BENGAL IMMUNITY LTD. Vs. TATA PHARMA LTD.

JUDGEMENT

(1.) This was an application for winding up of the company under the relevant provisions of the Companies Act, 1956, ('the Act'). It was alleged in the petition that in pursuance of a contract between the parties the petitioner had sold and delivered to the company divers quantities of goods which the company had received and accepted but did not pay the price in that respect, inspite of demands. The petitioner claimed the price of the goods, and damages on the basis of allegations that the respondent- company had wrongfully terminated the contract. The company did not reply to the statutory notice of demand. In its affidavit in opposition the company denied the alleged claims of the petitioner. It was alleged on behalf of the company that sometime in 1995, the company had been registered with the Board for Industrial and Financial Reconstruction, ('BIFR'), and that a scheme for rehabilitation had been sanctioned. There was nothing to substantiate the allegations of the company. It was contended on behalf of the petitioner that its claim had not been included in the alleged scheme and that its claim arose after the scheme had been sanctioned. On the prayer made on behalf of the petitioner liberty was given and the petitioner filed a supplementary affidavit enclosing a copy of the alleged scheme, three letters dated 10-8-1998, 2-9-1998 and 16-12-1998 were produced by the company, and it was confirmed that the sanctioned scheme was continuing to be in the process of implementation.

(2.) According to the petitioner the embargo under section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, ('the SICA') was not applicable to the present winding up proceedings, as the transaction between the parties had taken place after the sanction of the scheme and the petitioner's claim was not included in the sanctioned scheme. On that ground, according to the counsel for the petitioner, this application for winding up could be taken up for hearing by the Court and dispose of the matter accordingly. The debt of the petitioner was not before the BIFR, he argued earnestly, and that the intention of the legislators must have been to exclude such claims from the effect of section 22(1) of the SICA. In support of his contentions he cited and relied on the decisions in Dy. CTO Vs. Corromondal Pharmaceuticals Ltd. (1997) 10 SCC 649, A. (1998) S.C. 2064 , and Sirmor Sudburg Auto Ltd. Vs. Kuldip Singh Lamba, (1998) 91 Comp. Cas 727 (Delhi) . Strong reliance was placed in particular on the decision in Corromondal Pharmaceuticals Ltd. 's case (supra) and the counsel for the petitioner argued that though the facts in that case related to the recovery of sales tax, from the company by the revenue-authorities, the principle laid down by the Supreme Court in that case, was applicable generally and was not restricted to claims by the revenue only and the petitioner would, therefore, be entitled in law, to continue with its present proceedings against the company.

(3.) It was submitted on behalf of the company, that the principles of law which had been applied in deciding the case of Corromondal Pharmaceuticals Ltd. case (supra) were restricted to the facts of that case. He contended that the language of section 22(1) was clear, and the petitioner was barred from instituting the present proceedings against the company, or continuing with it further. It was contended, that the company was a sick industrial company within the meaning of the SICA and it could not be, nor it was, the intention of either the legislators, or the Courts in their enunciation of the law, that the sick industrial company should be further burdened with financial liability as that would frustrate the very purpose of the framing of a scheme to rehabilitate and run the business smoothly. The decisions which had been relied on by the counsel for the petitioner, it was argued on behalf of the company, did not support the case of the petitioner and the law was and continued to be that 'a claim as that of the petitioner must be stayed in accordance with the embargo contained in the provisions in section 22(1).