Sick company moratorium does not protect leased equipment owned by financier, and receiver may take possession.

Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 applies only to proceedings against the properties of the sick industrial company; leased equipment owned by the petitioner remained its property despite being in the respondent's possession under the lease. The equipment did not become the respondent's property merely because it was installed at the site, and the objection based on immovable property failed because the lease treated it as movable equipment and the lease term had expired. On that reasoning, the receiver could take possession of the equipment in favour of the petitioner.

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Issues: Whether section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 barred appointment of a receiver and interim protection in respect of leased equipment owned by the petitioner but in possession of the sick company, and whether the equipment could be treated as the property of the respondent company.

Analysis: Section 22 applies to proceedings against the properties of the sick industrial company. The lease agreement showed that ownership of the equipment remained with the petitioner, while the respondent had only possession under the lease. Leased equipment owned by the financier did not become the property of the sick company merely because it was in its possession or affixed at the site. The objection based on immovable property also failed because the equipment was leased as movable property and, in any event, the lease period had expired.

Conclusion: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 did not bar the relief sought. The receiver was directed to take possession of the leased equipment, in favour of the petitioner.

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