ICICI, which has been fighting a legal battle to recover Rs 100 crore (including interest), argued in a petition filed with the AAIFR that the section 22 of Sick Industrial & Companies Act (Sica) was not applicable for PSL, ICICI sources said.

ICICI maintains that the appointment of a receiver by the Mumbai high court makes section 22 invalid in the case of PSL. The institution has also sought permission to proceed against PSL and its promoters, the sources added.

The tussle between the institution and the company reached a flashpoint when the BIFR declared the company sick in March 1999 and appointed IDBI as the operating agency. BIFR was acting under adirective from the Supreme Court.

BIFR's verdict on PSL came after a detailed report from the IDBI assessing the company's financial performance over the last few years and checking the veracity of the claims shown to prove the case of sickness. The supreme court had asked IDBI to prepare a report for enabling BIFR to arrive at a conclusion.

Though IDBI differred with the company on two crucial issues, the report in general was supportive of the company's stand. IDBI has mentioned in the report that the company's accounting practices are not in conformity with the norms laid down by Institute of Chartered Accountants of India (ICAI), sources said.

Parasrampuria Synthetics knocked the BIFR doors in November 1997 citing huge erosion in net worth as the reason for sickness. ICICI filed a petition against this in the Delhi high court.

The Court's verdict went against the ICICI forcing the institution to approach the Supreme Court. Supreme Court asked the BIFR to take a final view on the matter on thebasis of a report by IDBI.

ICICI has been embrolied in litigation battles with the defaulting companies for quite some time now. It recently won a case against Baroda Rayon Corporation when the Mumbai High court gave a verdict for appointment of a provisional liquidator for the company.