GRAM PANCHAYAT AND ANR. vs SHREE VALLABH GLASS WORKS LIMITED AND ORS.

The Supreme Court upheld the Bombay High Court's decision to quash recovery proceedings against a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, 1985, specifically citing Sections 16, 17, and 22. The Court affirmed that once the Board declares a company as sick and appoints an operating agency for rehabilitation, no execution or distress proceedings can continue without the Board's consent as per Section 22(1). The Court clarified that the remedy for recovery is only postponed, not extinguished, and the period of suspension is excluded from the limitation period under Section 22(5).