Execution against company assets needs leave once winding up petition is presented; BIFR recommendation alone does not trigger section 446.

Section 22(1) of the Sick Industrial Companies Act does not bar relief once no proceeding under that Act is pending; the chamber summons was therefore not barred when decided. Section 446 of the Companies Act applies only after a winding up order or appointment of a provisional liquidator, and a BIFR recommendation for winding up is insufficient; section 446 did not apply. After presentation of a winding up petition, winding up is deemed to commence and execution against company assets cannot proceed without leave of the company court under sections 441 and 537; the receiver order could not be executed without such leave, and the plaintiffs were not entitled to the requested directions.

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Issues: (i) Whether the chamber summons was barred under the Sick Industrial Companies (Special Provisions) Act, 1985 during pendency of the appeal before the appellate authority. (ii) Whether section 446 of the Companies Act, 1956 applied on the basis of the BIFR recommendation for winding up. (iii) Whether the order appointing and continuing the Court receiver could be executed without leave after commencement of winding up proceedings under sections 537 and 441 of the Companies Act, 1956.

Issue (i): Whether the chamber summons was barred under the Sick Industrial Companies (Special Provisions) Act, 1985 during pendency of the appeal before the appellate authority.

Analysis: The statutory bar under section 22(1) operates when proceedings under the Act are actually pending. By the time the chamber summons was decided, the appellate proceedings had already been disposed of and no proceeding under the Act remained pending against the company. The earlier pendency of the appeal at the time of filing did not justify rejection of the application when the embargo had ceased to operate at the stage of decision.

Conclusion: The chamber summons was not barred under section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985.

Issue (ii): Whether section 446 of the Companies Act, 1956 applied on the basis of the BIFR recommendation for winding up.

Analysis: Section 446 is triggered only when a winding up order has been made by the Court or a provisional liquidator has been appointed. A recommendation by BIFR does not amount to a winding up order within the meaning of that provision. Since no winding up order had been passed by the company court at that stage, the statutory condition for applying section 446 was absent.

Conclusion: Section 446 of the Companies Act, 1956 did not apply.

Issue (iii): Whether the order appointing and continuing the Court receiver could be executed without leave after commencement of winding up proceedings under sections 537 and 441 of the Companies Act, 1956.

Analysis: Under section 441(2), winding up by the Court is deemed to commence on presentation of the petition. Section 537(1) renders void any attachment, distress, execution or sale in force without leave of the Court after such commencement. As the winding up petition had been presented and was pending, execution of the earlier order against the company's assets could not proceed without leave of the Court where the winding up petition was pending.

Conclusion: The order could not be executed without leave of the company court dealing with the winding up petition.

Final Conclusion: The plaintiffs were not entitled to the requested directions for execution of the receiver order, and the chamber summons failed.

Ratio Decidendi: Proceedings under the sick company law cease to bar relief once no proceeding under that Act remains pending, but execution against a company's assets after presentation of a winding up petition is prohibited without leave because winding up is deemed to commence on presentation of the petition and section 537 invalidates execution in its absence.

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