Mr. Rajendra P. Bansal vs Reliance Communication Ltd
2022 Latest Caselaw 10201 Bom

                                             13-ASIA-1161-2020-IN-FA-1539-2012.DOC
VARSHA       Digitally signed
             by VARSHA
VIJAY        VIJAY RAJGURU
             Date: 2022.10.06
RAJGURU      17:08:28 +0530


    Varsha



         IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                      CIVIL APPELLATE JURISDICTION
                 INTERIM APPLICATION NO. 1161 OF 2020
                                           IN
                        FIRST APPEAL NO. 1539 OF 2012


    Rajendra P Bansal                                               ...Applicant
          Versus
    Reliance Communication Ltd                                   ...Respondents


    Mr Ramesh C Mishra, for the Applicant/Respondent in FA/1539/12.
    Mr Cyrus Bharucha, with Tushad Kakalia, DJ Kakalia & Paresh
         Patkar, i/b Mulla & Mulla and Craigie Blunt & Caroe, for the
         Appellant/Respondent.


                                CORAM       G.S. Patel &
                                            Gauri Godse, JJ.

                                DATED:      4th October 2022
    PC:-

1. The First Appeal was admitted on 18th February 2013. The Appellant is the original defendant. The suit, filed in the court of Civil Judge Senior Division, Thane arose out of an employment contract between the Appellant, Reliance Communications Ltd, and the Plaintiff-Respondent, Rajendra Bansal. The relief sought in the plaint was inter-alia for reinstatement, unpaid salary, and damages. The resultant decree of 30th June 2012 awarded the Plaintiff an

4th October 2022 13-ASIA-1161-2020-IN-FA-1539-2012.DOC

amount of Rs. 4,82,112/- as three months' salary with interest at 18% per annum from the date of termination, 1st November 2006 until realization. The plaintiff was also received a decree in the amount of Rs. 9,24,006/- towards leave encashment, also with interest at 18% per annum. Finally, there was a decree for Rs. 2.5 Lakhs payable to the plaintiff by the defendant as damages. This amount was to be paid within three months.

2. It seems that the First Appeal was then dismissed for default but was subsequently restored.

3. The Defendant-Appellant deposited the entire decretal amount with interest with the trial court.

4. The present Interim Application No. 1161 of 2020 is by the Plaintiff seeking a withdrawal of the amount deposited by the Defendant-Appellant.

5. Mr Bharucha, learned counsel, points out that Reliance Communications Ltd is now in a Corporate Insolvency Resolution Process ("CIRP") under the provision of Insolvency and Bankruptcy Code 2016. A petition has been admitted and there is a moratorium in place under section 14 of the Code. Under Section 14(1)(a) there is an automatic stay inter-alia on execution of any judgment decree or order of any court of law. Mr Bharucha appears for the Resolution Professional appointed in the CIRP process.

4th October 2022 13-ASIA-1161-2020-IN-FA-1539-2012.DOC

6. Mr Bharucha also draws our attention to the decision of a three-judge bench of the Supreme Court in Chitra Sharma and Ors v Union of India and Ors.1 This inter-alia considered various provisions of the IBC. In paragraphs 48 and 48.1 there was a specific consideration of what was to be done where amounts had been deposited in court. The Supreme Court said that during the pendency of CIRP, as a matter of law, it would be impermissible for a Court to direct a preferential payment being made to a particular class of creditors, whether secured or unsecured. The claim before the Supreme Court was by certain home buyers. Despite being sympathetic to their cause, the Supreme Court held that it could not, in law, allow a disbursement of the amount of Rs. 750 Crores that had been deposited.

7. This situation is precisely applicable to the present case. There is no doubt that Bansal has a decree. The First Appeal is indeed pending. Its ultimate fate is unknown. But even assuming that the First Appeal fails on merits, so long as there is a moratorium in place, the law does not permit a court to allow Bansal to withdraw the amount deposited pending the CIRP. Mr Bansal equally has our sympathy, for, having succeeded in the Trial Court, and having obtained a decree in his favour, he is now effectively being denied the fruits of his litigation labours. But we cannot pass an order contrary to the plain meaning of the statute, especially once this has been interpreted by the Supreme Court.

1     (2018) 18 SCC 575.




                           4th October 2022
                                     13-ASIA-1161-2020-IN-FA-1539-2012.DOC

8. Having said this, we are not prepared to dismiss Bansal's Interim Application. That would be unduly harsh on him. We are also anxious to ensure that Bansal himself, a decree-holder at present, is not excluded even inadvertently from the CIRP process. Neither the Resolution Professional nor any Resolution Applicant can possibly have any objection if Bansal is permitted to participate in the CIRP process. To this end, we direct that the Resolution Professional will keep Mr Bansal's Advocate informed at all stages of all developments in the CIRP. If there is a resolution plan, he will be informed of it and his decree will be included in that resolution plan subject to the pendency of this First Appeal. Mr Bansal will also be entitled to participate in or be represented at any meeting of a Committee of Creditors to advocate his case that, although an unsecured creditor, he holds an executable decree (subject to the First Appeal) against the original Defendant. It will be open to Bansal to renew the present application at any appropriate time, depending on the progress of the CIRP. Once the moratorium is lifted, for example, it will be open to Bansal to press the present Interim Application for a decision on merits.

9. To ensure that Bansal and his Advocate are not put to undue difficulty in getting a listing, we propose that Interim Application itself be listed periodically for directions, thus ensuring that it appears regularly high on board. For the present, we list the IA for directions on 21st November 2022. It will then be listed at similar intervals thereafter.

4th October 2022 13-ASIA-1161-2020-IN-FA-1539-2012.DOC

10. As regards the First Appeal, we find that the R&P has been received with the paper-book. We dispense with printing of paper- book. Both sides agree that we can proceed to hear the First Appeal on merits on the basis of the paper-book. We list the First Appeal itself for directions on 21st November 2022 for fixing a peremptory date of the final hearing of the First Appeal.

(Gauri Godse, J)                                       (G. S. Patel, J)





                         4th October 2022