Arora Paper Products vs Kedia Castle Dellon Industries Ltd.

Manindra Mohan Shrivastava, J.

This petition under Article 227 of the Constitution of India is directed against order dated 5-10-09 passed by the Executing Court whereby, further proceedings in execution have been stayed. In the matter of a dispute arising out of the contract, as per arbitration clause in the agreement between the parties, arbitration proceedings were drawn, which culminated in passing of an award by the Industrial Facilitation Council on 30-12-05/28-5-06.

The respondent/judgment debtor moved an application for staying the proceedings on the ground that the judgment debtor is a sick company under Section 22(1) of Sick Industrial Companies (Special Provisions) Act, 1985 (for short "the Act of 1985"). The objection was rejected by the Executing Court on 13-3-08 and an order was passed for attachment of movable property. This order was not challenged by the judgment debtor before any Higher Court in any proceedings.

Later on, the executing proceedings were transferred to the Court at Durg. Again an application was filed before the Executing Court at Durg, where proceedings were transferred to stay the proceedings on the ground that proceedings before the BIFR are under the Act of 1985 and therefore, further proceedings may not be continued in view of the provisions contained in Section 22(1) of the Act of 1985. Despite objections taken to the maintainability of the second application for stay, the Executing Court at Durg allowed the application and stayed the executing proceedings holding that in view of the provisions contained in Section 22(1) of the Act of 1985, further proceedings towards execution of decree by distress cannot be allowed to continue. It is this order, which is under challenge before this Court.

The sole submission of learned Counsel for the petitioner is that the objection of similar nature was earlier raised by the judgment debtor before the Executing Court, which was rejected by the Executing Court on 13-3-08. He further submits that such objection taken before the Facilitation Council was also rejected by passing award. Therefore, a second application was not maintainable merely because the execution case was transferred to another Court. Relying upon the judgment of the Supreme Court in the cases of Uttar Pradesh State Road Transport Corporation v. State of Uttar Pradesh, 2004 Law Suit (SC) 1155 and India Household and Healthcare Ltd. Vs. LG Household and Healthcare Ltd., , learned Counsel for the petitioner contended that after an issue has been decided at one stage of the same proceedings, at a later stage of proceedings, the same cannot be re-agitated. According to him, if the judgment debtor was aggrieved by order dated 13-3-08 rejecting his objection, he ought to have taken proceedings before the Higher Court. In the same execution proceedings between the same parties, at a later stage of proceedings, the same could not be entertained by the Court below and pass an order, in conflict with an earlier order dated 13-3-08.

On the other hand, learned Counsel for the respondents submits that though a specific objection was taken by the respondent/judgment debtor before the Executing Court earlier, the objection was not considered in its proper perspective and it was completely erroneous order. Therefore, there is no bar in moving fresh application before the Executing Court for stay of execution proceedings on the basis that proceedings of execution are pending under the Act of 1985. Learned Counsel for the respondent relied upon the judgment of the Supreme Court in the case of Mathura Prasad Bajoo Jaiswal and Others Vs. Dossibai N.B. Jeejeebhoy, , to submit that an erroneous decision does not operate as res judicata.

I have considered the submission of learned Counsel for the parties.

The parties not disputed before this Court that an award was given in favour of the petitioner by the Industry Facilitation Council on 30-12-05. It is also not disputed that the execution proceedings for execution of award were instituted before the District Judge, Raipur in Execution Case No. 144/06.

A perusal of order dated 13-3-08 passed by the Executing Court at Raipur, reveals that the judgment debtor had moved an application under Section 22(1) of the Act of 1985 for stay of execution proceedings on the ground that it is a sick company. The Executing Court however, rejected the application on certain grounds and directed attachment of movable properties. This order was not assailed by the judgment debtor in any proceedings. Neither in the reply nor before this Court it could be demonstrated that any challenge was laid to order dated 13-3-08 passed by the Executing Court at Raipur.

It appears that later on, on an application made by the award holder, the proceedings were transferred to the Court at Durg. Here, the respondent again moved an application repeating his prayer for stay of execution of proceedings with reference to the provisions contained in Section 22(1) of the Act of 1985. It is luminously clear that the objection with regard to stay of execution was again repeated in the same proceedings between the same parties and more importantly on the same ground, i.e., the proceedings are pending before the BIFR, therefore, proceedings may be stayed in view of the provisions contained in Section 22(1) of the Act of 1985.

By entertaining the new application at the instance of the judgment debtor, the Executing Court reopened earlier order dated 13-3-08 by which objection of the identical nature was rejected.

In the opinion of this Court, the order passed by the Executing Court on 5-10-09 was clearly in excess of jurisdiction. Once the objection was rejected earlier by the Executing Court on 13-3-08, the same could not be reopened on the same ground at a later stage of the same proceedings. Merely because the case was transferred from Raipur to Durg, it cannot be said that while executing the award, the Court at Durg could have reopened the earlier order on 13-3-08 passed in the-same proceedings between the parties. The principle of law which holds the Court from reopening the issue at a later stage was propounded in the judgment of the Supreme Court in the case of Uttar Pradesh State Transport (supra):--

"10. The principle of res judicata is based on the need of giving a finality to judicial decisions. The principle, which prevents the same case being twice litigated is of general application and is not limited by the specific words of Section 11 of Code of Civil Procedure in this respect. Res judicata applies also as between two stages in the same litigation to this extent that a Court, whether the Trial court or a Higher Court having at an earlier stage decided a matter in one way will not allow the parties to reagitate the matter again at a subsequent stage of the same proceedings. (See : Satyadhan v. Smt. Deorajin Devi).

This Court having specifically considered the question in two earlier decisions as to whether the draft scheme dated 13-2-1986 had lapsed under sub-section (4) of Section 100 of the Act and having recorded a clear finding that the scheme had not lapsed, it was not at all open to the High Court to examine the said question all over again and to hold that the draft scheme had lapsed. The decision rendered by this Court concluded the controversy and it was not permissible to any party or to any authority/Tribunal or Court, including the High Court to reopen the issue and to record a contrary finding. We are clearly of the opinion that the High Court committed manifest error of law in reexamining the question and recording a finding, which is totally in variance with the earlier decisions of this Court.''''

The aforesaid decision was relied upon by the learned Single Judge of this Court in the case Shyam Lal Agrawal and Others Vs. Sardar Guruvachan Singh, , in which same principle was applied.

In view of the above consideration, I am of the considered opinion that the learned Executing Court clearly exceeded its jurisdiction in again reopening the order passed by the Executing Court on 13-3-08.

Learned Counsel for the respondent strenuously argued that order dated 13-3-08 is palpably illegal and therefore, the interest of justice demands that the respondents should be protected from any execution proceedings till the matter is pending before the BIFR.

Whether order dated 13-3-08 is sustainable in law or not, can be decided only in an appropriately constituted proceeding and not in a matter when order dated 13-3-08 is not under challenged. In the result, the petition is allowed. The order dated 5-10-09 is set aside. No order as to costs.