SATYA BRATA SINHA, J.

( 1 ) THE petitioner in this writ application has, inter alia, prayed for issuance of a writ of or in the nature of mandamus directing respondents Nos. 1 and 2 to restore the three bank guarantees upon payment-back by respondent No. 1 to respondent No. 2 of the sum received upon recovering the relevant debt entries in the account of the petitioner with defendant No. 2 forthwith.

( 2 ) THE fact of the matter is not much in dispute. The petitioner obtained a purchase order from respondent No. 1, Steel Authority of India, on December 12, 1985, and for the purpose of execution of the said contract it received advances from the said respondent, upon furnishing three bank guarantees executed by respondent No. 2 in favour of respondent No. 1, the details whereof are as follows :

TABLE

Sr. No. Purpose Bank guarantees No. date Amount (Rs.) Initial period of validity Extended period 1. Against 10% of supply value towards approval of GA drawings 2. Against 10 per cent. of contract value in respect of advance for mobilisation and/ or delivery of materials. 3. Towards security deposit amounting to 5 per cent. of the total value. 10/77 1-7-1986 35,01,000 October 24, 1987 September 24, 1991       18/151 29-10-1985 38,95,000 October 24, 1987 September 24, 1991   18/15 . 19,47,000 October 24, 1987 February 24, 1992

( 3 ) ALLEGEDLY the petitioner was declared a sick industrial undertaking on or about February 9, 1988, purported to be in terms of the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter called and referred to for the sake of brevity as "the said Act" ). On January 29, 1991, the Steel Authority of India Ltd. filed a suit against the State Bank of India for recoveries of the amount under the three bank guarantees. On February 27, the said bank informed the petitioner that a writ of summons would be served upon the bank in Money Suit No. 22 of 1991 filed by respondent No. 1 for payment of the amount under the said bank guarantees. The bank intimated the petitioner that if respondent No. 1 presses its claim, the said bank guarantees would be paid and the proceeds thereof would be recovered by debiting the cash credit account of the petitioner. During pendency of the said suit the said bank paid voluntarily the entire proceeds of the three guarantees on March 9, 1992, without any order from the court. The petitioner filed two applications in the suit, one for being added as a party and another for restraining the bank from paying the said amount to respondent No. 1.

( 4 ) AN arbitration proceeding was initiated which was terminated by an order dated June 21, 1995, by referring all the disputes other than the bank guarantees in question to arbitration whereafter the instant writ application was filed. The contention of the petitioner is that in terms of Section 22 (1) of the said Act, respondent No. 2 could not have paid the amount under the bank guarantees in favour of respondent No. 1. Mr. Biswarup Gupta, learned senior counsel appearing on behalf of the petitioner, submitted that in view of the said provisions an interdict came into being restricting the making of such payment in view of the objective of the Act as has been laid down by the apex court in Gram Panchayat v. Shree Vallabh Glass Works Ltd. [1991] 71 Comp Cas 169 (SC) and Maharashtra Tubes Ltd. v. State Industrial and Investment Corporation of Maharashtra Ltd. Learned counsel also placed strong reliance upon the decision of a learned single judge of this court reported in Himalaya Rubber Products Ltd. v. Board for Industrial and Financial Reconstruction [1992] 1 Cal LT 279 ; [1993] 76 Comp Cas 281 and submitted that as upon payment of the guaranteed amount the bank had realised the same from the petitioner, it comes within the purview of the word "distress or the like" as defined in Section 22 (1) of the said Act. Learned counsel submits that although the prohibition relating to the filin

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