TaxTMI 
TaxTMI 
2014 (3) TMI 1146
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....ormalities proclamation of sale order was issued on 14.09.2010 by the Recovery Officer on land to an extent of Ac.4.89 cents in Sy.Nos.162/2 (3.11 acres), 162/1 (Part 1.78 acres) at Chennai Road, Melapattu Group, Natham Revenue Village, Nagari Municipality, Chittoor District out of 12.31 acres attached. Accordingly, open auction was conducted, wherein sixth respondent stood as highest bidder at Rs. 64,50,000/- and the sale was confirmed in th his favour. Sale certificate dated 22.11.2010 was issued to the 6 respondent. The sale certificate was registered by the fifth respondent on 05.09.2011. After the registration of sale certificate this writ petition was instituted. 2. Petitioner company went into losses, resulting in initiating proceedings by the Board for Industrial and Financial Reconstruction (BIFR). In case No.95/95, the Board by Order dated 21.06.2000, opined that the sick industrial company was not likely to make its net worth exceed its accumulated losses within a reasonable time and not likely to become viable in the future and recommended that the company should be wound up in accordance with Section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1....
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....ent Fund Organization that the Act, 1952 is a special enactment intended to safeguard the interests of employees working in a company and it is the primary responsibility of the organization to ensure payment of contributions by the employer. In order to ensure proper enforcement of the provisions, sufficient safeguards are provided in the Act and power vested in the organization for enforcement of its orders. In the said manner, section 8(f) of the Act empowers to resort to all modes to recover the amounts due to the organization. Learned standing counsel further contended that on 22.10.2010, petitioner was given one month time to clear the dues and was also informed that sale would not be confirmed, even though auction was conducted, if the petitioner paid the amount due to the organization. Since the petitioner did not respond to the notice th dated 22.10.2010, on 22.11.2010 sale was confirmed in favour of the 6 respondent. Petitioner failed to respond to the notices and failed to take steps to pay the amounts due. SICA has no application to the facts of the case. 9. Learned standing counsel placed reliance on the decision of the Division Bench of this Court in the case of Sa....
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....Act, 1956, or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof [and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance 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. Section 32. Effect of the Act on other laws (1) The provisions of this Act and of any rules or schemes made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law except the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973) and the Urban land (Ceiling and Regulation) Act, 1976 (33 of 1976) for the time being in force or in the Memorandum or Articles of Association of an industrial company or in any other....
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.... the employee) or the employer's contribution], the amount so due shall be deemed to be the first charge on the assets of the establishment, and shall, notwithstanding anything contained in any other law for the time being in force, be paid in priority to all other debts. 14. Power is vested in the BIFR under Section 16 to cause enquiry to determine whether any industrial company has become a sick industrial company and incidental thereto. If in such enquiry it is established that a company has become a sick industrial company, in exercise of power vested by Sections 17 to19, the BIFR can take all possible steps to revive the sick industrial company. If the BIFR fails in its effort to revive the sick industrial company, it is empowered to recommend to wind up the sick industrial company in exercise of power under Section 20(1). However, such company cannot be wound up unless winding up orders are passed. Section 20(4) deals with the interregnum period between the date of recommendation by BIFR to wind up a sick industrial company and the date of order of winding up. As per Section 20(4), the power to sell the assets of sick industrial company vests only in BIFR. However, BIF....
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....ndents that both the Company Court and BIFR exercise concurrent jurisdiction. If such a construction is upheld, there shall be chaos and confusion. A company declared to be sick in terms of the provisions of SICA, continues to be sick unless it is directed to be wound up. Till the company remains a sick company having regard to the provisions of sub-section (4) of Section 20, BIFR alone shall have jurisdiction as regards sale of its assets till an order of winding up is passed by a Company Court. 50. ...... but there cannot be any doubt whatsoever that having regard to the phraseology used in Section 20 of SICA that BIFR is the authority proprio vigore which continues to remain as custodian of the assets of the company till a winding up order is passed by the High Court." 23. I n Raheja Universal Ltd., V. NRC Ltd (2012) 4 SCC 148, Supreme Court reviewed the entire case law on the subject and held, "From the above judgments of this Court, the unambiguous principle of law that emerges is that the provisions of SICA 1985 shall normally override the other laws except the laws which have been specifically excluded by the legislature under Section 32 of SICA 1985. SI....
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.... be only through the medium of BIFR. In the instant case, procedure envisaged in Section 20(4) of SICA was not followed. 26. The admitted position is EPF has assessed Rs. 60,21,000/- as arrears of amounts of contribution by the petitioner to the PF, the penal interest and damages thereon. Petitioner was given ample opportunity to repay the amounts due, but the petitioner did not respond to the opportunity afforded by the EPF. Even after conducting sale, petitioner was given one month time to clear the dues informing the petitioner that if the amounts are paid, the sale already conducted would be cancelled. Petitioner did not respond and having waited for the time granted to the petitioner, EPF had no other option, but to confirm the sale. Petitioner invoked jurisdiction of this Court only after the sale certificate was registered in favour of the buyer. Petitioner only disputed the quantum of amount of dues payable by him. Sixth respondent is a bona fide purchaser having participated in the open auction. One other important factor mitigating against the petitioner is, as stated by petitioner, even after thirteen years of the recommendation by the BIFR, so far no winding up order....
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....oes not place any fetter on the power of the extraordinary jurisdiction but leaves it to the discretion of the court. However, being that the power is discretionary; the court has to balance competing interests, keeping in mind that the interests of justice and public interest coalesce generally. A court of equity, when exercising its equitable jurisdiction must act so as to prevent perpetration of a legal fraud and promote good faith and equity. An order in equity is one which is equitable to all the parties concerned. The petition can be entertained only after being fully satisfied about the factual statements and not in a casual and cavalier manner. (vide Champalal Binani v. CIT(1971) 3 SCC 20); Chimajirao Kanhojirao Shirke v. Oriental Fire and General Insurance co. Ltd. (2000) 6 SCC 622 ; LIC v. Asha Goel (2001) 2 SCC 160; Haryana Financial Corpn. V. Jagadamba Oil Mills(2002) 3 SCC 496 ; Chandra Singh v. State of Rajasthan(2003) 6 SCC 545) and Punjab Roadways v. Punja Sahib Bus and Transport Co. (2010) 5 SCC 235)." 30. The EPF Act, 1952 is a social welfare legislation and is intended to safeguard the interest of employees. Provident fund contribution is one of the important ....