Post-sanction supply claims fall outside rehabilitation scheme protection, so statutory proceedings cannot be stayed for independent liabilities.

Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 protects proceedings only where they would affect the inquiry into, or implementation of, a rehabilitation scheme for a sick industrial company. That statutory embargo does not extend to an independent commercial liability arising from supplies made after the scheme was sanctioned and never included in the rehabilitation scheme. On that reasoning, the post-sanction supply claim fell outside the protective ambit of the Act, and the proceedings could not be stayed on that basis.

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Issues: Whether the bar under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 applies to claims arising from supplies made after the scheme had already been sanctioned and which were not part of the rehabilitation scheme.

Analysis: Section 22 creates a protective embargo to prevent coercive proceedings from frustrating the inquiry or implementation of a rehabilitation scheme for a sick industrial company. That protection is directed to the scheme and the state of affairs covered by it. Where the liability arises from an independent commercial transaction occurring after the scheme was sanctioned, and the claim was never before the Board or included in the scheme, the transaction stands outside the intended scope of the statutory protection. Extending the embargo to such post-scheme dues would enlarge the provision beyond its purpose.

Conclusion: The bar under Section 22 did not apply to the appellant's claim, and the proceedings could not be stayed on that basis. The issue was decided in favour of the appellant.

Final Conclusion: The appeal succeeded because the post-sanction supply claim was held to be outside the protective ambit of the rehabilitation scheme and the statutory suspension of proceedings.

Ratio Decidendi: The embargo under Section 22 protects proceedings only to the extent they relate to the sick company's inquiry or rehabilitation scheme, and it does not extend to independent liabilities arising from transactions entered into after the sanctioned scheme and not covered by it.

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