M/S Sneh Dyechem Ltd. Vs. Madhya Pradesh State Industrial. - Court Judgment

Excerpt:
[mohit s. shah; s.j. vazifdar, jj.] - the respondents contended that they are the proprietors inter-alia of the trade mark 555 written in a stylized manner. the respondents claim to be the assignees of this mark. the mark was assigned from time to time. ultimately by a deed of assignment dated 14.9.2004, the registered trade mark label 555 was assigned to the respondents. the application for renewal of the mark is pending. the respondents have used the trade mark label 555 in conjunction with other marks such as meredian, merelane delux and merelane premium. see also, fuentes trade marks (1891, 2 ch.,166)." the above observations establish that it is a defence even to an action for passing off or infringement of a trade mark that the plaintiffs (in this case the respondents) marks are an imitation of the mark of another to wit that the respondents had themselves infringed the mark of another. it is thus clear that the principle was applied to an action for infringement of trade mark and passing off. if the purchasers were in such a case to stamp their goods with the trade mark, "a.b. the basis of the ratio is to deny an infringer a right based on the mark or work which infringes the mark or work of another. the respondents in their affidavit in rejoinder denied the allegations that they had infringed the mark of state express 555. there are no averments, much less is there any evidence, to indicate that the respondents' marks/cartons/labels are an imitation of the mark state express 555. it is significant to note that there is no evidence whatsoever to the effect that the third party has used the mark 555 or created the labels/cartons or marks prior to the creation of and use by the respondents of these marks/labels and cartons which may have persuaded the court to come to the conclusion that the respondents had infringed the mark. if it is established that the mark is a well known mark, the mark being used in respect of different goods may make no difference. firstly, whether the principle would apply even if the mark is not established to be a well known mark. secondly, whether the principle would apply if such a mark i.e. not a well known mark, infringed by the respondents is applied to different goods. the goods need not be identical even if a well known mark is not involved. 1. many a grounds have been raised by the petitioner in this petition under article 226 of the constitution wherein the challenge is to an order dated 16.112009 whereby in a proceeding drawn under the provisions of madhya pradesh lok dhan shodhya rashion ki vasuli adhiniyam 1987 at the instance of respondent no. 1 for recovery of rs.25,00,000/- along with interest rs.37,68,033/- total rs.62,68,033/- the naib tahsildar, bairagarh, bhopal turned down the objection raised by the petitioner for stay of proceedings in lieu of section 22 of the sick industrial companies (special provisions) act, 1985 (referred to as sica 1985).2. the petitioner, however, has confined its challenge only to the extent that the proceedings under adhiniyam 1987 to remain suspended till enquiry is pending under the sica 1985 as per section 22 of sica 1985. facts relevant for the present are that financial assistance of rs.25 lacs was extended by the respondent to the petitioner to set up its industrial unit for manufacturing of dye intermediates at village raipur nayakhera district sehore, m.p. in the year 1995. by way of security several documents were executed including the indemnity bond in favour of respondent by the petitioner. petitioner nos. 2 to 4 besides executing the security documents for and on behalf of petitioner no. 1 company also stood as guarantor in the personal capacity for the security of repayment of financial assistance extended in favour of the petitioner company by way of executing indemnity bond whereby and whereunder the respondents were given right to enforce the terms thereof for the recovery of dues outstanding as an arrear of land revenue (paragraph 13 of the indemnity bond dated 21.4.1997). it appears that the petitioner company defaulted in repayment of financial assistance resulting therein certain outstanding dues towards the principal amount as also the interest thereon. this outstanding amount led the respondents to take recourse to the provisions of adhiniyam 1987 by invoking clause 13 of indemnity bond dated 21.4.1997. it is in a proceeding instituted under the adhiniaym 1987 that an objection was raised by the petitioner company as to the maintainability of the recovery proceeding because of the pendency of reference before the board for industrial and financial reconstruction (hereinafter shall be referred as bifr) under sica 1985. it was contended before the competent authority that by virtue of section 22 thereof proceeding for recovery would not be maintainable. it is this objection raised by the petitioner which was dealt with by the authority concerned by its order dated 16.11.2009 whereby the authority concerned while negativing the plea put-forth by the petitioner observed:criticizing the order on the anvil of provision contained under section 22 of the sica 1985 and by relying upon the judgment rendered in the case of rishabh agro industries ltd. v. p.n.b. capital services ltd. (2005) 5 scc 515 and patheja bros. forgings & stamping and another v. icici ltd. and others (2006) 6 scc 545), it is contended by learned counsel for the petitioner that the approach of the authority concerned suffers from the vice of perversity. it is urged by learned counsel for the petitioner that reference under section 15 (1) of sica 1985 was registered on 25.9.2002 with the bifr as case no. 377/2002. it is contended that with the registration of reference the petitioner company became entitled for protection as available under section 22 of sica 1985, whereunder no suit for recovery of money or for the enforcement of loans or advance granted to the industrial company shall lie or be proceeded further. it is contended that since the proceedings initiated against the petitioner under adhiniyam 1987 in pursuance to r.r.c issued by respondents was after 25.9.2002 (proceedings under adhiniyam 1987 were initiated on 27.7.2009), the same would not lie as per the stipulations under section 22 of the sica 1985. it is accordingly contended that the proceedings as drawn against the petitioner are liable to be set aside because of the bar created under section 22 of the sica 1985. 