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UNION TERRITORY CONSUMER DISPUTES
REDRESSAL COMMISSION, CHANDIGARH
Hon’ble Mr. Justice K.Y. Srivastava, President;
Dr. P.K. Vasudeva & Mrs. Devinderjit Dhatt, Members
PARKASH INDUSTRIES LIMITED—Appellant
versus
BRIJ BHUSHAN MITTAL—Respondent
Appeal No. 92 of 2000—Decided on 7.9.2000
Counsel for the Parties :
For the Appellant :Mr. Naresh Katyal, Advocate.
For the Respondent:Mr. B.B. Mittal, Advocate.
The main legal point established is that Section 22 of SICA provides for the suspension of legal proceedings/contracts and does not allow for the dismissal of complaints for want of jurisdiction.
Headnote:
SICK INDUSTRIAL COMPANIES - Consumer Protection - Sick Industrial Companies (Special Provisions) Act, 1985, Section 22
Fact of the Case:
The appeals involved the treatment of the appellant-Company as a sick industry under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and the suspension of a complaint filed by the respondent under the Consumer Protection Act, 1986.
Finding of the Court:
The District Forum held that the complaints were not required to be stayed or dismissed based on the appellant's contention of being a sick company under SICA. The complaints were allowed with costs, directing the appellant to make payments and refunds as per the stipulated terms and conditions.
Issues: The main issue was the applicability of Section 22 of SICA and whether the District Forum had jurisdiction in the matter.
Ratio Decidendi: The court interpreted Section 22 of SICA, emphasizing that it provides for the suspension of legal proceedings/contracts and does not allow for the dismissal of complaints for want of jurisdiction. The court also referenced previous cases to support its interpretation.
Final Decision: The court dismissed all the appeals, affirming the District Forum's decision and ordering the parties to bear the costs.
Mr. Justice K.K. Srivastava, President— By this order we propose to dispose of 15 appeals i.e. Appeals Nos. 88 to 102 of 2000 filed against the order of the District Forum-II, U.T., Chandigarh. All the appeals have been filed by Parkash Industries Ltd. through Shri I.D. Sharma, Corporate Advisor of the Parkash Industries Ltd. In all the appeals the common point involved and raised is about the appellant-Company having been treated as sick industry under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (in short hereinafter referred to as SICA) by the Board of Industrial and Financial Reconstruction (in short hereinafter referred to as B.I.F.R.) and as such the District Forum should have acted under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 and suspended the complaint filed by the respondent. The learned Counsel for the appellant and the learned Counsel for the respondent during the course of arguments have referred to the record of Appeal No. 92 of 2000 i.e. Parkash Industries Ltd. v. Brij Bhushan Mittal. Accordingly, the facts involved in this case are being referred from the complaint filed before the District Forum in this case by Shri Brij Bhushan Mittal against Parkash Industries Ltd. and others. The respondent in this case deposited a sum of Rs. 20,000 / - with the appellant Parkash Industries Ltd. in response to the scheme floated by the appellant promising to pay the maturity value of the deposits made with the Company within a particular time frame. The complainant deposited the amount and were allotted Secured Redeemable Non-convertible Debentures (NCDs) in different schemes redeemable at the expiry of the stipulated period from the date of allotment. Since the complainant was not paid the maturity value of his deposit inspite of repeated requests, hence he filed the complaint before the District Forum under the Consumer Protection Act, 1986.
2. The opposite parties impleaded in the complaint which was registered as Complaint No. 935 of 1998 were Parkash Industries Ltd., Business Park, 25, Shivaji Marg, New Delhi, Harjeet Arora and Co. SCO. No. 22-23 (2nd Floor), Sector 9-D, Chandigarh and the Industrial Finance Corporation of India, Bank of Baroda Building, 16, Sansad Marg, New Delhi. The appellant - Company i.e. Parkash Industries Ltd. sent reply through registered A.D. post; vide letter dated 10.12.1998 to the President of the District Forum-II, U.T., Chandigarh. It was averred, inter alia, in the reply that “...the performance of the Company during the year 1997-98 suffered adversely and there was a net loss of Rs. 320 crores. As a result of these losses, the Company’s net worth has turned negative as on 31st March, 1998 and accordingly, the Company has become a “sick company’ and on a reference being made to the Hon’ble Board of Industrial and Financial Reconstruction (BIFR) pursuant to the provisions of Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, the Company has been declared a Sick Company and registered at SI. No. 107/98”. It was further averred that it appointed Industrial Finance Corporation of India Ltd. (IFCI) as an “Operating Agency’ to prepare a scheme to make the Company viable. Thereafter, reference was made to Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 and it was urged that Forum had no jurisdiction in the matter and the complaint was not maintainable and deserves to be dismissed.
3. The District Forum after hearing the learned Counsel for both the sides repelled the contention of the appellant about the applicability of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 and held that the complaint alongwith other complaints involved in the remaining appeals were not required to be stayed or dismissed on the ground urged in the reply of the appellant. Consequently, the complaint was allowed with costs and the District Forum passed the following
