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SCA/755/2010 4/ 4 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 755 of 2010
With
SPECIAL
CIVIL APPLICATION No. 756 of 2010
=========================================================
ARTSON
ENGINEERING LTD - Petitioner(s)
Versus
NAVIN
D KOTHARI - Respondent(s)
=========================================================
Appearance
:
MR
MR BHATT FOR MS REETA CHANDARANA
for
Petitioner(s) : 1,
MR VIVEK N MAPARA for Respondent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE MD SHAH
Date
: 02/12/2010
COMMON
ORAL ORDER
Special
Civil Application No.755 of 2010 challenges order dated 4-1-2010
passed below application Ex.13 in Special Darkhast No.16 of 2009 by
the learned Principal Senior Civil Judge, Jamnagar, while Special
Civil Application No.756 of 2010 challenges order dated 27-10-2009
passed below application Ex.5 in Civil Misc. Application No.101 of
2009 by learned 8th Addl. Senior Civil Judge, Jamnagar.
As
both the petitions have arisen out of same facts and parties are
also same, both the petitions were heard together and are being
decided by this common order.
Heard
learned Senior Advocate, Mr.M.R.Bhatt for Ms.Reeta Chandarana for
the petitioner and learned advocate, Mr.Vivek Mapara for the
respondent in both the petitions.
Rule.
Learned advocate, Mr.Vivek Mapara, for the respondent waives service
of rule. With the consent of the learned advocates appearing for the
parties, the matter is taken up for final disposal.
Short
facts are that the petitioner was awarded a project by M/s Essar
Construction Pvt. Ltd, Jamnagar and a sub-contract for construction
of Tank Pad was given by the petitioner to the respondent at the
said turnkey project site with various technical specifications. The
work of respondent was of inferior quality and repairs were to be
carried out before the same could be offered to M/s Essar
Construction. However, since repairs were not carried out by the
respondent, a notice was issued to the respondent on 25-4-1998. The
respondent filed Special Civil Suit No.81 of 2002 against the
petitioner for a decree of Rs.9,19,724/- wrongly showing his
registered office. The petitioner vide written statement submitted
that only Rs.51,634/- were payable to the respondent on his
fulfilling the terms and conditions of the sub contract. Meanwhile,
petitioner preferred reference before the Board for Industrial
Financial Reconstruction under the provisions of Sick Industrial
Companies (Special Provisions) Act, 1985 which was registered on
16-3-2004. Several proceedings were held before BIFR and a draft
rehabilitation scheme was considered by it on 17-9-2007 inviting
objections from the public by way of public notice. Said scheme was
sanctioned by BIFR on 27-11-2007. On 12-8-2008, an ex-parte decree
was passed in Special Civil Suit No.81 of 2002 which was not known
to the petitioner. It was informed by M/s Essar Construction to the
petitioner that a garnishee order was passed in Special Darkhast
No.16 of 2009 filed by the respondent. The petitioner preferred an
application Under Order 9 Rule 13 of the Code of Civil Procedure
praying for setting aside the ex-parte decree along with an interim
application being Civil Misc. Application No.101 of 2009. However,
said interim application was rejected vide order dated 27-10-2009 by
the 8th Senior Civil Judge, Jamnagar, in Civil Misc.
Application No.101 of 2009, which is under challenge by way of
Special Civil Application No.756 of 2010. Petitioner also filed an
application below Ex.13 praying for stay of execution proceedings in
Special Darkhast No.16 of 2009. However, said application was also
rejected vide order dated 4-1-2010, which is under challenge by way
of Special Civil Application No.755 of 2010.
It
is submitted by learned Senior Advocate, Mr.Bhatt, that the
provisions of the Act are mandatory and the sanctioned Scheme is
binding on all parties. He has further submitted that some of the
winding up petitions filed against the defendant were dismissed by
the High Court of Bombay as the defendant has been implementing
sanctioned Scheme approved by BIFR. He placed reliance on an order
dated 19-9-2008 passed by the Appellate Authority for Industrial
and Financial Reconstruction in the appeal preferred by one of the
unsecured creditors of the petitioner Company against the sanctioned
scheme wherein it was observed that since there is no legal
infirmity in the approved scheme of BIFR, dues of the unsecured
creditors were directed to be satisfied as per the sanctioned Scheme
and not by giving preferential treatment.
It
is to be noted that the provisions of the Act are mandatory and
sanctioned Scheme of rehabilitation is binding on all parties. The
fact the respondent original plaintiff is an unsecured creditor is
an undisputed fact and hence, dues of the respondent are to be
cleared as per the provisions made in the approved scheme. In view
of the above, both the petitions are required to be allowed.
Both
the petitions are allowed and order dated 4-1-2010 passed below
application Ex.13 in Special Darkhast No.16 of 2009 by the learned
Principal Senior Civil Judge, Jamnagar, as well as order dated
27-10-2009 passed below application Ex.5 in Civil Misc. Application
No.101 of 2009 by learned 8th Addl. Senior Civil Judge,
Jamnagar and both the applications stand allowed. Dues of the
respondent shall be cleared by the petitioner as per the approved
scheme of BIFR. It is informed to this Court that certain
instalments have been paid to other creditors as the scheme is in
operation since 2007 and hence, arrears of payment as on date shall
be made by the petitioner as per the scheme within six weeks from
today and further payments as per the schedule stipulated in the
Scheme. Rule is made absolute in each petition with no order as to
costs.
(M.D.SHAH,J.)
radhan
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