Sick company proceedings do not bar reinstatement awards; coercive enforcement is restricted, but labour adjudication may continue.

Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 bars coercive enforcement against a sick industrial company during BIFR proceedings, but it does not prohibit adjudication of an industrial dispute or automatically invalidate an award directing reinstatement. The Calcutta High Court treated back wages as a monetary component, yet held that the award for reinstatement and payment of 50 per cent back wages was not unenforceable merely because sickness proceedings were pending. The challenge to the award and its publication therefore failed, and the labour award was left undisturbed.

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Issues: Whether, in view of proceedings pending before the BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985, the labour award directing reinstatement of the workman and payment of 50 per cent back wages could be implemented and enforced.

Analysis: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 suspends coercive legal proceedings against a sick industrial company during inquiry, scheme consideration, sanction, and implementation, but it does not create an absolute bar to the adjudication of industrial disputes or to reinstatement. The embargo is directed against coercive execution and recovery, not against the continuation of proceedings or the making of an award on merits. Back wages were treated as a monetary claim, but the reinstatement direction and the award-based payment of 50 per cent arrears were regarded as outside the mischief of a complete prohibition, particularly where the appellate authority had permitted mutual settlement and the award reflected a court-supervised settlement in substance.

Conclusion: The challenge to the award and its publication failed. The award directing reinstatement and partial back wages was not held unenforceable merely because BIFR proceedings were pending.

Final Conclusion: The writ petition was rejected, and the labour award was left undisturbed.

Ratio Decidendi: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 bars coercive enforcement against a sick industrial company, but it does not bar adjudication of an industrial dispute or automatically nullify an award for reinstatement and partial back wages.

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