L G ELECTRONICS LTD Vs. USHA INDIA LTD

JUDGEMENT

(1.) This petition raises an interesting question touching the extent and reach of Section 22 of the Sick Industrial Companies (Special Provisions) Act (in short 'the SICA'), namely, whether the security deposit given by the tenant to the company (which is before the Board for Industrial and Financial Reconstruction/Appellant Authority for Industrial and Financial Reconstruction) is covered by Section 22 of the SICA and the tenant is precluded from filing the suit/proceedings or the execution petition to recover back this security amount which was given as deposit at the time of taking the company premises on rent. We may first set down the facts surrounding this question which has arisen for consideration.

(2.) The appellant (hereinafter referred to as 'the decree holder') entered into a lease agreement with the respondent No. 1 (hereinafter referred to as the JD No. 1) in respect of premises bearing No. A-42, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi, at a monthly rent of Rs. 7,26,600/- exclusive of electricity and water charges vide lease dated 15-3-1997. Separate maintenance agreement was also signed between the decree holder and sister concern of JD No-1 (hereinafter referred to as 'the JD No. 2). The decree holder also handed over a sum of Rs. 2,03,44,800/- as interest free security to JD No. 1 and a sum of Rs. 87,93,200/- as interest free security deposit to JD No. 2. This lease and maintenance agreements were terminated vide notice dated 12-12-1999 by the decree holder, with effect from 14-3-2000. However, as the JDs did not come forward to take possession of the premises and did not return the security money either, the decree holder filed Suit No. 762/2000 in this Court against the JDs and certain other persons to deliver back the premises to JDs and for return of its security deposit. On 20-5-2000 order was passed by a learned single Judge of this Court permitting the decree holder to deposit the keys of the premises through a Local Commissioner. This suit was ultimately decreed on admissions, while allowing the application of the decree holder under Order VI, Rule 12 of the Code of Civil Procedure. The decree in the sum of Rs. 2,31,25,803/- with proportionate cost and pendente lite and future interest of the rate of 12% per annum was passed. Prior to that, on an application preferred by the JDs, possession of leased premises was handed over to JD No. 1 vide order dated 25-1-2002 by releasing the keys, which were deposited in the Court.

(3.) In January 2002, JD No. 1 had moved an application before the BIFR seeking a declaration that it had become a Sick Industrial unit. However, this fact was not disclosed in the pending suit and for this reason, the Court had proceeded with the suit which culminated into aforesaid decree. The BIFR ultimately rejected the reference on 28-10-2002. The JD No. 1 filed an appeal there- against before the AAIFR.