Full Judgment Text
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PETITIONER:
M/S. INDIAN MAIZE & CHEMICALS LTD.
Vs.
RESPONDENT:
STATE OF U.P. & ORS.
DATE OF JUDGMENT: 13/01/1997
BENCH:
K. RAMASWAMY, G.T. NANAVATI
ACT:
HEADNOTE:
JUDGMENT:
O R D E R
Delay condoned.
The petitioner is, through this petition, assailing the
correctness of the order of the Allahabad High Court,
Lucknow Bench, made on July 26, 1996 in Writ Petition No.
2109 of 1996. The petitioner- U.P. State Electricity Board
on February 6, 1990 for the supply of electric energy of
1650 KVA. The petitioner had executed an agreement and also
complied with the formalities for the supply of electricity
in terms of Indian Electricity Act, 1910. The petitioner
claimed the rebate on the basis that he had established the
industry in an undeveloped area but we are not concerned
with that controversy. Admittedly, a sum of Rs. 49395 lacs
was due from the petitioner. On a demand raised by the Board
on June 4, 1996 in that behalf, the petitioner approached
the High Court. The petitioner, with a view to avoid
disconnection had agreed with the Board on June 10,1996 for
payment of above outstanding amount in 12 monthly
instalments and the Board had agreed for the same and given
re-connection subject to the petitioner paying the amount as
agreed. The petitioner after depositing one instalment,
committed default in the payment. Since the petitioner
anticipated disconnection, it approached the High court for
the direction not to recover the amount putting forth the
plea that the petitioner is a sick industry and his claim
for rehabilitation was pending before B.I.F.R and,
therefore, no action could be taken in that behalf. The High
Court has refused to grant the relief by the impugned order
dated June 26, 1996. Thus, this special leave petition.
Learned counsel for the petitioner has contended that
the controversy is covered by the judgment of this Court in
C.E.S.C. Ltd. & Ors. vs. Bowrech Cotton mills Co. Ltd & Ors.
[1993 Supp. (1) SCC 451]. Therefore, the high Court was not
right in relying upon that court’s earlier judgment in Modi
spinning & Weaving Mills Co. Ltd. vs. U.P.S.E.B & Ors.[AIR
1992 All. 247]. We find that the contention raised by the
leaned counsel is not correct in law. It is seen that in
CESC Ltd. case, this Court had expressly left open the
question of the undertaking given and the default committed
and fulfilment thereof since that question was not raised in
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the High Court as expressly mentioned in paragraph 3
thereof. With regard to the delayed payment, surcharge etc.
the direction issued by the High Court was modified in
paragraph 4 and direction was given to pay the amount in
instalments as envisaged in paragraph 4 of the judgment. as
far as the arrears are concerned, since the first question
was not considered, this Court had held that since the
matter was pending before the BIFR itself.
It is seen that Section 22(1) of the sick Industrial
Companies (Special provisions ) Act, 1985 envisages as
under:
"22. Suspension of legal
proceedings, contract, etc.--(1)
Where in respect of an industrial
company, an inquiry under section
16 is pending or any scheme
referred to under preparation or
consideration or a sanctioned
scheme is under implementation or
where an appeal under section 25
relation to an industrial company
is pending, then, notwithstanding
anything contained in the companies
Act, 1956 (q 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 on
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.
A reading of the above section would indicate that when
the proceedings are pending before the BIFR in respect of
any matter referred to therein for inquiry by the Board, the
proceedings or order of execution, distress or the like
would be stayed until the proceedings get concluded before
the BIFR or would not be proceeded without the leave of the
Board or appellate authority. It is seen that under the
Indian Electricity supply Act, one of the conditions is that
continued payment of the price of electrical energy supplied
by the Board is a condition for the condition for the
continued supply and the default committed in the payment
thereof entails disconnection of the supply of electrical
energy, except in accordance with the procedure prescribed
under the contract or the regulation issued under the Indian
Electricity supply Act. Execution connotes pre-existing
decree. It is true that any action for realisation etc.
Pending decision by BIFR or without its permission is
prohibited. Enforcement or compliance of the obligation
under the contract or regulation for supply of electrical
energy by ordering payment of electrical energy is not and
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cannot be considered to be execution of decree. Execution of
the decree presupposes existence of a decree of a competent
Court and the decree- holder should take steps to have it
executed pending proceeding before or leaf BIFR. There is no
decree of court. since the petitioner had committed default
and as a condition for re-connection, agreed to pay the
amount in instalments, he is liable to comply with the
undertaking given for supply of electrical energy. the
petitioner committed default in that behalf. so, it is not
entitled to seek any declaration or direction from the Court
that since the matter is pending before the BIFR, he would
be untitled to the supply of electrical energy without the
compliance of the corresponding obligation of payment under
regulations or of the contract under the Indian Electricity
supply Act. It is, therefore, not correct to say that since
the proceedings are pending before the BIFR, the electricity
is required to be supplied to the consumer without
compliance of the conditions. It is then sought to be
contended that the authorities may take coercive steps to
recover the arrears. at this state, we need not go into the
question.
The special leave petition is accordingly dismissed.