Section 22 SICA protection does not bar disputed counterclaims outside the sanctioned scheme and admitted liabilities.

Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 bars money recovery and similar proceedings only where they would impede implementation of a sanctioned scheme. A pending BIFR inquiry alone does not trigger the bar. Where a counterclaim is disputed, not admitted by the sick company, and not included among liabilities considered by BIFR, its adjudication is not prohibited. On these facts, the counterclaim was not covered by Section 22 and could not be rejected on that ground.

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Issues: Whether the defendants' counterclaim could be rejected or stayed for want of consent under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, when the counterclaim was disputed by the plaintiff and was not shown to be included in any sanctioned scheme.

Analysis: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 bars suits for recovery of money and similar proceedings against a sick industrial company only to the extent they would impede implementation of the sanctioned scheme. The protection is not attracted merely because an inquiry is pending before BIFR. Where the claim is disputed and is neither admitted by the sick company nor reckoned in the liabilities before BIFR, adjudication of that claim is not barred. The claim asserted in the counterclaim was not part of the admitted liabilities before BIFR and no sanctioned scheme covering it existed.

Conclusion: The counterclaim was not hit by Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 and could not be rejected on that ground. The application was dismissed, in favour of the defendants.

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