Section 22 sick company protection applies only during a live scheme or pending inquiry, not completed recovery proceedings.

Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 operates only when an inquiry is pending, a scheme is under preparation or consideration, or a sanctioned scheme is under implementation; it is not an absolute bar to recovery. The Madras HC held that the protection does not extend to completed proceedings or to recovery of dues where no live BIFR or AAIFR process subsists. As no qualifying scheme or pending claim existed on the facts, the petitioner could not resist recovery of sales tax arrears under section 22, and the challenge failed.

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Issues: Whether the petitioner could resist recovery of sales tax arrears by invoking the bar under section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985.

Analysis: The protective embargo under section 22 operates only when an inquiry is pending, a scheme is under preparation or consideration, or a sanctioned scheme is under implementation. The Court applied the settled view that the provision is not an absolute bar and is intended to prevent proceedings that would impede implementation of a live scheme. On the facts, no such pending claim or subsisting scheme existed, as the proceedings had already come to a close. The request for leniency on arrears was also beyond the Court's jurisdiction in the absence of the Government as a party.

Conclusion: The petitioner could not invoke section 22 to stop the recovery proceedings, and the challenge failed.

Final Conclusion: The writ petition was dismissed and the recovery proceedings were left undisturbed.

Ratio Decidendi: The bar under section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 applies only while a qualifying BIFR/AAIFR process or sanctioned scheme is subsisting and does not extend to completed proceedings or to recovery of dues not protected by that embargo.

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