Case: The New Phaltan Sugar Works Limited &amp; Others Vs. The State of Maharashtra &amp; Others

only make a reference to Exhibit B which are proceedings for attachment. In other words there is no challenge in so far as to the orders of 2nd and 3rd respondents are concerned. It is then pointed out that the Revision preferred against the orders of the 2nd respondent was only by petitioners 2, 5, 6 and 7. The petitioner Nos. 1, 3 and 4 had not challenged the same. The order passed against them by the 2nd respondent has become final. It would not, therefore, be open to the said petitioners who had not challenged the order in Revision, for the first time to challenge the said order before this Court. On facts it is pointed out that the petitioner No.1 was served on 25th September, 2003 and was represented. Similarly, the petitioner No.2 was served as also petitioner No.7. These petitioners chose not to remain present before the 2nd respondent. They cannot now make a grievance assuming that they are allowed to do so for the first time before this Court, even though such ground is not taken in the petition, to contend that they had no opportunity. They were duly served and chose not to remain present and consequently the proceedings against them have proceeded exparte. Apart from that it is pointed out that the case of petitioners 2 to 7 in the Civil Suit was not of denial that the amount was not due and payable but their contention was that the said amount was due and payable by the petitioner No.1 and not by petitioner Nos. 2 to 7. It is, therefore, contended that the petitioner No.1, who had not challenged the order before the Revisional Authority and considering the admission by its own directors cannot now contend that the amount is not due and payable. Apart from that it is pointed out that the petitioners 2 to 7 also would be estopped from contending that the said amount is not due and payable considering their own admission and the material on record as reflected in the order dated 17th September, 2003 that the amount is due and payable. It is, therefore, pointed out that it will be futile exercise to remand the matter back to the respondent No.2 for reconsideration.Having heard Counsel on this aspect in our opinion what would emerges is that the petitioner Nos. 1, 2 and 7 were duly served and consequently they can have no grievance that they were not served. They did not avail of the opportunity. Petitioner No.1 had also not challenged the order in revision. In so far as Respondent Nos. 2 and 7 are concerned, they also choose not to appear though served. In the suit filed by them there are averments that petitioner No.1 had deducted the amounts and not remitted the amounts to respondent No.5. The challenge by these petitioners that the order against them is liable to be set aside must be rejected.That, however, cannot be said against the petitioners 3 to 6. From the dates narrated earlier it is clear that the respondent No.2 proceeded without satisfying himself that the said petitioners were duly served. In fact the petitioners 5 and 6 were served on 30th September, 2003 that is after the date of hearing whereas the petitioners 3 and 4 were served on the same date of hearing. There is nothing in the record to indicate whether the respondent No.2 had notice that the petitioners 3 and 4 were served. The order is so far as those petitioners are concerned, therefore, would be liable to be set aside.Another argument which needs to be noted is, that considering the amount involved the matter against all the petitioners is liable to be set aside. As noted earlier the petitioner No.1 never challenged the order passed by the respondent No.2 before the 3rd respondent. Even before this Court the petitioner No.1 has not disputed that the amount claimed is not due and payable. In paragraph 5 on the contrary the contention is that on account of various reasons the conditions of petitioner No.1 was affected seriously. The other aspect of the matter is that the Directors who represent the petitioner No.1. i.e. the petitioner Nos. 2 to 7 in the suit filed by them and which is adverted to earlier being Suit No.339 of 2003 have not denied that the said amount is not due and payable. Their only contention is that it is the petitioner No.1 who is liable and not them. In these circumstances and considering this aspect of the matter in so far as the petitioner Nos. 1, 2 and 7 are concerned who have been duly served it will not be possible to interfere with the finding in so far as the amount due and payable is concerned. Even in respect of the petitioner Nos. 3, 4, 5 and 6 it will be open to the respondent No.5 to contend before the Recovery Officer that they are bound by the admission made in the suit and that an order accordingly be passed in terms of the admission. It is, however, not necessary for this Court presently to hold that amounts to admission on the part of the said petitioners considering that the matter would be alive before the respondent No.2.8. The only other issue is of attachment. The order of attachment against the petitioner Nos.1, 2 and 7 cannot be interfered with. In so far as the petitioner Nos. 3 to 6 are concerned considering the earlier finding that they are liable along with the petitioner No.1 and as the liability of the petitioner No.1 has been established and as the contention of the petitioner Nos. 1, 2 7 is being rejected, it would be proper that the order of attachment continues also against the assets of petitioner Nos. 3 to 6 till such time the matter is decided by the Respondent No.2 and for a further period thereafter which will be set out in the direction to be issued.