Calcutta High Court
Bengal Immunity Limited vs Mukul Kumar Kar And Ors. on 10 July, 2003
Equivalent citations: (2004)1CALLT130(HC), [2004(101)FLR34], (2004)IILLJ381CAL
Author: Amitava Lala
Bench: Amitava Lala
JUDGMENT Amitava Lala, J.
1. This writ petition is made by the petitioner company virtually for the purpose of restraining the respondents form proceeding with the criminal case being M624 pending before the respondent No. 3 and withdraw, recall and rescind the certificate and/or the criminal proceeding and order passed therein amongst other prayers which are virtually connected therein.
2. The petitioner contended that the company is now constituted under Bengal Immunity Company Limited (Acquisition and Transfer of Undertakings) Act, 1984. By reason of the same right, title and interest of the erstwhile company stood transferred to and vest in the Central Government with effect from 1st October, 1984. The nationalization Act provides appointment of Commissioner of Payments for disbursing the claimed amounts against the erstwhile company. Such company is presently sick when an application being Case No. 538 of 1992 is registered with BIFR (Board for Industrial and Financial Reconstruction). On 13th September, 2002 a review hearing was fixed by such Board on rehabilitation of sanctioned in 1985.
3. According to the petitioner, the respondent No. 1 was initially appointed by the original company and he resigned from his service on 18th April 1976. Again he was reappointed by such company on 21st August, 1979 as probationary Officer but as such the company was not satisfied with the service, he was terminated from his service on 12th July, 1980 within the probationary period. The respondent No. 1 raised an industrial dispute and the Government ultimately by an order of reference dated 15th October 1981 referred the matter to the Industrial Tribunal. The Industrial Tribunal by delivering an award dated 28th August, 1996 held that the termination of service of the respondent No. 1 is unjustified and the respondent No. 1 is deemed to be in continuous service till he is attaining the age pf superannuation of 16th July 1995 and would be in continuous service till he is attaining the age of superannuation of 16th July 1995 and would be entitled to monetary benefits. The direction had been given to pay 35% of his back wages from the date of termination till the date of superannuation at the rate as if he was in employment.
4. The respondent No. 1 thereafter filed an application under Section 33C(2) of the Industrial Disputes Act, 1947 before the appropriate Labour Court for the purpose of computation of the benefit and payment as per the award of the Industrial Tribunal. Such monetary benefit was computed at Rs. 3,57,315.95p as on 11th August, 2000. The petitioner company moved a writ petition challenging such order because of the reason that the computation was not correctly made and in fact the backwages were awarded prior to the date of appointment. However, such writ petition was dismissed by a Bench of this Court, Thereafter respondent No. 1 approached the Deputy Labour Commissioner (respondent No. 2 herein) for implementation of the said order of the First Labour Court when such respondent No. 2 issued a certificate for recovery of the said sum to the learned Chief Metropolitan Magistrate, Calcutta. The said case was registered as case No. MM-24 of 2001 where it is still pending,
5. The petitioner's case is that the criminal case is filed for recovery of money on account of backwages which was awarded by the Industrial Tribunal, as such the same is barred by Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter called as SICA). The Metropolitan Magistrate has no jurisdiction to entertain the complaint case in view of such provision. The respondent No. 3 i.e. the Metropolitan Magistrate in excess of his jurisdiction and/or usurpation of his jurisdiction passed various orders including the order of attachment dated 11th February, 2002 against the petitioner which is ex facie barred by Section 22 of the Act and as such it is absolutely non est and/or nullity. Although pursuant to such order concerned Police authority sent his representative for the purpose of attachment of the property but according to the petitioner upon being satisfied with the documents relating to the proceedings before BIFR such representative did not take any further step as yet.
