A Supreme Court directive on Friday will restrict the government from taking any coercive action against companies that have not been able to pay wages because of the lockdown.

The court ruling applies to certain industrial houses in Punjab, that had challenged the validity of a Union labour ministry notification of March 20 and another issued by the home ministry on March 29, warning of prosecution for non-payment of wages during the lockdown .

However, given there are multiple petitions from elsewhere against the notifications, the apex court’s observations imply companies in the rest of the country will also not be prosecuted.

The court said such an omnibus order should not have been passed as many industries are struggling to continue in business. The bench wanted the Centre to explore a solution that could take into consideration the interests of both the management and workers.

“Issue notice returnable next week. No coercive action shall be taken in the meanwhile,” a bench of Justices L.N. Rao, S.K. Kaul and Bhushan Gavai said .

The bench passed the order while dealing with a batch of petitions by the managements of the industrial houses challenging the two circulars as being illegal on the grounds that the government was not vested with any powers to issue such circulars under the Disaster Management Act, 2005.

In the two circulars, the Centre had warned the management of all private companies of prosecution if they withheld or failed to pay salaries and wages to workers during the lockdown period. Senior advocate Jamshed Kama, who appeared for some of the companies, told the court that many industrial houses are going out of work, yet they are being threatened with prosecution by the government.

“There may be small industries...how can they pay if they are not earning. They can sustain for another 15 days. This is an omnibus order. This is a larger question... you need to find a solution to this,” Justice Kaul told solicitor-general Tushar Mehta during the brief hearing.

The matter has been posted for hearing next week.