Export obligation guarantees remain enforceable where the SICA stay does not cover guarantees tied to performance obligations.

Public notice dated 6 April 1999 did not grant an automatic extension of time for discharge of export obligation under the EPCG scheme; it only allowed a licence-holder to seek extension within the prescribed period and subject to conditions, including furnishing the required bank guarantee, which the petitioner had not done. Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 was held to protect proceedings relating to loans, advances, or guarantees for such loans or advances, not bank guarantees furnished to secure performance of export obligations. On that construction, invocation and enforcement of the guarantees were not barred, and writ relief to restrain enforcement was unavailable.

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Issues: (i) Whether the public notice dated 6 April 1999 extended the time for discharge of export obligation so as to entitle the petitioner to its benefit. (ii) Whether invocation and enforcement of the bank guarantees for non-fulfilment of export obligation under the EPCG licence was barred or suspended by reason of pending proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985.

Issue (i): Whether the public notice dated 6 April 1999 extended the time for discharge of export obligation so as to entitle the petitioner to its benefit.

Analysis: The public notice did not grant an automatic extension. It only enabled a licence-holder who had failed to complete the export obligation to apply for extension within the prescribed period and subject to compliance with the stated conditions, including furnishing the required bank guarantee. The petitioner did not comply with those conditions and therefore did not secure an extension.

Conclusion: The issue was decided against the petitioner.

Issue (ii): Whether invocation and enforcement of the bank guarantees for non-fulfilment of export obligation under the EPCG licence was barred or suspended by reason of pending proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985.

Analysis: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 was construed as protecting proceedings connected with loans, advances, or guarantees in respect of such loans or advances. The bank guarantees here were furnished to secure compliance with export obligations under the import-export scheme, not to secure repayment of any loan or advance. The liability arose from failure to perform the statutory export obligation and not from a creditor-debtor loan transaction. On that construction, the statutory bar in section 22 did not apply.

Conclusion: The issue was decided against the petitioner.

Final Conclusion: The bank guarantees were liable to be enforced and the writ relief sought to restrain such enforcement was not available.

Ratio Decidendi: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 bars enforcement only of guarantees in respect of loans or advances granted to the sick industrial company and does not suspend invocation of bank guarantees furnished to secure compliance with export obligations under an import-export scheme.

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