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2009 Supreme(Mad) 665

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S. NAGAMUTHU
K. Logachandran
Versus
The District Collector, Salem & Others
Writ Petition No. 531 of 2008 & M.P.No.1 of 2008
Decided on : 04-03-2009

The main legal point established in the judgment is that the embargo under Section 22(1) of the Sick Industrial Companies Act 1985 does not apply to the recovery of workmen compensation, emphasizing the workmen's right to timely compensation and the employer's obligation to pay the same.

Headnote:

Workmen Compensation Act - Enforcement of award - Section 22(1) of Sick Industrial Companies Act 1985 - Section 3, 4(A), 31 of Workmen Compensation Act - Summary of Acts and Sections: The court discussed the provisions of the Workmen Compensation Act, emphasizing the employer's liability to pay compensation as soon as it falls due and the authority's power to recover the amount as arrears of land revenue. The court also analyzed Section 22(1) of the Sick Industrial Companies Act 1985 and its scope in relation to various other special enactments, citing multiple judgments to establish the legal principles governing the enforcement of awards and recovery of dues from sick industrial companies.

Fact of the Case:

A workman lost his right arm at work and was awarded compensation under the Workmen Compensation Act. The employer, a sick industrial company, refused to pay citing Section 22(1) of the Sick Industrial Companies Act 1985. The workman sought the court's direction to recover the amount.

Finding of the Court:

The court held that the compensation payable to a workman is a statutory benefit and does not fall within the embargo of Section 22(1) of the Sick Industrial Companies Act 1985. It emphasized the employer's obligation to pay compensation as soon as it falls due and directed the authorities to recover the amount expeditiously.

Issues: Enforcement of workmen compensation award against a sick industrial company and the applicability of Section 22(1) of the Sick Industrial Companies Act 1985.

Ratio Decidendi: The court established that the embargo under Section 22(1) of the Sick Industrial Companies Act 1985 does not apply to the recovery of workmen compensation, emphasizing the workmen's right to timely compensation and the employer's obligation to pay the same.

Final Decision: The court allowed the writ petition and directed the authorities to recover the compensation amount as per the certificate issued by the Commissioner in accordance with the provisions of the Revenue Recovery Act, preferably within three months.

Judgment

Whether enforcement of an award made under the Workmen Compensation Act can be stalled by the employer by taking re-course to Section 22(1) of the Sick Industrial Companies Act (Special Provision) 1985;

A company which has become sick wants to revive; whereas a poor workman who has fallen sick struggles to survive; Revival or Survival?, which overtakes the other?

Seeking answer to these questions, a poor workman who has lost his right arm while at work 10 years ago, knocks at the doors of this Court for justice.

2. The petitioner/workman, working in the third respondent Industry, lost his right hand while at work in the year 1998. On a claim made by him, the Commissioner for Workmen Compensation passed an award on 03.05.2001, awarding a sum of Rs.41,137/- payable by the third respondent herein with interest at the rate of 12% per annum from the date of the accident if the amount was not deposited within 30 days from the date of receipt of a copy of the award. The third respondent did not pay the amount. At the instance of the petitioner, the Commissioner for Workmen Compensation issued a Revenue Recovery Certificate under Section 31 of WC Act on 28.09.2005 to the first respondent and the first respondent in turn directed the second respondent, by an order dated 29. 2006, to recover the amount. The second respondent, thereafter, by his proceeding dated 012. 2006 directed the third respondent to deposit the amount in Court. But the third respondent, by its letter dated 28.01.2009, informed the second respondent that the third respondent-Company had become sick and the same was so declared by BIFR by order dated 09.07.2002 under the provisions of Sick Industrial Companies (Special Provision) Act 1985 (hereinafter referred to as "SICA"). Based on the said letter, the second respondent has expressed his inability to recover the amount from the third respondent. It is in these circumstances, the petitioner has come forward with the present writ petition seeking appropriate direction to the respondents 1 and 2 to recover the amount.

3. It is contended by the learned counsel for the petitioner that Section 22(1) of SICA cannot operate against an award made under the Workmens Compensation Act (hereinafter referred to as "WC" Act). He relies on a Full Bench Judgment of this Court in Gowri Spinning Mills (P) Ltd. rep. by the Managing Director, Vs Assistant Provident Fund Commissioner and another reported in 2006(5) CTC 1.

4. The third respondent has not made appearance despite service of notice. The learned Special Government Pleader appearing for respondents 1 and 2 has produced a copy of the order of B.I.F.R. made in No.333 /2001 dated 7. 2002 and also a letter from the third respondent to the second respondent dated 28.01.2009, wherein the third respondent has stated that the award cannot be satisfied without further orders from B.I.F.R. The learned counsel has also produced a report from the second respondent, expressing his inability to recover the amount.

5. In order to appreciate the legal position on this subject, at first, it would be useful to examine the scheme of Workmens Compensation Act. Admittedly, it is a piece of Labour Welfare Legislation providing for payment by certain class of employers to their workmen of compensation for the injury by accident. Section 3 of the Act provides that in case of any personal injury caused to a workmen, by accident, arising out of and in the course of employment, his employer shall be liable to pay compensation in accordance with the provisions of the Act. Section 4(A) of the Act provides, "Compensation under Section 4 shall be paid as soon as it falls due". It also provides " in case where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts and such payment shall be deposited with the Commissioner or made to the Workman as the case may be without pre



















































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