3. learned counsel appearing for the respondents vehemently opposing the plea raised by the petitioner on the ground that it is as per the terms contained in indemnity bond that the recovery proceedings were initiated against the petitioner as per the adhiniyam 1987 and the bar as stipulated under section 22 does not get attracted in such matters. reliance is placed on the judgment in deputy commercial tax officer and others v. corromandal pharmaceuticals and others (air 1997 sc 2027).4. after hearing learned counsel for the parties the question which crops up for consideration is as to whether the naib tahsildar was justified in entertaining the proceeding under adhiniyam 1987 for recovery of dues and outstanding against the company. section 22 of sica 1985 stipulates:22. suspension of legal proceedings, contracts, etc. (1) 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 or 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 proceedings 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.5(2) where the management of the sick industrial company is taken over or changed, in pursuance of any scheme sanctioned under section 18, notwithstanding anything contained in the companies act, 1956 (1 of 1956) or any other law or in the memorandum and articles of association of such company or any instrument having effect under the said act or other law -(a) it shall not be lawful for the shareholders of such company or any other person to nominate or appoint any person to be a director of the company; (b) no resolution passed at any meeting of the shareholders of such company shall be given effect to unless approved by the board.(3) where an inquiry under section 16 is pending or any scheme referred to in section 17 is under preparation or during the period of consideration of any scheme under section 18 or where any such scheme is sanctioned thereunder, for due implementation of the scheme, the board may by order declare with respect to the sick industrial company concerned that the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force, to which such sick industrial company is a party or which may be applicable to such sick industrial company immediately before the date of such order, shall remain suspended or that all or any of the rights, privileges, obligations and liabilities accruing or arising thereunder before the said date, shall remain suspended or shall be enforceable with such adaptations and in such manner as may be specified by the board:provided that such declaration shall not be made for a period exceeding two years which may be extended by one year at a time so, however, that the total period shall not exceed seven years in the aggregate.(4) any declaration made under sub-section (3) with respect to a sick industrial company shall have effect notwithstanding anything contained in the companies act, 1956 (1 of 1956) or any other law, the memorandum and articles of association of the company or any instrument having effect under the said act or other law or any agreement or any decree or order of a court, tribunal, officer or other authority or of any submission, settlement or standing order and accordingly, - (a) any remedy for the enforcement of any right, privilege, obligation and liability suspended or modified by such declaration, and all proceedings relating thereto pending before any court, tribunal, officer or other authority shall remain stayed or be continued subject to such declaration; and(b) on the declaration ceasing to have effect - (i) any right, privilege, obligation or liability so remaining suspended or modified, shall become revived and enforceable as if the declaration had never been made; and(ii) any proceeding so remaining stayed shall be proceeded with, subject to the provisions of any law which may then be in force, from the stage which had been reached when the proceedings became stayed. (5) in computing the period of limitation for the enforcement of any right, privilege, obligation or liability, the period during which it or the remedy for the enforcement thereof remains suspended under this section shall be excluded."in rishabh agro industries ltd. (supra) it was observed by their lordships:"5. the act is shown to have been made, in public interest, with a view to securing the timely detection of sick and potentially sick companies owning industrial 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 and for matters connected therewith or incidental thereto. the object of the act appears to be to afford maximum protection of employment, optimise the use of financial resources, salvaging the assets of production, realising the amounts due to the banks and to replace the existing time consuming and inadequate machinery by efficient machinery for expeditious determination by a body of experts to safeguard the economy of the country and protect viably sick units. chapter iii deals with the reference, enquiries and claims. section 15 provides that when an industrial company becomes a sick industrial company as defined under section 2(o) of the act, the board of directors of the company, shall, within 60 days from the date of finalisation