6. According to the respondent No. 1 all the statements made hereunder were discussed during the courses of hearing at various stages before the appropriate Courts. According to such respondent the petitioner company suppressed the material fact that even the office of the Commissioner of payment had been wound up in 1985. Thereafter all the sources of payments of claim vested to the Managing Director of the Company since 1985. The case before the BIFR was registered in 1992 but the company nowhere mentioned that the rehabilitation was sanctioned in 1995 nor the company submitted any such document. It is also contended that no document has been produced that BIFR declared applicability of the provisions of Section 22 of SICA. Till this date no result of the review has been furnished before this Court although the same was heard on 13th September, 2002. Even the same was not submitted before the Court at the time of hearing of erstwhile writ petition. According to the petitioner, he was not appointed by the original Company but the management of the undertaking and he was terminated by such management. As per the designation in the appointment letter dated 21st August, 1979 he was the Production Officer but not the Probationary Officer. In fact, he worked as approved chemist. The designation was also shown as approved competent technical staff as per the list submitted by the company to the Directorate of Drug Control, Government of West Bengal and before the Tribunal. The case was heard by a Bench of this Court in W.P. No. 1863(W) of 2001 and not only the writ petition was dismissed but the company was directed to pay the amount failing therewith the awarded amount will carry interest at the rate of 18% per annum from the date of award till the date of payment.
7. Section 22 of SICA is not applicable in the case. Company did not register the case under Section 22 of the Act. BIFR did not declare the company as sick industry and suspended recovery proceedings under such section. According to him, the concerned Sub-Inspector who was directed to implement the order had no jurisdiction to adjudicate whether the order of attachment barred by Section 22 of the Act or not. He exceeded his jurisdiction. BIFR did not declare suspension of any right, privilege, obligation and liability as against third party. On the other hand BIFR declared that the particular would have been required to prove it to overcome the proviso to Sub-section (3) of Section 22. The proviso makes it clear that if any declaration is made it would not in any way be declaration exceeding seven years in aggregate. Petitioner's case was registered in 1992.
8. In reply, the petitioner company contended before this Court that as soon as an application for rehabilitation is entertained by BIFR, there would be automatic suspension of all proceedings for recovery of money. The petitioner further contended that there is a difference between Section 22(1) and Section 22(3) of the Act. The deponent has categorically stated that Section 22(1) came into effect as soon as the application of the company was entertained by the BIFR and the case was registered and the same will continue as long as the sanction of scheme under implementation. As such no proceeding for winding up of the company or for execution or distress or the like against such company shall lie or proceed further except with the consent of the Board. The scheme of rehabilitation of the petitioner company is now under implementation. Therefore, no order for attachment can be made against the company.
9. According to me, the case is rested in a very short campus. As various aspects of the matter considered by Hon'ble Justice Dilip Kumar Seth in his judgment and order dated 11th June, 2001 arising out of W.P. No 1836(W) of 2001 (Bengal Immunity Limited v. Mukul Kumar Kar and Ors.). There is no scope of considering such aspects of the matter once again in this writ petition.
10. No indication of preferring appeal from such order has been given hereunder. Therefore, any try of reopening the issue in this writ petition is hit squeraly by principles of res judicata. It is appropriate to mention hereunder that not only the writ petition was dismissed but the petitioner company was directed to pay the dues of the workmen in terms of the award within the specified period and in case of default the award shall carry interest at the rate of 18% per annum from the date of the award till payment. Therefore, virtually the petitioner has no case to prevent the respondents in getting the awarded amount. However, since the petitioner contended that respondent No. 1 approached the Deputy Labour Commissioner, respondent No. 2 herein, for implementation of the order after the order being passed by this High Court and as such respondent issued certificate for recovery of the said sum under Section 33C(1) of the Industrial Disputes Act, 1947 to the learned Chief Metropolitan Magistrate, Calcutta and various orders including order of attachment was passed on 11th February, 2002 following which an attachment of the property was tried by the office of the respondent No. 4, appropriate order is required to be passed only in respect of such activities of the respondents.
11. According to me, the application before the Deputy Labour Commissioner and issuance of certificate hereunder and proceeding before the learned Metropolitan Magistrate and order of attachment hereunder and action for attachment by the respondent No. 4 have consequential effect of the earlier order passed by this Court on 11th June, 2001 in W.P. No. 1836(W) of which cannot be prevented by filing a separate writ petition. Such actions are as good as execution of the order passed by the Hon'ble Justice Dilip Kumar Seth on 11th June, 2001. Each and every order of a single Judge has a persuasive value over and above other single Judges when the cases are similar unless and until the fact is so glaring that there is no other alternative for the Court but to intervene. If such principle is accepted it will borne out from the order dated 11th June, 2001 that Hon'ble Justice Dilip Kumar Seth has already recorded every part including the question of nullity of the award and order held as follows:
"All these grounds were open to be agitated in the dispute itself. If not raised, it would be deemed to have been raised and refused by reason of the principles of constructive res judicata."
