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TMI Blog2009 (3) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Constitution of India, if not extended, the armless man's life would be further put in peril. As I have already concluded, this is a very appropriate situation where the power under article 226 of the Constitution of India should be exercised in favour of a poor litigant like the petitioner. Writ petition is allowed. Respondents Nos. 1 and 2 are directed to recover the amount as per the certificate issued by the Commissioner in accordance with the provisions of the Revenue Recovery Act, 1890 expeditiously, preferably within three months from the date of receipt of a copy of this order. - WP NO 531 OF 2008 AND M.P. NO 1 OF 2008 - - - Dated:- 4-3-2009 - S. NAGAMUTHU, J. S. Ayyathurai for the Petitioner. Mrs. Malarvizhi Udhaya Kumar for the Respondent . JUDGMENT S. Nagamuthu, J. Whether enforcement of an award made under the Workmen's Compensation Act, 1923, can be stalled by the employer by taking re-course to section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. 2. A company which has become sick wants to revive ; whereas a poor workman who has fallen sick struggles to survive ; revival or survival, 1 which overtake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de in No. 333 of 2001 dated July 9, 2002 and also a letter from the third respondent to' the second respondent dated January 28, 2009, wherein the third respondent has stated that the award cannot be satisfied without further orders from the* BIFR. Learned counsel has also produced a report from the second respondent, expressing his inability to recover the amount. 7. In order to appreciate the legal position on this subject, at first, it would be useful to examine the scheme of the Workmen's 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 workman, 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 4A(1) of the Act provides, "Compensation under section 4 shall be paid as soon as it falls due". It also provides "In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he industrial company or for execution, distress or the like against any of the properties of the industrial company or' for the appointment of a receiver in respect there of and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance 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." 11. The scope and amplitude of section 22 of the SICA in relation to various other special enactments came to be considered by various High Courts and the hon'ble Supreme Court on several occasions. At this juncture, it would be worthwhile to analyse some of those judgments. 12. In. Deputy Commercial Tax Officer v. Corromandal Pharmaceuticals [1997] 89 Comp. Cas. 1 (SC) ; [1997] 105 STC 327, in the concurring judgment of hon'ble Mr. Justice B. P. Jeevan Reddy, his Lordship has observed as follows (page 12) : "It is also a well-known fact that the proceedings before the Board for Industrial and Financial Reconstruction take a long time to conclude and all the while the protective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on hand, in the order of the BIFR, it is not known as to whether the compensation awarded in favour of the petitioner has been, included in the scheme or not. In the absence of any such clear material on record, I cannot hold that section 22 of the SICA would be an embargo for the petitioner to enforce the award. 15. Yet another principle laid down by the hon'ble Supreme Court in the same judgment is that the money collected by the company from the consumers towards tax belongs to the Government and the same cannot be withheld by the company, either sick or non sick. Applying the said principle to the Workmen's Compensation Act, it needs to be examined-as to whether the money awarded by way of compensation becomes the money of the workman as soon as the adjudication is over. I will discuss about the same later. 16. Corromandal Pharmaceuticals case [1997] 89 Comp Cas 1 (SC) ;.[1997] 105 STC 327, came up for consideration before the hon'ble Supreme Court in Tata Davy Ltd. v. State of Orissa [1998] 93 Comp Cas. 1 ; AIR 1998 SC 2928. In the said judgment, distinguishing the facts involved in Corromandal Pharmaceuticals case [1997] 89 Comp Cas 1 (SC); [1997] 105 STC 327 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in paragraph No. 8 it has Keen held as follows (page 453) : "It is very clear that the pre-requisites or conditions precedent set out in section 22(1) are totally wanting in the facts of the present case and there is no question of defeating the claim with regard to the wages and work on the basis of the provisions of section 22. Despite the wide import of the word 'proceeding' as has been given by the Supreme 'Court in the judgment delivered in Maharashtra Tubes Ltd. v. State Industrial and Investment Corporation of Maharashtra Ltd. [1993] 78 Comp Cas 803, this court does not find that the impugned orders passed by the Labour Court and the Industrial , Court with regard to the wages due and the work with reference to the agreement dated May 24, 1983, can be set aside so as to defeat the claim of the respondent association. On the basis of the provisions of section 22 of the Act as aforesaid, the