S B PACKAGINGS LTD Vs. PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) The petitioner is a Company, engaged in the manufacturing of Poly Coated Paper, Plastic Film in reels, Plastic Film lacquered, flexible laminated film and Lady Flat Tubing etc. Due to erosion in its net worth, the petitioner approached the Board of Industrial and Financial Reconstruction (for short 'the BIFR') for registration of its case under Section 15(1) of the Sick Industrial Companies (Special Provisions), Act, 1985 (for short 'the SICA') on 23.6.2005. The petitioner is also registered with the Provident Fund Commissioner, Rohtak and had failed to remit the employees' share of provident fund for the months of June, 2002 to May, 2003, July, 2003 to November, 2003, December, 2003 and January, 2004. A penalty of Rs. 5,00,742/- was imposed on the petitioner vide order dated 16.6.2004 passed by the Assistant Provident Fund Commissioner, under Section 14B of the Employees Provident Fund & Miscellaneous Provisions Act, 1952 (for short the EPF Act).

(2.) The grievance of the petitioner is that since the Rehabilitation Scheme is being considered by the BIFR, therefore, the impugned recovery is liable to be stayed in terms of Section 22 of the SICA. Learned counsel for the petitioner relies upon a Single Bench judgment of Madras High Court reported as Essorpe Mills Ltd. v. Central Provident Fund Commissioner and others,2001 104 CompCase 588, to contend that the respondent could not take any distress or coercive proceedings to recover the amount with respect to which the order of adjudication has been passed.

(3.) We have heard learned counsel for the parties and do not find any merit in the present writ petition. In Deputy Commercial Tax Officer and others v. Corromandal Pharmaceuticals and others, 1997 AIR(SC) 2027, while interpreting Section 22 of the SICA, it was held by the Hon'ble Supreme Court that the language of Section 22 is of wide import regarding suspension of legal proceedings from the moment an inquiry is started, till after the implementation of the scheme or the disposal of an appeal under Section 25. It will be reasonable to hold that the bar or embargo envisaged in Section 22(1) can apply only to such of those dues reckoned or included in the sanctioned scheme. Such amounts like sales tax, etc., which the sick industrial company is enabled to collect after the date of the sanctioned scheme legitimately belonging to the Revenue, cannot be and could not have been intended to be covered within Section 22 of the SICA.