12. However, since the applicability or non-applicability of Section 22 of SICA is germane for the purpose of due consideration being part and parcel of the execution, this Court has no other alternative but to deal with the executability of the order in view of the applicability of such section. Sub-sections being Sub-section (1) and Sub-section (3) of Section 22 are necessary for due consideration. The relevant part under Section 22(1} is as follows.
"....... no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a Receiver in respect thereof (and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loan or advance granted to the industrial company) shall He or be proceeded with further, except with the consent of the Board, or as the case may be, the appellate authority."
Relevant part of Section 22(3) is as follows:
".......the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force, to which such sick industrial company is a party or which may be applicable to such sick industrial company immediately before the date of such order, shall remain suspended or that all or any of the rights, privileges, obligations and liabilities accruing or arising hereunder before the said date, shall remain suspended or that all or any of the rights, privileges, obligations and liabilities accruing or arising thereunder before the said date, shall remain suspended or shall be enforceable with such adaptations and in such manner as may be specified by the Board."
13. Therefore, from the plain reading of these two parts of sub sections it is abundantly clear that either proceeding as aforesaid shall not lie or be not preceded without the consent of the Board or be suspended or enforceable in such manner as specified by the Board. Therefore, the next question arises what is to be suspended? The suspension is about legal proceedings, contracts etc. Therefore, next question arises from when it will be suspended? Sub-section (1) says that suspension will occur when the enquiry under Section 16 is pending or a scheme under Section 17 is under preparation or consideration or a sanctioned scheme is under implementation or an appeal under Section 25 relating to industrial company is pending. Similarly, under Sub-section (3) where the enquiry under Section 16 is pending or where the scheme is under preparation under Section 17 or during the period for consideration of scheme under Section 18 or where any such scheme is sanctioned for due implementation of the scheme, Board may declare that no operation etc. as above will be taken effect. As per Section 22 of the Act it appears that law itself prescribes for suspension. But as per Sub-section (3) Board may declare the same. Therefore, it is to be considered by this Court whether the same will be governed by Sub-section (1) or Sub-section (3). The petitioner's own case under the affidavit in reply is that Section 22(1) of the Act is applicable to its case. Therefore, the restrictions, if any, in respect of the suit for recovery of money or for enforcement of any security against the industrial company or of any guarantee in respect of the loans or advance granted to the industrial company will be available for the parties against the company under BIFR. That apart, winding up of the company or for execution, distress or the like against any of the properties or for appointment of Receiver will be applicable. Therefore, nothing is available from above part under Section 22(1) which can prevent the workmen from any relief as against such company on the basis of the award or order passed by the Industrial Tribunal Court. Coercive action may not take effect but the same will be applicable in connection with the aforesaid proceedings which has nothing to do in respect of payment of legal dues of a workman who is much sick than a purported sick company. There is no embargo in respect of payment of statutory dues to be paid to a workman under an order or award of the Court. The only embargo is that without the consent of the Board it cannot be done. But if the embargo is not applicable in the case of the workman who has been decided at every stage upto the level of High Court there can not be any legal impediment on the part of the respondent company in withholding the statutory dues.
14. If it arises out of Section 22(3) then there should be a formal order of the Board. Since the petitioner has avoided in saying that whether any order has been passed or not by taking its matter to Section 22(1) it can safely be concluded that there was no such order. Therefore, the period as provided under such sub section will come into play. Such proviso is as follows:
"provided that such declaration shall not be made for a period exceeding two years which may be extended by one year at a time so, however, that the total period shall not exceed seven years in the aggregate."
