Sick company recovery bar under SICA blocks excise duty enforcement during pending Board inquiry without consent.

Where a reference of a sick industrial company had been registered and an inquiry under the Sick Industrial Companies (Special Provisions) Act, 1985 was still pending, Section 22 operated as a statutory bar against coercive proceedings for recovery from the company's properties without the Board's consent. The court treated excise duty arrears recovery as covered by that protection because the reference had been admitted and the inquiry under Section 16(1) was not concluded. The recovery notices were therefore unsustainable and were quashed.

---

---

Issues: Whether recovery proceedings for arrears of excise duty could be continued against a company after its reference to the Board for Industrial and Financial Reconstruction had been registered and an inquiry under the Sick Industrial Companies (Special Provisions) Act, 1985 was pending.

Analysis: On registration of a reference under Section 15(1), the Board is required to proceed with an inquiry under Section 16(1) to determine whether the company is sick. Section 22 places a statutory bar on proceedings for winding up, execution, distress or like proceedings against the properties of the company during the pendency of such inquiry, except with the consent of the Board. Since the reference had been registered and the inquiry had not been concluded, recovery of amounts due, including excise duty arrears, could not lawfully proceed without the Board's consent.

Conclusion: The notices for recovery of excise duty arrears were unsustainable and were quashed.

Ratio Decidendi: Where a reference of a sick industrial company has been registered and an inquiry under Section 16(1) is pending, coercive recovery proceedings against the company's properties cannot be pursued without the consent of the Board under Section 22.

---