Basudeva Panigrahi, J.:—The Writ petitioner, BRAITHWATTE & CO. LTD. a Government of India undertaking, has filed this writ application Under Article 227 of the Constitution of India for following reliefs:—

“(a) Issue a notice directing the Opposite parties to show cause as to why the impugned order dated 22.3.95 passed by the Learned Assistant District Judge, 8th Court, 24 Paraganas (S) Alipore in Misc. Case No. 34 of 1994 shall not be set aside and/or cancelled.

(b) Cause being shown and or due to insufficient cause set aside the impugned order dated 22.3.95 passed by the Learned Assistant District Judge, 8th Court, 24 Paraganas(S) pass appropriate orders directing the Sole Arbitrator to suspend the proceeding pending before the Arbitrator under s. 22(i) SICA;

(c) Stay all further proceedings pending between the parties:

(d) Ad-interim order of stay in terms of prayer (c) above.”

2. There was some dispute between the petitioner and the opposite parties leading to an arbitration proceeding appointing a retired Judge of this Court, Justice L.M Ghosh, as the sole arbitrator. Before the appointment of the retired Judge, the opposite party, DTM Construction Pvt. Ltd., twice moved application under s. 28 of the Arbitration Act for extension of time before this Court but those applications were rejected on the sole question of territorial jurisdiction. Later on another application was filed before the Court at Alipore which resulted in the appointment of Justice L.M Ghosh (retired) as an arbitrator before whom the arbitration proceeding is said to be pending. During the pendency of the proceeding, the petitioner Braithwaite & Col Ltd. seems to have filed an application before the Learned Arbitrator under s. 22(1) of Sick Industries (Special Provisions) Act, 1992 (hereinafter referred to as SICA) for stay of the arbitration proceeding, in view of the statutory powers granted under s. 22(i) by way of amendment by including the word “suit for recovery of money” in s. 22(i) of the Act. The main contention of the petitioner before the arbitrator was that the provision of SICA Act being benevolent in nature which was aimed at protecting the greater interest of public as provided in the preamble of the said Act the entire scheme of the Act would stand nugatory, unless the suit proceeding for realisation of the amount against such Industry is not stayed. The opposite party, DTM Construction Pvt. Ltd., has however, disputed the application of the provision of SICA Act in respect of the Arbitration Proceeding. Their main thrust of defence is that the arbitration proceeding would never mean and includes the term ‘suit’. After the amendment of SICA Act and insertion of the word ‘suit’ it has to be understood that any suit which has been filed (i) for the recovery of money, (ii) for enforcement of any security against industrial Company, and (iii) for enforcement of any guarantee in respect of any loans or advance granted to the industrial company, then only the aforesaid provisions can come to the aid of the persons claiming benefit thereunder. It is however, stressed by the opposite party that the purview of the expression ‘suit’ and/or ‘like’ the benefit given thereunder cannot be claimed by the petitioner.

3. Before the examination in the rival contention of the parties I feel it necessary to quote the provision of s. 22 of the Industrial Companies (Special Provision Act) 1985.

“22. Suspension of legal proceeding, contracts, etc.—(1) Where in respect of an industrial company, an inquiry under s. 16 is pending or any scheme referred to under s. 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under s. 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956) or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding-up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof (and no unit for the recovery of money or for the enforcement of any security against the industrial company or for any guarantee in respect of any loans, or advance granted to the industrial company) shall lie or be proceeded with further, except with the consent of the Board as the case may be, the Appellate Authority.”

(Italics supplied for emphasis).

4. Mr. Roy Choudhury, the learned counsel appearing for the petitioner company, has strongly urged that the company has suffered financial setback and its net worth had become eroded. Therefore, the Company finding no other alternative approached under s. 15(1) SICA for its rehabilitation to the authority, i.e, the Board of Industrial and Financial Reconstruction (BIFR). After hearing on 11.3.93 it declared the petitioner company as a Sick Industrial Company in terms of s. 3(1)(e) of the SICA. The BIFR has, eventually appointed a Special Director to the Board of the petitioner company. In the said meeting, it was, inter alia, decided that for public interest BIFR has to take measures specified under s. 18 of the SICA and appointed Industrial Reconstruction Bank of India (IRBI) as the operating agency and authorised them to prepare a viability report for the revival of the company. While the said proceeding was pending the petitioner filed an application under s. 22 of the SICA.

5. From the petitioners submission, it has emerged that BIFR has already declared the petitioner company as a Sick Industrial Company under the provision of SICA. It is further undisputed that BIFR had appointed Industrial Reconstruction Bank of India (IRBI) for preparing a report regarding the viability of the revival of the company. Therefore, in the above premises the facts of the case lie within a narrow compass as to whether the provision of s. 22 of the SICA can at all be attracted to the present arbitration proceeding.

