Arbitrator appointment under section 11 is not stayed by sickness proceedings; it is not a recovery action.

Proceedings for appointment of an arbitrator under section 11 of the Arbitration and Conciliation Act, 1996 are not stayed by section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 merely because the respondent company has been declared sick and a revival scheme is pending. Section 22 bars specified recovery-related actions, such as winding up, execution, distress, and enforcement of security, but a section 11 application is confined to appointment of an arbitrator and does not itself amount to a suit or recovery proceeding against the sick company. The application seeking discontinuance of the section 11 proceedings was therefore not maintainable and was dismissed.

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Issues: Whether proceedings under section 11 of the Arbitration and Conciliation Act, 1996 can be stayed or discontinued merely because the respondent company has been declared sick under section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 and its revival scheme is pending.

Analysis: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 stays specified proceedings for winding up, execution, distress, recovery of money, enforcement of security, and similar actions against a sick company during the pendency of inquiry, scheme preparation, consideration, implementation, or appeal. The scope of a proceeding under section 11 of the Arbitration and Conciliation Act, 1996 is limited to appointment of an arbitrator and does not itself amount to a suit or recovery proceeding against the sick company. The earlier authority dealing with execution of an award was distinguished, as that situation involved steps towards recovery of money, unlike an application for appointment of an arbitrator. The Supreme Court authority relied on was treated as directly governing the point and held that section 11 proceedings are not covered by the statutory bar.

Conclusion: The application for discontinuance of the section 11 proceedings was not maintainable and was dismissed.

Ratio Decidendi: Proceedings for appointment of an arbitrator under section 11 of the Arbitration and Conciliation Act, 1996 are not proceedings for recovery of money and are not stayed by section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985.

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