Section 22 sick company bar stayed money-recovery suit and defeated an interim decree request pending BIFR proceedings.

Section 22 of the Sick Industrial Companies Act, 1985 bars further proceedings in a suit for recovery of money against a sick industrial company while BIFR proceedings are pending, unless consent is obtained from the Board or Appellate Authority. Because the suit combined a money-recovery claim with declaratory and injunctive reliefs, the HC stayed the suit pending disposal of the BIFR proceedings. A request for an interim decree under Order XII Rule 6 CPC, said to rest on an admission in the defendant's letter, was also declined at that stage and left for consideration after the BIFR process concludes.

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Issues: (i) Whether the suit proceedings were liable to be stayed under section 22 of the Sick Industrial Companies Act, 1985 pending BIFR proceedings; (ii) Whether the plaintiff was entitled to an interim decree under Order XII Rule 6 of the Code of Civil Procedure.

Issue (i): Whether the suit proceedings were liable to be stayed under section 22 of the Sick Industrial Companies Act, 1985 pending BIFR proceedings.

Analysis: The defendant had been declared a sick industrial company and proceedings were pending before BIFR. Section 22 bars continuation of proceedings, including a suit for recovery of money against a sick industrial company, unless consent is obtained from the Board or the Appellate Authority. Since the suit included a prayer for recovery of money in addition to declaratory and injunctive reliefs, the Court held that the statutory bar applied to the further proceedings.

Conclusion: The suit proceedings were stayed pending disposal of the BIFR proceedings, in favour of the respondent.

Issue (ii): Whether the plaintiff was entitled to an interim decree under Order XII Rule 6 of the Code of Civil Procedure.

Analysis: The request for an interim decree was based on an alleged admission in the defendant's letter. However, once the suit was held to attract the bar under section 22 because of the money-recovery claim against a sick industrial company, the Court declined to grant an interim decree at that stage and held that the matter could be considered after the BIFR proceedings concluded.

Conclusion: The prayer for an interim decree was rejected.

Final Conclusion: The defendant succeeded on the stay application, while the plaintiff's request for an interim decree was not granted, leaving the suit suspended until the BIFR proceedings end.

Ratio Decidendi: Where a suit against a sick industrial company includes a claim for recovery of money, section 22 of the Sick Industrial Companies Act, 1985 bars further proceedings without the consent of the Board or Appellate Authority, notwithstanding other reliefs claimed in the suit.

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