Section 22 of SICA does not bar mere invocation of a bank guarantee or foreign proceedings against a guarantor.

Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 was treated as territorially confined to India and directed against suits or proceedings covered by the statutory bar. Mere invocation of a bank guarantee was held not to amount, by itself, to a barred proceeding, because a bank guarantee is a separate and independent contract. The plaintiff's proper remedy, if any, lay under section 22(3), which was not invoked, and no fraud or irretrievable injustice was shown. On that basis, the requested injunction was not justified.

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Issues: Whether section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 barred the respondent from proceeding in Switzerland against the guarantor or from invoking the bank guarantee, and whether the plaintiff was entitled to an injunction restraining such steps without resort to section 22(3).

Analysis: The suit against the guarantor was pending in Switzerland, while section 22 had territorial operation within India. The bar in section 22(1) was directed to suits and proceedings against the industrial company or for enforcement of security or guarantees in relation to loans or advances, and the Court held that mere invocation of a bank guarantee was not, by itself, a proceeding within that provision. A bank guarantee was treated as a separate and independent contract. The plaintiff's grievance, if any, lay in seeking appropriate relief under section 22(3), which had not been invoked. The Court also noted that no case of fraud or irretrievable injustice had been made out.

Conclusion: Section 22 did not justify the injunction sought, and the motion was liable to be dismissed.

Ratio Decidendi: A bank guarantee is an independent contract, and section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 does not, by itself, extend to restrain foreign proceedings or mere invocation of the guarantee in the absence of a proceeding covered by the statutory bar or a case for relief under section 22(3).

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