ANDHRA PRINTERS LTD. Vs. V. ARJUN RAO

JUDGEMENT

(1.) THE respondents filed O.S. No. 56 of 2001 in the court of Senior Civil Judge, Nizamabad, against the petitioner, claiming damages for libel against them. It was pleaded that in a daily newspaper published by the petitioner, certain derogatory and defamatory remarks were published and a sum of Rs. 1,01,000 was claimed as damages.

(2.) THE petitioner filed I.A. No. 90 of 2006 under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short "the Act"), with a prayer to suspend all further proceedings in the suit. It was pleaded that the petitioner had become a sick industrial company and that the proceedings were initiated under the Act, before the Board of Industrial and Financial Reconstruction (BIFR). Placing reliance upon Section 22 of the Act, it was urged that no proceedings for recovery of the amount against a company, declared as sick industry, can be maintained or proceeded with, in view of the prohibition contained in it. The application was opposed by the respondents. Through its order dated August 14, 2007, the trial court dismissed the I.A. Hence, this civil revision petition.

(3.) PARLIAMENT enacted the Act with an object of timely detection of sick and potentially sick companies, owning industrial undertakings, the speedy determination by a Board of experts, of the necessary measures, which need to be taken in respect of such companies, and the expeditious enforcement of the measures, so determined. Sick industrial company is defined under Section 3(o) of the Act as a company registered for not less than five years and has, at the end of any financial year the accumulated losses equal to or exceeding its entire net worth. Sections 4 - 14 of the Act deal with the constitution of the BIFR and the appellate authority. Chapter III, comprising of Sections 15 to 22A, deal with the method of references, enquires and the schemes. Section 22 of the Act, which takes care of any proceedings initiated or pending against such companies, reads as under: