TMI Blog2010 (3) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of the Maharashtra Land Revenue Code, there is no change brought about in the situation. In our opinion, the provisions of Section 169 of the Maharashtra Land Revenue Code makes the position absolutely clear. The above observations make it clear that by operation of Section 529-A, priority is given to the dues of the secured creditors and workers over State first statutory charge. In this view of the matter, therefore, in our opinion, the learned single Judge was not justified in holding that dues of the State Government are recoverable pari pasu with the dues of the Appellant. In the result, therefore, both the Appeals succeed and are allowed. The order of the learned single Judge in Company Application No.540 of 2002 and Company Application No.101 of 2002 is set aside. No order as to costs. - D.K.DESHMUKH V.R.KINGAONKAR,JJ Mr.V.R.Dhond with Mr.R.S.Kelkar i/b M/s. Prakash Panjabi Co. , Mr.R.S.Apte, Sr.Advocate i/b Mandar Limaye for the Appellant Mr.A.A.Kumbhakoni with Ms.Geeta Shastri,AGP for the Respondent JUDGEMENT (PER D.K.DESHMUKH,J.) 1. These Appeals can be conveniently disposed of by a common order, because the challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Government has been upheld by the learned single Judge. 4. The learned Counsel appearing for the Appellants relying on the judgment of the Supreme Court in the case of Central Bank of India v/s. State of Kerala ors., (2009) 4 SCC 94 submits that the Supreme Court in this judgment has considered the entire law on the subject and has held that to a property in relation to which provisions of Section 529-A of the Companies Act operates, Section 38(c) of the Bombay Sales-tax Act does not operate. The learned counsel relying on the judgment of the Constitution Bench of the Supreme Court in the case of Builders Supply Corporation v/s. Union of India, (1965) 2 SCR 289 submits that the provisions of the Land Revenue Code which provide for recovery of the dues of the State Government as arrears of land revenue does not elevate the dues to the level of dues of land revenue. The learned Counsel therefore submitted that the learned single Judge has misread the provisions of the Companies Act and the Bombay Sales-tax Act. 5. The learned Counsel appearing for the Respondent-State Government, on the other hand, relied on the observations in the Judgment of the Division Bench of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to any other person in his right, on the termination of his employment before or by the effect of, the winding up order or resolution; (d) unless the company is being wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company, all amounts due, in respect of contributions payable during the twelve months next before the relevant date, by the company as the employer of any persons, under the Employees State Insurance Act, 1948 (34 of 1948), or any other law for the time being in force; (e) unless the company is being wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company, or unless the company has, at the commencement of the winding up, under such a contract with insurers as is mentioned in section 14 of the Workmen's Compensation Act, 1923 (8 of 1923), rights capable of being transferred to and vested in the workman, all amounts due in respect of any compensation or liability for compensation under the said Act in respect of the death or disablement of any employee of the company; (f) all sums due to any employee from a provident fund, a pension fund, a gratuity fund or any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or having distrained on any goods or effects of the company within three months next before the date of a winding up order, the debts to which priority is given by this section shall be a first charge on the goods or effect so distrained on, or the proceeds of the sale thereof: Provided that, in respect of any money paid under any such charge, the landlord or other person shall have the same rights of priority as the person to whom the payment is made. (8) For the purposes of this section- (a) any remuneration in respect of a period of holiday or of absence from work through sickness or other good cause shall be deemed to be wages in respect of services rendered to the if company during that period; (b) the expression accrued holiday remuneration includes, in relation to any person, all sums which, by virtue either of his contract of employment or of any enactment (including any order made or direction given under any enactment), are payable on account of the remuneration which would, in the ordinary course, have become payable to him in respect of a period of holiday, had his employment with the company continued until he became entitled to be allowed the holiday; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dues of the State Government towards sales-tax is subject to there being no contrary provision in any Central Enactment. Therefore, if there is a Central Enactment containing a provisions for creation of first charge, then Section 38C will not operate. If Section 38C does not operate, then there is no question of Section 38C creating any right whatsoever in favour of the State Government in relation to the property concerned. Section 38C by no stretch of imagination can operate to create a right in favour of the State Government, which will be equal to any right created by Central enactment. Because operation of Central enactment creating any right of priority totally displaces Section 38C. In other words, Section 38C and Central enactment containing contrary provisions do not exist and operate side by side. If the Central Enactment operates, then Section 38C is totally displaced. In our opinion, the learned single Judge clearly erred in holding that though Section 529A of the Companies Act operates, Section 38C of the Sales-tax Act also operates. If Section 529A which is the Central Enactment giving priority to the secured creditors and workers operates in relation to a pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that after receiving the certificate from the Income-tax Officer, the Collector has to proceed to recover the arrears in question as if the said arrears were arrears of land revenue. We have already seen that other alternative remedies for the recovery of arrears of land revenue are prescribed by sub-sections (3) and (5) of s.46. In making a provision for the recovery of arrears of tax, it cannot be said that s.46 deals with or provides for the principle of priority of tax dues at all; and so, it is impossible to accede to the argument that s.46 in terms displaces the application of the said doctrine in the present proceedings. 11. The learned Counsel appearing for the State Government relied on observations made in the judgment of the Division Bench in The Thane Janata Sahakari Bank Ltd. s case, in that case the Court was not considering the situation whether the provisions of Section 529-A of the ig Companies Act operate. The Division Bench in that case was considering the question whether in view of the provisions of the Securitisation Act and D.R.T.Act, the provisions of Section 38C apply. The Court held that the provisions of the Securitisation Act do not create any first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the same was enacted. 35. In terms of Section 529 of the Companies Act, as it stood prior to its amendment, the dues of the workmen were not treated pari passu with the secured creditors as a result whereof innumerable instances came to the notice of the Court that the workers may not get anything after discharging the debts of the secured creditors. It is only with a view to bring the workmen's dues pari passu with the secured creditors, that Section 529-A was enacted. 36. The non obstante nature of a provision although may be of wide amplitude, the interpretative process thereof must be kept confined to the legislative policy. Only because the dues of the workmen and the debts due to the secured creditors are treated pari passu with each other, the same by itself, in our considered view, would not lead to the conclusion that the concept of inter se priorities amongst the secured creditors had thereby been intended to be given a total go-by. 37. A non obstante clause must be given effect to, to the extent Parliament intended and not beyond the same. 38. Section 529-A of the Companies Act does not ex facie contain a provision (on the aspect of priority) amongst ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
