Coercive recovery against a sick industrial company is barred without Board consent during pending insolvency-style proceedings.

Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 bars coercive recovery proceedings, including execution, distress and similar steps, against the property of a sick industrial company while an inquiry, scheme or appeal is pending, unless the Board or Appellate Authority gives consent. The provision is directed at preventing recovery action from disrupting the revival of the sick unit. Applying that principle, even where gratuity dues had been certified for recovery through the revenue recovery mechanism, coercive action could not be taken without prior consent.

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Issues: Whether recovery proceedings for gratuity dues could be pursued against a sick industrial company without the consent of the Board under section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985.

Analysis: Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 bars proceedings for execution, distress or like coercive steps against the properties of a sick industrial company when an inquiry, scheme, or appeal is pending, except with the consent of the Board or Appellate Authority. The provision was construed in the cited Supreme Court decisions as intended to freeze coercive recovery so that the revival scheme of the sick unit is not impeded. Applying that principle, the Court held that even though the amount had been certified for recovery under the revenue recovery mechanism, coercive action could not be directed without first obtaining the Board's consent.

Conclusion: The petitioner was not entitled to a mandamus for immediate coercive recovery, and the respondents could not be compelled to proceed without obtaining consent under section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985.

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