VALLABH GLASS WORKS LIMITED Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) THE 1st petitioner is a public limited company and will be hereinafter referred to as "the company" and has an industrial undertaking at Salwad in Palghar Taluka of Thane District. The 2nd petitioner is the Director of the company. The petitioners were presented with a bill by the Gram Panchayat of Salwad (the 2nd respondent), hereinafter referred to as "the Gram Panchayat" for a sum of Rs. 9,47,539/ -. This amount consists of the property tax of Rs. 8. 77 lakhs and a sum of Rs. 53,700/-, as being expenses of conducting the appeal-an appeal presumably preferred by the company against the claim of the Gram Panchayat. The 1st respondent in the petition is the State of Maharashtra, while the 3rd respondent is the Sarpanch of the Gram Panchayat.

(2.) THE petitioners contend that the recovery of the dues of the Gram Panchayat is stayed by the provisions of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, hereinafter referred to as "the Act". If the company does not pay the bill, the Gram Panchayat is entitled to resort to the provisions of sub-section (7) and sub-section (8) of section 129 of the Bombay Village Panchayats Act, 1958. If resort be had to these provisions, it will amount to coercive procedure for recovering the amounts due. It will be, in other words, distress against the property of the Company, this is what is prohibited by the provisions of section 22 of the Act.

(3.) IN order to appreciate this contention of the company, it is necessary to state certain facts which are not disputed. The company, as mentioned above, is a public limited company and it owns an industrial undertaking in the village of which the 2nd respondent is the Gram Panchayat. The Industrial undertaking manufactures glass. The manufacture of glass is an industry as mentioned in the First Schedule to the Industries (Development and Regulation) Act, 1951. This Industrial undertaking is covered by the provisions of the Act. In view of the precarious financial condition of the company, certain actions have been undertaken under the provisions of the Act. The Board for Industrial and Financial Reconstruction constituted under the Act has appointed the Industrial Credit and Investment Corporation of India Ltd. as the operating agency as defined in clause (i) of section 3 of the Act. By another order, the Board for Industrial and Financial Reconstruction has declared that the company has become a sick industrial company within the meaning of section 3 (i) (o) of the Act. By a further order, the Board has directed that an inquiry be conducted under section 17 of the Act.