SICA recovery bar does not cover summary proceedings against guarantors under the U.P. recovery law.

Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 barred only the proceedings expressly covered by its language and did not extend by implication to summary recovery action against guarantors under the U.P. Public Money (Recovery of Dues) Act, 1972. The Court held that a certificate-based recovery process is not a suit in a court of law, and that the guarantors' liability remained co-extensive under section 128 of the Contract Act unless the contract provided otherwise. Since enforcement of the guarantee in this manner did not frustrate the revival of the sick company, the recovery proceedings against the guarantors were permitted.

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Issues: Whether section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 barred recovery proceedings initiated against guarantors under the U.P. Public Money (Recovery of Dues) Act, 1972 for loans granted to a sick industrial company.

Analysis: The amended text of section 22(1) draws a distinction between a "suit" for recovery of money or enforcement of a guarantee and "proceedings" for recovery. A suit, in ordinary legal usage, denotes a curial process in a court of law, whereas the certificate-based recovery mechanism under the U.P. Act is not an adjudicatory suit but a summary recovery process. The guarantees themselves preserved the guarantors' liability, and section 128 of the Indian Contract Act, 1872 recognises the co-extensive liability of the surety unless the contract provides otherwise. The protective object of SICA is to facilitate revival of the sick industrial company, not to confer a general shield on guarantors against non-judicial recovery action, and the enforcement of the guarantee in this manner would not frustrate the revival process.

Conclusion: Section 22(1) did not prohibit the respondent from proceeding against the guarantors under the U.P. Public Money (Recovery of Dues) Act, 1972. The issue was decided against the appellants.

Ratio Decidendi: The statutory bar in section 22(1) of SICA, as amended, protects only the proceedings expressly covered by its language, and does not extend by implication to summary recovery proceedings against guarantors that are not suits in a court of law.

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