Section 22 moratorium under sick company law does not cover post-scheme claims or later recovery proceedings.

Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 is to be strictly construed and applies only to rights, liabilities, and proceedings arising from matters existing before the relevant order or sanctioned scheme. A scheme framed under sections 17 and 18 is based on the company's existing assets and liabilities, and creditors bound under section 18(8) are those covered at that stage. Claims arising after sanction, being independent of the scheme, do not fall within the moratorium merely because recovery may be sought against company assets. The bar cannot be extended by interpretation to future liabilities, and proceedings based on post-scheme claims are therefore not excluded.

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Issues: Whether the bar under section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 extends to claims and recovery proceedings arising after the scheme has been prepared or sanctioned, so as to prevent winding-up proceedings based on such later claims.

Analysis: The protection under section 22 is to be strictly construed and operates to prevent enforcement of rights and liabilities that existed immediately before the relevant order or scheme. A sanctioned scheme under sections 17 and 18 is framed on the basis of the company's existing assets and liabilities, and sub-section (8) of section 18 binds creditors who were before the Board when the scheme was prepared. Claims arising after the scheme, being transactions dehors the sanctioned scheme, are not included in that moratorium merely because they may also result in recovery against company assets. The embargo cannot be extended by interpretation to future liabilities that were neither reckoned nor included in the scheme.

Conclusion: Section 22 does not bar proceedings based on post-scheme claims, and the appellant's winding-up application could not be rejected on that ground.

Ratio Decidendi: The moratorium under section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 is restricted to liabilities and proceedings arising from matters existing before the sanctioned scheme and does not extend to independent claims accruing after the scheme.

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