M/s Indian Sulphacid Industries Ltd., Upadhayay Marg, New Delhi v. Radha & Ors.

Hon'ble Rajasthan High Court has clearly opined in M/s World Tax Limited and others Vs. State of Rajasthan and another reported in 2004(2) RCR (Crl) page 903 that the Section 22 creates embargo against the disposal of the assets of company for recovery of it's debts. This section does not bar the payment of money by the company or it's Director to other persons for satisfaction of their legal enforceable dues. This section does not create any legal impediment for institution and execution to recover the compensation awarded in accident cases. In the present case the company was held liable to pay Rs. 2,40,000/- to the claimants due to death of Jitender Singh. So, in these circumstances, the objections filed by JD No.02 are not maintainable and same is hereby dismissed.” The petitioner challenged the order passed by the learned Executing Court by way of this revision. This Court passed the following order on 8.5.2006:- “ Admitted. Keeping in view the fact that for the year ending 31.4.2005, the petitioner has earned an amount of Rs. 21.40 lacs and the net profit after depreciation and tax was Rs. 18.90 lacs, I do not find any ground to stay the execution of payment of the compensation amount to the respondent- C.R. No. 2217 of 2006 6 claimants payable on account of motor vehicular accident” In spite of the fact, that no stay was granted by this Court, the petitioner successfully evaded the execution of the award. When this case came up for hearing, an adjournment was sought by the respondent-decree-holder to seek permission of the Board to continue the execution proceedings. As per Section 22 of the Act, the proceedings against the sick company can continue with the permission of the Board. The learned counsel appearing on behalf of the respondents/ decree-holder points out, that the reference of the petitioner stands rejected by the Board, and the petitioner has preferred an appeal before the AAIFR Appellate Authority for Industrial & Financial Reconstruction (hereinafter called 'AAIFR') and the appeal filed is still pending. The application moved by the respondent-decree-holder, for permission to execute the decree of the learned Tribunal, has been taken on record, but the 'AAIFR' has not taken up the application, for hearing, in spite of request in this regard. The impugned order passed by the learned Executing court cannot be sustained, as there is a statutory bar to continue with the execution proceedings for recovery against a sick company, except with the permission of the Board. The impugned order is set aside, and the application moved by the petitioner under Section 22 of the Act, is allowed and the execution of award against the petitioner alone, is stayed. However, in view of the fact, that this Court had not stayed the C.R. No. 2217 of 2006 7 execution of the award, and the petitioner successfully evaded the payment. Directions are issued to 'AAIFR' to dispose of the application moved by the petitioner, for permission to execute the award, within three months from the date of receipt of certified copy of this order by taking a sympathetic view. The respondent /decree-holder is poor helpless widow and the minor children of the deceased, with no other source of livelihood, it will therefore be inhumane to delay the execution of award any further. The directions be complied with strictly. With the above observations, the revision is allowed, and the impugned order is set aside.

18.1.2010 'sp' ( VINOD K. SHARMA ) JUDGE