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]5. At the outset it may be pointed out that to consider Section 22 of the S.I.C. (S.P.) Act, Section 22 must be attracted. In the instant case the petitioner No.1 is a company and the petitioner Nos. 2 to 7 are its Directors. The proceedings under Section 49 are not proceedings by way of a suit. At the highest the orders passed by the 2nd and 3rd respondents are sought to be executed and if Section 22 is applicable would fall under the expression execution, distress or the like against any of the properties of the Industrial Company. The Section further provides that no suit for the recovery of money or for enforcement of any security against Industrial Company or of any guarantee in respect of any loans, advances granted to the 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 so far as the petitioner No.1 is concerned, as pointed out earlier, the proceedings under Section 49 not being a suit Section 22 would not be applicable. In so far as the petitioners 2 to 7 are concerned though they are directors the proceedings are not in respect of any guarantee which they had given to the petitioner No.1 towards any loans or advances granted to the industrial company. The proceedings, therefore, against the petitioner Nos. 2 to 7 cannot be stayed by virtue of Section 22 of the Act but could be proceeded with unlike the earlier part of the Section which provides that no proceedings for winding up of the industrial company or for execution distress or the like against any of the properties of the Industrial Company. There is no similar provision in so far as guarantors are concerned by which the proceedings for execution cannot be proceeded with. Therefore, it is clear that even considering the terminology used in Section 22, proceedings against petitioners 2 to 7 at any rate cannot be stayed nor proceedings for recovery can bethis situation if the amount cannot be recovered from the company the consequences would be that though the petitioner No.1 deducted the amount from the wages of its employees till such time the proceedings before B.I.F.R. were completed or B.I.F.R. permitted Respondent No.5 to proceed, the moneys could not be recovered from Petitioner No.1. In our opinion Section 22 would not be attracted in such cases as what is sought to be recovered are wages which were deducted from the employees and not remitted to respondent No.5 in terms of the instructions of the workmen. Another single Judge of this Court in the matter of payment of gratuity in the case of Modistone Ltd.Ors. Vs. Deputy Commissioner of Labour, MumbaiOrs., 1999 II CLR 371 held that gratuity payable would not attract the provisions of Section 22 of the SIC (S.P.) Act. Similarly another learned Judge in the case of Ralliwolf Ltd. Vs. Regional Provident Fund2001 (2) Mah. L. J. 169 took a view that the recovery of Provident Fund due to employees under the Employees Provident FundMiscellaneous Provisions Act, 1952 does not fall within the scope of Section 22(1). In our view considering the judgments of this Court it is clear that in the matter of wages and terminal dues of the workmen the provisions of Section 22 will not be attracted. The learned Counsel for the petitioners, however, had placed reliance in the case of Tata Davy Ltd. etc. v. State of OrissaOrs., JT 1997 (7) SC 216  . In that case the Apex Court had taken the view that the arrears of sales tax cannot be recovered under the provisions of Section 22 (1) by coercive process. In our opinion that judgment would be of no assistance to the petitioners. Recovery of arrears of sales tax was money recovered by the company on sale of goods. That cannot be equated with wages and terminal dues of workmen. There can be no difference or distinction between wages due and not paid and wages deducted and not remitted. In our view considering the consistent view of this Court that wages and terminal benefits are not be covered by Section 22 that argument will have to be rejected. If the provisions of Section 22 are not attracted the relief in terms of prayer clause (b) as prayed for by the petitioners will have to be rejected. As earlier noted the bar of Section 22 would not operate as against the petitioner Nos. 2 to 7 as recovery sought is not in respect of guarantee given by the petitioner Nos. 2 to 7 for and on behalf of petitioner No.1 for loans advanced. Similarly, in so far as petitioner No.1 is concerned what is sought to be recovered may be by respondent No.5 as their legal dues, are in fact wages of its employees which has been deducted from the wages by the petitioner No.1 and as such the bat of Section 22 would not behowever, cannot be said against the petitioners 3 to 6. From the dates narrated earlier it is clear that the respondent No.2 proceeded without satisfying himself that the said petitioners were duly served. In fact the petitioners 5 and 6 were served on 30th September, 2003 that is after the date of hearing whereas the petitioners 3 and 4 were served on the same date of hearing. There is nothing in the record to indicate whether the respondent No.2 had notice that the petitioners 3 and 4 were served. The order is so far as those petitioners are concerned, therefore, would be liable to be set aside.Another argument which needs to be noted is, that considering the amount involved the matter against all the petitioners is liable to be set aside. As noted earlier the petitioner No.1 never challenged the order passed by the respondent No.2 before the 3rd respondent. Even before this Court the petitioner No.1 has not disputed that the amount claimed is not due and payable. In paragraph 5 on the contrary the contention is that on account of various reasons the conditions of petitioner No.1 was affected seriously. The other aspect of the matter is that the Directors who represent the petitioner No.1. i.e. the petitioner Nos. 2 to 7 in the suit filed by them and which is adverted to earlier being Suit No.339 of 2003 have not denied that the said amount is not due and payable. Their only contention is that it is the petitioner No.1 who is liable and not them. In these circumstances and considering this aspect of the matter in so far as the petitioner Nos. 1, 2 and 7 are concerned who have been duly served it will not be possible to interfere with the finding in so far as the amount due and payable is concerned. Even in respect of the petitioner Nos. 3, 4, 5 and 6 it will be open to the respondent No.5 to contend before the Recovery Officer that they are bound by the admission made in the suit and that an order accordingly be passed in terms of the admission. It is, however, not necessary for this Court presently to hold that amounts to admission on the part of the said petitioners considering that the matter would be alive before the respondent No.2.8. The only other issue is of attachment. The order of attachment against the petitioner Nos.1, 2 and 7 cannot be interfered with. In so far as the petitioner Nos. 3 to 6 are concerned considering the earlier finding that they are liable along with the petitioner No.1 and as the liability of the petitioner No.1 has been established and as the contention of the petitioner Nos. 1, 2 7 is being rejected, it would be proper that the order of attachment continues also against the assets of petitioner Nos. 3 to 6 till such time the matter is decided by the Respondent No.2 and for a further period thereafter which will be set out in the direction to be issued.