BANK OF BARODA Vs. CHADDHA AND COMPANY

JUDGEMENT

(1.) THIS is a revision under Section 115 of the Code of Civil Procedure arising out of the order dated April 17, 1988, passed by the learned VIth Additional Judge, to the Court of the District Judge, Indore, in Civil Suit No. 148-A of 1984 whereby the plaintiff/applicants' suit for recovery of Rs. 6,17,829. 95 against Chadha and Co. and others has been stayed under the provisions of Section 6 of the Textile Undertakings (Taking Over of Management) Act, 1983, Act No. 40 of 1983 (for short, "the Act" ).

(2.) THE main contention of Shri A. K. Chitale, learned counsel appearing for the applicant/plaintiff-bank, is that the suit was filed against respondent No. 7, Sitaram Mills Co. Ltd. , the borrower, for realisation of the loan amount advanced by the bank and others were impleaded as necessary parties to the suit making them jointly and severally liable. The management of this mill was taken over by the Central Government under Section 3 of the Act. After taking over the management, a custodian under Section 4 of the Act was appointed on October 18, 1980, for the purpose of carrying on the management of the undertaking. After taking over the management and appointment of custodian, no notification under Section 6 (1) of the Act by the Central Government of making certain declarations in relation to the said undertaking which vested in the Central Government the suspending operation of contracts, assurances of property, etc. , was made, and unless such a notification is there, the suit of the plaintiff-bank for realisation of the amount could not have been stayed. For stay of suits or contracts or assurances of property, etc. , it is necessary in the interest of general public, with a view to prevent any fall in the volume of production of the undertaking, to issue a notification declaring that the operation of all or any of the contracts, assurances, etc. , shall remain suspended as provided in Section 6 of the Act. Section 6 of the Act reads as under :

(3.) THE suit was filed on March 24, 1982, for recovery of the amount. The custodian so appointed for respondent No. 7, appeared and was defending the suit. In the suit, an objection was raised by their application dated 27th July, 1985, by the present respondents Nos. 1, 2, 3 and 6 for stay of the suit under Section 6 of the Act. It is noteworthy that the custodian or respondent No. 7 did not raise any such objection.