Judgment

C.K. Thakker, J. —

1.Leave granted.

2.The present appeal raises a question of great public importance having far- reaching consequences. The appeal is filed by KSL & Industries Ltd. (‘appellant’ for short) against final Judgment and Order passed by the Division Bench of High Court of Delhi on February 23, 2006 in Writ Petition (Civil) Nos. 2041-42 of 2006. By the said Judgment, the High Court, set aside the Order passed by the Debt Recovery Appellate Tribunal, Delhi (‘DRAT’ for short) and held that in view of the provisions of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereafter referred to as ‘SICA’), no recovery proceedings could be effected against the first respondent-Company in the light of the bar contained therein.

Factual Background

3.To understand the controversy in its proper perspective, it is necessary to keep in mind the factual matrix of the case. Respondent No. 1 (M/s. Arihant Threads Ltd.) (‘Company’ for short) was incorporated as a joint venture with Punjab State Industrial Development Corporation. It set up an export oriented spinning unit for manufacturing cotton yarn in the industrial area of Amritsar District of the State of