SAKETH INDIA LIMITED Vs. W DIAMOND INDIA LIMITED

JUDGEMENT

(1.) The Appellant, Saketh India Limited, assails the impugned Order of the learned Single Judge passed on 24.8.2 009, whereby two Applications preferred by the Appellant/Defendant were dismissed and the Suit filed under Order XXXVIII of the Code of Civil Procedure, 1908 ("CPC" for short) for the recovery of mesne profits for the sum of Rupees 31,30,153/- together with interest and costs was decreed. In the first Application, IA No. 1171/2006, the Appellant/Defendant prayed for condonation of delay in entering appearance (that is filing the Address Form). In the second Application, IA No. 1170/2006, the Appellant/Defendant sought the rejection of the Plaint under Order VII Rule 11(d) of the CPC on the ground that it had been declared a Sick Industrial Unit in terms of Section 3(1)(o) of Sick Industrial Companies (special Provisions) Act, 1985 ("SICA" for short). Before us, the only aspect that has been argued is that SICA places a complete prohibition on all judicial proceedings leaving no alternative to the Trial Judge other than ordering the rejection of the Plaint.

(2.) It appears from a perusal of the records that Summons in Form 4 under Order XXXVII of the CPC were served on Defendant No. 1 by affixation at Hosur, Karnataka on 22.8.2005 and on Defendant No. 2 on 30.8.2005 at Bangalore. The aforementioned Applications filed on behalf of the Defendants are dated 25.1.2006 and were filed on that very day; they have been supported by Affidavits of Defendant No. 2 who is the Managing Director of Defendant No. 1. On 7.11.2008, the learned Single Judge directed the Defendants to file, within four weeks, an affidavit stating whether or not the monies claimed by the Plaintiff have been admitted by the Defendant and have been reflected in the documents filed by the Defendant before the Board for Industrial and Financial Reconstruction ("BIFR" for short). On 16.3.2009, the learned Single Judge granted a last opportunity to file the said Affidavit. On the next date of hearing, viz., 19.5.2009, the submission made on behalf of the Plaintiff to the effect that the Defendant was not before BIFR was recorded. In response, the Defendant stated that proceedings were pending before Appellate Authority for Industrial and Financial Reconstruction ("AAIFR" for short). Yet another opportunity to file the aforementioned Affidavit was granted to the Defendant, subject to payment of costs of Rupees 5,000/-. Since the directions were not complied with, costs were increased to Rupees 10,000/- and another chance for filing the said Affidavit before 24.8.2009 was permitted.

(3.) On 24.8.2009, the Court, keeping in perspective the plentitude of opportunities granted but not availed of by the Defendants to file the required Affidavit, as well as the Defendants failure to pay costs, dismissed both the Applications. The Court took into consideration that delay in entering appearance had not been condoned and, therefore, opined that all the averments in the Plaint were deemed to have been admitted, and decreed the Suit. This Appeal arises before us in these circumstances.