RAMAVTAR KUNJILAL GUPTA Vs. SICOM LIMITED

JUDGEMENT

(1.) THIS appeal is directed against the order of the learned single Judge of this Court dismissing the notice of motion under section 9(5) of the Presidency Towns Insolvency Act, 1909 to set aside the insolvency notice. Only few facts need to be stated in order to appreciate the controversy between the parties. The respondents are judgment creditors. The respondents served a notice on the judgment debtors i.e. the appellants based upon the decree in their favour in the sum of Rs.4,43,18,813.00 with interest thereon at the rate of 18% p.a. as set out in the notice. Pursuant to the notice being served, appellants took out a notice of motion for setting aside the insolvency notice served on respondents. In support of the motion, an affidavit of appellant no.2 was filed on behalf of himself and appellant no.1. By the said affidavit number of objections were raised which were repelled by the learned single Judge and the motion was dismissed.

(2.) MR .Shailesh Shah, learned Counsel appearing for the appellants contended that the notice is based on a decree passed by this Court on 30th June 1989 in Summons for Judgment No.108 of 1989 in Summary Suit No.3646 of 1987, more than 12 years have passed after the date of the said decree and as such the decree is barred by law of limitation and inexecutable and consequently the notice is bad in law. This objection was negatived by the learned single Judge on the ground that the judgment creditors had taken out a Notice under Order XXI Rule 22 of the Code of Civil Procedure pursuant to the Execution Application no.386 of 2003 lodged by the judgment creditors on or before 3rd September, 2003. That notice was made absolute by order dated 12nd December, 2003. Therefore, objection raised was hit by res-judicata and/or principles of constructive resjudicata. Mr.Shah, however, relying upon the decision of this Court in Laxman Dayaram Wani Vs. Shivram Gatlu Patil; ILR 1977 460 contended that before applying the principles of constructive resjudicata the Court must proceed with caution and unless there is something to show that the Court has decided the issue then only by principles of constructive resjudicata becomes final and debars the party from raising the contention in the subsequent proceedings. The Court must see whether there is sufficient material on record to show that such a decision had taken place.

(3.) OUR attention is also drawn to the judgment of P.N.Bhagwati (as he then was in Gujarat High Court) in the case of Ganchi Laxmichand Ambaran Vs.Tulsidas Madhavdas; AIR 1963 Gujarat 1. In that case the judgment debtor had failed to appear in answer to the notice under O.XXI Rule 22 of the Code of Civil Procedure and the order was passed permitting levy of execution under Order XXI Rule 23 of the Code of Civil Procedure. Later on the judgment debtor had filed his written statement raising several objections to the execution of the said decree. The question arose before the court as to whether on principles of constructive resjudicata the judgment debtor was precluded in law from raising such objections by reason of order having already been passed against the absent judgment debtor under Order XXI rule 23 of the Code of Civil Procedure. Bhagwati J. observed as under: