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Issues: (i) Whether the bar under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 extends to recovery proceedings and execution measures taken under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. (ii) Whether, on a proper construction of the two enactments, the Sick Industrial Companies (Special Provisions) Act, 1985 prevails over the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 in relation to proceedings affecting the properties of a sick industrial company.
Issue (i): Whether the bar under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 extends to recovery proceedings and execution measures taken under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
Analysis: Section 22 was construed in the context of its object of protecting the assets of a sick industrial company from coercive steps that would defeat revival and rehabilitation. The expression covering execution, distress or the like was held to be wide enough to include recovery applications under the later enactment when such applications culminate in attachment, sale, or other coercive realization against the company's properties. The absence of an express reference to the later recovery statute was attributed to the fact that it had not yet been enacted when Section 22 was framed. The provision was therefore read purposively, not narrowly, so that proceedings which are in substance directed to execution and recovery against the company's assets are interdicted.
Conclusion: Yes. Section 22 bars such recovery proceedings against the sick industrial company.
Issue (ii): Whether, on a proper construction of the two enactments, the Sick Industrial Companies (Special Provisions) Act, 1985 prevails over the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 in relation to proceedings affecting the properties of a sick industrial company.
Analysis: The two statutes were reconciled by applying their distinct purposes and the legislative scheme of the later enactment. Although the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 contains an overriding clause, its saving language that it is in addition to and not in derogation of the Sick Industrial Companies (Special Provisions) Act, 1985 was treated as preserving the field of sick-company reconstruction. The Court gave weight to the object of SICA, the need to avoid conflicting orders over the same assets, and the principle that a later special law does not abrogate an earlier special law where Parliament has expressly preserved the earlier statute. The result was a harmonious construction under which rehabilitation proceedings under SICA remain protected.
Conclusion: Yes. In the field of reconstruction of a sick industrial company, SICA prevails and the RDDB Act yields to Section 22.
Final Conclusion: The recovery proceedings could not be pursued against the sick company while SICA protection subsisted, and the High Court's interference with the recovery tribunal's order was unsustainable. The appeal was therefore allowed and the writ petitions were dismissed.
Ratio Decidendi: Where Parliament has enacted a later recovery statute but expressly preserved the earlier sickness-revival statute, Section 22 of the latter must be given purposive effect to restrain coercive recovery measures against a sick industrial company's assets until the statutory rehabilitation process is concluded or consent is obtained.
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