of the duly audited accounts of the company for the financial year make a reference to the board for determination of the measures which shall be adopted with respect to the company. section 16 obliges the board to make such enquiry as it may deem fit for determining whether any industrial company had become a sick industrial company in accordance with the procedure prescribed therein. explanation to sub-section (3) of section 16 was inserted by act no.12 of 1994 which provides:"explanation--for the purposes of this sub-section, an inquiry shall be deemed to have commenced upon the receipt by the board of any reference or information or upon its own knowledge reduced to writing by the board."5. it follows, therefore, that from the date of submission of reference under section 15, an enquiry shall be deemed to have been commenced for the purposes of section 22 of the act. this court dealt with this aspect of the matter in real value appliances ltd. v. canara bank & ors. [1998 (5) scc 554] and held as under:"in our view, when section 16(1) says that the bifr can conduct the inquiry 'in such manner as it may deem fit', the said words are intended only to convey that a wide discretion is vested in the bifr in regard to the procedure it may follow for conducting an inquiry under section 16(1) and nothing more. in fact once the reference is registered after scrutiny, it is, in our view, mandatory for the bifr to conduct an inquiry. if one looks at the format of the reference as prescribed in the regulations, it will be clear that it contains more than fifty columns regarding extensive financial details of the company's assets, liabilities, etc. indeed, it will be practically impossible for the bifr to reject a reference outright without calling for information/documents or without hearing the company or other parties. further, the act is intended to revive and rehabilitate sick industries before they can be wound up under the companies act, 1956. whether the company seeks a declaration that it is sick or some other body seeks to have it declared as a sick company, it is, in our opinion, necessary that the company be heard before any final decision is taken under the act. it is also the legislative intention to see that no proceedings against the assets are taken before any such decision is given by the bifr for in case the company's assets are sold, or the company wound up it may indeed become difficult later to restore the status quo ante. therefore, in our view, the high court of allahabad in industrial finance corpn. of india v. maharashtra steels ltd. [1990 (67) comp cas 412(all)], the high court of andhra pradesh in sponge iron india ltd. v. neelima steels ltd. [1990 (68) comp cas 201 (ap)], the high court of himachal pradesh in orissa sponge iron ltd. v. rishab ispatt ltd.[1993 (78) comp cas 264 (hp)] are right in rejecting such a contention and in holding that the inquiry must be treated as having commenced as soon as the registration of the reference is completed after scrutiny and that from that time, action against the company's assets must remain stayed as stated in section 22 till final decisions are taken by the bifr."in pathera bros. forgings & stamping and another (supra)6. the words in the square brackets above were inserted into section 22 by act 12 of 1994 and it is these words which are relevant for our purposes. as we read them, they provide that no suit- (a) for the recovery of money, or(b) for the enforcement(i) of any security against the industrial company, or(ii) of any guarantee in respect of any loans or advance granted to the industrial company, shall lie or be proceeded with except with the consent of the board or the appellate authority under the said act. for our purposes, therefore, the relevant words are: "no suit. . . .for the enforcement. . . . .of any guarantee in respect of any loans or advance granted to the industrial company" shall lie without the consent of the board or the appellate authority. the words are crystal clear. there is no ambiguity therein. it must, therefore, be held that no suit for the enforcement of a guarantee in respect of a loan or advance granted to the concerned industrial company will lie or can be proceeded with without the sanction of the board or the appellate authority under the said act.7. it is not possible to read the relevant words in section 22 as meaning that only a suit against the industrial company will not lie without such consent. there is no requirement in section 22, as analysed above, that, to be covered thereby, a suit for the enforcement of a guarantee in respect of a loan or advance to the industrial company should be against the industrial company.though the respondents have placed reliance on judgment in corromandal pharmaceuticals and others (supra); however, as borne out from paragraph 10, the 10matter pertains to recovery towards sales tax as it was observed by their lordships "such amounts like sales tax, etc, which the sick industrial company is enabled to collect after the date of the sanctioned scheme legitimately belonging to the revenue cannot be and could not have been intended to be covered within section 22 of the act." present is not a case where the amount of tax is being recovered but here the respondent has taken recourse to the provisions contained in adhiniyam 1987 for recovery of dues outstanding in the loan account of the petitioner. therefore, the principle of law culled out from corromandal pharmaceuticals and others (supra) is not attracted in the present matter.9. in view of above, since a reference is pending before bifr further proceedings of case no. 73/a-76/08-09 in the court of naib tahsildar bairagarh shall remain stayed unless consent as required by section 22 is obtained. in the result petition succeeds to the extent above. however, no costs.

