Section 22 sick company bar blocks recovery by attachment or sale without BIFR or AAIFR consent.

Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 bars recovery proceedings, including attachment, distress and sale, against the properties of a sick industrial company while proceedings remain pending before the BIFR or appellate authority. Recovery under the Public Demands Recovery Act is treated as a recovery proceeding within that embargo, and the statutory bar is not displaced merely because the underlying liability arose under State co-operative law. Recovery could not proceed without prior consent or approval of the BIFR or AAIFR, although the recovery certificates were not quashed and relief was limited to the extent of the stay.

---

---

Issues: Whether recovery proceedings initiated under the Public Demands Recovery Act against a sick industrial company were barred by section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, and whether such recovery could proceed without prior consent of the BIFR or the appellate authority.

Analysis: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 creates an embargo during the pendency of proceedings before the BIFR or the appellate authority against winding up, execution, distress or similar proceedings for recovery against the properties of a sick industrial company. Recovery as arrears of land revenue under the Public Demands Recovery Act, including execution by attachment and sale of property, is in substance a recovery proceeding within the meaning of section 22. The fact that the underlying liability arose under the State Co-operative Societies law did not displace the statutory bar under section 22 for the purpose of recovery proceedings against the sick company.

Conclusion: Recovery proceedings under the certificate could not proceed without the consent or approval of the BIFR or AAIFR while the proceedings before those authorities remained pending.

Final Conclusion: The recovery machinery was stayed to the extent of the statutory bar, but the certificates themselves were not quashed, and the petitioner was granted limited relief subject to the status of the BIFR proceedings.

Ratio Decidendi: Recovery by attachment, sale, distress, or similar coercive process against the properties of a sick industrial company is barred by section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 unless prior consent of the BIFR or AAIFR is obtained.

---