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TMI Blog2010 (3) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... of India (IDBI), as the operating agency to examine the viability of the proposals and for formulation of a scheme for rehabilitation. The BIFR vide orders dated May 6, 2001, issued directions and one such direction was for preparation of a rehabilitation scheme. 4. M/s. Nova Electro Magnetics Ltd., aggrieved by the orders passed by the BIFR, preferred an appeal before the AAIFR and the said appeal was also dismissed. 5. In the meanwhile, the first respondent herein forwarded a letter dated November 24, 2003, to the Commissioner of Labour, stating that they are contemplating to initiate eviction proceedings in terms of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, against the above said company. The first respondent also requested the Commissioner of Labour to intimate about the statutory dues of the workers of M/s. Nova Electro Magnetic Ltd., so as to enable the first respondent and the bankers/financial institutions who are charge holders on the assets to know about the same and consider the claim as per law. The sixth respondent, viz., the Assistant Commissioner of Labour, Chennai in turn informed the petitioner union about the proposed action to be taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above said Acts and Rules, if the companies/firms established inside the MEPZ, failed to fulfil its export obligations as per the licence issued to them and/or committed default in payment of lease/rent in respect of public premises leased to them, they are liable to be evicted. It is further averred in the counter by the first respondent that the company, viz., M/s. Nova Electro Magnetics Ltd., a licensee under the first respondent for manufacture and export of video cassettes, video magnetic tapes and video housing, had accumulated the rental arrears of Rs. 52,56,771 and water consumption charges of Rs. 63,068 as on June 30, 2003. The first respondent had also cancelled the lease of 11.88 acres granted in favour of the above said company vide order dated May 12, 2003. It is further averred that the company within a period of five years, had failed to fulfil their export obligations and also failed to renew their licence and left with no other option, the first respondent had initiated proceedings for their eviction and it is also averred in the counter by the first respondent that the banks had also initiated proceedings under the SARFAESI Act and properties have also been sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o consideration the rival submissions, has dismissed the writ petition vide order dated April 21, 2006, on the grounds that without impleading the company, viz., M/s. Nova Electro Magnetics Ltd., the writ petition cannot be entertained and citing the said reasons, had dismissed the writ petition. 16. The petitioner union, aggrieved by the dismissal of the writ petition, had filed this writ appeal. 17. Mr. N. G. R. Prasad, learned counsel appearing for the appellant would submit that in terms of section 13(9) of the SARFAESI Act, the workers of the company, viz., M/s. Nova Electro Magnetics Ltd., are to be treated as secured creditors and consequently, the dues payable to them being the first charge over the secured assets of the company. It is further contended that the third respondent ought to have taken into consideration the plight of the workmen especially under the provisions of section 25F of the Industrial Disputes Act, 1947 and should have set apart some portion of the realised money for payment of the workmen's dues. 18. Learned counsel appearing for the appellant in support of his submissions, has placed reliance upon the following decisions : (1)[2006] 134 Comp. Cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aiver under section 14B is subject to those conditions which have been prescribed therein. Parliament having thus amended the EPF Act had taken within its purview the position of a sick industrial undertaking, the extent of the immunity which have been conferred upon such undertaking with reference to provident fund dues under the Act, must be confined to what has been legitimised by Parliament. The extent of the immunity or exemption cannot be extended beyond what was allowed in terms of the amendment to the EPF Act." 21. In [2008] 144 Comp. Cas. 600 (Mad.); [2008] 3 LLN 290 (Palani Andavar Cotton and Synthetic Spinners Ltd. v. Solyraj ), the question arose for consideration was whether the prayer under section 22 of the SICA is attracted for passing any order under section 17B of the Industrial Disputes Act, 1947 and it has been held as follows (page 607) : "The question of grant of wages under section 17B normally does not arise in case the employer reinstates the workman, but may challenge the award subject to reinstatement or if challenges part of the award, relating to payment of wages, etc., except reinstatement. Only in case the employer do not implement the award of rein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank was to the tune of Rs. 30 crores and therefore, held that the balance amount should be set apart for distribution in the event of any necessity arising for such distribution by virtue of section 25FF of the Industrial Disputes Act, 1947. 25. M/s. New Horizon Sugar Mills Ltd., aggrieved by the decision taken in the above cited decision, had preferred writ appeals and so also some of the respondents. 26. A Division Bench of this court, vide order dated March 27, 2007, made in W. A. Nos. 1788 of 2005, etc., batch, after taking into consideration the availability of the excess amount for satisfying the dues of the secured creditor, was of the view that no interference is warranted and therefore, upheld the order of the learned judge. 27. Per contra, Mr. N. V. Srinivasan, learned counsel appearing for respondents Nos. 2 and 3 and other counsel appearing for the respondents, viz., respondents Nos. 4 to 7 made their submissions based on the counter affidavit filed by the respective respondents. 28. The third respondent, viz., IDBI, has filed its counter and would submit that the company, viz., M/s. Nova Electro Magnetic Ltd., approached the BIFR and submitted its proposal for reha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missal of the writ appeal. 