Delhi High Court
Orissa Industries Limited vs Hardayal And Sons (Huf) Through ... on 20 February, 2007
Author: J Malik
Bench: J Malik
JUDGMENT
J.M. Malik, J.
1. This order shall decide an application for restoration of appeal which was pending in this Court. The appellant approached his counsel Mr. Sudarsh Menon, who informed the appellant that his Junior noted the wrong date of hearing and therefore, the appeal was dismissed in default on 08.04.2004 The appellant asked his above said, ex-Advocate, to get the appeal restored in May, 2004 The appellant was made to sign his application for restoration of appeal in May, 2004 However, the counsel for the appellant misled the appellant about filing of the said application. In January, 2005, Mr. Sudarsh Menon informed him that the application for restoration of appeal was misplaced and therefore, he asked him to file a fresh application for restoration. The Advocate kept on misleading the appellant and informed him that it would be listed in the High Court of Delhi very shortly. The appellant became suspicious, came to know that his appeal was dismissed in default on 08.04.2004 and no restoration application was moved. It also transpired that restoration application was filed in January, 2005. The same was taken from the filing counter on account of objections by Mr. Sudarsh Menon on 25.01.2005. However, the same was never re-filed. The instant application was filed on the record on 10.03.2005 i.e. after the expiry of about 11 months. The respondent has contested this application tooth and nail.
2. The first submission made by the learned Counsel for the appellant was that appellant is a sick company and in view of the National Textile Corporation (D.P. and R) Ltd. v. Sh. Ramesh Chander Puri in C.R. No. 449/2002 and CM No. 979/2002, the conditions suggested by the respondent's counsel to deposit the entire amount with the Court should not be imposed.
3. I find force in this submission in a measure. How much money the appellant is required to deposit would be seen at the time of admission of this case. At this stage, I will decide the case to the extent of condensation of delay and position of a sick company. In Deputy Commercial Tax Officer and Ors. v. Corromandal Pharmaceuticals and Ors. , it was held:
The language of Section 22 of the Act is certainly wide. But, in the totality of the circumstances, the safeguard is only against the impediment, that is likely to be caused in the implementation of the scheme. If that be so, only the liability or amounts covered by the scheme will be taken in, by Section 22 of the Act. So, we are of the view that though the language of Section 22 of the Act is of wide import regarding suspension of legal proceedings from the moment an inquiry is started, till after the implementation of the scheme or the disposal of an appeal under Section 25 of the Act, it will be reasonable to hold that the bar or embargo envisaged in Section 22(1) of the Act can apply only to such of those dues reckoned or included in the sanctioned scheme.
4. In a case decided by this Court reported in Sirmor Sudburg Auto Ltd. v. Kuldip Singh Lamba 1997 (42) DRJ 421, the petitioner company took the premises belonging to the plaintiff/respondent for three years under a lease agreement dated 16.04.1992. On 02.08.1993, the petitioner company was declared a sick company. The plaintiff/respondent filed a suit seeking a decree for recovery of possession over the premises held by the petitioner company and decree for arrears of rent to the tune of Rs. 1,77,840/-. In that suit mesne profits and damages at the rate of Rs. 90/- per square feet were demanded from 01.12.1995 to 15.12.1995. It was held:
It follows from the law laid down by the Supreme Court in Corromandal Pharmaceuticals case (supra) that to be entitled to stay of the legal proceedings under Section 22 of the Act a mere pendency of the enquiry would not suffice; the dues must be reckoned or included in the sanctioned scheme. Section 22(1) is also not attracted to the dues incurred after the date of the sanctioned scheme.
For the foregoing reasons, the revision is allowed in part. The impugned order in so far as it refuses to stay the suit for the relief of ejectment is maintained. The matter as to stay of the suit for the relief of recovery of money is sent back for consideration afresh by the trial Court consistently with the observations made hereinabove. No order as to the costs.
5. Similar view was taken in authorities reported in Cement Corporation of India v. Smt. Manohar Bhasin 1999 (6) A.D.(Delhi) 398; Karamjit Singh Gahunia and Ors. v. Dalmia Industries Limited 2001 (59) DRJ 768. It must be borne in mind that the respondent in this case has filed a suit for recovery of possession/ejectment and arrears of rent/mesne profits against the appellant. Under these circumstances, I am unable to locate force in the argument that the sick company is not liable to pay the amount in dispute.
6. On the other hand, the main thrust of the arguments urged by the learned Counsel for the respondent was that the appellant should be directed to deposit the entire decretal amount. This legal jangle is being kept open and would be adjudicated at the time of the admission of this case.
7. Although the counsel for the respondent has cited authorities reported in Shri M. Paul Babuta v. Union of India and Anr. 1999 AIHC 495 (Delhi); Badri Bhagat Jhandewalan Temple v. D.D.A. , Ashis Kumar Hazara v. Rubi Park Co-operative Housing Society Ltd. and Ors. , Salil Dutta v. T.M. and M.C. Private Limited , Gobind Parshad Jagdish Parshad v. Hari Shankar and Ors. , P.K. Ramachandran v. State of Kerala and Anr. J.T. 1997 (8) S.C. 189 and Chanceteam Investments Ltd. v. R.D. Ramanath Co. and Ors. , yet, for the following reasons I am inclined to accept this application. Firstly, in view of authorities cited by the learned Counsel for the appellant reported in Rafiq and Anr. v. Munshilal and Anr. , Devendra Swamy v. Karnataka State Road Transport Corporation and a case decided by this Court in case Daljit Singh and Ors. v. Yogeshwar Prasad IA 1021/2004, FAO No. 470/2001 decided on 20.04.2006, wherein appeal was restored pending before the learned Additional District Judge and the delay in filing the application under Order 41 Rule 9 of C.P.C. was condoned subject to payment of costs in the sum of Rs. 7,000/-, I find that appellant has established a sufficient cause in its favor.
8. It must be borne in mind that appellant is a sick company. Again, it is also well settled that refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties.
9. Keeping in view the facts and circumstances of the case, I hereby condone the delay, subject to payment of Rs. 7,000/- as costs, out of which Rs. 3,500/- be deposited with Delhi High Court Mediation and Conciliation Centre, UCO Bank Account No. 48852 and Rs. 3,500/- be paid to the learned Counsel for the respondent within two weeks from today. The applications stand disposed of.
RSA No. 50/2003
Fix the case for arguments on the application for condensation of delay under Section 5 of the Limitation Act in filing the present appeal in CM No. 166/2003 on 06.03.2007. It is also mentioned here that the case is pending for its admission since 01st April, 2003.
No further adjournment shall be granted on any ground.
