Existing asset under SICA: incomplete sale agreement did not pass title, and the Board could regulate the transaction for rehabilitation.

Land covered by an incomplete and conditional agreement for sale remained an existing asset of the sick company because title had not passed by conveyance and the company continued to treat the property as part of its assets. Section 22A of SICA therefore applied, and the Board could restrain disposal of the land in the interest of rehabilitation and stakeholders; the contrary view was unsustainable. Section 22(3) was also broad enough to let the Board suspend, adapt, and regulate existing contractual arrangements for sale where required for revival. The Appellate Authority's order was quashed and the Board's order restoring control over the transaction was upheld.

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Issues: (i) whether land covered by the agreement for sale and supplementary agreement remained an existing asset of the sick company so as to attract Section 22A of the Sick Industrial Companies (Special Provisions) Act, 1985; (ii) whether the Board's powers under Section 22(3) of the Sick Industrial Companies (Special Provisions) Act, 1985 extended to modifying or regulating the existing contractual arrangements for sale of the company's assets in aid of rehabilitation.

Issue (i): whether land covered by the agreement for sale and supplementary agreement remained an existing asset of the sick company so as to attract Section 22A of the Sick Industrial Companies (Special Provisions) Act, 1985.

Analysis: The agreements for sale did not amount to completed conveyances and did not by themselves transfer title. The company's own records treated the land as its property and as part of its assets when the reference was made. Section 22A empowers restraint in respect of a sick company's existing assets when such restraint is necessary in the interest of the company, creditors, shareholders, employees, or public interest. The fact that the land was the subject of an antecedent agreement and that lenders had issued no-objection certificates did not denude the company of ownership or exclude the land from the Board's control while the sale remained incomplete and conditional.

Conclusion: The land continued to be an existing asset of the company and was amenable to directions under Section 22A; the contrary view of the Appellate Authority was unsustainable.

Issue (ii): whether the Board's powers under Section 22(3) of the Sick Industrial Companies (Special Provisions) Act, 1985 extended to modifying or regulating the existing contractual arrangements for sale of the company's assets in aid of rehabilitation.

Analysis: Section 22(3) contemplates suspension or enforcement of contracts with such adaptations and in such manner as may be specified by the Board. That language is broad and is meant to enable the Board to protect and revive a sick industrial company. In the facts of the case, the company required substantial funds for viability and rehabilitation, and the remaining sale consideration from the land transaction formed an important part of the finance structure. The Board was therefore entitled to regulate the transaction and to require that the balance sale proceeds be brought into the rehabilitation framework rather than treating the agreement as beyond its supervisory reach.

Conclusion: The Board had power under Section 22(3) to regulate and adapt the existing sale arrangement for the purposes of the rehabilitation scheme.

Final Conclusion: The impugned order of the Appellate Authority was quashed, the Board's order was restored, and the land covered by the incomplete sale arrangement remained within the control of the rehabilitation process.

Ratio Decidendi: Land that continues to vest in a sick industrial company under an incomplete and conditional agreement for sale remains an existing asset, and the Board may, in public interest and for rehabilitation, restrain its disposal and regulate the contractual arrangement under Sections 22A and 22(3) of SICA.

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