The main legal point established in the judgment is that the claim of the defendants would not be covered by the sanctioned scheme under BIFR, and therefore, the counter-claim would not be hit by Sec. 22(1) of SICA.

V.K. JAIN, J. (ORAL)

I.A. No. 9059/2010 (by plaintiff u/o VII r/w Sec. 151 CPC and Sec. 22 of the Sick Industrial Companies Act, 1985, for rejection of counter-claim)

This is an application for rejection of the counter-claim on the ground that permission from Board of Industrial and Financial Reconstruction (BIFR) under Section 22 of the Sick Industrial Companies (Special Provisions) Act (SICA), 1985, has not been obtained by the defendants in respect of the counter-claim filed by it.

2. In the suit, the plaintiff has sought recovery of Rs. 90,34,079.73ps from the defendants. On the other hand a counter-claim for recovery of Rs. 5.22 lacs has been filed by the defendants against the plaintiff. The case of the plaintiff is that its goods worth Rs. 1,82,14,358/- were supplied to the defendant from time to time after giving credit for the payments made by it, a principal sum of Rs. 63.27.471.11 remained due to it. The plaintiff has claimed the aforesaid amount with interest @ 20% per annum, thereby directing a total sum of Rs. 90,34,079.73. The case of the defendant on the other hand is that taking into account of the debit and credit notes of both the sides as on 01.04.2006, the amount due to the plaintiff was only Rs. 27,28,948.20p, after deducting Rs.6 lac which the plaintiff had received in cash out of the debit cheques, the balance amount payable to it came to Rs. 21,28,948. As against this, the amount of debit notes which the defendant given to the plaintiff came to Rs. 26,51,086/- and, therefore, they are entitled to recover that amount from the plaintiff.

3. Admittedly, the plaintiff before this Court filed petition No.03/1999 under SICA before BIFR, New Delhi and the same is still pending. No scheme has so far been approved by BIFR for rehabilitation of the plaintiff company. In the suit before this Court, the defendants are seeking adjustment of the principal amount claimed in the suit and have alleged that after that adjustment, a sum of Rs. 5.22 lacs is due to them from the plaintiff. The claim of the defendants is based upon various credit notes alleged to have been issued to them by the plaintiff during the period from 1997-98 to 2006-07.

4. Section 22 of SICA, to the extent it is relevant provides that where in respect of an industrial company, an inquiry under Section 16 is pending or any scheme referred in Section 17 is under preparation or consideration or a sanction scheme is under implementation or where an appeal under Section 25 relating to an industrial company is pending, no suit for recovery of money shall lie or be proceeded with further, except with the consent of the Board or the Appellate Authority, as the case may be.

5. The learned counsel for the defendants has relied upon the decision of the Supreme Court in Deputy Commercial Tax Officer and Ors v. Corromandal Pharmaceuticals and Ors. (1997) 10 SCC 649. There, the Court inter alia held as under:

“Under the statute, the BIFR is to consider in what way various preventive or remedial measures should be afforded to a sick industrial company. In that behalf, BIFR is enabled to frame and appropriate scheme. To enable the BIFR to do so, certain preliminaries are required to be followed. It starts with the reference to be made by the Board of Directors of the sick company. The BIFR is directed to make appropriate inquiry as provided in Sections 16 and 17 of the Act. At the conclusion of the inquiry, after notice and opportunity afforded to various persons including the creditors, the BIFR is to prepare a scheme which shall come into force on such date as it may specify in that behalf. It is in implementation of the scheme wherein various preventive, remedial or other measures are designed for the sick industrial company, steps by way of giving financial assistance etc. by Government, banks or other institutions, are contemplated. In other words, the scheme is implemented or given effect to, by affording financial assistance by way of loans, advances