Dues of Petitioning creditor relating to period beyond scheme under implementation by Board and not forming part of scheme, bar u/s. 22(1) of SICA does not apply

RELEVANT EXTRACTS :

The Petitioners supplied goods to the Respondent company and part payments were made by the Respondent company to all the Petitioners except V.

On a reference to the Board for Industrial and financial Reconstruction (BIFR) by the company, a scheme of rehabilitation was sanctioned and the management of the company was taken over under the directions of the Board. The scheme sanctioned by the Board for Industrial and Financial Reconstruction failed to reflect the dues of the Petitioners.

In a winding up petition, the Petitioners contended that the company had failed to pay the balance amount despite service of statutory notice to it. The company contended that the present management could not be held responsible for the transactions that took place prior to the takeover of the company by the new management and the Petitioners’ claims were barred u/s.22(1) of the Sick Industrial companies (Special Provisions) act, 1985, (SICA) since the scheme of rehabilitation was under implementation.

Please become a Premium member. If you are already a Premium member, login here to access the full content.