Section 22 sick company protection does not cover leased equipment owned by the lessor; receiver may be appointed.

Section 22 of the Sick Industrial Companies Act bars proceedings only against the properties of the sick industrial company, so it does not extend to equipment owned by a lessor under a lease. The Delhi HC distinguished leasehold interests in immovable property from leased equipment whose title remained with the petitioner, and held that seeking possession and preservation of that equipment was not action against the respondent's property. It further noted that treating the lessor's own equipment as the lessee's property would defeat the lease and improperly impair the lessor's contractual and proprietary rights. The section 22 bar therefore did not prevent appointment of a receiver under section 9 of the Arbitration and Conciliation Act.

---

---

Issues: Whether the bar under section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 prevented the Court from appointing a receiver and granting interim protection in respect of equipment leased by the petitioner under section 9 of the Arbitration and Conciliation Act, 1996.

Analysis: Section 22 protects only proceedings against the properties of the sick industrial company. The Court distinguished leasehold interest in immovable property from leased equipment whose ownership remained with the lessor under the lease agreement. Since the equipment did not belong to the respondent company, proceedings for its possession and preservation were not proceedings against the respondent's property. The Court also relied on the principle that a construction which treats the lessor's own equipment as the property of the lessee would defeat the purpose of the lease and unfairly deprive the lessor of its contractual and proprietary rights.

Conclusion: The section 22 bar did not apply, and the receiver could be appointed to take possession of the leased equipment.

---