BIFR protection for guarantors bars execution and attachment against security given for a sick company's liabilities.

Pendency of BIFR proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985 extends the statutory bar to enforcement against guarantors for the sick company's liabilities. Section 22(1) prevents execution, distress and similar proceedings, and also bars enforcement of guarantees for loans or advances granted to the industrial company, unless the Board or Appellate Authority consents. On that construction, attachment of a guarantor's immovable property pursuant to an arbitral award could not be sustained, and enforcement action against the guarantors was not maintainable during the bar period.

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Issues: Whether, during pendency of proceedings before the BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985, execution and attachment could be levied against the guarantors of the industrial company on the strength of an arbitral award.

Analysis: Section 22(1) bars proceedings for execution, distress or the like against the properties of the industrial company and also bars a suit or proceeding for enforcement of any guarantee in respect of loans or advances granted to the industrial company, except with the consent of the Board or the Appellate Authority. The provision, as amended, extends protection beyond the company itself to guarantees given for its indebtedness. The Supreme Court's exposition of the section made the statutory language controlling, so that the pendency of BIFR proceedings prevented enforcement action against the guarantors as well. In that setting, attachment of the guarantor's immovable property pursuant to the award could not be sustained.

Conclusion: Execution and attachment against the guarantors were not maintainable and the attachment had to be raised.

Ratio Decidendi: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 protects guarantors as well as the sick industrial company from enforcement proceedings in respect of the company's liabilities during the statutory bar period, unless consent of the Board or Appellate Authority is obtained.

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