Judgment:
1. Many a grounds have been raised by the petitioner in this petition under Article 226 of the Constitution wherein the challenge is to an order dated 16.112009 whereby in a proceeding drawn under the provisions of Madhya Pradesh Lok Dhan Shodhya Rashion Ki Vasuli Adhiniyam 1987 at the instance of respondent No. 1 for recovery of Rs.25,00,000/- along with interest Rs.37,68,033/- total Rs.62,68,033/- the Naib Tahsildar, Bairagarh, Bhopal turned down the objection raised by the petitioner for stay of proceedings in lieu of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (referred to as SICA 1985).

2. The petitioner, however, has confined its challenge only to the extent that the proceedings under Adhiniyam 1987 to remain suspended till enquiry is pending under the SICA 1985 as per Section 22 of SICA 1985. Facts relevant for the present are that financial assistance of Rs.25 lacs was extended by the respondent to the petitioner to set up its industrial unit for manufacturing of dye intermediates at village Raipur Nayakhera district Sehore, M.P. in the year 1995. By way of security several documents were executed including the Indemnity Bond in favour of respondent by the petitioner. Petitioner Nos. 2 to 4 besides executing the security documents for and on behalf of petitioner No. 1 company also stood as guarantor in the personal capacity for the security of repayment of financial assistance extended in favour of the petitioner company by way of executing Indemnity Bond whereby and whereunder the respondents were given right to enforce the terms thereof for the recovery of dues outstanding as an arrear of land revenue (paragraph 13 of the Indemnity Bond dated 21.4.1997). It appears that the petitioner company defaulted in repayment of financial assistance resulting therein certain outstanding dues towards the principal amount as also the interest thereon. This outstanding amount led the respondents to take recourse to the provisions of Adhiniyam 1987 by invoking clause 13 of Indemnity Bond dated 21.4.1997. It is in a proceeding instituted under the Adhiniaym 1987 that an objection was raised by the petitioner company as to the maintainability of the recovery proceeding because of the pendency of reference before the Board for Industrial and Financial Reconstruction (hereinafter shall be referred as BIFR) under SICA 1985. It was contended before the competent authority that by virtue of Section 22 thereof proceeding for recovery would not be maintainable. It is this objection raised by the petitioner which was dealt with by the authority concerned by its order dated 16.11.2009 whereby the authority concerned while negativing the plea put-forth by the petitioner observed:

Criticizing the order on the anvil of provision contained under Section 22 of the SICA 1985 and by relying upon the judgment rendered in the case of Rishabh Agro Industries Ltd. V. P.N.B. Capital Services Ltd. (2005) 5 SCC 515 and Patheja Bros. Forgings & Stamping and another v. ICICI Ltd. And others (2006) 6 SCC 545), it is contended by learned counsel for the petitioner that the approach of the authority concerned suffers from the vice of perversity. It is urged by learned counsel for the petitioner that reference under Section 15 (1) of SICA 1985 was registered on 25.9.2002 with the BIFR as case No. 377/2002. It is contended that with the registration of reference the petitioner Company became entitled for protection as available under Section 22 of SICA 1985, whereunder no suit for recovery of money or for the enforcement of loans or advance granted to the industrial company shall lie or be proceeded further. It is contended that since the proceedings initiated against the petitioner under Adhiniyam 1987 in pursuance to R.R.C issued by respondents was after 25.9.2002 (proceedings under Adhiniyam 1987 were initiated on 27.7.2009), the same would not lie as per the stipulations under Section 22 of the SICA 1985. It is accordingly contended that the proceedings as drawn against the petitioner are liable to be set aside because of the bar created under Section 22 of the SICA 1985.

