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1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF JUNE 2015 BEFORE THE HON’BLE MR.JUSTICE A.S.BOPANNA
WRIT PETITION NO.22805 OF 2012( GM-RES) C/W WRIT PETITION NO.21746 OF 2012(GM-RES)
WP.NO.22805/2012: BETWEEN:
SRI SUJITH KUMAR N S/O NIRMAL PADMANABHA, AGED ABOUT 44 YEARS, R/AT DOOR NO.16-73-731, “INDU PADMA” NEAR:NAZARETH CONVENT, BALMATTA, MANGALORE, D.K. ... PETITIONER
(BY SRI SANATH KUMAR SHETTY K., ADVOCATE)
AND :
KARNATAKA CASHEW DEVELOPMENT CORPORATION, “KRISHNA TOWERS” LADY HILL, MANGALORE – 575 004, REPRESENTED BY ITS MANAGING DIRECTOR. ... RESPONDENT
(BY SRI A.MADHUSUDHAN RAO, HCGP)
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2 THIS WRIT PETITION IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 3.1.2012 PASSED ON IA.NO.1 IN IC.NO.3/03, ON THE FILE OF CIVIL JUDGE (SR.DN.) MANGALORE AND ALSO THE ORDER DATED 19.6.2012 PASSED IN EX.PET.NO.41/02, ON THE FILE OF II ADDL. CIVIL JUDGE (SR.DN.) MANGALORE, DK., VIDE ANNEXURE-A & B RESPECTIVELY.
WP.NO.21746/2012: BETWEEN:
SRI M.MOHAN AGED ABOUT 58 YEARS, W/O SRI VEERAPPA, RESIDING AT NEKKAREMARU HOUSE, UJJODI, MANGALORE – 575 005. ... PETITIONER
(BY SRI SANATH KUMAR SHETTY K., ADVOCATE)
AND :
KARNATAKA CASHEW DEVELOPMENT CORPORATION, “KRISHNA TOWERS” LADY HILL, MANGALORE – 575 004, REPRESENTED BY ITS MANAGING DIRECTOR. ... RESPONDENT
(BY SRI A.MADHUSUDHAN RAO, HCGP)
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THIS WRIT PETITION IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 3.1.2012 PASSED ON IA.NO.2 IN IC.NO.3/03, ON THE FILE OF CIVIL JUDGE (SR.DN.) MANGALORE AND ALSO THE ORDER DATED 19.6.2012 PASSED IN EX.PET.NO.41/02, ON THE FILE OF II ADDL. CIVIL JUDGE (SR.DN.) MANGALORE, DK., VIDE ANNEXURE-A & B RESPECTIVELY.
3 THESE WRIT PETITIONS COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R
The issue involved in both these petitions is similar and therefore the petitions are taken up together and disposed off by this common order.
For the purpose of narration, the facts as pleaded in the writ petition No.22805/2012 is noticed which in any event, is similar in the companion petition. The respondent Corporation filed a petition in IC No.3/2003 to which the petitioners in both these petitions were arrayed as respondents. In the said petition, the respondent Corporation had sought that the petitioners herein be adjudicated as insolvents. The Court below before which IC 3/2003 was filed, in that
4 regard has by its order dated 20-2-2010 allowed the petition and adjudicated the petitioners herein as also other respondents to the said petition as insolvents. The petitioners herein were granted 6 months time to apply seeking their discharge from the order. The fact remains that neither the petitioners nor the respondent Corporation have exercised their right in law to seek discharge of the said order and the adjudication of the petitioners by the said order dated 20-2-2010 continues to subsist in the said proceedings.
In that view, the petitioners herein filed applications in I.A.I & II seeking grant of protection in terms of provision contained in Section 31 of the Provisional Insolvency Act. The Court which had
5 adjudicated the petitioners as insolvents, by the order dated 3-1-2012 granted protection for a period of 90 days, though the right to attach moveables and immoveables for recovering the amount in Execution No.41/2002 was permitted. The said period of 90 days has elapsed. In that view, the question for consideration is as to whether the respondent could proceed with the Execution proceedings wherein they have also sought for the arrest of the petitioners herein and notice in this regard has been ordered. A perusal of the provisions contained in the Act would no doubt indicate that even subsequent to the adjudication made by the competent Court, the protection order if any is to be granted by the said Court itself as provided under Section 31 of the Act. If that be the position, in the instant case, as noticed the petitioners
6 had filed an appropriate application seeking such protection and the same was granted for a period of 90 days but has not been extended.
The contention on behalf of the respondent Corporation is that the petitioners only in order to avoid execution and recovery of the money by the respondent are contending that they still continue to be in financial difficulties and are taking the benefit of the adjudication order. Along with the objection statement that they have also produced the copy of the order wherein consideration was made in that Execution Petition and the objection filed by the petitioners herein has been overruled on the Executing Court coming to the conclusion that the petitioners herein have sufficient
7 means. The Income Tax returns being filed by the petitioners are also produced as Axnnexures-R2 & R3. Nodoubt, it has been adverted to by the petitioners in their re-joinder statement.
Be that as it may, at this juncture this Court need not embark upon to decide the question as to whether the petitioners have means to pay and in that view, whether the respondent Corporation would be entitled to proceed with the execution? All that is to be noticed herein is that the petitioners themselves have exercised the option of filing an application under Section 31 before the Court which had adjudicated them as insolvents seeking for protection and such order had been granted only for a period of 90 days. It is only if the petitioners seek for extension of the said period, the
8 Court which adjudicated them as insolvents would take note of the contentions to be put forth by the respondent Corporation and a decision would rendered on that aspect of the matter as to whether the said protection is to be granted or not. If such protection is not granted by the said Court certainly the Corporation would be entitled to proceed further with the Execution Petition. Therefore at this juncture, considering the fact that the petitioners had enjoyed the benefit of interim order granted by this Court, the petitioners are granted liberty of filing an application under Section 31 of the Act before the Court which adjudicated them as insolvents. Such an application in any event, shall be filed within a period of two weeks from the date of receipt of a copy of this order.
The respondent would have the liberty of filing their objections to the application and the Court below shall dispose off the application one way or the other in accordance with law within a period of two months from the date on which the objections are filed by the respondents to the said application. If the protection order is declined by the Court below the respondent Corporation would be entitled to proceed with the execution for recovery of the amount. The contentions on the said application and the objections thereof are left open on all aspects. It is needless to mention that if the respondent Corporation chooses to file an application in the original proceedings under Section 43 of the Act, the said
10 application shall also be considered on its merits and in accordance with law. The petitions are disposed off accordingly.
SD/- JUDGE
Rsk/-