30th June 2012 | The Trial Court passed a judgment (“Impugned Judgment”) directing appellant to pay the following sums of money to respondent : (a) Rs.4,82,112/-towards 3 months’ salary along with interest @18% p.a. from 1st November 2006 till the date of realization. (b) Rs.9,24,006/-towards leave encashment along with interest @18% p.a. from 1st November 2006 till the date of realization. (c) Rs.2,50,000/-towards damages within 3 months from the date of the decree. |
| 7. | 5th October 2012 | Respondent filed the present appeal challenging the impugned judgment. |
| 8. | 10th December 2012 | This Court passed an order directing the stay of execution of the impugned judgment subject to appellant depositing the entire decretal amount (payable as of 10th December 2012) with the Trial Court within a period of four weeks from 10th December 2012. |
| 9. | 3rd January 2013 | This Court passed an order recording appellant’s statement that the entire decretal amount had been deposited with the Trial Court in terms of the order dated 10th December 2012. Appellant had deposited a sum of Rs.32,16,909/- with the Trial Court. |
| 10. | 18th February 2013 | This Court passed an order admitting the First Appeal. |
| 11. | 18th February 2013 | This Court passed an order in Civil Application No.405 of 2013 filed by respondent in the First Appeal, inter alia, directing that : (a) Respondent was entitled to withdraw Rs.5,00,000/-without furnishing any security. (b) Respondent was allowed to withdraw Rs.10,00,000/-on furnishing security to the satisfaction of the Executing Court. (c) The Executing Court was directed to invest the remaining amount in a fixed deposit scheme of any nationalised bank with renewal clause. NOTE: In terms of the order dated 18th February 2013, respondent has withdrawn Rs.5,00,000/-without furnishing security and Rs.10,00,000/-on furnishing security. The balance sum of Rs.17,16,909/-continues to be deposited with the Trial Court. |
| 12. | 4th January | |
Encashed bank guarantee proceeds deposited as pre-deposit condition for MSME award stay held corporate debtor's CIRP asset subject to moratorium; decree holder claim via resolution process; writ not ....
The court affirmed that a decree can be issued based on admissions where debts owed are settled through an approved resolution plan, allowing the security deposit to be recovered unconditionally.
(1) Assets of company would include amounts lying to credit in bank accounts.(2) Power under Section 482 of Cr.P.C. may not be available to Court to countenance breach of a statuary provision.
Interest ceased to run on the deposited amount after the dismissal of FAO No. 284/2005 on 04.12.2008.
The court established that the nature of challenge under Article 226 and the absence of jurisdiction could trigger the invocation of the High Court's jurisdiction. The court also clarified that the f....
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