TaxTMI 
TaxTMI 
2001 (5) TMI 880
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....iled by the parties in support of their respective contentions. Perused the entire record relevant to the issue at hand. 3. The petitioner-creditors had filed a claim before the arbitrator in respect of the amount claimed to be due by the respondent No. 1- company under the lease agreement dated 27-7-1994, entered into between the petitioners and respondent No. 1-company. The repayment of the lease amount due from respondent No. 1-company under the lease agreement was guaranteed by respondent Nos. 2 and 3 by a guarantee deed dated 27-7-1994, executed in favour of the petitioner-company, guaranteeing payment of the lease rental amounts on behalf of respondent No. 1-company, and respondent Nos. 2 and 3 having been directors of respondent No.....
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....w, the provisions of section 22 stipulate as under: "22. Suspension of legal proceedings, contracts, etc.-(1) Where in respect of an industrial company, an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding-up of the industrial company or for execution, distress or the like against....
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....e, in this proceeding it is not in dispute that respondent Nos. 2 and 3 are guarantors of respondent No. 1 pursuant to the deed of guarantee dated 27-7-1994. It may be noted that this fact was brought to the notice of the sole arbitrator by the respondents. However, though the learned arbitrator, took cognizance of the said information received from the respondents, he observed that the very conduct of the respondents proved that the company was not interested in making payment to the claimants or settling the claim. It was further observed that respondent No. 1, pending arbitration, has approached the BIFR to frustrate the claim. After referring to the provisions of section 22, the learned arbitrator was of the view that the arbitration ca....