JAYBHARAT CREDIT LTD. Vs. APS STAR INDUSTRIES LTD.

JUDGEMENT

(1.) Respondent No. 2 has taken out this chamber summons praying for raising of attachment of the right, title and interest of respondent No. 2 in the premises known as Yuchit Bungalow, Juhu Tara Road, Juhu, Santacruz (West), Mumbai, levied pursuant to the warrant of attachment dated 31-1-2000.

(2.) Heard the learned counsel for the parties. Perused the affidavits filed by the parties in support of their respective contentions. Perused the entire record relevant to the issue at hand.

(3.) The petitioner-creditors had filed a claim before the arbitrator in respect of the amount claimed to be due by the respondent No. 1-company under the lease agreement dated 27-7-1994, entered into between the petitioners and respondent No. 1-company. The repayment of the lease amount due from respondent No. 1-company under the lease agreement was guaranteed by respondent Nos. 2 and 3 by a guarantee deed dated 27-7-1994, executed in favour of the petitioner-company, guaranteeing payment of the lease rental amounts on behalf of respondent No. 1-company, and respondent Nos. 2 and 3 having been directors of respondent No. 1-company. Respondent No, 1-company pointed out to the arbitrator by a letter dated 4-8-1998, that respondent No. 1 -company had been declared a sick company within the meaning of the provisions of Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 ('SICA') and it filed a reference before the BIFR which had been registered as Case No. 28 of 1999, on 20-2-1998, and respondent No. 1-company was declared sick as on 31-7-1998. The respondents pointed out to the arbitrator that in view of the provisions of the SICA, the arbitration proceedings could not proceed against the respondents. However, the arbitrator passed an award dated 4-8-1998, awarding the impugned amount against all the respondents jointly and severally and directed that the award would not be enforced against respondent No. 1-company until it came out from the BIFR.