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TMI Blog2001 (5) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... ng been declared sick is entitled to get any protection under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1955 (hereinafter referred to as "the said Act") or not. My order dated 9th April, 2001 speaks as follows : "In this Matter I do not find any point to be dealt with by this court excepting the point whether demand notice can be proceeded with without the leave of BIFR." 2.Against this order no appeal has been preferred by either of the parties so it has reached its finality. It is settled law as laid down by the Supreme Court in the judgment reported in AIR 1977 SC 397 that any decision or finding at the interlocutory stage operate as res judicata at the later stage of the same proceedings. By the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Senior Counsel, for the respondent with great force contends that the company cannot get any protection under Section 22 of the said Act. First of all, it is a mere demand notice and there is no proceeding as yet taken for recovery of the alleged dues by way of distress proceedings. Secondly, even if the aforesaid notice is termed to be a distress proceeding, still then he cannot get protection as because he has filed an application before the BIFR and such application has been entertained. He contends that in an extreme case Allahabad High Court has held in a case reported in 2000 (119) E.L.T. 524 that even if the scheme is prepared the benefit of Section 22 will not be applicable in the event the amount which is sought to be recovered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar procedure. In that case on the factual matrix His Lordship has been pleased to hold that the measure adopted by the sales tax authority for recovery of the alleged sales tax dues by withholding supply of sales tax declaration form is a distress proceeding of like nature. The aforesaid principle may not be applicable universally but will be depending upon each and individual facts and circumstances of the case. The method which might be adopted for recovery of the alleged dues is really meant for recovery of the dues by any harsh method. The notice admittedly was issued under Section 142 of the Customs Act. Therefore, it is to be seen what is the purpose and object of Section 142 of the aforesaid Act. If the purpose and object of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other instrument executed under this Act or any rules or regulations made thereunder provide that amount due under such instrument may be recovered in the manner laid down in sub-section (1), the amount may, without prejudice to any other mode of recovery, be recovered in accordance with the provisions of that sub-section." 6.It will be clear from plain reading of clause (a) or (b) that these provide for measure of deducting any amount of the debtor and also take other measures for recovery of the amount. The clause (c) of sub-section (1) of Section 142 provides for initiation of certificate proceedings in case of failure under clauses (a) and (b). Therefore, notice of the aforesaid section speaks for such measure being taken in the ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utside the purview of the scheme can possibly be touched or can be recovered by any creditor without approaching BIFR for leave. 10.In this case the scheme has not yet been prepared. Until and unless the scheme is prepared it will not be understood what is the assets and properties or the funds will be covered by the scheme. Under such circumstances, I am of the view that the petitioner is entitled to get protection under Section 22 of the aforesaid Act, as I can not accept the contention of Mr. Chakraborty that the petitioner cannot get protection under the aforesaid section. Therefore, I uphold the contention of the learned advocate for the petitioner that the recovery proceeding as sought to be done by the aforesaid impugned notice can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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