Section 22 protection under sick industrial law barred unilateral takeover action without BIFR consent once inquiry was deemed commenced.

A reference under the Sick Industrial Companies (Special Provisions) Act was registered and a call for additional information was issued, so inquiry under section 16(1) was deemed to have commenced and the section 22 bar became operative. Once that statutory protection applied, the respondent could not invoke section 29 of the State Financial Corporations Act to recover or take over the unit without BIFR consent. The Court also held that the question whether the company was actually sick lay within the BIFR's domain and would not be examined in this proceeding. The takeover notice and action under section 29 were quashed, and possession of the unit had to be restored.

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Issues: Whether the inquiry under the Sick Industrial Companies (Special Provisions) Act, 1985 commenced so as to attract the bar under section 22, and whether the respondent could invoke section 29 of the State Financial Corporations Act, 1951 to take over the unit without BIFR consent.

Analysis: A reference under section 15 had been filed and registered by the BIFR. The Registrar's letter calling for additional information showed that the step contemplated by regulation 19(5) had also been taken. In such a situation, the inquiry under section 16(1) is deemed to have commenced for the purposes of section 22, and the statutory prohibition becomes operative immediately. Once that bar applied, the respondent could not proceed with recovery or takeover action under section 29 without the Board's consent. The Court declined to examine whether the company was in fact sick, as that question lay within the domain of the BIFR.

Conclusion: The takeover notice and the action taken under section 29 were quashed, and the respondent was directed to restore possession of the unit to the petitioner.

Final Conclusion: Protection under section 22 operated from the stage of registration of the reference and the concomitant call for information, rendering the respondent's unilateral takeover action impermissible.

Ratio Decidendi: For the purposes of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, inquiry under section 16(1) is deemed to commence when the reference is registered and the statutory call for information or documents is issued under the relevant regulation.

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