MARUTI UDHYOG LTD Vs. INSTRUMENTATION LTD

JUDGEMENT

(1.) BY this order, the application filed by the respondent -company on December 8, 1993, under Rule 9 of the Companies (Court) Rules, 1959, read with Section 151 of the Civil Procedure Code, and Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, is being disposed of.

(2.) AN application filed by the respondent -company for dismissal of the company petition on the ground that an enquiry under Section 16 of, the Sick Industrial Companies (Special Provisions) Act, 1985 (for short 'the Act'), was pending had been dismissed by the court on October 14, 1993, and a special appeal filed against that order is pending consideration before the Division Bench.

(3.) SHRI S. M. Mehta, senior advocate, appearing for the respondent -company, has invited the court's attention to the fact that the board of directors of the respondent -company had in their meeting held on July 29, 1993, resolved to make a reference under Section 15(1) of the Act to the Board for Industrial and Financial Reconstruction (for short 'the BIFR'). The company made a reference to the BIFR in Form No. 'AA'. On October 5, 1993, a copy of the reference was delivered in the office of the Board. On October 28, 1993, the reference made by the board of directors of the company has been registered as Case No. 509 of 1993. After scrutiny of the reference had been made, the company was required to furnish certain informations. These informations have been submitted by the respondent -company, vide letter dated November 10, 1993. Thereafter, the case has been assigned to Bench No. 1 of the BIFR and the Board has decided to issue notice to 12 persons/institutes, whose names have been given out in the enclosure to the notice, which has been issued by the Registrar of the BIFR on November 30, 1993. Shri Mehta submitted that enquiry must be deemed to have been initiated immediately on the making of the reference application by the respondent -company and in any case the enquiry must be deemed to be pending as soon as the Board has taken cognizance of the reference application after the same was scrutinised by the Registrar of the BIFR. Shri Mehta argued that in view of the non -obstante clause contained in Section 22(1), the statutory bar against taking further proceedings under the Companies Act, 1956, operates and as such the petition filed by the petitioner under sections 433 and 439 of the Companies Act should be dismissed. Shri Mehta has also relied on a Bill which according to him has been introduced in Parliament for amendment of the Act. Shri Mehta invited the court's attention to some amendments introduced with reference to Section 16(3) of the Act and submitted that this Bill is also indicative of the intention of the Legislature that as soon as an application is submitted by the board of directors of the company under Section 15 of the Act, the enquiry must be deemed to have commenced and must be deemed to be pending for the purposes of Section 22(1). Shri Paras Kuhad, learned counsel for the petitioner, has strenuously argued that the application dated December 8, 1993, filed by the respondent -company is frivolous and vexatious and it has been filed with the sole object to delay the hearing of the petition on the merits. Shri Kuhad argued that having failed to persuade the Division Bench to stay the order dated October 14, 1993, passed by the company court, the respondent -company has moved this application even though there has been no material change in the fact situation. Shri Kuhad argued that the findings recorded by the court in its order dated October 14, 1993, must be treated as res judicata and, therefore, there is no need for fresh examination of the case. Shri Kuhad also argued that the notice annexure 3 filed with the application dated November 30, 1993, has been issued by the Registrar of the BIFR and there has been no application of mind by the Board itself. He submitted that till the matter is considered by the Board, enquiry cannot be treated as having been initiated. In regard to the Bill on which reliance has been placed by Shri Mehta, Shri Kuhad argued that till the Bill is passed by Parliament, it cannot be treated as a piece of legislation and no reliance can be placed on such Bill for the purposes of interpretation of the statutory provision contained in Section 16 and Section 22 of the Act.