15. Aggregate seven years cannot be made available from each and every stage of action either under Section 16 or under Section 17 or under Section 18 or any stage or stages thereafter. If it is so, then few decades will expire without revival or rehabilitation of the company and not only the workman by his or her success in interest will also die without recovery of salary etc. Therefore, the aggregate seven years means from the day one if such order is passed. If not, like Section 22(1) it is expected that such long tenure of seven years will be more than enough to get appropriate relief. It is not the intention of the legislature that a company under BIFR will retain its position under it for indefinite period to frustrate the legitimate dues of the others. This is a case of a workman who is much sicker than a purported sick company and if dispute arises in respect of interpretation of two statues made as the beneficial pieces of legislation in between the employer and employee obviously it will go in favour of the employee being representative of the weaker section of the society. As such, there cannot be any obstruction in implementing the order passed by the Tribunal/Court including the writ jurisdiction of this Court in the earlier occasion. In view of the interpretation as above scope and ambit of Sections 22(1) and 22(3) or Section 32 being consequential to the same cannot be made applicable in this issue.
16. Learned counsel appearing for the petitioner relied upon a judgment (Gram Panchayat and Anr. v. Shree Vallabh Glass Works Limited and Ors.) in its paragraph 11 to satisfy the Court that one can approach the Board for permission for recovery of the dues. The Board at its discretion may accord its approval for proceeding against the company. If the approval is not granted, the remedy is not extinguished. It is only postponed. Factually the claim of a Panchayat under the property tax was dealt with by the Supreme Court.
17. He further relied upon a judgment reported in in its paragraph 19 Where under the Division Bench held that proceeding for recovery of money can be made subject to the consent of BIFR as provided under Section 22 of the Act. This observation, however, will not apply to the mere continuation of the proceedings under Payment of Gratuity Act, 1972 nor to the transfer of Provident Fund dues as fairly offered by the respondent Corporation. Therefore, in such case continuation of proceeding was allowed by the Court on the basis of the concession on behalf of the Corporation which is factually distinguishable. However, in paragraph 16 of such judgment it is also held that no disciplinary proceeding was initiated as against the employee.
18. In 2002(1) LLJ 224 (Calcutta Jute Manufacturing Co. Ltd. v. State of West Bengal and Ors.) it was held by a Bench of this Court that recovery of backwages is as good as recovery of money which is given under the meaning of Section 22 of the Act.
19. He also relied upon a judgment reported in 2002 Lab IC 382 (Cement Corporation of India v. Presiding Officer, Central Government, Industrial Tribunal Labour Chandigarh and Ors.) in its paragraphs 27 and 28 whereunder it was held that the sections do not provide that no proceedings ..... distress or the like except proceedings for the recovery of the wages of the workmen shall lie or be proceeded with. However, the Court held therein that recovery certificate issued under Section 33C(1) of the Industrial Disputers Act can only be effective subject to the bar contained under Section 22 of the Act.
20. Learned council appearing for the respondent relied upon various judgments for the purpose of coming into an appropriate conclusion. He relied upon (Deputy Commercial Tax Officer and Ors. v. Corromandal Pharmaceuticals and Ors.). According to the Supreme Court the language of Section 22 is certainly wide. But, in the totality of the circumstances the safeguard is only against the impediment that is likely to be caused in the implementation of the scheme. If that be so, only the liability or amounts covered by the scheme will be taken in by Section 22. So though the language of Section 22 is wide import regarding suspension of legal proceedings from the moment an enquiry is started, till after the implementation of the scheme or the disposal of an appeal under Section 25 it will be reasonable to hold that the bar or embargo envisaged in Section 22(1) can apply only to such of those dues reckoned or included in the sanctioned scheme. Such amounts like sales tax, etc. which the sick industrial company is enabled to collect after the date of sanctioned scheme legitimately belonging to the Revenue, cannot be and could not have been intended to be covered within Section 22 of the Act. Any other construction will be unreasonable and unfair and will lead to a state of affairs enabling the sick industrial unit to collect the amounts due to the Revenue and withhold it indefinitely and unseasonably. Such a construction which is unfair, unreasonable and against spirit of the statute in a business sense should be avoided. It is in implementation of the, scheme wherein various preventive remedial or other measures, are designed for the sick industrial company, steps by way of giving financial assistance etc. By the Government, banks or other institutions are contemplated. In other words, the scheme is implemented or given effect to by affording financial assistance by way of loans, advance or guarantees or relief or concessions or sacrifices by the Government, banks public financial institutions and other authorities. In order to see that the scheme is successfully implemented and no impediment is caused for the successful carrying out of the scheme, the Board is enabling to have a say when the steps for recovery of the amounts or other coercive proceedings are taken against sick industrial company which, during the relevant time acts under the guidance/control or supervision of the Board (BIFR). Any step for execution, distress or the like against properties of the industrial company, or other similar steps should not be pursued which will cause delay or impediment in the implementation of the sanctioned scheme. In order to safeguard such state of affairs embargo or bar is placed under Section 22 against any step for execution, distress or the like or other similar proceedings against the company without the consent of the Board or as the case may be, the appellate authority.
