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2012 (11) TMI 122 - HC - Companies LawDenial of counter-claim of the defendants - plaintiff instead of being liable to pay any amount to the defendants are entitled to recover an amount of Rs.90,34,079.73ps from them - petition under SICA before BIFR by Plaintiff - Held that - Since the plaintiff does not admit the counterclaim, the defendants are entitled to an adjudication with respect to their claim and admittedly that adjudication cannot be done by BIFR. For this reason alone, the counterclaim is not liable to be stayed. Admittedly, the amount of adjustment sought by the defendants and that of counter-claim does not find inclusion in the liabilities admitted by the plaintiff before BIFR. The defendants have not approached BIFR and the plaintiff does not admit the claim set up by them. The Scheme by BIFR is yet to be framed. Since the claim of the defendants is not the subject matter of the proceedings before BIFR, the Scheme as and when it is framed, obviously, would not include the claim of the defendants. Therefore, it can hardly be disputed that the claim of the defendants would not be covered by the sanctioned scheme as and when it is approved by the Board. Therefore, the ratio of the decisions of the Supreme Court in Deputy Commercial Tax Officer and Ors v. Corromandal Pharmaceuticals (1997 (3) TMI 452 - SUPREME COURT OF INDIA) squarely applies to the present case and, counter-claim, therefore, would not be hit by Sec. 22(1) of SICA.
Issues involved:
Application for rejection of counter-claim under Section 22 of the Sick Industrial Companies Act, 1985. Analysis: The plaintiff sought recovery of a specific amount from the defendants, while the defendants filed a counter-claim for a different amount. The plaintiff contended that the counter-claim should be rejected as permission from the Board of Industrial and Financial Reconstruction (BIFR) under Section 22 of the Sick Industrial Companies Act had not been obtained by the defendants. The plaintiff's claim was based on goods supplied to the defendant, with a principal sum remaining due. On the other hand, the defendant argued that after considering debit and credit notes, a different amount was payable to them by the plaintiff. The plaintiff had initiated proceedings before BIFR, but no scheme had been approved for its rehabilitation. The defendants sought adjustment of the principal amount claimed in the suit, alleging a sum due to them from the plaintiff based on credit notes issued during a specific period. The legal issue centered around Section 22 of the Sick Industrial Companies Act, which restricts legal proceedings against a company under certain circumstances. The defendants relied on a Supreme Court decision emphasizing the importance of the scheme sanctioned by BIFR and the inclusion of dues in that scheme. The court referred to previous judgments to clarify that a mere pendency of an inquiry is not sufficient to stay legal proceedings under Section 22; the dues must be included in the sanctioned scheme. In this case, the plaintiff disputed the counter-claim, asserting they were entitled to recover a specific amount from the defendants. Since the plaintiff did not admit the counterclaim and the defendants had not approached BIFR, the claim was not part of the ongoing proceedings before BIFR. Therefore, the court concluded that the counter-claim would not be covered by the sanctioned scheme and, thus, not hit by Section 22(1) of the Act. The court dismissed the application for rejection of the counter-claim, stating it was devoid of merit. The case was scheduled for further proceedings, including admission/denial of documents and framing of issues on specific dates. The judgment clarified the application of Section 22 of the Sick Industrial Companies Act in the context of the dispute between the plaintiff and defendants, emphasizing the importance of the sanctioned scheme by BIFR and the inclusion of dues in that scheme for legal proceedings to be stayed.
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