31. Mr. N. G. R. Prasad, learned counsel appearing for the appellant in response to the submissions made on behalf of the respondents, had drawn the attention of this court to the order dated July 13, 2007, passed by the BIFR and in paragraph No. 10 of the order it has been stated as follows : "After considering the submissions made and the material on record, the Bench noted that as IDBI, the secured creditor, had already taken action under section 13(4) of the SARFAESI Act, the present reference stands abated in terms of the third proviso to section 15(1) of the SICA. IDBI shall note that the workers' dues will have to be paid from out of the sale proceeds of the company's assets." 32. Therefore, learned counsel appearing for the appellant would contend that in view of the above said orders passed by the BIFR, the third respondent, viz., IDBI, is to be directed to pay the workers' dues out of the sale proceeds realised. 33. The court has carefully considered the submissions made by learned counsel appearing on either side and also perused the typed set of documents and the decisions cited. 34. In [2000] 101 Comp. Cas. 64 ; [2000] 4 SCC 401 (Allahab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the other creditors on the other, it will, in our opinion, be necessary for the Tribunal to decide such questions of priority bearing in mind the principles underlying section 73 of the Civil Procedure Code, 1908. Section 22 of the RDB Act, in our view, gives sufficiently wide powers to the Tribunal and the Appellate Tribunal to decide such questions of priorities, subject only to the principles of natural justice. This court has explained that the powers under section 22 are wider than those of the civil courts and the only restriction on its powers is that the principles of natural justice have to be followed . . . But under section 73 of the Civil Procedure Code, sharing in the sale proceeds (here, sale proceeds realised under the RDB Act) is permissible only if a person seeking such share has obtained a decree or an order of adjudication from the Tribunal and has also complied with other conditions laid down under section 73. In the present case, the Canara Bank is not in a position to invoke the principles underlying section 73 of the Civil Procedure Code because it has not yet obtained any decree or adjudication of its debt from the Tribunal. Nor has it complied with othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration Act, 1951, before the learned company judge for staying outside the liquidation proceedings. The learned judge had granted an order to the A. P. State Financial Corporation subject to certain conditions and two appeals were preferred and those appeals were also dismissed. The A. P. State Financial Corporation being aggrieved by the same, preferred appeals before the hon'ble Supreme Court of India. The hon'ble Supreme Court of India in the said decision, has held as follows (page 4) : "The Act of 1951 is a special Act for grant of financial assistance to industrial concerns with a view to boost industrialisation and also recovery of such financial assistance if it becomes bad and similarly the Companies Act deals with companies including winding up of such companies ... the proviso to sub-section (1) of section 529 and section 529A being a subsequent enactment, the non obstante clause in section 529A prevails over the non obstante clause found in section 29 of the Act of 1951 in view of the settled position of law. We are, therefore, of the opinion that the above proviso to sub-section (1) of section 529 and section 529A will control section 29 of the Act of 1951. In other w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied, it cannot be flouted on the ground of section 22 of the SICA. 39. In [2005] 4 CTC 469 (PNL Depositors' Welfare Association v. Union of India), the submission made on behalf of the petitioner therein to explore the possibility of alternative measures for revival of the company came up for consideration and it has been held that if such a course is adopted then it would run contrary to the object of the SARFAESI Act and the ratio laid down in Mardia Chemicals Ltd. case reported in [2004] 120 Comp. Cas. 373 ; [2004] 4 SCC 311. The facts of the said case would also disclose that a sum of Rs. 50.20 crores were realised by way of sale under the SARFAESI Act and after appropriation, a sum of Rs. 30 crores as surplus amount was available and therefore, it was directed to be set apart for distribution in the event of any necessity arising by virtue of section 25FF of the Industrial Disputes Act. The said decision reported in [2005] 4 CTC 469 (PNL Depositors' Welfare Association v. Union of India), was also affirmed by the Division Bench of this court vide judgment dated March 27, 2007, made in W. A. No. 1788 of 2005 batch, etc. 40. In so far as the facts of this case are concerned, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision reported in [2000] 101 Comp. Cas. 64 ; [2000] 4 SCC 401 (Allahabad Bank v. Canara Bank) , has also laid down a ratio to the effect that subject to the principles enumerated under section 73 of the CPC, there must be a decree or order of adjudication from the Tribunal. 44. As already stated above, the adjudication with regard to the dues of the members of the appellant-union who were workmen of the company, viz., M/s. Nova Electromagnetic Ltd., are yet to take place and the company, viz., M/s. Nova Electromagnetic Ltd., is yet to be wound up. 45. The writ petition came to be dismissed on the primary ground that the company, viz., M/s. Nova Electromagnetic Ltd., Chennai-45 has not been impleaded as respondent. Since it was represented that the above said company had shifted its operation to New Delhi, this court vide order dated January 28, 2009, had directed the appellant herein to serve notice on the above said company having address at Door No. 506, Hemkunt Tower, 98, Nehru Palace, New Delhi-110 019 and also to the Chennai address of the said company. The private notice taken to the company at New Delhi was returned with an endorsement "refused" and the notice taken to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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