JUDGMENT - Dr. D.Y. CHANDRACHUD, J.:---Rule, returnable forthwith. Respondents waive service. By consent taken up for final hearing.

2. The issue involved in the present proceedings is whether an action to recover dues payable under the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952, is maintainable when the employer who is sought to be proceeded against, is an industrial company in respect of whom a proceeding is pending under the Sick Industrial Companies (Special Provisions) Act, 1985. Since the petition involves a lis not merely between the employer, the petitioner before the Court, and the Regional Provident Fund Commissioner and the grant of any relief would impinge upon vital interests of the employees engaged in the industrial undertaking, the Unions representing workmen were impleaded in these proceedings. Accordingly, the Association of Engineering Workers and the Maharashtra Rajya Rashtriya Kamgar Sangh have been impleaded as the Third and the Fourth respondents and the perspective of the workers has been placed for consideration before this Court by their Learned Counsel as well. Since the issue involves a matter of some importance, with the consent of the learned Counsel for the parties, the petition is being heard and disposed of finally by this judgment.

3. On 4th September, 1991, a company by the name of Rallies India Ltd. which was then described as forming a part of the Tata Group of Companies, sold its Engineering Division together with the petitioner, which was a subsidiary, to the H.M.P. Group of Companies. In 1998, the petitioner made a reference before the Board for Industrial and Financial Reconstruction (B.I.F.R.). under section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (S.I.C.A., 1985). On 1st May, 1998, the B.I.F.R. declared the petitioner as a sick industrial company and the Industrial Credit and Investment Corporation of India (I.C.I.C.I.) was appointed under section 17(3) of the Act in order to prepare a rehabilitation proposal after considering the viability of the petitioner. An appeal against the order of the B.I.F.R. was filed by the fourth respondent, the Maharashtra Rajya Rashtriya Kamgar Sangh. By an order dated 12th March, 1999, the appeal was allowed and the order of the B.I.F.R. was set aside. In its order, the Appellate Authority directed that the I.C.I.C.I., which was to work as an Operating Agency under section 16(2) of the Act, shall engage the services of a firm of Chartered Accountants for conducting a special investigation into the audited accounts of the petitioner especially for the five financial years prior to 31st December, 1998. The Appellate Authority directed that after the report was submitted and the objections of the parties were heard, the B.I.F.R. would take a view as to whether or not, the petitioner was a sick industrial company. This order of the A.A.I.F.R. was passed in view of the serious allegations made on behalf of the union representing the workmen that the petitioner was not, in fact, a sick industrial undertaking; that there had been a manipulation of accounts for the financial year ending 31st December, 1998 and that funds had been siphoned off by selling the products of the petitioner to H.M.P. Engineering Ltd., a group company, at prices even below the cost of production. A reference to these submissions is contained in para 3(e) of the order of the A.A.I.F.R. dated 12th March, 1999. As directed by the A.A.I.F.R., the I.C.I.C.I. conducted a special investigative audit in respect of the accounts for the five years ending on 31st December, 1998. The investigative audit by the I.C.I.C.I. found that the petitioner had appointed a company known as 'H.M.P. Engineering (P) Ltd.', which was group company to sell its products in India and more than 70 percent of the total sales of the petitioner were generally sold through H.M.P. The differential between the price at which products were sold to H.M.P.

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