6. It was noticed that there was a gradual deterioration of potentiality of a few prospering industries on account of several factors, such as, due to acute shortage of financial resources, lack of managerial capabilities, for sore relationship between the management and workmen, therefore, an expert committee was appointed who could suggest preventive, alternate remedial measure for the survival of the sick industries. Therefore, the main scope and subject of the provision of the SICA is to rehabilitate the Sick Industrial undertakings from their financial set back. A statutory Board was constituted under the heading “Board for Industrial and Financial Reconstruction” (BIFR) to exercise the jurisdiction and powers and to discharge the functions and duties conferred or imposed thereby or under the provisions of the Act. Under the statute, the appellate authority is constituted under the name ‘appellate authority for Industrial and Financial Reconstruction’ for hearing appeals against the orders of the BIFR. In the Instant case, the petitioner company has been declared already as a Sick Industry by BIFR.

7. Meanwhile, an arbitration proceeding has emerged as regards the claim and counter-claim made by both the parties. On 19.4.93 the dispute was referred to the learned arbitrator Justice Mr. L.M Ghosh (retired). The application was filed before the arbitrator for staying his hands under s. 22 of the SICA on 8.7.94 But the arbitrator had taken an erroneous view that the power under s. 22 lies not with the arbitrator but with BIFR. Thereafter, the petitioner filed an application before the 8th Assistant District Judge, Alipore in Misc. Case No. 38/94 under s. 22 of the SICA. But the learned Court below seems to have taken a view that the arbitration proceeding is not a suit within the scope of s. 22(i) of the Act, and, therefore, the application was misconceived and accordingly, it was rejected.

8. Let me first of all advert to the contention raised by the learned advocate Mr. Chatterjee for the opposite party, as to whether the arbitration proceeding can at all be said to be a ‘suit’. The ‘suit’ according to s. 26 of the Civil Procedure Code can only be brought by presentation of a plaint. Commencement of arbitration proceeding is not dependent on presentation of a plaint. Though the term ‘suit’ has not been defined in the Code, nevertheless, Order 7 of the Code provides and includes the term ‘plaint’ etc. Under the various provisions of the Arbitration Act, 1940 distinction between the ‘suit’ and ‘proceeding’ can well be drawn,

9. Mr. Chatterjee, the learned counsel, further strongly urged that an arbitration proceeding does not come within the purview of the legal proceeding and as such the provisions of s. 22 of the SICA cannot be stretched.

10. Mr. Roy Choudhury, the learned counsel appearing for the petitioner, has however, drawn my attention that ‘proceeding’ in this case was referred to will only mean legal proceedings which have been decided in reported decision (1993) 2 SCC page 144 in the case of (Maharashtra Tubes Ltd. v. State Industrial & Investment Corporation of Maharashtra Ltd.) The apex court in the aforementioned case has discussed the various provisions of the SICA and also s. 29 and or s. 31 of the State Financial Corporation Act, 1951. The scope of Ss. 29 and 31 of the State Financial Act are widely for recovery of the Corporations's due from the Industrial Unit. The Apex court has taken the view about the expression ‘proceedings’ as follows:—

“On the other hand, the 1985 Act was enacted, as its preamble manifests, with a view to timely detection of sick or potentially sick companies owning industrial undertakings, the identification of the nature of sickness through experts in relevant fields with a view to devising suitable remedial measures through appropriate schemes and their expeditious implementation. Here the emphasis is to prevent sickness and in cases of sick undertakings to prepare schemes for their rehabilitation by providing financial assistance by way of loans, advances or guarantees or by providing reliefs, concessions or sacrifices” from Central or State Governments, scheduled banks etc. The basic idea is to revive sick units, if necessary, by extending further financial assistance after a thorough examination of the units by experts and only when the unit is found to be no more capable of rehabilitation, that the option of winding up may be resorted to. It is for that reason that s. 22(1) provides that during the pendency of (i) an inquiry under s. 16 or (ii) preparation or consideration of a scheme under s. 17, or (iii) an appeal under s. 25, no proceedings for winding up of the concerned industrial company or for execution, distress or the like shall lie or be proceeded with in relation to the properties of that concern unless BIFR/appellate authority has consented thereto. The underlying idea is that every such action should be frozen unless expressly permitted by the specified authority until the investigation for the revival of the industrial undertaking is finally determined. It is thus crystal clear that the main thrust of this special legislation is at revival or rehabilitation of the sick industrial undertaking and it is only when it is realised that the same is not feasible that the portion of winding up of the unit can be resorted to.

