CHANDRASEKHARAN NAIR Vs. PUNALUR PAPER MILLS LTD.

JUDGEMENT

(1.) THE Petitioners are workmen of the first Respondent -Company.The factory of the Company is closed.Several of the Petitioners are retired workmen as well.There are Orders from the Gratuity Authority to pay gratuity to them.But,it could not be paid.The 5th Respondent,a lessee of the company who had committed default in paving rent to the company,had effected a payment of Rs.4,84,18,527 towards the dues of Rs.6,06,36,103 after deducting a sum of Rs.1,22,17,676 towards income tax.The Petitioners submit that the amount so paid to the first Respondent or its officer,the third Respondent,shall be recovered back.They also seek a direction to the 7th Respondent -Union of India in that regard.The Petitioners further seek a direction to Respondents 7 and 8 to attach and recover back the said amount from the first Respondent -Company.Thus,the assets of the first Respondent -Company shall be proceeded against,the Petitioners submit,to recover the said amount.As per Section 22 of the Sick Industrial Companies(Special Provisions)Act 1985,during the pendency of a proceeding before the Board or the Appellate Authority,as the case may be,notwithstanding anything contained in the Companies Act or any other law or Memorandum of Articles of Association of the company or any other instrument having effect under the said Act,"no proceeding for winding up of the industrial company or for execution distress or the like against any of the properties of 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.In the nature of the prayers sought for by the Petitioners seeking a direction to attach the amount already paid to the first Respondent -Company at the instance of which an appeal is admittedly pending before the Appellate Authority,it comes within a proceeding referred to as "the like "in Section 22 of the Act to proceed against the property which includes money of the first Respondent as well.In such circumstances,as an appeal is pending to declare the company as a sick concern before the Appellate Authority,no such direction can be issued in terms of Section 22 of the said Act.It is also held by the Supreme Court in Rishabh Agro Industries Ltd.v.P.N.B.Capital Services Ltd.101 Comp.Cases(2000)285 with reference to the provisions in the Act,that: It is also the legislative intention to see that no proceedings against the assets are taken before any such decision is given by the B.I.F.R.for in case the Company's assets are sold,or the Company wound up it may indeed become difficult later to restore the status quo ante.

(2.) IF the Company's assets are proceeded with or attached and recovered from the Company,necessarily it will indeed become difficult to restore the possession.Of course,no proceedings are at present pending before the B.I.F.R.But,admittedly an appeal is pending.Then,going by Section 22 of the Act based on which the decision is applicable to appeal as well,the position remains the same.Accordingly,I am of the view that the direction as sought for cannot be granted.Therefore,the original petitions fail and are dismissed.No costs.