2003 (11) TMI 350 - HC - Companies Law

Summary

Issues:
1. Implementation of award by the company pending before BIFR.
2. Suspension of legal proceedings under Sick Industrial Companies (Special Provisions) Act, 1985.
3. Consideration of scheme under SICA and effect on court orders.
4. Mutual settlement between workers and management under SICA.
5. Recovery of back-wages and reinstatement under SICA.

Analysis:
1. The key issue in this case is whether the company, while being under the purview of the Board for Industrial and Financial Reconstruction (BIFR), can implement an award from the Industrial Tribunal and a subsequent notification from the State Labor Department. The petitioner argues that the BIFR had initially deemed the unit non-viable, leading to a winding-up order. However, an appeal to the Appellate Authority resulted in a revival scheme for the company, including provisions for worker payments and mutual settlements.

2. The judgment delves into the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985, emphasizing the suspension of legal proceedings and enforcement of court orders during BIFR proceedings. Section 22 of the Act prohibits coercive actions based on court orders while a scheme is under consideration, ensuring a balance between statutory obligations and company viability assessments.

3. The court addresses the interplay between BIFR proceedings and court orders, highlighting that the suspension of legal actions extends to the period of scheme consideration. It clarifies that the statutory liabilities and worker wages cannot be indefinitely delayed by awaiting scheme approval, emphasizing the importance of timely actions and adherence to legal obligations.

4. The judgment also discusses the role of mutual settlements between workers and management under the SICA framework. It notes that court interventions leading to settlements, such as reinstatement and back-wage exclusions, are permissible within the Act's provisions, ensuring a fair balance between labor rights and company interests.

5. Finally, the court concludes that there is no legal basis to grant the writ petition, dismissing it without costs. The analysis underscores the intricate balance required between statutory provisions, court orders, and company viability assessments under the SICA framework, ensuring a fair and equitable resolution for all parties involved.