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2003 (2) TMI 338 - SC - Indian LawsScope of the protection afforded to guarantors under section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 - whether PICUP is prohibited by section 22(1) of the Act from doing so? Held that:- Appeal dismissed. The phrase introduced by the 1994 amendment relates to the pre-decretal stage because recovery proceedings by way of execution is already covered under the first half of sub-section (1) of section 22. If the procedure under the U.P. Act is covered under the word ‘proceeding’ in the first limb of section 22(1) of SICA, which it is according to Maharashtra Tubes, it is not a ‘suit’ for recovery under the second limb of that section. As rightly contended by learned counsel appearing for PICUP, the proceedings under the U.P. Act are really recovery proceedings within the meaning of the word ‘proceeding’ as defined in Maharashtra Tubes. Since section 22(1) only prohibits recovery against the industrial company, there is no protection afforded to guarantors against recovery proceedings under the U.P. Act.
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