AUTO PINS INDIA LTD Vs. GRINDWELL NORTON LTD

JUDGEMENT

(1.) The respondent filed a suit for recovery against the petitioner company under the provisions of Order 37 of the Code of Civil Procedure, 1908 (hereinafter referred to as the said Code). The petitioner, defendant in the suit, filed an application under Section 22 of the Sick Industrial (Special Provisions) Companies Act, 1985 (hereinafter referred to as, 'the SICA'). The application was contested by the respondent and in terms of the impugned order dated 11.3.2005 the same was rejected. The petitioner thereafter filed an application seeking recall of that order, which was also dismissed vide order dated 2.5.2006. The petitioner has thus preferred the present proceedings under Article 227 of the Constitution of India.

(2.) The submission of the learned counsel for the petitioner is that in view of the application filed by the petitioner under Section 15(1) of the SICA and the same being registered by the BIFR, an enquiry as contemplated under Section 16 of the SICA is now pending before the Board. It is, thus, submitted that in view of the judgement of the Apex Court in Real Value Appliances Ltd. etc. Vs. Canara Bank and Ors. (1998) 5 SCC 554, the suit could not proceed further and was liable to be stayed.

(3.) A perusal of the impugned order shows that the suit had been filed for recovery of Rs.4,85,630/- against the petitioner. The principal amount claimed in the suit is Rs.3,63,654.31 apart from interest. It is not disputed that the only mention in the scheme proposed by the petitioner sets out an amount of Rs.4,000/- as due to the respondent. It is, thus, obvious that the same is more in the nature of the formality rather than any admission of debt due whether in whole or in part.