ORDER
Vijender Jain, J.
IA no. 3034/2001
1. This is an application under Order 1 Rule 10 (1) read with Section 151 of CPC. Mr. Chandhiok says, learned counsel for the non-applicant, states that he has no objection if the name of the defendant is changed from M/s Dalmia Industries Limited to Bharatpur Nutritional Products Limited.
2. Application is allowed. Amended memo of parties has been filed on record. Let the same be taken on record.
3. Application stands disposed of.
IA No. 3033/2001
4. This is an application under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 read with Section 151 CPC by the defendant-tenant. It has been contended by Mr. Sandeep Aggarwal that the suit filed by the plaintiff is for recovery of possession and recovery of mesne profits and damages. It has been contended by the learned counsel for the applicant-defendant that defendant company has made a reference under Section 15(1) of SICA to the Board for Industrial and Financial Reconstruction on 27.2.2001 to declare the defendant company as sick industrial company and the said reference has been registered as a case by the Board being case no. 108/2001. It has been contended before me that since the Board has registered a case on the reference of the defendant and has initiated enquiry under Section 16 of the SICA, the present suit is liable to be stayed under Section 22 of SICA. In support of his contentions he has relied that pursuant to the amendment in 1994 in Sick Industrial Companies (Special Provisions) Act, 1985 whereas words “and no suit for recovery of money or for the enforcement of any security…..” were added the present suit coming within the ambit of a suit for recovery of money is to be stayed.
5. He has further contended that on the basis of observations made in Sirmor Sudburg Auto Ltd. vs. Kuldip Singh Lamba by this court which judgment took into consideration judgment of the Supreme Court in Deputy Commercial Tax Officer Vs. Corromandal Pharamaceuticals 1997 III AD SC 713, laid down that matter with regard to recovery of money has referred the trial court as court followed Deputy Commercial Tax Officer Vs. Corromandal Pharamaceuticals (supra) and held that suit for rent or arrears of rent was also a suit for recovery. Learned counsel for the applicant-defendant has further contended that the relief of recovery of money would squarely be covered under Section 22(1) of SICA and, therefore, that part of the relief prayed in the suit be stayed.
6. On the other hand, Mr. A S Chandhiok, learned counsel for the Plaintiff/non-applicant-landlord, has contended that the tenancy of the defendant was terminated vide a notice dated 17.4.1997 w.e.f. 31.5.1997. He has further contended that written statement was filed by the defendant on 19.1.1999 and in the written statement plea was taken by the defendant that the tenancy of the defendant was extended till the year 2000. Mr. Chandhiok has argued that even if the averment in the written statement is taken to be true even then there is no right with the defendant to hold the possession of the property in question beyond year 2000. He has further contended that recovery of arrears of rent is not what is contemplated under Section 22 of SICA. Learned counsel for the plaintiff has relied upon Shree Chamundi Mopeds Ltd. Vs. Churuch of South India Trust Association CSI Cinod Secretariat, Madras and Gujarat Steel Tube co. Ltd. Vs. Virchandbhai B. Shah and Others .
7. I have given my careful consideration to the arguments advanced by the learned counsel appearing for both the parties the arrears of rent within four weeks. That order was not complied with by the defendant/applicant. The defense of the applicant/defendant was thereafter struck off on 14.12.1999. The relief in the suit is with regard to a decree of possession in respect of first Floor of the premises which are tenanted of possession would come under the purview of Section 22 of SICA. Supreme Court in Shree Chamundi Mopeds Ltd. (supra) dealt extensively with regard to such kind of proceedings.
“Eviction proceedings initiated by a landlord against a tenant company wold not fall n the categories (1) and (3) referred to above. The question is whether they ll in category (2).; It has been urged by the learned counsel for the appellant-company that such proceedings fall in category (2) since they are proceedings against the property of the sick industrial company. The submission is that the leasehold right of the appellant-company in the premises leased out to it is property and since the appellant-company being deprived of the said property, the said proceedings would be covered by category (2). We are unable to agree. The second category contemplates proceedings for execution, distress or the like against any other properties of the industrial company. The words ‘or the like’ have to be construed with reference to the proceedings which are contemplated in this category are proceedings whereby recovery of dues is sought to be made by way of execution, distress or similar proceedings against the property of the company. Proceedings for eviction instituted by a landlord industrial company, cannot, in our opinion, be regarded as falling in this category. We may, in this context, point out that, as indicated in the Preamble, the Act has been enacted to make special provisions with a view to securing the timely detection of sick and potentially undertakings, the speedy determination by a Board of experts of the preventive, ameliorative, remedial and other measures which need to be taken with respect to such companies and the expeditious enforcement of the measures so determined. The provision regarding suspension of legal proceedings contained in Section 22(1) seeks to advance the object of the Act by ensuring that a proceedings having an effect on the working or the finances of a sick industrial company shall not be instituted or continued during the period the matter is under consideration before the Board of the Appellate Authority or a sanctioned scheme is under implementation without the consent of the ‘Board or the Appellate Authority. It could not be the intention of Parliament in enacting the said provision to aggravate the financial difficulties of a sick industrial company while the said matters were pending before the Board of the Appellate Authority by enabling a sick industrial company to continue to incur further liabilities during this period. This would be the consequence if sub-section (1) of Section 22 is construed to bring about suspension of proceedings for eviction instituted by landlord against a sick industrial company which has ceased to enjoy the protection of the relevant rent law on account of default in payment of rent. It would also mean that the landlord of such a company must continue to suffer a loss by permitting the tenant (sick industrial company) to occupy the premises even though it is not in a position to pay the rent. Such an intention cannot be imputed to Parliament. We are, therefore, of the view that Section 22(1) does not cover a proceeding instituted by a landlord of a sick industrial company for the eviction of the company premises let out to it.”
8. Therefore, I do not find any force in the arguments of the learned counsel for the applicant-defendant that the proceedings in the suit be stayed.
9. Now coming to the second part of the prayer of the plaintiff in which plaintiff is claiming the arrears of rent as well as future rent in the shape of mense profits and damages. Whether that would be proceedings which are being contemplated for recovery under Section 22 of SICA? In Gujarat Steel Tube Co. Ltd. (supra) Supreme Court held:-
“Section 22, no doubt, inter alia, states that notwithstanding any other law no suit for recovery of money shall lie or be proceeded with except with the consent of the Board, but as we look at it the filing of an eviction petition on the ground of non-payment of rent control be regarded as filing of a suit for recovery of money. If a tenant does not pay the rent, then the protection which is given by the Rent Control Act against his eviction is taken away and with the non-payment of rent order of eviction may be passed. It may be possible that in view of the provisions of Section 22, the trial court may not be in a position to pass a decree for the payment of rent but when an application under Section 11(4) is filed, the trial court in effect gives an opportunity to the tenant to pay the rent failing which the consequences provided for in the sub-section would follow. An application under Section 11(4), or under any other similar provision, cannot, in out opinion, be regarded as being akin to a suit for recovery of money.”
10. Therefore, the application of the applicant-defendant for staying the proceedings in the suit in terms of Section 22 of SICA is not sustainable. In Shree Chamundi Mopeds Ltd. Vs. Church of South India Trust Association CSI Cinod Secretariat, Madras (supra) Supreme Court held that right to occupy the tenanted premises could not be regarded as property of the company for the purposes of Section 22(1) of the SICA. In the present case also proceedings for possession and recovery of rent would be akin to the proceedings for recovery of money as contemplated under Section 22 of SICA.
11. Dismissed.
Suit no. 548/1998
12. List this matter for further proceedings on 31.07.2001.
13. Copy of this order be given dusty to counsel for the defendant.