Cheque dishonour prosecution survives sick industry proceedings where the underlying debt remains legally enforceable under section 138.

Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 bars civil recovery proceedings, but it does not extend to criminal prosecution for cheque dishonour under section 138 of the Negotiable Instruments Act, 1881. The pendency or registration of proceedings under the sick industrial legislation does not by itself make the underlying debt legally unenforceable for the purpose of section 138. In the absence of any express inconsistency, section 32 also does not displace section 138. The review application therefore failed, and the criminal complaint remained maintainable.

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Issues: Whether proceedings under section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 barred a criminal complaint under section 138 of the Negotiable Instruments Act, 1881 on the footing that the underlying debt was not legally enforceable.

Analysis: Section 138 of the Negotiable Instruments Act creates a criminal offence on dishonour of a cheque where the cheque was issued towards discharge of a debt or other liability and the statutory requirements are fulfilled. Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 restricts suits and other civil proceedings for recovery of money or enforcement of security, but does not extend to criminal prosecution for cheque dishonour. The Explanation to section 138 requires only that the debt or liability be legally enforceable; the pendency or registration of proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985 does not render the debt non-recoverable for purposes of section 138. Section 32 also does not displace the operation of section 138 in the absence of an express inconsistency.

Conclusion: The bar under section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 did not prevent maintainability of the criminal complaint under section 138 of the Negotiable Instruments Act, 1881, and the contention raised in review failed.

Final Conclusion: The review application was rejected after holding that proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985 do not disable prosecution for cheque dishonour under the Negotiable Instruments Act, 1881.

Ratio Decidendi: A statutory bar on civil recovery proceedings does not by itself negate the criminal liability created by cheque dishonour legislation, where the debt remains legally enforceable for the purpose of section 138.

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