1999 (6) TMI 416 - HC - Companies Law

Summary

Issues:
1. Interpretation of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985.
2. Enforcement of recovery certificate issued by the Labour Court against a sick industrial company.
3. Conflict between provisions of the Industrial Disputes Act and the Sick Industrial Companies Act regarding recovery of dues.

Analysis:
1. The petitioner sought a direction to the Collector to initiate proceedings under the Bombay Land Revenue Code against the respondent based on a recovery certificate issued by the Labour Court. The respondent argued that as a sick industrial company under the SICA, recovery proceedings were stayed under Section 22, preventing enforcement of the Labour Court's order.

2. Section 22 of the SICA suspends legal proceedings against industrial companies under certain conditions. The court analyzed the provision, emphasizing that it bars winding up, distress, or receiver appointments against the company's properties without consent. However, it noted that the word "distress" should not prevent workmen from recovering their wages, as per Section 33C of the Industrial Disputes Act. A previous case decision was cited to support the interpretation.

3. The respondent contended that the recovery certificate amounted to distress proceedings, prohibited under Section 22. However, the court disagreed, citing a Karnataka High Court decision that highlighted the distinct purposes of the Industrial Disputes Act and the SICA. The court held that the SICA did not curtail the rights of workmen to claim their dues under the Industrial Disputes Act.

4. The court examined the minutes recorded by the Bench of the BIFR, which clarified that it did not restrain payment of workers' dues. This clarification undermined the respondent's argument based on Section 22 of the SICA. Consequently, the court allowed the petition, directing the initiation of proceedings to recover the dues from the respondent as per the Labour Court's order.

5. The judgment concluded by allowing the petition and directing the respondent to initiate proceedings under the Bombay Land Revenue Code to recover the dues owed to the petitioner. The court emphasized the importance of honoring the Labour Court's order and ensuring the timely payment of the petitioner's wages.

This detailed analysis of the judgment highlights the key legal issues, interpretations of relevant provisions, and the court's reasoning leading to the decision in favor of the petitioner.