METAL BOX INDIA LIMITED Vs. MADRAS TELEPHONES

JUDGEMENT

(1.) BY consent of both the parties the main writ petition itself is taken up for final disposal. The petitioner is Metal Box India Limited, a public limited company registered under the Companies Act, 1956. It is stated in the affidavit filed in support of the writ petition filed by the general manager of the company that due to certain difficulties the petitioner-company has been declared as a sick industrial company under section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as "the Act"), and at present is awaiting a rehabilitation package from BIFR for its revival. The Board has further appointed ICICI as the operating agency within the meaning of section 3(1)(i) of the Act to prepare a report for the rehabilitation of the petitioner-company. However, the report has not yet been submitted by ICICI and by virtue of the operation of section 17(1) of the Act, section 22 gets attracted and in view of the same any execution, distress or the like proceedings are not maintainable against the properties of the company, which has been declared as a sick industrial company under section 3(1)(o) of the Act. It is contended by learned counsel appearing for the petitioner that the impugned order of the first respondent, directing the petitioner-company to pay a sum of Rs. 84, 445 being the alleged arrears of telephone charges for telephone<AT> No.</AT> 552183 for the period from September 7, 1992, to October 13, 1992, failing which the other telephones of the petitioner-company will be disconnected is not maintainable in law and as such it is liable to be quashed. In support of the said contention, learned counsel for the petitioner submitted that once the petitioner-company has been declared a sick industrial company under section 3(1)(o) of the Act, read with section 17(1) and (3) of the Act, section 22 of the Act gets attracted and no proceedings for the winding up of the sick 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 shall lie or be proceeded with or for recovery of money or for enforcement of any security against the industrial company or of any guarantee in respect of any loan 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. In support of the said contention, learned counsel for the petitioner cited the decision in Gram Panchayat v. Shree Vallabh Glass Works Limited, wherein, while interpreting section 22 of the Act, the Supreme Court has observed as follows (at pages 171-173):