9911796707
TMI Blog2004 (1) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioners and respondent No. 5. However, the moneys so recovered from the wages of the employees was not forwarded or paid to the respondent No. 5. On the application moved by the respondent No. 5, notice was issued by the respondent No. 2 to the petitioners. The petitioner No. 1 was served on 25th September, 2003. The petitioner No. 2 was intimated on various dates between 23rd September, 2003 and 27th September, 2003. The petitioner No. 2 however, did not claim the postal packet containing the notice for appearance. The petitioner No. 7 was served on 22nd September, 2003. The petitioner Nos. 3 and 4 were served on 29th September, 2003. The petitioners 5 and 6 were served on 30th September, 2003. Appearance was put up on behalf of petitioner No. 1. On hearing the parties present, respondent No. 2 passed an order on 1st October, 2003 after proceeding ex parte against the parties who had not appeared and issued a certificate in the sum of Rs. 1,04,95,702. 2A. The petitioner Nos. 2, 5, 6 and 7 preferred a Revision Application before the respondent No. 3. The petitioner No. 1 and some other petitioners in the petition who were not revision petitioners were added as respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the Directors they being the Employer. It is then pointed out that the contention raised on behalf of the petitioners that considering section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 the respondent No. 2 could not proceed with the proceedings is devoid of merit. There was no bar on respondent No. 2 proceeding with the proceedings even considering section 22 and further also proceeding in execution as what is sought to be recovered are amounts which the petitioner No. 1 deducted from the wages of its employees and are, therefore, "wages", which the petitioner No. 1 was to pay to respondent No. 5. It is, therefore, contended that the provisions of section 22 would not apply to the facts of the present case. It is also pointed out that no relief has been sought by the petitioners to challenge the orders passed by the 2nd and 3rd respondents in the present petition. Even before the 3rd respondent the petitioner No. 1 as also the petitioner Nos. 3 and 4 had not challenged the order passed by the 2nd respondent. It would, therefore, not be open to them for the first time to challenge the order in the Writ Petition. All the petitioners, it was contended, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e would fall under the expression "execution, distress or the like against any of the properties of the Industrial Company." The section further provides that no suit for the recovery of money or for enforcement of any security against Industrial Company or of any guarantee in respect of any loans, advances granted to the industrial company shall lie or be proceeded with further except with the consent of the Board or as the case may be, the Appellate Authority. Insofar as the petitioner No. 1 is concerned, as pointed out earlier, the proceedings under section 49 not being a suit section 22 would not be applicable. Insofar as the petitioners 2 to 7 are concerned though they are directors the proceedings are not in respect of any guarantee which they had given to the petitioner No. 1 towards any loans or advances granted to the industrial company. The proceedings, therefore, against the petitioner Nos. 2 to 7 cannot be stayed by virtue of section 22 of the Act but could be proceeded with unlike the earlier part of the section which provides that no proceedings for winding up of the industrial company or for execution distress or the like against any of the properties of the Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rehabilitation of an industry workers must be denied their legitimate dues. Even in a case of winding up, Parliament realising the need to protect the workers has made them pari passu charge holders with secured creditors by introducing section 529-A and amending sections 529 and 530 of the Companies Act. In these circumstances workers cannot be put in a worse position than that of a company which is being wound up." In this situation if the amount cannot be recovered from the company the consequences would be that though the petitioner No. 1, deducted the amount from the wages of its employees till such time the proceedings before BIFR were completed or BIFR permitted respondent No. 5 to proceed, the moneys could not be recovered from petitioner No. 1. In our opinion section 22 would not be attracted in such cases as what is sought to be recovered are wages which were deducted from the employees and not remitted to respondent No. 5 in terms of the instructions of the workmen. Another single Judge of this Court in the matter of payment of gratuity in the case of Modistone Ltd. v. Dy. Commissioner of Labour 1999 (II) CLR 371 held that gratuity payable would not attract the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he salary or wages payable to him by the employer, such total amount payable to the society and in such instalments as may be specified in the agreement and to pay to the society the amounts so deducted in satisfaction of any debt or other demand of the society against the member. A copy of such agreement duly attested by an officer of the society shall be forwarded by the society to the employer. (2) On receipt of a copy of such agreement, the employer shall, if so required by the society by a requisition in writing, and so long as the total amount shown in the copy of the agreement as payable to the society has been deducted and paid to the society, make the deduction in accordance with the agreement and pay the amount so deducted to the society, as if it were a part of the wages payable by him as required under the Payment of Wages Act, 1936 on the day on which he makes payment. (3) If after the receipt of a requisition made under the foregoing sub-section, the employer at any time fails to deduct the amount specified in the requisition from the salary or wages payable to the member concerned, or makes default in remitting the amount deducted to the society, the employer sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as deducted from the salary of the workmen. The learned judge further held that the employer under section 49(3) who deducts certain amounts from the wages cannot contend that in view of the take over he should be exonerated from the consequences of not remitting moneys which belonged to the workmen. If the above principle is also kept in mind it is clear that section 49 of the Act which refers to the expression employer must be read in the widest possible term. The Legislature the learned Judge held has not used the word company in section 49(1), but used the word employer who deducts certain amounts from the wages of the employees to be paid over to the workers society and it is for this very reason that in section 49(2) there is a reference to the Payment of Wages Act, 1936 which clearly indicates that the amount deducted by the employer constitutes the wages under the Payment of Wages Act. The learned Judge further held that the ultimate control of the company which is the owner of the establishment of the factory vests in the Directors and in the absence of nomination the Directors could be held jointly and severally responsible for no payment of the dues of the workmen. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner No. 1 and not by petitioner Nos. 2 to 7. It is, therefore, contended that the petitioner No. 1, who had not challenged the order before the Revisional Authority and considering the admission by its own directors cannot now contend that the amount is not due and payable. Apart from that it is pointed out that the petitioners 2 to 7 also would be estopped from contending that the said amount is not due and payable considering their own admission and the material on record as reflected in the order dated 17th September, 2003 that the amount is due and payable. It is, therefore, pointed out that it will be futile exercise to remand the matter back to the respondent No. 2 for reconsideration. Having heard counsel on this aspect in our opinion what would emerge is that the petitioner Nos. 1, 2 and 7 were duly served and consequently they can have no grievance that they were not served. They did not avail of the opportunity. Petitioner No. 1 had also not challenged the order in revision. Insofar as respondent Nos. 2 and 7 are concerned, they also choose not to appear though served. In the suit filed by them there are averments that petitioner No. 1 had deducted the amounts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of attachment against the petitioner Nos. 1, 2 and 7 cannot be interfered with. Insofar as the petitioner Nos. 3 to 6 are concerned considering the earlier finding that they are liable along with the petitioner No. 1 and as the liability of the petitioner No. 1 has been established and as the contention of the petitioner Nos. 1, 2 and 7 is being rejected, it would be proper that the order of attachment continues also against the assets of petitioner Nos. 3 to 6 till such time the matter is decided by the respondent No. 2 and for a further period thereafter which will be set out in the direction to be issued. 9. For all the aforesaid reasons we are of the view that the reliefs as sought by the petitioner Nos. 1, 2 and 7 will have to be rejected. Insofar as the petitioner Nos. 3, 4, 5 and 6 the petition will have to be partly allowed. In the light of the above the following order : ( a )Relief in terms of prayer clause ( b ) is rejected. The provisions of SIC (SP) Act will not apply. ( b )The orders passed by respondent Nos. 2 and 3 insofar as petitioners 1, 2 and 7 are confirmed. ( c )The orders dated 1st October, 2003 and 13th November, 2003 insofar as the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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