2013 Supreme(Raj) 939
RAJASTHAN HIGH COURT
Alok Sharma, J.
CIMMCO Ltd. - Appellant
Versus
State of Rajasthan & Ors. - Respondents
S.B. Civil Writ Petition Nos. 7372 of 2010.
Decided On : 15-03-2013
For the Petitioner:G.K. Garg, Yash Sharma and Anant Kasliwal, Advocates.
For the Respondent: Manoj Bhardwaj, Counsel for the State and S.D. Khaspuriaya, Addl. A.G.C.
The Sick Industrial Companies (Special Provisions) Act, 1985 is a special law overriding other laws outside the excepted categories of statute detailed under section 32 of the Act of 1985. The Act of 1985 is a self-contained code to ensure revival of sick industries through the due implementation of the sanctioned scheme. The sanctioned scheme under the Act of 1985 is binding on the parties to the scheme.
Headnote:
PAYMENT OF GRATUITY ACT, 1972 - RECOVERY OF GRATUITY - SETTLEMENT UNDER SECTION 18 OF THE INDUSTRIAL DISPUTES ACT, 1947 - SANCTIONED SCHEME UNDER SECTION 18 OF THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985 - INTERPRETATION OF CLAUSE 10.6.1 OF THE SANCTIONED SCHEME - JURISDICTION OF THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR) - WRIT PETITION - QUASHING OF ORDERS.
Fact of the Case:
The petitioner-Company, a sick company declared under the Sick Industrial Companies (Special Provisions) Act, 1985 (Act of 1985), challenged the recovery proceedings initiated against it under the Payment of Gratuity Act, 1972 (Act of 1972) for the recovery of gratuity amount determined by the Controlling Authority under its order dated 4.11.2006. The petitioner-Company contended that subsequent to the order dated 4.11.2006, the workers/employees of the petitioner-Company through their authorized representative and the management of the petitioner-Company have entered into a settlement dated 5.3.2008 referable to section 18 of the Industrial Disputes Act, 1947 (Act of 1947) which has thereafter been incorporated in a sanctioned scheme on 11.3.2010 under section 18 of the Act of 1985 by the Board for Industrial and Financial Reconstruction (BIFR).
Finding of the Court:
The Court held that the settlement dated 5.3.2008 and the sanctioned scheme dated 11.3.2010 under section 18 of the Act of 1985 subsume and override the order dated 4.11.2006 passed by the Controlling Authority under the Act of 1972. The Court further held that the dispute with regard to the interpretation of the provisions of the sanctioned scheme is a subject matter of proceedings only before the BIFR and not before the authority under the Act of 1972 in view of the overriding provisions of section 32 of the Act of 1985.
Issues: 1. Whether the settlement dated 5.3.2008 and the sanctioned scheme dated 11.3.2010 under section 18 of the Act of 1985 override the order dated 4.11.2006 passed by the Controlling Authority under the Act of 1972? 2. Whether the dispute with regard to the interpretation of the provisions of the sanctioned scheme is a subject matter of proceedings only before the BIFR?
Ratio Decidendi: 1. The Court held that the settlement dated 5.3.2008 and the sanctioned scheme dated 11.3.2010 under section 18 of the Act of 1985 subsume and override the order dated 4.11.2006 passed by the Controlling Authority under the Act of 1972. The Court relied on the provisions of section 18(7), 18(9) and 18(12) of the Act of 1985 to hold that the BIFR has the exclusive jurisdiction to review and determine the implementation of the sanctioned scheme. 2. The Court held that the dispute with regard to the interpretation of the provisions of the sanctioned scheme is a subject matter of proceedings only before the BIFR. The Court relied on the provisions of section 32 of the Act of 1985 to hold that the Act of 1985 is a special law overriding other laws outside the excepted categories of statute detailed under section 32 of the Act of 1985.
Final Decision: The Court allowed the writ petitions and quashed and set aside the orders passed by the SDM, Bharatpur, the SDO, Bharatpur, the Recovery Officer and the Controlling Officer under the Act of 1972. The Court also directed the parties to approach the BIFR for clarification on the issue as to whether clause 10.6.1 of the sanctioned scheme dated 11.3.2010 entails payment of gratuity alone or also interest thereon.
JUDGMENT
1. - The issue in the present writ petitions, which are being disposed of by this common order, is fundamentally the illegality of proceedings taken under the Payment of Gratuity Act, 1972 (hereinafter 'the Act of 1972') for recovery of gratuity amount determined by the Controlling Authority under its order dated 4.11.2006 in spite of the fact that subsequent to the aforesaid order, the workers/employees of the petitioner-Company through their authorised representative and the management of the petitioner-Company have entered into a settlement dated 5.3.2008 referable to section 18 of the Industrial Disputes Act, 1947 (hereinafter 'the Act of 1947') which has thereafter been incorporated in a sanctioned scheme on 11.3.2010 under section 18 of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter 'the Act of 1985') by the Board for Industrial and Financial Reconstruction (hereinafter 'BIFR'). The facts of the case are that the petitioner-Company declared lockout on 13.11.2000. On a proper application being made as mandated under the provisions of the Act of 1985, the petitioner-Company was declared a sick company by the BIFR on 21.8.2002. Subsequently, an operating agency was appointed by BIFR and the prospects of the petitioner-Company being revived were under consideration of the BIFR.
2. In the meantime, the workers/employees of the petitioner-Company aggrieved of the non-payment of their gratuity in terms of the Act of 1972 approached the Controlling Authority for payment of due gratuity under section 4 of the Act of 1972 and interest thereon under section 7(3-A) thereof. Vide order dated 04.11.2006, the Controlling Authority under the Act of 1972 was pleased to pass an order directing that the gratuity amount of the workers/employees of the petitioner-Company as computed by it be paid along with interest @ 9% per annum thereon. No appeal against the order dated 4.11.2006 appears to have been filed by the petitioner-Company under the Act of 1972 consequent to which the order dated 4.11.2006 attained finality. Subsequently, owing to non-payment of gratuity amount in spite of the finality of the order dated 4.11.2006, the workers/employees of the petitioner-Company took steps for the recovery of the amount determined by the Controlling Authority.
3. For this purpose, the Controlling Authority appears to have remitted the matter to the District Collector, Bharatpur, who in turn forwarded the requisition to the Sub-Divisional Officer, Bharatpur. The SDO, Bharatpur consequent to the final order dated 4.11.2006 by the Controlling Authority sought to make recoveries of the gratuity amount determined qua each of the workers/ employees along with interest @ 9% per annum thereon.
4. That it appears that following the petitioner-Company having been declared to be a sick company under the order dated 21.8.2002 by the BIFR under the provisions of the Act of 1985, on 5.3.2008, the representative union of the workers/employees of the petitioner-Company entered into a tripartite settlement with the aid of the Labour Commission with the petitioner-Company's management, whereunder it was agreed that for the purpose of revival of the petitioner-Company and its proper and profitable running in future, the workers/employees of the petitioner-Company would make certain scarifies on their dues owing by the petitioner-company and on the receipt of agreed wages due, bonus, leave encashment and gratuity would have no other claim due and outstanding against the petitioner-Company with no dispute on this count in future surviving. Following the settlement dated 5.3.2008 under section 18(3) of the Act of 1947 with regard which there is no dispute, the matter again came to be considered holistically during the working out of a rehabilitation scheme for the petitioner-Company by the BIFR under the Act of 1985. The BIFR vide order dated 11.3.2010 sanctioned a rehabilitation scheme for the petitioner-Company. Under clause 10.6 the
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