Section 22 bar on guarantee enforcement applies to suits against guarantors unless Board consent is obtained.

Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, as amended in 1993, was read according to its plain language: a suit for enforcement of any guarantee relating to a loan or advance granted to an industrial company cannot be filed or proceeded with without consent of the Board or appellate authority. The provision was held not to be confined to suits against the sick industrial company itself; it also covers proceedings against a guarantor. The statutory language was treated as clear and unambiguous, and reference to other provisions of the Act did not justify narrowing its express scope.

---

---

Issues: Whether section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 bars a suit for enforcement of a guarantee granted in respect of a loan or advance to the industrial company, even when the suit is against the guarantor and not the industrial company itself.

Analysis: The words added to section 22 by the 1993 amendment were held to be clear and unambiguous. The provision expressly states that no suit for enforcement of any guarantee in respect of a loan or advance granted to the industrial company shall lie or be proceeded with except with the consent of the Board or the appellate authority. The section was read according to its plain language, and it was rejected that its operation is confined only to suits against the industrial company. Reference to other provisions of the Act did not justify cutting down the width of the express language used in section 22.

Conclusion: Section 22 applies to a suit against a guarantor for enforcement of a guarantee in respect of a loan or advance granted to the sick industrial company, and such suit cannot proceed without the requisite consent.

Ratio Decidendi: Where the statutory language is clear, effect must be given to its plain terms, and section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 suspends suits for enforcement of guarantees relating to loans or advances granted to the industrial company unless consent of the Board or appellate authority is obtained.

---