BIFR sickness can justify full pre-deposit waiver for a company, but not automatic relief for personal penalties on officers.

A BIFR declaration of sickness can justify full waiver of pre-deposit and stay of recovery for a company facing duty and penalty demands, as the sick status was treated as sufficient ground for interim relief. The same sickness declaration does not automatically extend to personal penalties on company functionaries, because they must show an independent prima facie case or financial hardship. On the facts stated, the company obtained complete waiver, while the two individual applicants received only partial relief subject to a limited deposit.

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Issues: (i) Whether the company, having been declared a sick industrial company by the BIFR, was entitled to full waiver of pre-deposit and stay of recovery in respect of the duty and penalty demands; (ii) Whether the two company functionaries were entitled to complete waiver of pre-deposit and stay against the personal penalties imposed on them.

Issue (i): Whether the company, having been declared a sick industrial company by the BIFR, was entitled to full waiver of pre-deposit and stay of recovery in respect of the duty and penalty demands.

Analysis: The company's sick status under the BIFR was accepted as a sufficient ground for relief. In the circumstances, the existence of the sickness declaration justified dispensation with pre-deposit and protection against recovery of the duty confirmed and the penalty imposed on the company.

Conclusion: Full waiver of pre-deposit and stay of recovery was granted in favour of the company.

Issue (ii): Whether the two company functionaries were entitled to complete waiver of pre-deposit and stay against the personal penalties imposed on them.

Analysis: The company's sickness declaration did not furnish a defence to the personal penalties. No strong prima facie case or evidence of financial hardship was shown by the individual applicants. Nevertheless, considering the overall facts, the Tribunal granted relief to a substantial extent and required a limited deposit from each of them.

Conclusion: Only partial waiver of pre-deposit and stay of recovery was granted in favour of the two functionaries, subject to a deposit of Rs. 1 lakh each.

Final Conclusion: The stay applications were substantially allowed for the company and partly allowed for the individual applicants, with full relief to the sick company and conditional interim relief to the personal penalty recipients.

Ratio Decidendi: A declaration of sickness by the BIFR can justify complete waiver of pre-deposit and stay of recovery for the sick company, but it does not by itself absolve individual directors or officers from personal penalty liability, for which an independent prima facie case must be shown.

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