NAGAR PALIKA NIGAM, RATLAM Vs. SAJJAN MILLS LTD.

JUDGEMENT

(1.) BEING aggrieved by the order dated 31 -08 -2004 passed by District Judge, Ratlam in Civil Suit No. l -B/2001, whereby the civil suit filed by the appellant for realization of a sum of Rs. 12 lacs has been returned to the appellant with a direction to present the suit before Board of Industrial and Financial Reconstruction (BIFR)/ or Appellate Authority namely Industrial and Financial Reconstruction (AAIFR), the present appeal has been filed. Short facts of the case are that the appellant filed a suit before the District Judge Ratlam on 27 -08 -2001 for realization of a sum of Rs. 12 lacs alleging that after winding up of the Unit of Respondents an advertisement was published by the Respondent No. 3 on 13 -7 -1998, whereby the tenders were invited for sale of surplus land situated at Ratlam. It is submitted that appellant submitted the rates and also deposited a sum of Rs. 12 lacs as the rates submitted by the appellant were highest. When it was found that the title of the respondent is defective, the appellant requested for return of the amount. Since, the amount was not returned, hence suit was filed. Written statement was filed, wherein the claim of the appellant was denied on various grounds. It was also submitted in the written statement that Respondent Unit is a sick unit and vide order dated 13 -7 -1998 and 20 -8 -1998, Appellate Authority for Industrial and Financial Reconstruction, New Delhi has declared that the respondents unit is a sick unit and the official liquidator was appointed by this Court. It was submitted that in view of this the suit is not maintainable.

(2.) ON the basis of the pleadings of the parties, learned Court below framed the issues. At the stage of recording of evidence an application was filed under Section 9 and 151 CPC read with Section 26 or Sick Industrial Companies on (Special Provisions Act) of 1986, wherein it was prayed that in view of Section 26 of the Act suit be dismissed. By the impugned order learned District Court allowed the application holding that since the action of auction of suit property has been taken by AAIFR, New Delhi, therefore, suit is returned to the plaintiff/appellant herein to file before the competent Board or the appellate authority. Learned counsel for the appellant submits that Court below committed error in returning the suit as the suit for realization of amount is not barred under the provisions of the Act referred. For the convenience Section 26 of the Act is reproduced herein below : Section 26. Bar of Jurisdiction: No order passed or proposal made under this Act shall be appealable except as provided therein and no civil court shall have jurisdiction in respect of any matter which the Appellate Authority or the Board is empowered by, or under, this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act. From perusal of Section 26 of the Act, it is evident that jurisdiction of Civil Court is barred in respect of any matter which the appellate authority of the Board is empowered by or the act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.

(3.) LEARNED counsel further placed reliance on a decision of this Court reported in : AIR 1996 MP 1. Allahabad Bank Katni, Jabalpur Vs. M.P. Electricity Board, Rampur, wherein this Court while dealing with the matter relating to Bank guarantee has observed that M.P. Electricity Board has not been shown as party to any of the agreements entered into under this Sick Industrial Act nor is there any matter pending before the Board between the parties i.e. M.P. Electricity Board and Allahabad Bank in respect of any of the matters mentioned therein. Section 26 of the Act creates bar of jurisdiction in respect of any order passed or proposal made under the Act to be questioned in any Civil Court. In the instant case, M.P. Electricity Board is not challenging any order passed or proposal made under the Act what the Board is exercising is a right conferred under the bank guarantee which is the contract between the Bank and the Board.