L.P.A No. 865 of 2009 (O&M) ::1:: IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH L.P.A No. 865 of 2009 (O&M) Date of decision : August 9th, 2010 M/S Arihant Threads Ltd, ...... Appellant v. Employee's State Insurance Corporation and another, ...... Respondent(s) *** CORAM : HON'BLE MR. JUSTICE MUKUL MUDGAL, CHIEF JUSTICE HON'BLE MR.JUSTICE AJAY TEWARI *** Present : Mr. Anand Chhibbar, Advocate for the appellant. Mr. Brijeshwar Bhalla, Advocate for the respondents. *** 1. Whether Reporters of Local Newspapers may be allowed to see the judgment ? 2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest ? *** MUKUL MUDGAL, CHIEF JUSTICE This appeal has been filed against the judgment of the learned Single Judge dismissing the writ petition challenging the notice to show cause why warrant of arrests should not be issued (against one of the Directors of the petitioner-company) for non-payment of dues of Rs.31,25,604/- representing arrears due towards payment of Employee's State Insurance Corporation, interest and penalty. The case of the appellant was that the appellant firm having been declared a sick company by the Board for Industrial and Financial L.P.A No. 865 of 2009 (O&M) ::2:: Reconstruction (BIFR), the said amount could not be recovered under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short “the Act”). The learned Single Judge, relying upon a Division Bench judgment of the Bombay High Court reported as Ralliwolf Limited v The Regional Provident Fund Commissioner-I, 2001(2) SCT 873, (relating to dues of the Provident Fund), held that the dues under the Employees State Insurance Act, 1948 would not be covered under Section 22 of the Act. Learned Single Judge also noticed that the appellant had straightway challenged the notice without taking recourse to the alternative remedy. Counsel for the appellant has vehemently argued that the judgment of the Bombay High Court has since been overtaken by various judgments of the Hon'ble Supreme Court wherein dues under various Tax Laws, Civil Court decrees and Awards under the Arbitration Act have been held to be covered by Section 22 of the Act. Counsel for the respondents, apart from defending the judgment of the learned Single Judge, has also argued that there was yet another ground on the basis of which the writ petition was liable to be dismissed; viz that the noticee (the Director) had never raised any challenge to the notice. Developing the point further, he stated that the appellant and the Director being two independent legal entities, the said notice could not be challenged by the appellant but only by the noticee. Counsel for the appellant has sought to dislodge the above argument by asserting that since the dues related to the appellant-company, challenge could be mounted by the appellant-company. In our considered view, this appeal deserves to be dismissed in L.P.A No. 865 of 2009 (O&M) ::3:: any case on the twin grounds that only a notice was challenged and that too not by the noticee. Apart from this, the conduct of the appellant is most telling. On 11.2.2010, the following order was passed :- “ Counsel for the appellant states that the principal amount payable under the ESI contribution has been fully paid. However, counsel for the respondents rebuts this plea. Both the parties are directed to file statement of accounts before the next date of hearing. List again on 3.3.2010.” Thereafter, on 4.5.2010 the following order was passed :- “ Pursuant to order dated 11.02.2010, the respondents have filed their statement of account. However, the appellant has failed to do the needful and seeks time to comply with the order. Three weeks time is granted to do the needful. In the meanwhile, learned counsel for the appellant says that the principal amount demanded by the respondents shall be paid by the appellant within a period of three weeks from today. List again on 27.07.2010.” At the time of arguments, however, counsel for the appellant has fairly stated that the appellant had not deposited the principal amount and the appellant, thus, failed to honour the commitment given to this Court on 4.5.2010. In view of these stark facts, we do not propose to dilate upon the point whether dues under the ESI Act would be subject to the provisions L.P.A No. 865 of 2009 (O&M) ::4:: of Section 22 of the Act. This issue cannot be considered at this stage and in these proceedings as the impugned notice was issued only to the Directors of the Company and not the company who has filed this appeal. Consequently, upholding the judgment of the learned Single Judge, this appeal is dismissed with no order as to costs. As the main appeal has since been dismissed, all the pending civil miscellaneous applications, if any, also stand disposed of. ( MUKUL MUDGAL ) CHIEF JUSTICE ( AJAY TEWARI ) August 9th, 2010. JUDGE `kk'