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CASE NO.:

Appeal (civil) 4126 of 2006

PETITIONER:

Jay Engineering Works Ltd.

RESPONDENT:

Industry Facilitation Council and Anr.

DATE OF JUDGMENT: 14/09/2006

BENCH:

S.B. Sinha & Dalveer Bhandari

JUDGMENT:

J U D G M E N T

[Arising out of S.L.P. (C) No. 909 of 2005]

WITH

CIVIL APPEAL NO.4127 OF 2006

[Arising out of S.L.P. (C) No. 991 of 2005]

S.B. SINHA, J :

Leave granted.

The Appellant herein is a public limited company engaged in

business of manufacturing electronic fans and fuel injection equipments.

Respondent No. 2 is a small scale industry. It manufactures copper wires.

It supplied its products to the Appellant herein during the period 28th

December, 1996 and 3rd June, 2000. As the Appellant Company became

sick, its Board of Directors made a reference in terms of Section 15 of the

Sick Industrial Companies (Special Provisions) Act, 1985 (for short ’the

1985 Act’) on 8.4.1994. The Appellant Company was declared as sick

unit by the Board for Industrial and Financial Construction (for short "the

Board"). A rehabilitation scheme was framed by the Board but it was

declared to have failed by an order on 12.7.2001. By reason of the said

order, however, Industrial Development Bank of India (IDBI) was

appointed as an operating agency. A fresh report was submitted by the

said operating agency on 20th March, 2003 which was accepted by the

Board whereupon a fresh rehabilitation scheme was sanctioned on

8.4.2003.

In the meanwhile, the Respondent No. 2 herein filed a claim

petition before the Industry Facilitation Council (for short "the Council")

Respondent No. 1 herein in terms of the provisions of the Interest on

Delayed Payments to Small Scale and Ancillary Industrial Undertakings

Act, 1993 (for short "the 1993 Act"). Before the Council, the Appellant

herein raised a plea that it had been declared to be a sick company by the

Board and as such the matter should not be proceeded further. The

Council, however, opined that only because the Appellant Company has

been declared sick by the Board, it would not bind the Council to take a

decision in the matter. It passed an award directing:

"That upon the submissions made by both the

parties in the above case and in the light of

contentions raised it is prayed that the delay of

two years to four years was caused by the

respondents for making the payment to the

petitioner, which is enough. Therefore, Council

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has passed the order that an amount of Rs.

10,92,253.00 and one and half percent interest

of PLR of State Bank of India is due to the

Petitioner Messrs. Diamond Wire Industries,

Ratlam, of the Respondent Messrs. Jay

Engineering Works Limited, New Delhi."

The said award of the Council was put in execution. The bank

account of the Appellant was attached by the District Court, Ratlam. A

writ petition was filed by the Appellant herein before the Madhya

Pradesh High Court questioning the same which by reason of the

impugned judgment has been dismissed by a learned Single Judge. A

Letters Patent Appeal preferred thereagainst was dismissed by the

impugned judgment.

The High Court in its impugned judgment proceeded on the

premise that the 1993 Act could prevail over the 1985 Act.

Mr. S. Ganesh, learned senior counsel appearing on behalf of the

Appellant, at the outset, drew our attention to the fact that the award

made by the Council in favour of the Respondent had been taken into

consideration in the revised Scheme itself and as such the award of the

Council was non-executable. It was urged that both the 1985 Act and

1993 Act operate in different fields and in that view of the matter, the

question that the 1993 Act prevailing over the 1985 Act would not arise

in the instant case.

Mr. Sushil Kuma