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1997 Supreme(All) 1206
IN THE HIGH COURT OF ALLAHABAD
Aloke Chakrabarti, J.
POSYSHA INDUSTRIES CO.LTD. - Appellant
Versus
COLLECTOR - Respondents
Civil Misc. Writ Petition 29859 Of 1996
Decided On : 10/13/1997
Bharti Sapru, I.S.SINGH, Sharad Verma, Shashi Kant, TARUN AGARWAL, V.B.SINGH
Proceedings for recovery of wages are not covered by Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, and therefore, no consent from the Board for Industrial and Financial Reconstruction (BIFR) is required.
Headnote:
U. P. INDUSTRIAL PEACE (TIMELY PAYMENT OF WAGES) ACT, 1978 - SECTION 3(1) - RECOVERY CERTIFICATE - VALIDITY - SCOPE OF SECTION 22 OF THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985 - INTERPRETATION - APPLICABILITY OF THE ACT OF 1978 TO DISPUTED CLAIMS - DISMISSAL OF WRIT PETITION.
Fact of the Case:
The petitioner, a sick industrial company, challenged the recovery certificate issued under Section 3(1) of the U. P. Industrial Peace (Timely Payment of Wages) Act, 1978 (Act of 1978) for non-payment of wages to its employees. The petitioner contended that the recovery certificate was invalid as it was issued without the consent of the Board for Industrial and Financial Reconstruction (BIFR) as required under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (Act of 1985). The petitioner also contended that the Act of 1978 was not applicable as the claim for wages was disputed and the company had closed its manufacturing activities.
Finding of the Court:
The court held that the recovery certificate was valid and the Act of 1978 was applicable to the case. The court interpreted Section 22 of the Act of 1985 to mean that proceedings for recovery of wages are not covered by the said section and, therefore, no consent from the BIFR is required. The court also held that the claim for wages was not a disputed claim as the petitioner had not terminated the relationship of master and servant with its workmen and had not shown any reason for withholding payment of wages.
Issues: 1. Whether the recovery certificate issued under Section 3(1) of the Act of 1978 was valid in the absence of consent from the BIFR under Section 22 of the Act of 1985? 2. Whether the Act of 1978 was applicable to the case where the claim for wages was disputed?
Ratio Decidendi: 1. The court held that the recovery certificate was valid as the proceedings for recovery of wages are not covered by Section 22 of the Act of 1985 and, therefore, no consent from the BIFR is required. The court relied on the judgment in M/s. Shri Chamundi Mopeds Ltd. v. Church of S. I. T. Association, AIR 1992 SC 1439, which held that eviction proceedings are not covered by Section 22. The court reasoned that the purpose of the Act of 1985 is to rehabilitate the company itself, and this cannot mean that the workmen are to be compelled to continue without payment of wages. 2. The court held that the Act of 1978 was applicable to the case as the claim for wages was not a disputed claim. The court held that a dispute regarding adjudication of disputed facts relating to some claim of wages requires a reference under Section 4 of the U. P. Industrial Dispute Act, but this does not mean that in every case where the employer refuses to pay, the claim has to be described as a disputed claim.
Final Decision: The court dismissed the writ petition, holding that the recovery certificate was valid and the Act of 1978 was applicable to the case.
( 1 ) A recovery certificate dated 22. 5. 1996 under Section 3 (1) of U. P. Industrial Peace (Timely payment of Wages) Act, 1978 (hereinafter referred to as Act of 1978) was issued and in pursuance of such recovery certificate and removal of goods from the petitioners factory premises were challenged by this writ petition. By an application for amendment filed by the petitioner addition of three prayers were made for preparation of inventory of the goods and machines already removed and still remaining in the Factory premises of the petitioner, to open the Factory premises as and when required by the petitioner company and for preparation of an inventory of goods and machines removed from the factory premises and kept at and lying in the premises of certain named parties and for restoration of the said goods.
( 2 ) THE relevant factual background of this case is that the petitioner applied for rehabilitation of the Company as a sick industry before the Board for Industrial and Financial Reconstruction (hereinafter referred to as B. I. F. R.) under Section 15 of the Sick Industrial Companies (Special provision) Act, 1985 (hereinafter referred to as "act of 1985" ). It is also stated that the petitioner closed manufacturing activities in the factory premises of the petitioner at Ghaziabad and assets lying therein were being looked after by the Security Guards only as manufacturing activities had been closed. In the meantime on 26. 10. 1993 the B. I. F. R. passed order under Section 17 of the Act of 1985 declaring the petitioner-company as sick. Draft Scheme of rehabilitation was prepared and was under consideration. Recovery certificate for Rs. 15,58,087. 92/- for wages of the employees had been issued and auction was held on 18. 11. 1995 and such auction was cancelled on 18. 12. 1995 as the balance amount required to be deposited for such auction had not been deposited within time. The auction purchaser filed writ petition No. 470 of 1996 which was ultimately allowed on 22. 7. 1996 holding that the payment of balance amount was made within time. The petitioner received a letter dated 13. 8. 1996 from the Tehsildar, the respondent No. 2 and the gave a reply thereto on 16. 8. 1996. The Tehsildar by letter dated 24. 8. 1996 asked the petitioner to file his objection and the petitioner filed his objection. It is stated that on 12. 9. 1996 goods were being lifted and when the petitioner came to know about this, he moved a writ petition on 13. 9. 1996 and obtained stay order.
( 3 ) THE Collector, Ghaziabad and Tehsildar, Sadar Tahsil, Ghaziabad, being respondent Nos. 1 and 2 filed a joint counter affidavit and separate counter affidavits were filed by the respondent no. 3, Additional Labour Commissioner, Ghaziabad, respondent No. 4, Engineering Karamchari trade Union and the respondent no. 5 M/s. Shriram Trading Company. The petitioner filed rejoinder affidavit.
( 4 ) HEARD the learned Counsel for the petitioner and the learned Counsel representing the respondent Nos. 3, 4 and 5 respectively as also the learned Standing Counsel.
( 5 ) LEARNED Counsel for the petitioner in support of writ petition claiming reliefs urged three contentions. The first contention of the learned Counsel for the petitioner is that in view of the provision of Section 22 of the Act of 1985 the proceeding for recovery could not be held. The second contention of the learned Counsel is that the said Act of 1978 is not available as the claim itself is disputed and Company having closed its manufacturing activities, is not liable to pay wages to the workmen. The third contention of the learned Counsel is that holding of auction and removal of goods of the petitioner-company without notice to the petitioner, was result of malafide and as such are liable to be set-aside.
( 6 ) WITH regard to the first contention, the learned Counsel for the petitioner first placed reliance on various provisions of the said Act of 1985, including Section 22 ther