3. Learned counsel appearing for the respondents vehemently opposing the plea raised by the petitioner on the ground that it is as per the terms contained in Indemnity Bond that the recovery proceedings were initiated against the petitioner as per the Adhiniyam 1987 and the bar as stipulated under Section 22 does not get attracted in such matters. Reliance is placed on the judgment in Deputy Commercial Tax Officer and others v. Corromandal Pharmaceuticals and others (AIR 1997 SC 2027).

4. After hearing learned counsel for the parties the question which crops up for consideration is as to whether the Naib Tahsildar was justified in entertaining the proceeding under Adhiniyam 1987 for recovery of dues and outstanding against the company. Section 22 of SICA 1985 stipulates:

22. Suspension of legal proceedings, contracts, etc. (1) 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 or 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 proceedings 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.

5

(2) Where the management of the sick industrial company is taken over or changed, in pursuance of any scheme sanctioned under section 18, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956) or any other law or in the memorandum and articles of association of such company or any instrument having effect under the said Act or other law -

(a) it shall not be lawful for the shareholders of such company or any other person to nominate or appoint any person to be a director of the company; (b) no resolution passed at any meeting of the shareholders of such company shall be given effect to unless approved by the Board.

(3) Where an inquiry under section 16 is pending or any scheme referred to in section 17 is under preparation or during the period of consideration of any scheme under section 18 or where any such scheme is sanctioned thereunder, for due implementation of the scheme, the Board may by order declare with respect to the sick industrial company concerned that the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force, to which such sick industrial company is a party or which may be applicable to such sick industrial company immediately before the date of such order, shall remain suspended or that all or any of the rights, privileges, obligations and liabilities accruing or arising thereunder before the said date, shall remain suspended or shall be enforceable with such adaptations and in such manner as may be specified by the Board:

Provided that such declaration shall not be made for a period exceeding two years which may be extended by one year at a time so, however, that the total period shall not exceed seven years in the aggregate.

(4) Any declaration made under sub-section (3) with respect to a sick industrial company shall have effect notwithstanding anything contained in the Companies Act, 1956 (1 of 1956) or any other law, the memorandum and articles of association of the company or any instrument having effect under the said Act or other law or any agreement or any decree or order of a court, tribunal, officer or other authority or of any submission, settlement or standing order and accordingly, -

(a) any remedy for the enforcement of any right, privilege, obligation and liability suspended or modified by such declaration, and all proceedings relating thereto pending before any court, tribunal, officer or other authority shall remain stayed or be continued subject to such declaration; and

(b) on the declaration ceasing to have effect - (i) any right, privilege, obligation or liability so remaining suspended or modified, shall become revived and enforceable as if the declaration had never been made; and

(ii) any proceeding so remaining stayed shall be proceeded with, subject to the provisions of any law which may then be in force, from the stage which had been reached when the proceedings became stayed. (5) In computing the period of limitation for the enforcement of any right, privilege, obligation or liability, the period during which it or the remedy for the enforcement thereof remains suspended under this section shall be excluded."

In Rishabh Agro Industries Ltd. (supra) it was observed by their Lordships:

"5. The Act is shown to have been made, in public interest, with a view to securing the timely detection of sick and potentially sick companies owning industrial 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 and for matters connected therewith or incidental thereto. The object of the Act appears to be to afford maximum protection of employment, optimise the use of financial resources, salvaging the assets of production, realising the amounts due to the Banks and to replace the existing time consuming and inadequate machinery by efficient machinery for expeditious determination by a body of experts to safeguard the economy of the country and protect viably sick units. Chapter III deals with the reference, enquiries and claims. Section 15 provides that when an industrial company becomes a sick industrial company as defined under Section 2(o) of the Act, the Board of Directors of the Company, shall, within 60 days from the date of finalisation of the duly audited accounts of the company for the financial year make a reference to the Board for determination of the measures which shall be adopted with respect to the company. Section 16 obliges the Board to make such enquiry as it may deem fit for determining whether any industrial company had become a sick industrial company in accordance with the procedure prescribed therein. Explanation to Sub-section (3) of Section 16 was inserted by Act No.12 of 1994 which provides:

"Explanation--For the purposes of this sub-section, an inquiry shall be deemed to have commenced upon the receipt by the Board of any reference or information or upon its own knowledge reduced to writing by the Board."

