Arbitration proceedings not barred by sick company stay provision; section 22(1) does not automatically stop contractual arbitration.

Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1993 does not automatically stay arbitration proceedings against a sick industrial company because such proceedings are not treated as a suit for recovery of money or other proceedings listed in that provision. The analysis distinguishes arbitration from the specific classes of proceedings barred under section 22(1) and notes that section 22(3) separately contemplates suspension of contracts, awards and similar instruments by the Board. The operative effect is that the appointment and continuation of arbitration cannot be interdicted solely on the basis of section 22(1), though relief may be sought under section 22(3) if an award is made.

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Issues: Whether section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1993 barred arbitration proceedings initiated under the contract against a sick industrial company.

Analysis: Section 22(1) stays specified proceedings for winding up, execution, distress, appointment of receiver, suits for recovery of money, enforcement of security, and guarantees, except with the consent of the Board. The decision relied on the distinction between a suit for recovery of money and arbitration proceedings, and on the separate reference in section 22(3) to contracts, awards, and other instruments whose operation may be suspended by the Board. On that basis, arbitration proceedings were treated as outside the expression used in section 22(1).

Conclusion: Section 22(1) did not bar the arbitration proceedings, and the appointment of the sole arbitrator could not be interdicted on that ground.

Final Conclusion: The writ appeal succeeded, the order restraining arbitration was set aside, and the writ petition stood dismissed, leaving the parties free to seek relief under section 22(3) if an award is made.

Ratio Decidendi: Arbitration proceedings are not equivalent to a suit for recovery of money within section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1993, and are therefore not automatically stayed by pendency of rehabilitation proceedings.

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