21. In 2000 (1) LLJ 225 (Kusum Ingots and Alloys Ltd. v. Pennar Paterson Securities Ltd. and Ors.) at paragraph 17 therein the Supreme Court categorically held as follows:
"17. In our considered view Section 22 of SICA does not create any legal impediment for instituting any proceedings with a criminal case on the allegations of an offence under Section 138 of the NI Act against a company or its Directors. The sections as we read it only creates an embargo against disposal of assets of the company for recovery of its debts. The purpose of such an embargo is to preserve the assets of the company from being attached or sold for realization of dues of the creditors. The section does not bar payment of money by the company or its directors to other persons for satisfaction of their legally enforceable dues."
22. He cited 1999(81) FLR 234 [N.T.C. (South Maharashtra) Ltd. v. B.N. Jalgaonkar and Ors.] where the Bombay High Court held that Section 22 of the Act in no way would stand in the way of workers making recovery of wages much in the same way as recovery tax by Government as has been laid down by the apex Court in the case of Deputy Commissioner Tax Officer & Ors., .
23. In 1999(82) FLR 186 (Indian Plywood Manufacturing Co. Ltd. v. The Commissioner of Labour and Ors.) a Division Bench of Karnataka High Court held that such rehabilitation cannot be made on the heaps of the skeleton of human beings. Pending rehabilitation the workmen and their families cannot be forced to starvation. The Karnaktaka High Court relying upon Bombay High Court decision observed that the Parliament could never have intended that the industrial unit under the grab of sickness or for any like difficulty may be allowed to shirk its inability to pay the wages to its workers for the work they have done.
24. In 2002(94) FLR 1059 (Mideast India Ltd. v. K.M. Unni and Ors.) Delhi High Court held that there is a catena of judicial pronouncements to the effect that Section 22 of the SICA would not operate as a bar to the payment of dues of workmen-employees following the adjudication of an industrial dispute or determination of dues under the provisions of the Industrial Disputes Act.
25. Gujarat High Court in a reported judgment in 1998(79) FLR 772 (Rajnagar Textile Mills No. 1 v. Textile Labour Association) held that there is no impediment against the claim of the recovery of the wages as the case with regard to the recovery of wages stand on the entirely different footing and such claim stands on a different pedestal in the context of the scope of word 'proceeding' under Section 22.
26. Lastly, he relied on 2002(18) CLR 126 (Sukumar Paper Mills Ltd. v. Presiding Officer, Industrial Tribunal, Punjab, Chandigarh) thereunder the question of limitation of proceeding pending before BIFR was discussed. It was held that a declaration has to be made within seven years in aggregate. Therefore, after the expiry of the period one cannot take the advantage of the same. In the instant case, the admitted position is that the case was not only registered in the year 1992 from the annexure to the petition itself but the rehabilitation scheme under Section 18(4) was sanctioned in the case No. 538/9,2. Therefore, in the grab of review in the year, 2002 the company cannot take the advantage of the situation to frustrate the claim of the respondent/workman.
27. Therefore, upon taking into account all pros and cons of the factual aspects of the matter as well as ratio of the various judgments I, am of the considered view that there cannot be any impediment in implementing the order passed by this High Court on 11th June, 2001 in W.P. No. 1836(W) of 2001 arising out of disputes before the Industrial tribunal as well as before the Labour Court in connection with the release of the wages of the workmen. Having so, there is no other alternative but to implement the same as expeditiously as possible but not beyond the period of one month from the date of communication of this order by this Court.
Thus, the writ petition stands dismissed. No order is passed as to costs.
Prayer for stay is made, considered and refused.
Xerox certified copy will be supplied to the parties within a period of one week from the date of putting requisites for drawing up and completion of the order and for certified copy of the same.