SICA winding-up and debt recovery jurisdiction: recovery proceedings continue despite no surviving rehabilitation bar.

After a Section 20(4) SICA winding-up direction, the bar under Section 22(1) was treated as inapplicable because no inquiry, sanctioned scheme, or pending rehabilitative proceeding remained. The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 was held to continue operating in its own field, so the Debt Recovery Tribunal and Recovery Officer retained jurisdiction to adjudicate the debt, issue a recovery certificate, and proceed with auction of the mortgaged property. The earlier unchallenged recovery order had attained finality, and the objecting creditor could not collaterally reopen it on jurisdictional grounds.

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Issues: Whether, after the Board for Industrial and Financial Reconstruction had recorded an opinion under Section 20(4) of the Sick Industrial Companies (Special Provisions) Act, 1985 directing sale of the company's assets for winding up, the Debt Recovery Tribunal and the Recovery Officer retained jurisdiction to adjudicate the debt, issue a recovery certificate, and auction the mortgaged property; and whether the objecting creditor could reopen the final order passed by the Tribunal.

Analysis: The statutory scheme of the Sick Industrial Companies (Special Provisions) Act, 1985 was examined along with the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The bar under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 was held inapplicable because no inquiry, scheme preparation, sanctioned scheme, or pending appeal under that Act subsisted. An order under Section 20(4) was treated as part of liquidation after the company had been found incapable of rehabilitation, not as a continuing restraint on debt recovery. The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 was therefore held to operate in its own field for adjudication and recovery of bank dues. The Tribunal also noted that the earlier order issuing the recovery certificate had attained finality and the objecting party, having not appealed against it, could not later challenge the recovery proceedings as lacking jurisdiction.

Conclusion: The Recovery Officer had jurisdiction to proceed with the auction, and the earlier final order of the Debt Recovery Tribunal could not be collaterally reopened by the objecting creditor.

Final Conclusion: The writ petitions succeeded, and the appellate order interfering with the recovery and auction proceedings was set aside because the recovery process under the special debt recovery statute was not barred in the facts found.

Ratio Decidendi: Where proceedings under the sick industrial companies law have culminated in an order for winding up and no rehabilitative proceeding or statutory bar survives, recovery adjudication and execution under the debt recovery law are not denuded of jurisdiction, and a final unappealed recovery order cannot later be collaterally assailed on that basis.

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