INDIAN PLYWOOD MANUFACTURINGCOMPANY LIMITED DHARWAD Vs. COMMISSIONER OF LABOUR IN KARNATAKA BANGALORE

JUDGEMENT

(1.) AGGRIEVED by the show cause notice dated 8-3-1996 (Annexure-F)directing the appellant to pay the closure compensation totally amounting to Rs. 4,08,43,845/- within a period of 15 days from the date of the receipt of the aforesaid notice and the Certificate (Annexure-H) issued under Section 33-C (l) of the Industrial Disputes Act (hereinafter called 'the Act') dated 27th of July, 1996, authorising the Deputy commissioner, Dharwad, to recover the aforesaid amount, the appellant herein filed a writ petition praying for quashing of the aforesaid notice and certificate with a further prayer restraining the respondents to initiate any proceedings for attachment and sale of the assets and properties belonging to the appellant till the reference stated to be pending before the Board of Industrial and Financial Reconstruction was disposed of.

(2.) THE main ground urged was that in view of the provisions of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter called the '1985 Act'), no recovery could be made from the appellant. The learned Single Judge after referring to various provisions of law applicable in the case and relying upon a judgment of allahabad High Court in Modi Industries Limited v State of Uttar pradesh and Others, dismissed the writ petition vide the order impugned in this appeal.

(3.) THE facts giving rise to the filing of the present Petition are that the appellant-Company is stated to have set up a factory for the manufacture of plywood at Dharwad in the year 1944. Around the year 1993, the appellant-Company is stated to have started sustaining losses due to the shortage of raw material and thus became a sick industrial company as defined under Section 3 (l) (o) of the 1985 Act. The Board of directors of the Company are stated to have made a reference to Board of Industrial and Financial Reconstruction (hereinafter called the 'board'), which was registered as Case No. 53 of 1995. The Board by its order dated 5-10-1995 declared the appellant-Company to be sick industrial Company and appointed Central Bank of India as the operating agency with a direction to prepare a scheme for rehabilitation of the company. It was further contended that due to heavy losses sustained by it, the appellant was not able to provide work and pay wages to its workmen. Conciliation meetings are stated to have been held on 15-7-1995 and 22-7-1995, which were chaired by the Minister of Labour. In the meeting held on 22-7-1995 it was allegedly agreed by and between all the parties including the appellant and the labour represented by the workers union as also the officials of the Labour Department that the factory be closed and the workers be paid the closure compensation. Pursuant to the aforesaid decision, the appellant filed an application to the State Government on 9-8-1995 seeking permission for closure of the factory under Section 25-O of the Act. The State Government did not send any reply within two months from the date of the application, which according to the appellant amounted to deemed permission to close the factory with effect from 10-10-1995. On 9-2-1996, the commissioner of Labour called for certain particulars, which were replied by the appellant. The workers union is stated to have approached the first respondent with a request to grant them closure compensation in response to which the impugned notice-Annexure-F was issued, which is stated to have been appropriately replied vide Annexure-G, but allegedly without looking into the objections, the respondent 1 is stated to have issued impugned certificate-Annexure-H. It is contended that the certificate issued amounted to distress proceedings, which were not permissible in view of the provisions of Section 22 of the Act.