The non-supply of electricity in the future by an electricity board to a sick industrial company, even if it results in the company's inability to operate, does not amount to initiation or continuation of legal proceedings against the company's properties, as prohibited under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985.

( 1 ) PETITIONER Modi Spinning and Weaving Mills Co. Ltd. Modi- nagar is a Public Limited company incorporated under the Indian Companies Act having its registered office at modinagar and is running a textile manufacturing unit. For the purposes of running its unit it gets its electrical energy from the U. P. State Electricity Board (hereinafter referred to as the board) under an agreement executed between the parties. The dispute in the present writ petition centres round the question as to whether the Board can disconnect the supply of electrical energy to the petitioners textile mills in exercise of its power u/ S. 24 of the Indian Electricity Act after the petitioners unit has been declared as a sick industrial company under the provisions of the sick Industrial Companies (Special Provisions) Act, 1985.

( 2 ) BRIEF admitted facts for the purposes of adjudication of the question raised in the present writ petition are that the petitioner had filed a Civil Misc. Writ Petition No. 6915 of 1986 before the lucknow Bench of this Court wherein the petitioner had challenged the notification dated 28-1-1986. by means of which the respondent Board had revised the rates of power tariff. In the aforesaid writ petition a stay order was granted in favour of the petitioner which stood vacated when the writ petition was finally dismissed on 7-5-1990.

( 3 ) THE Board on 11-5-1990 intimated the petitioner that the total outstanding demand towards the petitioner amounted to Rupees 2,l7,30,335. 65p. According to the petitioner as the Board was intending to disconnect the electricity supply to the petitioners unit, the petitioners unit and its sister concerns had to agree in writing vide letter dated 31-5-1990 that a substantial amount shall be paid by 4-6-1990 and the balance amount will be paid in monthly instalments of Rs. 6 Lakhs with effect from August, 1990. The petitioners unit and its sister concerns gave an assurance that if the Board does not disconnect their electricity supply they would not file any appeal against the judgment of the High Court dated 7-5-90 before the Supreme Court. In pursuance of the aforesaid agreement certain amounts were paid by the petitioners unit.

( 4 ) THE petitioner moved a reference under S. 15 (1) of the Sick Industrial Companies (Special provisions) Act, 1985 to the Board for industrial and financial reconsiderations and for determination of the measures to be adopted with respect to the petitioners unit. On 20-6-1990 the Board declared the petitioners unit to be a sick company and directed the Industrial development Bank of India (IDBI) as the Operating Agency to prepare a scheme for the revival of the petitioner-Company. The petitioner informed the Board not to insist upon the payment of the balance amount of the electricity dues till such time as the matter of rehabilitation of the petitioner is pending before the Board for Industrial and Financial Reconstruction (BIFR) and the scheme prepared and presented by IDBI for this purpose is permitted to be implemented without any hindrance from any quarter.

( 5 ) BY a notice dated 20-11-1990 from the Board it was intimated to the petitioner that there were arrears with regard to the payment of some instalments contrary to an undertaking given earlier and if the petitioner did not pay the arrears in regard to the payment of such instalments the respondents will have no other alternative except to disconnect the petitioners supply under the electricity Act for non-payment of dues without any further notice. The aforesaid notice has been annexed as Annexure 7 to the writ petition. On 31-12-1990 the Board rejected the petitioners request for deferment of the payment of the outstanding dues of electricity on the ground that the petitioner and its sister concerns had earlier agreed to pay certain amount in instalments to discharge their total liability. The aforesaid letter of the Board dated 3-12-1990 has been annexed as Annexure 10 to the wri