Section 22 of SICA does not bar suits for recovery of money arising from consumption of electricity and is meant to apply to specified proceedings as specified in the Section.

1. Whether any suit is maintainable for recovery of money or enforcement of any security against the Industrial Company while the Company is declared sick and is under rehabilitation? This question arises for consideration in terms of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short "SICA") in this case.

2. The facts, in brief, are that the petitioner is a limited company which went into losses and had got itself registered with the Board of Industrial and Financial Reconstruction, New Delhi (for short "BIFR"). The company was registered with the BIFR in the year 1998. On 30-9-2005, BIFR concluded that the promoters of the Company are not in a position to revive it and that there is no rehabilitation proposal. The Company went in appeal against the said order before the Appellate Authority for Industrial and Financial Reconstruction (for short "AAIFR"). The operation of the order passed by the BIFR was stayed on 30-1-2006. On 13-6-2002 respondent No. 1 Electricity Board filed a civil suit for recovery of a sum of Rs. 28,14,088/- in the Civil Court at Hoshiarpur. The petitioner-company filed an application for dismissal of civil suit before a Civil Judge pleading that the said suit is not maintainable in view of the provisions of Section 22 of SICA. On 24-3-2006 Civil Judge (Senior Division), Hoshiarpur dismissed this application filed by the petitioner-company, which is impugned through the present revision petition.

3. The learned counsel for the petitioner has made a single fold submission before me on the basis of contents of Section 22 of SICA. As per the counsel, no proceedings for winding up of the industrial company or for execution against any of the properties of the industrial company and no suit for recovery of money etc. shall lie or proceeded with except with the consent of the Board (BIFR) or of the Appellate Authority (AAIFR) as the case may be. It is submitted that respondent No. 1-Board could have filed this suit only after obtaining permission from the Board where the company was registered or the Appellate Authority where appeal is pending in terms of Section 22 of SICA.

4. This line of reasoning to challenge the order is seriously contested by the counsel for respondent No. 1. He would say that Section 22 would not be a bar for filing a suit for recovery of money arising out of consumption of electricity and this provision is being wrongly read by the petitioner-company. He would, thus, contend that the trial Court has rightly held that Section 22 of the SICA would not be a bar for filling suit for recovery of electricity charges even where the unit is declared sick.

5. Mr. Mansur Ali counsel for the petitioner has placed strong reliance on the case of Maharashtra Tubes Ltd. v. State Industrial and Investment Corporation of Maharashtra Ltd. and another, (1993) Supreme Court Cases 144 : (1993 AIR SCW 991). He would refer to the observations of the Hon ble Supreme Court made in para 14 of the judgment where it is inter alia noticed as under :-

"We are, therefore, of the opinion that where an inquiry is pending under Sections 16/17 or an appeal is pending under Section 25 of the 1985 Act there should be cessation of the coercive activities of the type mentioned in Section 22(1) to permit the BIFR to consider what remedial measures it should take with respect to the sick industrial company. The expression proceedings in Section 22(1), therefore, cannot be confined to legal proceedings understood in the narrow sense of proceedings in a court of law or a legal tribunal for attachment and sale of the debtors property."

The counsel would also highlight the following observations of the Hon ble Supreme Court :-

"It is, therefore, difficult to accept the view of the High Court that where the creditors of a sick industrial concern happen to be banks or State Financial Corporations different considerations would come into play. It must be realised that in the modern industri