Fraud allegations and SICA protection give way where disputed facts and SARFAESI enforcement are involved.

Allegations that a de-registration order was obtained by fraud or without notice were said to depend on disputed facts, including service and dispatch records, and therefore were not suitable for determination in writ jurisdiction under Article 226; the availability of an appeal also weighed against interference. The text further explains that, after de-registration and in the context of SARFAESI enforcement, section 22 of SICA does not bar a secured creditor from pursuing recovery measures, because the later statute gives overriding effect to enforcement under section 13(4), subject to the position on multiple secured creditors. The petitioner was therefore unable to rely on SICA to stop recovery action.

---

---

Issues: (i) Whether the impugned de-registration order was vitiated by fraud or want of notice so as to warrant interference under Article 226 of the Constitution of India. (ii) Whether, after de-registration and in the light of the secured creditor's measures under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the protection under the Sick Industrial Companies (Special Provisions) Act, 1985 continued to bar recovery proceedings.

Issue (i): Whether the impugned de-registration order was vitiated by fraud or want of notice so as to warrant interference under Article 226 of the Constitution of India.

Analysis: The allegation that notice of hearing was dispatched only after the hearing and that the order was procured by fraud was specifically denied by the statutory authorities and the bank, which produced dispatch records and postal materials showing prior issue of notice and subsequent dispatch of the proceedings summary. The controversy turned on disputed facts, including service, affixture, and the timing of communications. Such allegations of fraud required proof on evidence and could not be resolved in writ proceedings. The availability of an appeal also weighed against writ intervention.

Conclusion: The allegation of fraud was not established, and no interference with the de-registration order was warranted.

Issue (ii): Whether, after de-registration and in the light of the secured creditor's measures under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the protection under the Sick Industrial Companies (Special Provisions) Act, 1985 continued to bar recovery proceedings.

Analysis: The legal effect of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 was considered alongside the overriding scheme of sections 35 and 37 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The later enactment expressly gave precedence to secured creditor enforcement under section 13(4), and the Supreme Court's pronouncement in Madras Petrochem Ltd. confirmed that where secured creditors enforce security under the SARFAESI regime, the protection of section 22 does not prevent such enforcement, subject to the position in cases of multiple secured creditors. On the facts, the bank had already initiated secured enforcement and the proceedings before the Board could not be kept alive merely on the basis of the earlier sick-company reference.

Conclusion: The petitioner could not invoke section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 to obstruct the secured creditor's recovery measures.

Final Conclusion: The writ court declined to disturb the de-registration order, and the secured creditor was left free to proceed under the SARFAESI framework.

Ratio Decidendi: Allegations of fraud resting on disputed facts cannot be adjudicated in writ jurisdiction, and once a secured creditor enforces security under the SARFAESI Act, the bar under section 22 of SICA does not prevent such enforcement.

---