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Issues: (i) Whether the legal proceedings for recovery of operational debt were suspended under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. (ii) Whether the appellant was entitled to exclusion of the period spent in SICA proceedings while computing limitation under Section 22(5) of the Sick Industrial Companies (Special Provisions) Act, 1985.
Issue (i): Whether the legal proceedings for recovery of operational debt were suspended under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985.
Analysis: The appellant was not found to be part of the rehabilitation scheme sanctioned by the BIFR. The appellant had sought permission to approach the civil court for adjudication of its dues and had also already initiated civil proceedings. In these circumstances, the right to pursue recovery was not treated as suspended under the statutory protection available in Section 22(1).
Conclusion: The legal proceedings for recovery of operational debt were not suspended under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985.
Issue (ii): Whether the appellant was entitled to exclusion of the period spent in SICA proceedings while computing limitation under Section 22(5) of the Sick Industrial Companies (Special Provisions) Act, 1985.
Analysis: Since the appellant was not treated as a beneficiary of the rehabilitation scheme and had already obtained consent to proceed before the civil court, the period during which SICA proceedings were pending was not held excludable for limitation purposes. The invocation of exclusion under Section 22(5) was therefore rejected on the facts of the case.
Conclusion: The appellant was not entitled to exclusion of time under Section 22(5) of the Sick Industrial Companies (Special Provisions) Act, 1985.
Final Conclusion: The application under Section 9 of the Insolvency and Bankruptcy Code, 2016 remained time-barred, and no interference was called for with the order rejecting it.
Ratio Decidendi: Exclusion of time under SICA is unavailable where the creditor was not part of the sanctioned scheme and had already been permitted to pursue its remedy before the civil court, so the limitation period continues to run for the insolvency claim.
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