V.K. Shali, J.

IA No. 7089/2009

1. This order shall dispose of IA bearing No. 7089/2009 under Section 22(1) of the Sick Industrial Companies (Special) Provisions Act, 1985 (hereinafter referred as 'the Act').

2. Briefly stated the facts of the case are that the Plaintiff had filed a suit in the month of November 2008 for recovery of a sum of Rs. 44,05,803.47 against the Defendant. It was alleged in the plaint that the Plaintiff is a proprietor of M/s Shree Shyam Packaging Industries, Gulshan Park, Opposite Rajdhani Dal Mill, Main Rohtak Road, Nangloi, Delhi-110041 and is engaged in the business of manufacturing and selling packaging material. The Defendant is a company engaged in the business of manufacturing and selling of two-wheeler scooters in the domestic as well as in foreign market. In the course of its business activities, the Defendant required wooden crates for packaging of its scooters meant for the purpose of export. On account of the said crates having been supplied by the Plaintiff, it was alleged that the Defendant on account of non-payment of various bills starting from 26.11.2005 to 31.01.2006 owed a sum of Rs. 24,83,409.27. In respect of the aforesaid amount, the Plaintiff filed a suit along with the interest @ 24% per annum because of the default on the part of the Defendant to clear the payment within 45 days for which the credit was given to the Defendant. The interest component which was calculated was to the tune of Rs. 15,39,714.20 starting from 01.04.2006 till the filing of the present suit i.e. 31.10.2008 and that is how a sum of Rs. 44,05,803.47 was claimed.

3. The Defendant filed its written statement and contested the claim of the Plaintiff. The preliminary objection was raised regarding the maintainability of the plaint itself on the ground that the Defendant was a sick company and the present suit could not be proceeded. The jurisdiction of the Court was also challenged as it was alleged that the Court in Kanpur has the exclusive jurisdiction. On merits, the Defendant denied the liability to pay the aforesaid amount to the Plaintiff.

4. After completion of the pleadings, the Defendant filed an application raising a plea that the proceedings of the suit be adjourned sine die on account of the fact that the Defendant was a sick company and by virtue of Section 22(1) of the Act, the suit for recovery could not be continued for want of permission by the BIFR. In order to support its contention, the Defendant along with the application had placed on record the photocopy of the letter dated 15.09.2006 written to the whole-time Director of the Defendant company, by the Registrar, BIFR, intimating that its reference dated 08.09.2006 was registered as a case No. 80/2006 with the BIFR on appeal to the Secretary, BIFR. A copy of the order dated 17.05.2007 in Case No. 80/2006 by the BIFR was also annexed wherein it was observed as under:

(ii) The secured/unsecured creditors are not permitted to file/pursue suits already filed at this stage. The bench, however, would reconsider its decision if the direction/guidelines issued are not complied with by the company within the given time frames.

5. On the basis of these orders having been passed by the BIFR, the contention of the learned Counsel for the Defendant, is that as the Defendant being a sick industrial company within the definition of Section (3)(1)(o) of the Act, and as there are orders passed by the BIFR on 15.09.2006 and 17.05.2007, by virtue of Section 22 of the Act, the proceedings of the present suit be adjourned sine die, awaiting the final decision of the BIFR. In order to support its contention, the Defendant in para 5 of the application has referred to various judgments of the Apex Court as well as of the High Courts although they are not cited.

6. The Plaintiff in its reply to the application took a plea that the Defendant had not admitted its liability to pay the suit amount and the dues are not reckoned in the scheme of rehabilitation, conse