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TMI Blog2000 (2) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... isions Act, 1952. The impugned proceeding is an adjudication proceeding passed by the third respondent in exercise of powers conferred under section 7A and the dues payable by the writ petitioner for the period from March 1998 to February 1999, in respect of the petitioner's establishment determined on the basis of materials collected by the second respondent and its subordinate. In fact before the second respondent sufficient opportunity had been afforded to the writ petitioner and on 20-9-1999, the counsel who had appeared for the writ petitioner in the enquiry, accepted the dues arrived at by the second respondent, based upon the enforcement officer's report dated 29-7-1999. The content of the said report has also been accepted by the writ petitioner. In terms of the impugned proceedings a sum of Rs. 17,97,576 is the total contribution due and payable by the petitioner. It is also made clear that the employer would be liable for damages under section 14B of the Act, for belated remittance of contributions. 4. Mr. Dhanasekaran, the learned counsel for the writ petitioner, contended that the writ petitioner had sustained loss during the last two years and it has approached the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the entire facts and there had been no dispute about the quantum of contributions payable by the petitioner. The petitioner had produced a letter from the BIFR to the effect that the petitioner's application has been registered in reference as Case No. 300 of 1999 on 9-9-1999. Excepting registration, there was nothing to indicate that any further proceedings had been proceeded with by the said BIFR, or a proceeding is pending consideration, nor any direction has been issued so far. 10. According to the respondent, passing an order of adjudication under section 7A is not a distress action, which is barred by or prohibited by section 22 of the SICA, as the said provision merely restricts distress action or proceedings for recovery of the amount. The impugned proceeding is only an adjudication proceeding and not a distress action nor an enforcement of the adjudication proceedings. 11. In respect of an earlier recovery order, the petitioner filed W.P. No. 12078 of 1999 and after hearing either side, this Court ordered payment of the amount outstanding in instalments, which instalment the petitioner had paid up to 30-11-1999. The request for modification of the earlier order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded by Mr. V. Vibishanan, the learned counsel appearing for the respondents that section 22 of the SICA is not a bar to passing orders of adjudication nor does section 22 suspend the operation of the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, or the liability to contribute, and what is disabled or prohibited under section 22 being enforcement or recovery of money due from the petitioner by coercive action alone shall not be resorted to by way of execution, distress or the like. What is relied upon is sub-section (1) of section 22. Section 22 reads thus : "22. Suspension of legal proceedings, contracts, etc.--(1) Where in respect of an industrial company, an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956) or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the guidance/control or supervision of the Board (BIFR). Any step for execution, distress or the like against the properties of the industrial company or other similar steps should not be pursued, which will cause delay or impediment in the implementation of the sanctioned scheme. In order to safeguard such state of affairs, an embargo or bar is placed under section 22 of the Act against any step for execution, distress or the like or other similar proceedings against the company without the consent of the Board or, as the case may be, the Appellate Authority. The language of section 22 of the Act is certainly wide. But, in the totality of the circumstances, the safeguard is only against the impediment, that is likely to be caused in the implementation of the scheme...." (p. 10) 16. In Gram Panchayat v. Shree Vallabh Glass Works Ltd. [1991] 71 Comp. Cas. 169 (SC) it has been held thus : "Section 22(1) provides that, in case the enquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration by the Board or any appeal under section 25 is pending, then certain proceedings against the Sick Industrial Company are to be suspe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itation. The words 'any other law' in section 22 cannot, therefore, be read in the manner suggested by learned counsel for the respondents. The Deputy CTO v. Corromandal Pharmaceuticals [1997] 89 Comp. Cas. 1, 11 (SC), judgment dealt with a sick industrial company which was enabled to collect amounts like sales tax after the date of the sanctioned scheme. This Court said, 'such amounts like sales tax, etc. which the sick industrial company is enabled to collect after the date of the sanctioned scheme, legitimately belonging to the Revenue, cannot be and could not have been intended to be covered within section 22 of the Act'. It added that the issue that had arisen before it had not arisen in the case of Vallabh Glass Works Ltd. [1991] 71 Comp. Cas. 169 (SC). It did not appear therefrom or from any other decision of this Court or of the High Courts 'that in any one of them, the liability of the sick company dealt with therein itself arose, for the first time after the date of the sanctioned scheme. At any rate, in none of those cases a situation arose whereby the sick industrial unit was enabled to collect tax due to the revenue from the customers after the sanctioned scheme but t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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