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Claim based on goods sold and delivered, Defence based on Sick Industrial Companies Act, Interpretation of section 22 of the Act. Analysis: The judgment in this case revolves around a claim made by the plaintiff for goods sold, supplied, and delivered to the defendant, amounting to Rs. 33,792, with an additional interest of 21% per annum. The total claim in the suit is Rs. 54,489, inclusive of the principal amount and interest. The plaintiff had issued a notice of demand on 11-2-1999, to which there was no response from the defendant. The defence presented by the defendant was centered on the Sick Industrial Companies Act, stating that a scheme had been sanctioned in 1991 after a reference made in 1988. However, the liability in question arose from transactions in 1996, post the sanction of the scheme, making it a crucial point of contention. The interpretation of section 22 of the Sick Industrial Companies Act was a pivotal aspect of the judgment. The Supreme Court's decision in Dy. CTO v. Corromandal Pharmaceuticals was referenced to clarify the application of section 22 in cases where liabilities arise post the sanction of a scheme. The Court held that section 22's scope is limited to dues included in the sanctioned scheme to prevent impediments in its implementation. Any liabilities incurred after the scheme's approval, such as in the present case, are not covered by the bar under section 22, as it would be unfair to allow a company to accumulate debts post-scheme approval without fulfilling payment obligations. The judgment concluded by affirming the plaintiff's entitlement to the claimed amount, decreeing the suit in their favor. Additionally, the plaintiff was granted further interest at 12% per annum on the principal amount from the date of suit institution until payment or realization, along with the costs of the suit. The defense based on the Sick Industrial Companies Act was dismissed, emphasizing the obligation of the defendant to pay for goods purchased post the sanction of the scheme, in alignment with the Supreme Court's interpretation of section 22.
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