impugned orders cannot be quashed and set aside and the embargo under section 22 does not apply to the cases, where the claim is with regard to the wages and on the basis of the ratio of the Bombay High Court's judgment which has been rendered after considering the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecution of distress proceedings or the appointment of the Receiver in respect of the property of the company. The recovery of money or for enforcement of any security against the company or any guarantee in respect of any loan or advance guaranteed to the company cannot be restored to by way of suit in a civil court. The impugned notice and recovery certificate cannot be termed to be the recovery of money by way of suit. Being conscious of this position of law, learned counsel for the appellant has tried to impress upon us that the amount sought to be recovered was distress and the recovery being effected in execution proceedings was not permissible. The word 'distress' used in section 22 of the 1985 Act has to be read ejusdem generis to the words, 'no proceeding for winding up execution, distress or the like against any of the properties of an industrial company." 23. In Modistone Ltd. v. Deputy Commissioner of Labour [1999] 2 LLJ 1043, Justice A. P. Shah, of the Bombay High Court (as he then was) has held as follows : "Section 22(1) of the SICA would not operate in the field of payment of wages, gratuity and other statutory benefits payable to the workmen." 24. In y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including various judgments of the hon'ble Supreme Court in extensio, a Full Bench of this court in Gowri Spinning Mills (P.) Ltd. v. Assistant Provident Fund Commissioner [2006] 134 Comp Cas 33 ; [2006] 5 CTC 1, has held as follows (page 58) : "For all the aforesaid reasons, we are of the considered view that the provident fund dues under the EPF Act are not covered by section 22(1) of the SICA and the provident fund benefits which the employees are entitled to cannot be placed on the same footing as taxes of the Government or dues of other commercial venture or dues to corporate or like others. In the result, Writ Appeals Nos. 173, 230 and 583 of 2006, as well as W. P. Nos. 41166 of 2005 and 1662 of 2006 are dismissed with costs. The appellants are given three months time to make payment of the provident fund dues as per the determination made by the Provident Fund Authorities." 28. By a close reading of all the above judgments and the Full Bench judgment of this court, the following principles could be culled out : (i) Any amount which had already fallen due and covered by the scheme or any proceeding under the SICA will fall within the embargo of section 22 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form part of the day-to-day operation of the company. Surely, a compensation payable to a workman under the Workmen Compensation Act does form part of the day-to-day operation of the company. As I have already stated, as soon as there is an adjudication order passed by the Commissioner for Workmen's Compensation, the amount falls due. As reflected in section 4A and various other provisions of the Workmen's Compensation Act, as soon as the amount falls due, the company is liable to pay the same to the workman concerned. Even if an appeal is sought to be made challenging the award, the employer is required statutorily to deposit the entire compensation awarded as a condition precedent. These provisions would go to indicate that as soon as the amount becomes due, though the money is retained by the company without making immediate payment, the money belongs to the workmen. Therefore, as held by the Full Bench of this court in Gowri Spinning Mills (P.) Ltd. v. Assistant Provident Fund Commissioner [2006] 134 Comp Cas 33 ; [2006] 5 CTC 1, since the compensation amount belongs to the workmen, though it is withheld or retained by the employer, section 22(1) of the SICA cannot place a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying for justice. As I have already held, the moment, the compensation amount falls due, it becomes the amount of the workmen. The company either sick or non-sick has no right to retain the said amount without paying the same. Having regard to all the above, I do not have even a semblance of hesitation to hold that section 22(1) of the SICA shall not put an embargo on the recovery proceedings initiated under the Revenue Recovery Act, 1890 on the basis of a certificate issued under section 31 of the Workmen's Compensation Act. 34. Now, let me refer to the order of the BIFR dated July 9, 2002. In paragraph 10(k) of the order the Board has directed as follows : "The company shall not dispose of, lease out, encumber or alienate in any way any of its fixed or current assets without specific prior approval of the BIFR and the charge-holders under section 22A of the Act. However, the current assets could be utilised for running day-today operations, subject to keeping proper records thereof and routing all transactions through the account with the company's financing bank only." 35. The above clause in the BIFR order would go to show that the BIFR has given free hand to the comp ..... 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