Dr. M. K. Sharma, J.

( 1 ) THE present revision petition is directed against the order dated 4. 12. 1998 passed by the Additional District Judge, Deli dismissing the application filed by the petitioner/defendant under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as the Act ). The respondent/plaintiff filed the aforesaid suit being Suit No. 31/1996 seeking for a decree for recovery of possession and for recovery of damages and mesne profits amounting to Rs. 1. 19,000. 00. The said suit is pending before the Additional District Judge, delhi. In the said suit an application came to be filed by the petitioner/defendant contending, inter alia that the defendant company has become sick and accordingly, its case has been referred to the Board of Industrial and Financial Reconstruction (BIFR) under Section 15 of the Act. It was further stated in the said application that the reference has since been registered by the BIFR and that pursuant thereto the Board has declared the defendant to be a sick company and IFCI has been appointed as the operating agent.

( 2 ) THE aforesaid application was contested by the respondent by contending, inter alia that the provisions of Section 22 of the Act are not applicable to the aforesaid suit as the said suit has been instituted seeking for decree of recovery of possession and for recovery of damages and mesne profits. The Additional District Judge took up the said application for consideration and after hearing the parties dismissed the application. Being aggrieved the present petition has been preferred.

( 3 ) MR. Taneja appearing for the petitioner submitted that as the recovery of damages/mesne profits claimed by the plaintiff from the defendants in this case relate to a period prior to the date on which the defendant was declared sick and thus are liabilities to be included in the Scheme and thus the same cannot be recovered in view of the provisions of Section 22 of the Act.

( 4 ) MR. Rajiv Nayyar appearing for the respondent, on the other hand submitted that the provisions of Section 22 of the Act are not applicable and would not cover a proceeding where decree is sought for either for eviction of the tenant or for payment of damages and mesne profits or for both.

( 5 ) IN order to appreciate the contentions of the learned counsel appearing for the parties it is necessary to extract the provisions of Section 22 (1) of the Sick Industrial Companies (Special Provisions) Act, 1985, which are extracted below:- 22. Suspension of legal proceedings, Contracts, etc.- (1) Where in respect of an industrial company, an inquiry under Section 16 is pending or any scheme referred to under Section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under Section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other law or the memorandum and articles of association of the Industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority.

( 6 ) THE aforesaid provision came to be interpreted by the Supreme Court in Deputy Confidential Tax Officer v. Corromandal Pharmaceuticals; reported in AIR 1997 SC 2027. Atleast two judgments of this court were referred to at the bar. They are National Textile Corporation v. Smt. Kamla Sharma; reported in 1997 (2) AD Delhi 281 and S

Click Here to Read the rest of this document