THE GENERAL MANAGER, HMT MACHINE TOOLS LIMITED Vs. THE DEPUTY COMMISSIONER, BANGALORE URBAN DISTRICT AND ORS.

JUDGEMENT

(1.) Heard the learned counsel for the petitioner and the learned counsel for the respondents.

(2.) It transpires that the petitioner - company was unable to withstand the global competition and was declared as a sick unit and was later referred to the Board for Industrial and Financial Reconstruction (BIFR) and a revival plan was submitted envisaging multi-dimensional strategy to put the company back on rolls. It was declared as a sick industry in the year 2006 and in the hearing conducted as on 19.2.2015, there was a direction to the State of Karnataka clearly mandating to exempt the company from levy of taxes during the period of 7 years from the date of sanction of the Scheme. There was also a direction to exempt the company from payment of stamp duty on equitable mortgage to be created in favour of the bank for reduction of interest rate on cash credit loan and waiver of property tax amounts due to the Bruhat Bengaluru Mahanagara Palike. The company was also exempted from payment towards the demand raised in respect of pre-deposit for filing appeals, which are finally decided.

(3.) It however transpires that the payments were made belatedly and by virtue of Section 7(3A) of the Payment of Gratuity Act, 1972 (Hereinafter referred to as the 'PG Act', for brevity), the interest was payable in respect of such delayed payments. It is in recovery of such payments, that proceedings had been initiated by impleading the workmen and notice having been issued against the petitioner - company calling upon the petitioner - company to show-cause why the amounts should not be recovered as arrears of land revenue, the present proceedings are filed.