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Issues: Whether proceedings before the Debts Recovery Tribunal and the consequential recovery certificate and attachment orders were barred and void in view of the pending reference before the Board for Industrial and Financial Reconstruction under the Sick Industrial Companies (Special Provisions) Act, 1985.
Analysis: The writ applicant had already filed a reference before the Board for Industrial and Financial Reconstruction, and the reference was pending when the recovery proceedings were initiated and proceeded with. Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 suspends proceedings for recovery, execution and similar coercive steps against a sick industrial company during the pendency of the statutory process. The Court applied the settled principle that, in such a situation, the special protection under the Sick Industrial Companies (Special Provisions) Act, 1985 prevails over recovery action under the Recovery of Debts and Bankruptcy Act, 1993. It further held that orders passed by a tribunal lacking jurisdiction in the face of the statutory bar are a nullity.
Conclusion: The recovery proceedings, the recovery certificate and the attachment orders were held unsustainable and were quashed. The decision is in favour of the writ applicant.
Final Conclusion: Coercive recovery steps could not be sustained while the BIFR reference remained pending, and the impugned tribunal and recovery officer orders were set aside with liberty to initiate fresh proceedings in accordance with law.
Ratio Decidendi: Where Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 is attracted by a pending BIFR reference, recovery proceedings and allied coercive measures against the sick industrial company cannot validly continue, and any order passed in disregard of that statutory bar is a nullity.
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