KAILASH NATH AGARWAL vs PRADESHIYA INDST.&INV.CORP.OF U.P.

The Supreme Court examined the scope of protection for guarantors under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), holding that the term 'suit' encompasses all proceedings for the enforcement of guarantees related to loans granted to industrial companies. The Court reaffirmed its previous ruling in Patheja Bros. Forgings & Stampings v. ICICI Ltd., emphasizing that the legislative intent is to protect guarantors during the restructuring of sick companies. Consequently, the Court stayed the recovery certificates issued against the appellants, ruling that PICUP could not enforce its demand against the guarantors while the company was under BIFR proceedings.