Repossession under hire-purchase agreements not barred by SICA when ownership remains with the claimant and default endangers assets.

Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 did not bar proceedings where the essential relief was repossession of machinery owned by the plaintiff under hire-purchase agreements. The agreements left legal ownership with the plaintiff until full payment, and the hirer had only a right to use the equipment. On default, the plaintiff could terminate the agreements and seek protection against dissipation or alienation of the assets. The court treated such proceedings as distinct from recovery against the sick company's property and held that appointment of a receiver was justified to secure the machinery where instalments remained unpaid and the assets were at risk.

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Issues: Whether the pendency of a reference under the Sick Industrial Companies (Special Provisions) Act, 1985 barred continuation of proceedings for recovery of hired machinery and appointment of a receiver, and whether the plaintiff remained entitled to immediate possession of the equipment under the hire-purchase agreements.

Analysis: The agreements expressly provided that the legal ownership in the machinery remained with the plaintiff until completion of payment, while the hirer was only entitled to use the equipment. On the defendant's default, the plaintiff terminated the agreements and sought protection against dissipation or alienation of the machines. The scope of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 was held not to extend to proceedings where the relief essentially sought return of property to its rightful owner, rather than execution or recovery against the property of the sick company. The Court relied on the distinction between proceedings that affect the working or finances of a sick company and proceedings for repossession of property owned by another. It further held that where instalments had not been paid and the equipment was at risk, appointment of a receiver was justified to secure the property and preserve it from damage or improper use.

Conclusion: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 did not bar the proceedings. The interim injunction was confirmed and a receiver was appointed to take possession of the machinery and equipment. The issue was decided in favour of the plaintiff.

Final Conclusion: The application for protective and possessory relief was granted, and the machinery was directed to be taken over through a receiver notwithstanding the SICA reference.

Ratio Decidendi: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 does not suspend proceedings whose essential object is repossession of property retained in ownership by the claimant under a hire-purchase arrangement, and a receiver may be appointed to safeguard such property where default and risk to the assets are shown.

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