TMI Blog2000 (3) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... urai District, [for short `the company'], a company registered under the Companies Act. The Government of Tamil Nadu took over the undertaking by the Madura Sugars Limited (Acquisition Transfer of Undertaking) Act, 1984 [hereinafter referred to as `the Act']. The undertaking of the company is engaged in the manufacture or production of sugar by means of vacuum pans and with the aid of mechanical power stood transferred to and vested in the Government. Section 5 of the Act provides for extinguishment of all encumbrances such as mortgage, charge, lien or other interests and it is further provided therein that the payment of mortgage money or other dues who holds such charge, lien or other interest shall be paid in whole or in part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the award made for payment by the Commissioner. The learned single Judge held that where law requires notice to be served and if the notice has not been served and a claim is foisted upon a party without such service of notice, there is clear violation of the principles of natural justice and an order passed in such a proceeding would be void. On that basis he took the view that the relief sought for by the appellant could not be granted and dismissed the writ petition. On appeal filed by the appellant, the Division Bench of the High Court considered the matter and, while agreeing with the learned single Judge, observed as under :- As the undertaking of the company had vested in the Government, notice ought to have been directed to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvocate appearing for the appellant, contended that the view taken by the Division Bench of the High Court on the scheme of the enactment is plainly erroneous. He submitted that Section 5(4) of the Act while extinguishing rights against the Government or the undertaking arising out of the security made it clear that a secured creditor is nevertheless entitled to claim in accordance with his rights and interests, payment of the mortgage or other dues, in whole or in part out of the amounts specified in Section 9 and did not limit it only to the amounts specified in Section 9. He further pointed out that other provisions to which the learned Judges adverted to were only provisions which were made not to override the other provisions of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t propose to consider or answer this aspect as we propose to rest our decision on another ground. We have set out in the earlier part of this order that the learned single Judge on full investigation of the records found that notice to the company had not been given, which was admitted by the learned counsel for the appellant before the learned single Judge. Under the scheme of the Act it is clear that the company is also liable to make good the amounts which remain outstanding and, therefore, principles of natural justice also require that a notice should have been given to it. The view taken by the learned single Judge and accepted by the Division Bench to which we have adverted to is placed on sound footing. Therefore, we are of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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