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Issues Involved:
The issues involved in this case are related to the enforcement of a bank guarantee in the context of a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, 1985. The key questions for consideration are: (i) Interpretation of section 22(1) of the Act regarding the applicability to liabilities arising from transactions post declaration as a sick industry. (ii) Whether invoking a bank guarantee constitutes proceedings for execution against the company's properties. (iii) Whether the conditions for enforcing the bank guarantee were fulfilled by the appellant. Summary: The writ appeal was filed against an interim order made absolute by a single judge, restraining the appellant from encashing a bank guarantee issued by the second respondent. The first respondent, a sick industry under the Act, argued that section 22(1) prevented the appellant from enforcing the bank guarantee. The court considered past judgments but decided the case without delving into the interpretation of the Act. The court held that the bank guarantee was not the property of the first respondent and that encashing it did not constitute execution against the company's properties. The court referenced a previous case where a similar argument was rejected by a single judge. Regarding the conditions for enforcing the bank guarantee, the court cited a Supreme Court decision and a judgment by a single judge, stating that challenges to bank guarantee enforcement were not permissible. The court dismissed the writ petition and deemed the writ appeal infructuous, denying the request for a certificate of fitness to appeal to the Supreme Court. The court allowed a two-week stay on the judgment's operation for the writ petitioner to move a special leave petition in the Supreme Court, with a clear understanding that the period would not be extended.
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