The main legal point established in the judgment is the interpretation of the applicability of Sections 22 and 32 of the Sick Industrial Companies Act and their impact on the proceedings initiated under Section 9 of the Arbitration Act.

A. Kulasekaran, J.

1. When the matter is listed for admission, after hearing the learned counsel for both sides, the same is disposed of in limine .

2. This appeal has been filed to set aside the order dated 27.10.2003 passed in Application No. 4298 of 2003, rejecting the request of the appellants to set aside the order dated 29.4.2003 made in Application No. 5074 of 2002 in appointing the Advocate Commissioner.

3. Learned counsel Mr. C.S. Dhanasekaran, appearing for the appellants, has submitted as follows:

The appellants and the respondent entered into a Hire Purchase Agreement dated 25.2.1998 in respect of the schedule machineries; the first appellant company has been duly declared as sick under Section 3(1)(o) of the Sick Industrial Companies Act and, therefore, the proceedings taken under Section 9 of the Arbitration and Conciliation Act, 1996, are not maintainable. The first appellant company has been directed by an order dated 22.9.2000 under Section 22-A of the Sick Industrial Companies Act by the BIFR, not to dispose of any fixed or current assets of the company, without the consent of the BIFR. Hence, non-payment of dues is neither wilful nor wanton, but for the restraint order passed by the BIFR. An arbitrator was appointed on 3.10.2002 to adjudicate the claim. During the pendency of arbitration proceedings, an advocate commissioner was appointed by this Court by virtue of an order dated 29.4.2003, to take custody of the machineries set out in the schedule. The said order was obtained ex parte . The advocate commissioner did not act upon immediately. Later on, extension of time to execute the warrant was sought for and this Court, by an order dated 16.7.2003, was pleased to extend the time by four weeks. The advocate commissioner has taken the symbolic possession of those machineries and thus executed the warrant. Further, an advertisement was made for sale of those machineries in public auction. In the said advertisement offers are invited, by fixing the dates of inspection and the venue for opening those offers on 11.10.2003. The entire proceedings taken out by the advocate commissioner affect the working as well as the financial condition of the appellant company. The seizure and sale of the machineries of the sick company without the consent of BIFR the deprecated by the judicial dicta laid down by the Apex Court. The proceedings taken out by the advocate commissioner do not have the consent of the BIFR, which is mandatory.

4. Learned counsel further submitted that Section 32 of the Sick Industrial Companies (Special Provisions) Act, 1985, is having overriding effect on other acts and, hence, an application under Section 9 of the Arbitration Act cannot be entertained, when the matter is pending before BIFR.

5. In support of his contention, the learned counsel relied on Sections 22 and 32 of the Act.

6. Per contra, learned counsel appearing for the respondent has submitted that they are owners of the machineries, which were hired to the appellants, and since the appellants committed default, they are entitled to repossess the said machineries, in terms of the agreement. The agreement also contains arbitration clause and in view of the same, the matter has been referred to the arbitrator and an award has also been passed. For an interim measure of protection, they have invoked Section 9 and filed necessary application. This Court, after affording an opportunity to the parties concerned, rightly appointed an advocate commissioner, who has taken symbolic possession and proceeded further for sale. Since the property hired to the appellant is not the property of the appellant company, the provisions of the Sick Industrial Companies (Special Provisions) Act cannot be made applicable. It is also submitted that, after passing of the award, the appellants admitted their liability and entered into second schedule of agreement dated 21.4.2001, but again committed default in paying the instalments.

7. In suppor