PRAKASH INDUSTRIES LIMITED Vs. BAJAJ AUTO FINANCE LIMITED

JUDGEMENT

(1.) The appellant seeks protection under Sick Industrial Companies (Special Provisions) Act, 1985 (referred to as SICA) not only for the purposes of not paying the lease rentals but also as remedy not to handover the wind-mills being the subject matter of the lease agreement and to continue to run the same without giving any compensation to the respondent who is the lessor of the said wind-mills.

(2.) The respondent has filed the suit for recovery of unpaid lease rentals as also for return of the wind-mills which were subject matter of the lease agreement specifically in view of termination of the lease agreement as a consequence of the respondents not having paid the amounts in terms of the lease agreements. The parties to the present appeal had entered into a lease agreement dated 28/03/1995 in respect of the wind-mills to be installed at Mupandal, Kanyakumari in the State of Tamil Nadu. The said wind-mills were delivered and installed and were used by the appellant. The appellant, however, only paid the first four instalments regularly, being quarterly instalments, and thereafter informed the respondent vide their letter dated 5/04/1996 that due to shortage of funds they were compelled to defer the payment of lease rentals. Suffice to say that certain cheques towards lease rentals bounced and the appellant failed to comply with their contractual obligations under the lease agreement dated 28/03/1995. It was in these circumstances that the respondent filed the suit in the Delhi High Court.

(3.) The appellant contested the suit and filed the written statement where inter alia they raised the plea of the suit not being maintainable in view of Section 22 of SICA. The appellant also contended that they had filed a suit for recovery of Rs. 1,02,05,956/- in the Civil Court at Pune for damages in relation to the lease agreement.