Section 22 sick company stay bar does not cover Section 9 arbitration interim protection against bank guarantee invocation.

Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 applies to suits and like proceedings against an industrial company, but a petition under Section 9 of the Arbitration and Conciliation Act, 1996 is only an interim measure in aid of arbitration and cannot be treated as a suit. The statutory bar therefore did not extend to the Section 9 petition for protection against invocation of a bank guarantee, and the stay application was not maintainable. The court also noted that the statute itself protected the company by restricting encashment of the bank guarantee without the Board's permission, so indefinite injunction was unwarranted.

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Issues: Whether proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 for interim protection against invocation of a bank guarantee are proceedings in a "suit" so as to attract the stay under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985.

Analysis: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 was held to apply to suits and like proceedings against an industrial company in the circumstances contemplated by that provision. A petition under Section 9 of the Arbitration and Conciliation Act, 1996 is only an interim application in aid of contemplated arbitration and cannot be equated with a suit. The protection under Section 22 was also found not to justify continuing an injunction indefinitely merely because proceedings were pending before the Board for Industrial and Financial Reconstruction, especially when the statute itself protected the company by restricting encashment of the bank guarantee without the Board's permission.

Conclusion: The application for stay of the Section 9 proceedings was not maintainable and the statutory bar under Section 22 did not apply to the petition.

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