A.V. Srinivasa Reddy, J.
1. In this appeal, the appellant calls in question the correctness and validity of the order passed by the learned single judge in W. P. No. 16606 of 1990.
2. The facts in brief are :
The appellant is a public limited company declared to be a sick industry by the Board for Industrial and Financial Reconstruction (in short 'BIFR') under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 ('the Act' for short). The Board is considering the proposal for revival. When the revival proposals were under the consideration of BIFR some of the depositors who deposited money with the appellant-company filed applications before the Company Law Board under Section 58A(9) of the Companies Act, 1956. The Company Law Board allowed the applications of the depositors holding that the provisions of Section 22 of the Act are not attracted to the proceedings under Section 58A(9) of the Companies Act. Aggrieved, the appellant filed the writ petition. The learned single judge dismissed the writ petition. Hence, the appeal,
3. We have heard learned counsel on both sides.
4. The question for our consideration is whether the Section 22 of the Act extends to and attracts proceedings under Section 58A(9) of the Companies Act, 1956.
5. The learned single judge after elaborate consideration of the matter answered the question in the negative. In order to appreciate the rival contentions of learned counsel for the parties and answer the question, it is necessary to extract Section 22(1) of the Act. It reads :
'22(1). Suspension of legal proceedings, contracts, etc.--Where in respect of an industrial company, an inquiry under Section 16 is pending or any scheme referred to under Section 17 is under preparation for consideration or a sanctioned scheme is under implementation or where an appeal under Section 25 relating to an industrial company is pending, then, notwithstanding, anything contained in the Companies Act, 1956 (1 of 1956), or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceeding for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company shall lie or be proceeded with further, except with the consent of the Board, or, as the case may be, the Appellate Authority.' (emphasis' supplied)
6. The only facet of Section 22(1) of the Act that can be said to be of some relevance to the present appeal is the relief for recovery of money that is prohibited under the Act in respect of a company under revival by the BIFR. The question is whether the claim for return of deposit could be termed as 'suit for recovery of money' against the company. If the answer is in the affirmative then the appellant-company would succeed and not otherwise.
7. The term 'deposit' has been defined by the Explanation to Section 58A as a deposit of money with a company including an amount borrowed by it but excluding such categories of amount as may be prescribed in consultation with the Reserve Bank of India. The learned single judge has considered this question in detail. He has placed reliance on the decision of the Supreme Court (sic) in Vijay Mills Co. Ltd. v. State of Gujarat [1990] 68 Comp Cas 597. The apex court had occasion in that case to decide the question whether the provisions contained in Section 22(1) of the Act extended to criminal prosecution of the company for its failure to pay the amount of sales tax recovered by it on behalf of the Government from the customers. The apex court held that the amount recovered from the customers by the company does not belong to it but it is held in trust to be passed over to the Government and in that view of the matter held that Section 22(1) of the Act would not extend to the criminal prosecution for failure to pay the sales tax as the same does not come under the ambit of Section 22(1) of the Act.
8. A deposit by the depositors is not a sum lent to the company but is a sum deposited with the company to be held in trust by the company till the time of maturity. It is not a loan in the strict sense of the term. Therefore, any claim made for return of a deposit made with the company cannot be termed as a suit for recovery of money due. Section 22(1) prohibiting as it does the taking up of certain proceedings against the company, without the consent of the Board, which proceedings in the natural course of things can be resorted to against the company without any reservation whatsoever by the person or persons interested, it goes without saying that the prohibitions contained in Section 22(1) do not lend themselves to any liberal interpretation. The said provisions must be interpreted in a limited sense and cannot be said to cover situations where there really is no element of execution, distress or the like against any property owned by the industrial company. Interpreting the term 'no suit for recovery of money' thus, we find that it certainly would not cover a simple claim made by depositors for the return of their deposits after maturity. As held by the apex court in the decision, supra, it is a sum kept with the company by the depositors in trust for return after maturity. The learned single judge has on proper and detailed appreciation of the matter has come to the correct conclusion. The reasons assigned by the learned single judge for arriving at the said conclusion are well-founded and do not call for any interference.
9. In the result, for the reasons stated above, we find no merit in the appeal and it is, accordingly, dismissed.