Now we come to the impugned decision. The High Court was considerably influenced by the fact that the appellant-company owed crores of rupees to banks and felt that so far as such creditors are concerned, different considerations may come into play but the High Court with respect failed to appreciate that the 1985 Act was enacted primarily to assist sick industrial undertakings which inter alia failed to meet their financial obligations. It is, therefore, difficult to accept the view of the High Court that where the creditors of a sick industrial concern happen to be banks or State Financial Corporations different considerations would come into play. It must be realised that in the modem industrial environment large industries are generally financed by banks and statutory corporations created specially for that purpose and if they are permitted to resort to independent action in total disregard of the pending inquiry under Ss. 15 to 19 of the 1985 Act the entire exercise under the said provisions would be rendered nugatory by the time the BIFR is able to evolve a scheme of revival or rehabilitation of the sick industrial concern by the similar device of the Financial Corporation resorting to s. 29 of the 1951 Act. We are, therefore, of the opinion that where an inquiry is pending under s. 16/17 or an appeal is pending under s. 25 of the 1985 Act there should be cessation of the coercive activities of the type mentioned in s. 22(1) to permit the BIFR to consider what remedial measures it should take with respect to the sick industrial company. The expression proceedings in s. 22(1), therefore cannot be confined to legal proceedings understood in the narrow sense of proceedings in a court of law or a legal tribunal for attachment and sale of the debtor's property.”

11. Mr. Chattterjee's next contention is that a proceeding under arbitration Act cannot be construed as a ‘legal proceeding’. But I find such contention has no substance since a proceeding filed under the Arbitration Act with a view to determining the rights and liabilities of the parties decided by a Judge of their own choice. Therefore, it is a judicial proceeding and the provision of the Civil Procedure Code have full attraction. The terms ‘proceeding’ is frequently used to denote a step-in an action, and, obviously, it has the meaning in such phrases as ‘proceeding in any cause or matter’.

12. Admittedly steps for revival of the Industry is pending with BIFR under s. 16 of SICA. From further contention of Mr. Chatterjee, it appears that since the expression “proceeding” must relate for the winding up of the Industrial Company or for execution, distress or the like against any properties of the Industrial Company or for the appointment a receiver in respect thereof, since that stage has not yet reached the petitioner cannot seek the assistance of s. 22.

13. Mr. Roy Chowdhury, the ld. counsel appearing for the opposite party, however, invited my attention that the narrow or parochial approach should not be adopted while interpreting the provision. The Court should take a broad and expansive view, keeping in view scope and object of the statute for the revival of the sick industry. He laid stress upon the expression or “like” the purpose of lodging of an arbitration proceeding was aimed at only for recovery of the money. Therefore, unless and until the opposite party obtained consent from the Board or the Appellate Authority, they should not be permitted to proceed with the arbitration proceeding. I found there is substantial force in his submission in as much as if no stay of the arbitration proceeding is granted the provision of s. 22 of the SICA will be stultified and would be rendered otiose. Therefore, while making a harmonious construction to the provision of s. 22 of the SICA, it is to be understood that the section was aimed at rehabilitation, revival and also for the amelioration of the petitioner's sick industry.

14. Mr. Chatterjee, contended by relying upon the decision reported in AIR 1992 SC 1439 in the case of Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association, Madras. I found the facts of that case was completely different from the present case. In the decision cited (supra) the Apex court held that in an eviction proceeding or for recovery of rent by the landlord against the tenant, the plea of s. 22 of SICA cannot be resorted to by the Sick Industry inasmuch as it did not come within the scope and ambit of the arbitration proceeding was with a view to recovery of the amount from the petitioner Company. In such view of the matter, the contention of Mr. Chatterjee is bound to fail. Another decision reported in AIR 1988 SC 184 in the case of Khalil Ahmed Bashir Ahmed v. Tufelhussein Samasbhai Sarangpurwala, was cited at the bar, but the said decision appears to have no relevancy in the present case. It is a revisional application, therefore, the question of availability of alternative remedy is outside the scope of this application.

15. Considering the submission made by Mr. Chatterjee from any angle I do not find any merit in the said contention and, accordingly, after having serious cogitation of the facts and circumstances of the case I upset the order passed by the lower court dated 22nd March, 1995 and allow the application filed by the revisional petitioner under s. 22(1) of the SICA and suspend further proceeding before the arbitrator till the finalisation of the scheme by the Board. In the result, the revisional application succeeds but the circumstances the parties are directed to bear their own costs.

Application allowed.