ONIDA SAVAK LIMITED Vs. MUTHUMEERA AGENCIES

JUDGEMENT

(1.) FOR the The applicant/defendant has filed this application to pass an order staying the proceedings in accordance with section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, and directing release to the applicant-company of the amount of Rs. 10, 80, 101.40. The case in brief is as follows :

(2.) THE applicant-company has incurred heavy financial loss during the years 1996-1999. As per the balance-sheet, the company has become a sick company. THE company in its annual general body meeting adopted the accounts and filed a reference for rehabilitation before the Board for Industrial and Financial Reconstruction under section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as SICA, 1985). It was registered as Case No. 191 of 1999. Further, the stocks of washing machines lifted by the applicant from the godown of the plaintiff were defective. THE applicant-company received complaints from consumers with regard to the defects in the washing machines. After inspection, it was found out that the washing machines lifted from the godown were defective. THE company had to remove and rectify the defects at its own cost and expenses. THE plaintiff is not entitled to receive any amount as the company had incurred heavy expenses for rectifying the defects.

(3.) FOR the purpose of this application, the only question that has to be considered is whether further proceedings in the suit have to be stayed in view of section 22 and whether the defendant is entitled to get refund of the said amount.Learned counsel for the plaintiff relied on Gopalaiyar v. Thiruvengadam, 1918 AIR(Mad) 1158, relating to a decision under Order 37, rule 4 of the Civil Procedure Code and this has no relevancy to the case on hand. Learned counsel for the applicant/defendant relied on Patheja Bros. FORgings and Stamping v. I. C. I. C. I. Ltd., wherein it was observed as follows (page 25) :