NILE LTD Vs. RENEWABLE ENERGY SYATEMS LTD

JUDGEMENT

(1.) This Civil Revision Petition is filed under Article 227 of the Constitution of India being aggrieved by an Orderdated 24-8-2004 made in E.A.No.50 of 2001 in E.P.No.32 of 1999 on the file of the learned Principal District Judge, Ranga Reddy district.

(2.) The petitioner is decree-holder and the 1st respondent is the judgment-debtor. The petitioner filed a suit - O.S.No.48 of 1998 on the file of the learned Principal District Judge, Ranga Reddy district - for recovery of certain amounts and obtained a decree. Thereafter, the decree-holder filed E.P.No.32 of 1999 for execution of the decree. In the said E.P., attachment of an amount of Rs.2,15,40,399/ - of the judgment-debtor (M/s. Renewable Energy Systems Limited, Hyderabad) lying with the garnishee i.e. Accounts Officer/ Director, Department of Telecommunications (DOT), Telecom Stores, 16 Greems Road, Chennai. After hearing the parties, the Executing Court prohibited the garnishee from making payment of amounts to the judgment- debtor and the said Orders were served on the garnishee on 21-10-1999. Thereafter, the decree-holder filed an application seeking a direction to the garnishee to deposit the attached amount. After receiving the notice, the garnishee filed a memo stating that they would deposit a sum of Rs.75,00,000/-. In view of the said Memo, the Executing Court permitted the garnishee to deposit the said sum of Rs.75,00,000/- to the credit of E.P., on 25-1 -2000. However, the authorities of DOT did not depositthe amount on the ground that there are some directions from the High Court of Calcutta on deposit of the amounts till the finalization of the proceedings before it. Further, on 25-8-2000, the respondent- garnishee received directions from the High Court of Calcutta in C.C.No.322 of 1999 filed by M/s. Magna Leasing Limited, Kolkattathat the DOT shall not make any payment to the judgment-debtor or anybody on their behalf without leave of the Court. Subsequently, the said Orders were modified by an Order dated 25-4-2001 directing DOT to keep a sum of Rs.47,23,786/- in Term Deposit in any Nationalized Bank, subject to further orders. That amount was deposited in Term Deposit for one year with effect from 10-11 -2003 (sic. 2001) and the said Order was modified on 12-12-2001. By an Order dated 7-9-2001 passed in Case No. 113 of 2001, the Board for Industrial and Financial Reconstruction (BIFR), directed that all the secured creditors, who filed suits againstthe company, were allowed under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short 'SICA') to continue the legal proceedings, subject to the condition that a decree, if any, passed would not be executed without the approval of the Bench (sic. Board). Therefore, the amounts as directed by the Court could not be deposited. As such, the present petition under Order XXI Rule 38 read with Section 151 of the Civil Procedure Code was filed by the decree-holderto issue warrant of arrest for arresting the Accounts Officer, DOT, Telecom Store, 16 Greems Road, Chennai, Tamilnadu State. The question that arose forconsideration of the Court below was whether, in view of Section 22(1) of SICA, when the matter is referred to BIFR and the same is pending, without the prior approval of the Board, the execution cannot be taken up? The Court below, after considering the rival contentions, dismissed the petition holding that since there is no dispute that the matter was referred to BIFR in Case No.113of 2001, unless and until prior approval of the Board is obtained, further proceedings cannot be taken up under Section 22(1) of SICA and the counsel forthe decree-holder has not shown any authority contrary to the provisions of Section 22(1), which specifically prohibits the continuance of any proceedings for winding up, execution, distress or the like against any of the properties of a company, which has been declared as a sick unit. Aggrieved by the same, the present Civil Revision Petition is filed.

(3.) Learned counsel for the petitioner strenuously contended that there is no necessity of obtaining any prior approval of BIFR under Section 22 of SICA, since this amount of Rs.75.00 lakhs is lying with the garnishee and as on to-day, the garnishee has already deposited the said amount into the Court. Further, the judgment-debtor is the lessee of the premises belonging to the decreeholder and the garnishee is the sub-lessee of the judgment-debtor. Therefore, this particular amount does not belong to the judgment- debtor. Further, Section 22 of SICA, strictly speaking, has no application to the facts of the case of this nature. After the amendment of Section 22 of SICA, the execution proceedings have been taken out of the purview of that Section in the year 1994. Therefore, a petition of this nature is maintainable and there is no necessity of obtaining priorapproval from the BIFR for the purpose of execution of the decree obtained by the petitioner-decree holder.