Criminal prosecution for provident fund default is not automatically barred by sick company proceedings; factual restraint issues need evidence.

Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 protects only specified proceedings such as winding up, execution, distress, recovery of money, security, or guarantee, and does not impose a general bar on criminal prosecution. Default in remitting provident fund contributions remains a statutory offence and may be prosecuted even during BIFR proceedings. Whether a rehabilitation restraint order actually prevented payment for the relevant period is a factual issue requiring evidence, and cannot be decided at the threshold in a quashing petition. The prosecution was therefore not barred by the sick company proceedings.

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Issues: Whether criminal prosecution for failure to remit provident fund contributions was barred by the Sick Industrial Companies (Special Provisions) Act, 1985 during pendency of BIFR proceedings, and whether the complaint could be quashed at the threshold on the basis of the restraint order and rehabilitation proceedings.

Analysis: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 protects only the specified proceedings relating to winding up, execution, distress, recovery of money, security, or guarantee. It does not create a general embargo against criminal proceedings. The liability to remit provident fund contributions is a statutory obligation, and default in discharge of that obligation can be prosecuted notwithstanding the pendency of BIFR proceedings. Whether the restraint order under the rehabilitation process actually prevented payment for the relevant period is a factual matter requiring evidence and cannot be decided for quashing at the threshold.

Conclusion: The prosecution was not barred by the sick company proceedings, and the request to terminate the criminal cases at the threshold was not accepted.

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