CWP No.12429/2010 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. DATE OF DECISION: 28.9 .2010 M/s Indian Sulphacid Industries Ltd. ...Petitioner VERSUS State of Haryana and others …Respondents CORAM HON'BLE MR.JUSTICE PERMOD KOHLI PRESENT: Mr. Mansoor Ali, Advocate for the petitioner Mr.RD Sharma, DAG, Haryana for respondents no.1 to 3 Mr.Rajesh Bansal, Advocate for respondent no.4 Permod Kohli, J. (Oral) Keeping in view the controversy involved and with the consent of learned counsel for the parties, this petition is disposed of at motion stage itself. Short controversy involved in this petition relates to the recovery from the sick company who has approached the Board of Industrial and Financial Reconstruction (hereinafter referred to as “the BIFR”) by making a reference under Section 15 (1) of the Sick Industries Companies (Special Provisions) Act, 1985 (hereinafter referred to as the “1985 Act”) on 21.2.2000. The reference was registered as Case No.50/2000. The CWP No.12429/2010 2 reference, however, came to dismissed and an appeal was preferred by the petitioner before the Appellate Authority for Industrial and Financial Reconstruction (hereinafter referred to as “the AAIFR”). The AAIFR remanded the case back to the BIFR vide its order dated 23.1.2006 (Annexure P-3). The BIFR again passed an order against the petitioner and the petitioner again approached the AAIFR. The appeal is presently pending before it. Respondent no.4 filed a petition under Section 33-C(2) of the Industrial Disputes Act, 1947 before the Industrial Tribunal for recovery against the Company. The Presiding Officer of the Labour Court, Ambala passed an award dated 4.9.2008 against the Company for recovery of an amount of Rs.7,16,081/- with interest at the rate of 12% per annum w.e.f. 5.12.99. The award was forwarded to the Labour-cum- Conciliation Officer, Kurukshetra for execution who issued the warrant of attachment and the proceedings have been initiated under Section 72 of the Punjab Land Revenue Act, 1887 for attachment of the property of the petitioner- Company. It is further alleged that even when proceedings have been initiated by respondent no.2, respondent no.3 has already attached the property of the petitioner-Company. The petitioner has taken shelter under Section 22 of the 1985 Act. Relevant extract of Section 22 is reproduced here under:- “22. Suspension of legal proceedings, contracts, etc. (1) Where in respect of an industrial company, an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956) or any other law or the memorandum and CWP No.12429/2010 3 articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof 3*[and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company] shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority. .......” From the clear, unambiguous and plain language of the aforesaid Section, it is evident that no recovery can be effected from the petitioner- Company for recovery of the amount during the pendency of the proceedings before the BIFR or AAIFR initiated in accordance with the provisions of the 1985 Act. Respondent no.2 issued notice dated 21.6.2010 (Annexure P-8) to the petitioner to show cause as to why warrant for attachment of the property of the factory be not issued. The aforesaid notice was followed by warrant of attachment dated 19.5.2010 (Annexure P-9) issued under Section 72 of the Punjab Land Revenue Act, 1887 for attachment of the property of the petitioner-Company by the Collector, Thanesar. The short contention of the petitioner is that both these orders are in contravention of the mandate of Section 22 of the 1985 Act. As noticed here-in-above, the petitioner-Company having been registered with the BIFR and an appeal against the order of BIFR for its revival/reconstruction being pending, the process of attachment of the property initiated by respondents is not justified and valid. Notice (Annexure P-8) and attachment order (Annexure P-9) are thus not sustainable in law. In view of the above, this petition is allowed and Impugned notice CWP No.12429/2010 4 dated 21.6.2010 (Annexure P-8) and attachment order (Annexure P-9) are hereby quashed. This quashment shall not prevent respondent no.4 from approaching AAIFR to seek leave under Section 22 of the 1985 Act to attach the property of the petitioner and to put it to sale in accordance with law. If respondent no.4 initiates such proceedings, the same shall be decided expeditiously. (PERMOD KOHLI) JUDGE 28.9. 2010 MFK CWP No.10585 of 2010 5