5. It follows, therefore, that from the date of submission of reference under Section 15, an enquiry shall be deemed to have been commenced for the purposes of Section 22 of the Act. This Court dealt with this aspect of the matter in Real Value Appliances Ltd. v. Canara Bank & Ors. [1998 (5) SCC 554] and held as under:

"In our view, when Section 16(1) says that the BIFR can conduct the inquiry 'in such manner as it may deem fit', the said words are intended only to convey that a wide discretion is vested in the BIFR in regard to the procedure it may follow for conducting an inquiry under Section 16(1) and nothing more. In fact once the reference is registered after scrutiny, it is, in our view, mandatory for the BIFR to conduct an inquiry. If one looks at the format of the reference as prescribed in the Regulations, it will be clear that it contains more than fifty columns regarding extensive financial details of the Company's assets, liabilities, etc. Indeed, it will be practically impossible for the BIFR to reject a reference outright without calling for information/documents or without hearing the Company or other parties. Further, the Act is intended to revive and rehabilitate sick industries before they can be wound up under the Companies Act, 1956. Whether the company seeks a declaration that it is sick or some other body seeks to have it declared as a sick company, it is, in our opinion, necessary that the Company be heard before any final decision is taken under the Act. It is also the legislative intention to see that no proceedings against the assets are taken before any such decision is given by the BIFR for in case the Company's assets are sold, or the company wound up it may indeed become difficult later to restore the status quo ante. Therefore, in our view, the High Court of Allahabad in Industrial Finance Corpn. of India v. Maharashtra Steels Ltd. [1990 (67) Comp Cas 412(All)], the High Court of Andhra Pradesh in Sponge Iron India Ltd. v. Neelima Steels Ltd. [1990 (68) Comp Cas 201 (AP)], the High Court of Himachal Pradesh in Orissa Sponge Iron Ltd. v. Rishab Ispatt Ltd.[1993 (78) Comp Cas 264 (HP)] are right in rejecting such a contention and in holding that the inquiry must be treated as having commenced as soon as the registration of the reference is completed after scrutiny and that from that time, action against the Company's assets must remain stayed as stated in Section 22 till final decisions are taken by the BIFR."

In Pathera Bros. Forgings & Stamping and another (supra)

6. The words in the square brackets above were inserted into Section 22 by Act 12 of 1994 and it is these words which are relevant for our purposes. As we read them, they provide that no suit- (a) for the recovery of money, or

(b) for the enforcement

(i) of any security against the industrial company, or

(ii) of any guarantee in respect of any loans or advance granted to the industrial company, shall lie or be proceeded with except with the consent of the Board or the Appellate Authority under the said Act. For our purposes, therefore, the relevant words are: "no suit. . . .for the enforcement. . . . .of any guarantee in respect of any loans or advance granted to the industrial company" shall lie without the consent of the Board or the Appellate Authority. The words are crystal clear. There is no ambiguity therein. It must, therefore, be held that no suit for the enforcement of a guarantee in respect of a loan or advance granted to the concerned industrial company will lie or can be proceeded with without the sanction of the Board or the Appellate Authority under the said Act.

7. It is not possible to read the relevant words in Section 22 as meaning that only a suit against the industrial company will not lie without such consent. There is no requirement in Section 22, as analysed above, that, to be covered thereby, a suit for the enforcement of a guarantee in respect of a loan or advance to the industrial company should be against the industrial company.

Though the respondents have placed reliance on judgment in Corromandal Pharmaceuticals and others (supra); however, as borne out from paragraph 10, the 10

matter pertains to recovery towards sales tax as it was observed by their Lordships "Such amounts like sales tax, etc, which the sick industrial company is enabled to collect after the date of the sanctioned scheme legitimately belonging to the revenue cannot be and could not have been intended to be covered within Section 22 of the Act." Present is not a case where the amount of tax is being recovered but here the respondent has taken recourse to the provisions contained in Adhiniyam 1987 for recovery of dues outstanding in the loan account of the petitioner. Therefore, the principle of law culled out from Corromandal Pharmaceuticals and others (supra) is not attracted in the present matter.

9. In view of above, since a reference is pending before BIFR further proceedings of case No. 73/A-76/08-09 in the Court of Naib Tahsildar Bairagarh shall remain stayed unless consent as required by Section 22 is obtained. In the result petition succeeds to the extent above. However, no costs.