The Supreme Court clarified that registration of reference with the BIFR initiates inquiry under the Sick Industrial Companies Act, invoking Section 22's prohibitions against legal actions.

1 Special leave granted in all the Special leave petitions.

2 Civil Appeal arising out of SLP (C) No. 14327/1997 is filed by 'Real Value Appliances Ltd' against the order of the High Court of Bombay dated 28-7-1997 passed by a Division Bench in an interlocutory appeal, appointing a Receiver to take formal possession of the mortgaged properties which are subject matter of suit No. 82 of 1997 pending before a learned Single Judge of the said High Court on the Original Side. The respondent Canara Bank, which is the plaintiff in the suit is claiming in consortium with Union Bank of India a sum of Rs. 23.67 crores (approximately) as due to it as on 24-12-1996. Earlier the Single Judge of the Bombay High Court in his order dated 10-1-1997 had disallowed the application for appointment of Receiver in view of the stay of appointment of provisional Liquidator granted by a Division Bench of the Bombay High Court in winding up proceedings on 20-12-1996.

3 Civil Appeal (arising out of SLP (C) No. 14750 of 1997) is filed by the appellant company against the order passed by another Division Bench of the Bombay High Court dated 8-8-1997 in Appeal No. 1193 of 1996 by which the order of the learned Single Judge on Company Side appointing a provisional Liquidator on 18-10-1996 was affirmed. Thereby an earlier order of stay dated 20-12-1996 (granted by the Division Bench in respect of the Company Judge's order dated 18-10-96) stood vacated. The respondents are Vardhman Spinning and General Mills Ltd., the creditors, who filed the winding up petition 415/1996 on 6-8-1996 against the appellant in the High Court of Bombay.

4 Civil Appeal (arising out of SLP (C) No. 15736/1997) is filed by the workmen (Engineering Kamgar Sangh) against the order dated 8-8-1997 passed by the Division Bench in winding up proceedings confirming the order of the Single Judge appointing provisional Liquidator. They are supporting the appellant company.

5 That is how these appeals have arisen and have come before us. The appellant company had, after taking some adjournments before the Division Bench in the Company Appeal - which was filed against the order of the learned Single Judge appointing provisional liquidator - submitted a reference before the Board for Industrial and Financial Reconstruction (hereinafter called the 'BIFR') on 17-7-1997 under the Sick Industrial Companies (Special Provision) Act, 1985 (hereinafter called the 'Act'). The said reference was registered on 24-7-1997 as Case No. 97 of 1997. The point raised in these appeals is that once the reference was registered by the BIFR on 24-7-1997, the Division Bench of the High Court ought not to have passed orders on 8-8-1997 vacating the interim stay granted by it on 24-12-1996 and ought not to have confirmed the order of the learned Company Judge dated 18-10-1996 appointing provisional liquidator, in view of the mandate of S.22 of the Act. Likewise, it is argued that the order of another Division Bench dated 28-7-1997 appointing a Receiver in the interlocutory appeal arising out of the Civil Suit is also bad in view of S.22 of the Act.

6 We may state that the order of the High Court in proceedings arising out of suit - appointing Receiver on 28-7-1997 was stayed by this Court on 5-8-1997 in SLP 14327/1997. Similarly the order of the High Court, in proceedings arising out of winding up proceedings, dated 8-8-1997 vacating the stay and confirming the Company Judges order appointing provisional Liquidator was stayed on 12-8-1997 in SLP 14750 / 1997 and it was further ordered that the provisional liquidator shall not take any further steps.

7 One other important fact to be noted is that on 10-11-1997 in SLP 14327/1997, this Court passed an order, - after hearing both sides, adjourning the SLPs "to enable the BIFR to come to a decision'. This Court, however, directed the appellant - company not to dispose of or alienate or create any third party interests in any of the assets of the Company except with the previous