Company lawSICASupreme Court of India

Jay Engineering Works Ltd v Industry Facilitation Council

(2006) 8 SCC 67720061 min read
The case in brief30-second read
Facts
A small-scale supplier got an award from the Industry Facilitation Council under the 1993 Act for interest on delayed payments. The buyer, Jay Engineering, was a sick company under the Sick Industrial Companies (Special Provisions) Act, 1985, with a rehabilitation scheme sanctioned by the BIFR.
Issue
Can the award be enforced against the sick company despite S.22 SICA?
Held
The adjudication under the 1993 Act may go on, but execution of the award against the sick company needs BIFR consent where the debt is covered by the sanctioned scheme.
Principle
An award under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 cannot be executed against a sick company without BIFR consent where the debt falls within a sanctioned scheme; S.22 SICA bars enforcement, though adjudication may proceed.
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Facts

  • A small-scale supplier got an award from the Industry Facilitation Council under the 1993 Act for interest on delayed payments.
  • The buyer, Jay Engineering, was a sick company under the Sick Industrial Companies (Special Provisions) Act, 1985, with a rehabilitation scheme sanctioned by the BIFR.

Issue

  1. Can the award be enforced against the sick company despite S.22 SICA?

Held

  • The adjudication under the 1993 Act may go on, but execution of the award against the sick company needs BIFR consent where the debt is covered by the sanctioned scheme.
  • S.22 SICA bars proceedings for execution during that period.

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Citation

Jay Engineering Works Ltd v Industry Facilitation Council (2006) 8 SCC 677

Reported: SC judgment PDF (JUDIS 28042, CA 4127 of 2006). This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.