Contractual electricity dues remain recoverable from a sick company unless the agreement is specifically suspended under the sickness law.

Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 does not, by itself, extinguish a sick industrial company's contractual liability to pay electricity dues under a subsisting supply agreement. Recovery of such dues and related coercive steps are not barred merely because the company is under sickness protection, particularly where the liability continues to accrue under contract. Section 22(3) can suspend contractual obligations only by a specific Board order for implementation of a scheme; in the absence of any such suspension order, the agreement remains enforceable. The recovery proceedings for electricity dues were therefore legally sustainable.

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Issues: (i) Whether section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 barred recovery of electricity dues and coercive steps against a sick industrial company where the liability arose under an existing supply agreement. (ii) Whether section 22(3) of the Sick Industrial Companies (Special Provisions) Act, 1985 could be invoked to suspend the agreement and thereby prevent recovery of the dues.

Issue (i): Whether section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 barred recovery of electricity dues and coercive steps against a sick industrial company where the liability arose under an existing supply agreement.

Analysis: The protection under section 22(1) applies to proceedings of the kind contemplated by the statute, but it does not extinguish a sick industrial company's contractual obligation to pay electricity charges that arise under a subsisting agreement. The Court relied on the principle that enforcement of a contractual obligation to pay for electrical energy is not the same as execution of a decree, and that the statutory protection cannot be used to avoid payment of dues which remain payable under the contract. The Court also noted that the dues in question included amounts accruing after the BIFR order and arrears which had in fact been paid in instalments for some time after the company was declared sick.

Conclusion: Section 22(1) did not bar recovery of the electricity dues, and the petitioner was not entitled to protection against such recovery on that ground.

Issue (ii): Whether section 22(3) of the Sick Industrial Companies (Special Provisions) Act, 1985 could be invoked to suspend the agreement and thereby prevent recovery of the dues.

Analysis: Section 22(3) permits the Board to suspend the operation of contracts and related liabilities by a specific order for due implementation of a scheme. No such order suspending the agreement was pleaded, claimed, or shown to exist. In the absence of any suspension order, the contractual liability continued. The Court further held that even if such suspension had been ordered, the statutory maximum period would not assist the petitioner on the facts pleaded, and in any event the agreement had not been placed in abeyance by the Board.

Conclusion: Section 22(3) afforded no relief to the petitioner, and the agreement remained enforceable.

Final Conclusion: The recovery proceedings for electricity dues were held to be legally sustainable, and the writ petitions failed.

Ratio Decidendi: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 does not suspend or erase a sick industrial company's independent contractual liability to pay electricity dues unless the contract is specifically suspended under section 22(3) or the claim otherwise falls within the statute's protective field.

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