Sick industrial company electricity dues remain recoverable for liabilities incurred after sickness declaration; prior decision also binds parties.

Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 did not bar recovery of electricity dues incurred by a sick industrial company after it continued operations following declaration of sickness. The provision protected against proceedings that would interfere with the company's working or finances during sickness proceedings, but it did not excuse payment of liabilities newly accrued in the course of ongoing consumption. The earlier final decision between the same parties on the same controversy was treated as binding under res judicata, and the recovery was also supported by the applicable dues recovery machinery. Accordingly, the challenge to the demand notices and restraint on recovery failed.

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Issues: Whether recovery of electricity dues raised against a sick industrial company was barred by section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, and whether the petitioners were entitled to quash the demand notices and restrain recovery proceedings.

Analysis: The company had already been declared sick, but it continued to function and consume electricity after that declaration. The dues in question related to a later period during which the company kept incurring liability. Section 22(1) was held to protect a sick company from proceedings that would affect its working or finance during the pendency of sickness proceedings, but not to permit it to continue operations and avoid payment of liabilities newly incurred after becoming sick. The earlier decision between the parties on the same controversy was treated as binding between them, and the bar of res judicata was applied. The demand was also supported by the recovery machinery under the relevant dues recovery law.

Conclusion: Recovery of the electricity dues was not barred, and the challenge to the demand notices failed.

Ratio Decidendi: Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 does not suspend recovery of liabilities subsequently incurred by a sick industrial company in the course of continuing operations, and an earlier final decision between the parties operates as res judicata.

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