The judgement in the case of Metal Box India Limited vs Jyotsana Poddar (GA 2 of 2022)was served by THE HON’BLE JUSTICE ARINDAM MUKHERJEE.
FACTS OF THE CASE:
The plaintiff is a company within the meaning of the Companies Act, 2013 with its registered office at New Delhi and an office at Kolkata but outside the Ordinary Original Civil Jurisdiction of this Court. The defendant is the widow of one Vishwanath Poddar, a shareholder of the plaintiff-company. The defendant is a resident of 4B/S, Mayur Apartments, 3A, Loudon Street, Kolkata- 700017 within the Ordinary Original Civil jurisdiction of this Court. C.S No. 233 of 2017. The plaintiff-company was declared a sick company on 27th May, 1988 under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as the SICA) by the Board of Industrial and Financial Reconstruction (BIFR). Industrial Credit and Investment Corporation (now ICICI Bank Limited) was appointed as the Operating Agency (OA) to prepare a Rehabilitation Scheme for revival of the plaintiff in accordance with the provisions of the SICA.
The court after analysing the facts and arguments observed that the Rehabilitation Scheme which permitted reduction of share capital was in operation at the time when the suit was instituted. The scheme remained in operation till 31st March, 2022. After 31st March, 2022 C.S No. 233 of 2017 the operation period of the scheme can either be extended by a competent forum or the scheme will be held to have failed. In either case, the right as to reduction of share capital in favour of the plaintiff- company does not crystallize. Thus, taking the fact scenario at the time when the suit was instituted as also the subsequent events that may occur after 31st March, 2022 it is evident that the reduction of share capital permitted under the scheme has not crystallized. The Court always retains a discretion under the provisions of Section. 34 of the Specific Relief Act, 1963 to give a decree of declaration if it is satisfied that the plaintiff is entitled to a character or right. Since, the right in favour of the plaintiff has not crystallized and the plaintiff is not entitled to a declaration of a legal character, no decree of declaration can be passed in the facts of the case. The consequential injunction cannot also be granted independently of the decree of declaration. The suit, therefor, fails and the same is accordingly dismissed. Since the suit is dismissed, the connected application filed by the defendant after conclusion of hearing also stands dismissed. Urgent Photostat certified copy of this judgment and order, if applied for, be supplied to the parties on priority basis after compliance with all necessary formalities.
JUDGEMENT REVIEWED BY AKANKSHA