TaxTMI 
TaxTMI 
1999 (8) TMI 906
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....ndustrial and Financial Reconstruction, New Delhi (BIFR), and the said reference has been registered as Case No. 175 of 1999. Accordingly, it was submitted in the said affidavit that the provisions of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 ('the Act'), came into play, as a result of which the present proceedings are required to be suspended. 2. Section 22 of the said Act, reads 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 ....
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....me referred to in section 17 is under preparation or during the period of consideration of any scheme under section 18 or where any such scheme is sanctioned thereunder, for due implementation of the scheme, the Board may by order declare with respect to the sick industrial company concerned that the operation of all or any of the contracts, assurances of property, agreements, settlements, awards standing orders or other instruments in force, to which such sick industrial company is a party or which may be applicable to such sick industrial company immediately before the date of such order, shall remain suspended or that all or any of the rights, privileges, obligations and liabilities accruing or arising thereunder before the said date, sh....
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....the proceedings became stayed. (5) In computing the period of limitation for the enforcement of any right, privilege, obligation or liability, the period during which it or the remedy for the enforcement thereof remains suspended under this section shall be excluded." 3. Section 22A of the said Act, reads as under : "22A. Direction not to dispose of assets.-The Board may, if it is of opinion that any direction is necessary in the interest of the sick industrial company or creditors or shareholders or in the public interest, by order in writing, direct the sick industrial company not to dispose of, except with the consent of the Board, any of its assets- (a )during the period of preparation or consideration of the scheme under se....
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....gment of the Apex Court in Real Value Appliances Ltd.'s case (supra), urged that once the reference is registered under the said Act, section 22 of the said Act comes into operation and inquiry under section 16(1) is deemed to have commenced, as a result of which, the prohibition contained in section 22 comes into play immediately. In this respect, my attention has been drawn to the judgment of the Apex Court. 7. The judgment of the Apex Court, which is relevant for deciding the controversy raised by learned advocate for the petitioners, reads as under : "There can, therefore, be no difficulty in holding that after the amendment to regulation 19 with effect from March 24, 1994, once the reference is registered and when once it is mand....
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....7(1) and the scheme for rehabilitation has been sought from the said company. 10. In the light of the law laid down by the Apex Court, the ruling of the single judge of this Court in Ramniklal and Co.'s case (supra), upon which reliance has been placed by the petitioners, would not in any manner help the cause of the petitioners. Moreover, the position therein was somewhat different and a restraint order had already been passed before the Board for Industrial and Financial Reconstruction had declared the company a sick industrial company and the question was only relating to the modification of the order of restraint already passed and it is in these circumstances that the modified order was passed by the learned single judge. 11. The....