Raghunath Rai Bareja And Another vs Punjab National Bank And Others

The facts of the case are that on a Company Petition No. 57 of 1983 M/s. S.P. Nagrath & Co. vs. M/s. Bareja Knipping Fasteners Ltd., the High Court vide order dated 23.10.1983 ordered winding up of the Company and an Official Liquidator was appointed who took over possession of the properties of the Company.

In the present case, the Bank filed three Execution Petitions. The first one, being Execution Petition No. 14-L of 1987, was dismissed on 8.11.1990 by the following order:

It appears that a second Execution Petition thereafter was filed in 1994 being Execution Petition No. 3-L of 1994 by which the decree holder bank sought attachment and sale of properties which did not belong to the judgment debtors. After contest by the objectors, this second Execution Petition was dismissed by a Learned Single Judge of the High Court on 18.8.1994 holding that the decree passed against the Company cannot be satisfied by attachment and sale of properties belonging to other Companies, as these other Companies are different and distinct juristic personalities with different set of shareholders.

Thereafter on 4.9.1998, the respondent-bank filed another Company Petition No. 236 of 1998 under Section 446 of the Companies Act, 1956 read with Rule 117 of the Companies (Court) Rules, 1959 seeking leave of the Company Court to commence the Execution proceedings before the Tribunal which had come into existence in 1993 under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 'RDB Act'). That petition was allowed by the Company Court vide order dated 18.12.1998 stating "Learned counsel for the parties are agreed that petitioner be granted leave to file execution petition in this Court."

The decree-holder Bank (respondent in this appeal), then filed a third Execution Petition No. 1 of 1999 dated 11.01.1999 against M/s. Bareja Knipping Fasteners Limited through the Official Liquidator, without impleading the appellants and Shri K.M.Bareja as parties to the Execution Petition. On this third Execution Petition, the High Court on 1.4.1999 passed the following order:

Thereafter, on 7.4.1999, the Bank instead of filing a petition as directed by the High Court, filed Company Application No. 173 of 1999 for restoration of the Execution Petition No. 1 of 1999 along with a fresh Memo of Parties before the High Court. The High Court issued notice on this Application and then on 22.7.1999 recalled the order dated 1.4.1999.

On 3.1.2005, the decree-holder Bank filed Company Application No. 55 of 2005 under Rule 9 of the Company (Court) Rules, 1959 read with Sections 17 and 18 of RDB Act for transfer of the Execution Petition to the Tribunal. The appellant filed a reply stating that the High Court has no jurisdiction to entertain this Application. However by the impugned order dated 26.5.2005 the High Court transferred the Execution Petition pending before it to the Debt Recovery Tribunal, Chandigarh.

Hence there should be judicial restraint in this connection, and the temptation to do judicial legislation should be eschewed by the Courts. In fact, judicial legislation is an oxymoron.

In the present case, we are clearly of the opinion that the literal rule applies, and the other rules have no application to interpreting Section 31, since the language of Section 31 is plain and clear, and cannot be said to be ambiguous or resulting in some absurdity.

In view of the above, we are clearly of the opinion that the recovery in question is time-barred and it is hereby quashed. The impugned order of the High Court is set aside. The appeals are accordingly allowed. No costs.