Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short “the SICA). - Application for protection of sec.22 (1) of SICA by Guarantors - whether maintainable - Settled law - if the action filed by the Bank comes with in the ambit of term suit, he can obtain protection - if the action of Bank is in the nature of proceedings , he can not avail the protection - in this case , he filed application in proceedings , High court rightly dismissed the application =2015 S.C.(2013) MSKLAWREPORTS


 whether  the
appellants who are Directors and  Guarantors  of  a  sick  company  and  are
entitled to get the protection of  Section  22(1)  of  the  Sick  Industrial
Companies (Special Provisions) Act, 1985 (for short “the SICA). =

Appellants, who are the guarantors, can obtain  the  protection  of  Section 22(1) of SICA only if the action filed by the bank comes  within  the  ambit of the term ‘suit’.  If the action filed  by  the  respondent  bank  in  the nature of ‘proceedings’ and not a ‘suit’,  protection  under  Section  22(1) would not be available, especially, when the appellants are guarantors. =

  This Court, in KSL and Industries Limited (supra) took the  view  that
even though both the conflicting statutes SICA and Recovery of Debts Due  to
Banks and Financial Institutions Act, 1993 (for short the “RDDB”) contain  a
non-obstante clause, in case of conflict the RDDB  Act,  1993  will  prevail
over SICA, so far as public revenue recoveries are  concerned.  
 This  Court
also emphasized that the liability of surety or  guarantor  is  co-extensive
with that of the  principal  debtor  in  Kailash  Nath  Agarwal  and  others
(supra).   
In  Nahar  Industrial  Enterprises  Limited  (supra)  this  Court
reiterated the term ‘suit’ have to  be  confined  in  the  context  of  sub-
section (1) of Section 22 of SICA to those  actions  which  are  dealt  with
under the Code and not in the comprehensive over-arching proceedings  so  as
to apply to any original proceedings before  any  legal  forum.    The  term
‘suit’ would apply only to proceedings in civil court  and  not  actions  or
recovery proceedings filed by banks  and  financial  institutions  before  a
tribunal such as DRT.

 In our view, all the legal  points  raised  by  the  appellants  stand
covered by the Judgments  referred  to  hereinbefore  and  hence  a  further
examination of the same  is  unnecessary.    The  appeal,  therefore,  lacks
merits and the same is dismissed, however, there will  be  no  order  as  to
costs.

Popular posts from this blog

Sec.482 Cr.P.C. - Section 8 of the Andhra Pradesh Public Examination (Prevention of Malpractice and Unfair Means) Act, 1997 - Part B question Paper was missed ( said to be distributed to A1 along with other students by A2 an invigilator ) - Charge - she was negligent in performing the invigilation duties. - Their Lordships held that Mere negligence in performing invigilation duties, does not attract the offence set-forth in the Act. Therefore, in absence of any allegation that the petitioner herein has committed the offence set out in Section 5 of the Act, she cannot be subjected to prosecution for which the penalty has been provided under Section 8 of the Act.- Quashed the criminal proceedings - 2015 Telganga & A.P. msklawreports

DVC CASE - Practice & Procedure - Magistrate shall issue a notice of the date of hearing fixed under Sec.12-the Magistrate need not, nay shall not issue warrant for securing presence of respondent - the Court need not insist for personal attendance of the parties for each adjournment like in criminal cases.-if the respondents failed to turn up after receiving notice and file their counter affidavit if any,pass an exparte order by virtue of the power conferred on him under Sec.23 of the D.V.Act.-only under exceptional circumstances, if the Magistrate feels required, he may issue warrants for securing the presence of the concerned party. -2015 A.P. MSKLAWREPORTS( Telegana)

Section 5 of Andhra Pradesh Rights in Land and Pattadar Pass Books Act, 1971 read with Rule 9(1)(a)(i), (ii) and (iii) of the Rules of 1989. - Powers of Revenue Court - Petitioners are the legal heirs of Late Sri A. Penta Reddy and respondents 1 to 3 are the brothers of Penta Reddy - Petitioners claimed as Separate Property - Brothers/Respondents claimed as Joint family Property - MRO held summary enquiry and held that it is Joint family Property - No Appeal to RDO - after the lapse of 12 years filed Revision directly to Joint Collector - JC. dismissed the revision - this Writ - Their Lordships held that in the absence of any suit for Declaration of title after receiving Rule 9 notice with in 3 months, the MRO can decide the dispute summarily - since no appeal is filed nor any suit is filed in any court - the orders of MRO can not be challanged after the lapse of 12 years - dismissed the revision - -2015 Telangana & A.P. MSKLAWREPORTS