Sick companies protection barred receiver and attachment proceedings against mortgaged property without Board consent.

A request for appointment of a receiver and attachment of mortgaged property under Section 30 of the Industrial Finance Corporation Act, 1948 could not proceed while a company reference was pending under the Sick Industrial Companies (Special Provisions) Act, 1985. Once the reference was registered and an inquiry under Section 16 was pending, Section 22 operated as a bar against execution, distress, and appointment of a receiver over the company's properties except with the Board's consent. The Court treated the revival-oriented scheme of the sick companies legislation as controlling and held that coercive relief could not be granted in the absence of such consent; the application was therefore not maintainable at that stage.

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Issues: Whether the Court could grant relief for appointment of a receiver and attachment of mortgaged property under Section 30 of the Industrial Finance Corporation Act, 1948 when a reference of the company was pending under the Sick Industrial Companies (Special Provisions) Act, 1985 and Section 22 operated as a bar.

Analysis: The application was founded on breach of loan agreements and default in repayment, but the Court held that the objections based on the Sick Industrial Companies (Special Provisions) Act, 1985 could not be ignored. Once the reference had been registered and a Bench assigned, the statutory scheme indicated that an inquiry under Section 16 was pending. In that situation, Section 22 barred further proceedings for execution, distress, or appointment of a receiver against the company's properties except with the consent of the Board. The Court also noted that the object of the sick companies legislation was to enable revival and rehabilitation, and that it would not be proper to proceed with coercive reliefs in the absence of such consent.

Conclusion: The reliefs sought under Section 30(3) could not be granted at that stage, and the application was not maintainable in view of the bar under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985.

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