Judgment Umesh Chandra Banerjee, J. 1. Mohini Mill one of the oldest cloth mills of West. Bengal was under turmoil for quite some time-The management was taken over and the statutory corporation viz., National Textile Corporation (NTC) was entrusted for running the mill by reason wherefor the mill was under National Textile Corporation (WBABO) Ltd., being a subsidiary of NTC. We refrain ourselves from making any comment as regards the effective management of the mill by NTC (WBABO) but the fact remains that the mill continued to remain in financially unsound position rendering it an uneconomical project to be maintained and managed by NTC. We, however, cannot help but to record that the manner and method of the management since its takeover seems to be rather peculiar and it did really concern none when year after year losses were allowed to incur without there being even any attempt to remedy the wrong or rectify the same-Probably it is possible in a governmental organisation only, where little concern are exhibited about the materialistic benefit of a commercial organisation. Be that as it may, on the factual score it appears that the Union of India for last about three years back has withdrawn its support to the mill and NTC thence-forth has ceased to have any connection with the management of the mill. The original owners also are not interested to run the mill and as such, the mill remained closed with a staggring liability of the banks and other financial institutions as also rendering the employees jobless. It is at this juncture that the plight of the employees ought to be considered. 2. The Central Government, considering it be a social obligation, takes over the management of the mill by reason of utter failure of the owners, obviously with a view to maintain the employment opportunities in these hard days of economic stringency and by reason of the growing cost-of-living index as also to continue with the production level. 2. The Central Government, considering it be a social obligation, takes over the management of the mill by reason of utter failure of the owners, obviously with a view to maintain the employment opportunities in these hard days of economic stringency and by reason of the growing cost-of-living index as also to continue with the production level. Realistically however, the situation is just the reverse; The mill suffered tremendous loss year after year by reason wherefor the Central Government decides to withdraw the support to the mill and consequently NTC the authorised agent of Central Government ceased to have any control so far as the management is concerned-The owners are also not interested at this juncture to take over the mill once again and run it and the Government has washed its hands out-But what about the employees numbering around 3,500. It seems neither the owners nor the Government has any concern for the same. On a reasonable estimation of about four to five persons per family there would thus be about 15 to 17 thousand people who are exposed to starvation leve1. 3. It appears that the secured creditors have filed civil suits which are pending in this Court and it is at this juncture that this Court's intervention has been asked for so that the order for withdrawal of support may be revoked and the Central Government be directed to run the mill since the employees have a right to live in this country as enshrined in our Constitution and without revoking the order this particular right under the Constitution would be seriously affected and prejudiced. The learned Trial Judge, however, passed an order of injunction restraining the Central Government from giving any effect or further effect to the notification revoking the authority of the National Textile Corporation and this appeal is directed against such an order. 4. Mr. Ramaswami, former Solicitor General of India, and also Additional Solicitor General of India, did appear and tried to impress upon the Court that it is well-nigh impossible for the Government of India to carryon the management and continue to suffer losses. 4. Mr. Ramaswami, former Solicitor General of India, and also Additional Solicitor General of India, did appear and tried to impress upon the Court that it is well-nigh impossible for the Government of India to carryon the management and continue to suffer losses. After all the money is made available to the running of the mill from the public exchequer and the public exchequer ought not to be saddled with such an uneconomical project any longer but the fact remains however, that this uneconomical project was taken over by the Government in terms of provisions of the Industries (Development and Regulation) Act-Has there been any attempt to effect any development of the mill to make it a viable unit-on the state of facts available to this Court, the answer unfortunately is in the negative. The matter is kept pending in this Court for quite some time. The submissions are not complete and; hearing continued-It is at this juncture that the employees themselves have been able to procure a purchaser, who has expressed his keen interest and willingness to run the mil and this Court's approval and sanction is required for such a sale of the mill. Be it noted here, that these assets are being maintained and closely guarded by the employees themselves and the mill, if it is worth anything it is by reason of the efforts of the employees. Incidentally, it is not out of place to mention that some of the employees have had to sacrifice their lives by reason of their inability to bear the financial strain and inability to provide food for their wives and children-Can the situation be allowed to continue wherein the employees have come to a stage of sacrificing their lives-We need not go into details of the same but suffice it to record, however, that it is a pity that in a civilised society on the threshold of 21st century and with a Constitution as that of ours employees have had to suffer this sort of end to their lives. 5. Without proceeding further with the sordid details as above, be it recorded here that this Court directed notice to the secured creditors including the financial institutions when the factum of availability of such a purchaser has been made known to this Court as there is no other alternative but to sell the mill. 5. Without proceeding further with the sordid details as above, be it recorded here that this Court directed notice to the secured creditors including the financial institutions when the factum of availability of such a purchaser has been made known to this Court as there is no other alternative but to sell the mill. Otherwise this Court will be a passive spectator of how the employees put an end their lives by reason of financial stress and hunger of their children. 6. One redeeming feature ought to be noted however, that the moment this proposal came to light before this Court both NTC and the Union of India together with the original owners of the mills became very vocal in regard to their respective dues. The owners claiment that it is their mill and as such, immediately upon payment of amount of money to the secured creditors, the entire sale proceeds ought to go to them. The Union of India, on the other hand, submitted that the amount of money spent from the public exchequer has got to be retrieved under the provision of the statute and the sale proceed ought to come to the Union of India as otherwise the provision of the statute would be rendered nugatory. The legal submission will be referred to immediately hereafter but before so doing we record our appreciation as regard the fair and reasonable stand taken by the financial institutions. Monies were advanced to the erstwhile owners under consortium agreement. Financial institutions also did lend money and their anxiety to recover cannot be ascribed to be bad or illegal by any stretch of the term. But what about Union of India? The management was taken over by reason of the inefficient running of the mills so as to continue with the employment opportunities-the fact remains however, that Government of India has not been able to improve the efficiency of the mill and went 011 spending money without any concern whatsoever as regards the manner and method of improvement of the mill. 7. It is on this factual backdrop that the submissions of the parties ought to be considered. It is placed on record that all and sundry agreed that the assets ought to be sold for the purpose of liquidation of dues of the mill including the employees. 8. Mrs. 7. It is on this factual backdrop that the submissions of the parties ought to be considered. It is placed on record that all and sundry agreed that the assets ought to be sold for the purpose of liquidation of dues of the mill including the employees. 8. Mrs. Mukherjee, appearing for Union of India strenuously contended that in terms of s. 29-D of the Industries (Development and Regulation) Act. 1951, the amount of money advanced to National Textile Corporation for carrying out the management of Mohini Mill has to be treated as a debt in favour of Union of India and as such the latter under sub-so (a) of S. 29-D shall have the priority over all other debts whether secured or unsecured, incurred before the management of such industrial undertaking being taken over. 9. Relying upon the statutory provision Mrs. Mukherjee contended that the entire sale proceeds by operation of statute therefor, be directed to be paid to the Central Government, as otherwise the statute would be rendered nugatory and a mere otiose. While it is true the language of sub-so (a) of s. 29-D of the Act 1951 is clear and categorical but by reason of incorporation of sub-so (b) to the effect that every debt shall be a preferential debt within the meaning of s. 530 of the Companies Act, 1956, it therefore, appears that this priority in terms of sub-so (a) shall have to be governed by the expression preferential debt within the meaning of S. 530 of the Companies Act. It is not as if, there is no guideline in the matter of consideration of the priority but the priority is restrictive in its nature and is governed by the provisions of sub-so (b) namely, as mentioned in S. 530 of the Companies Act. Therefore, on a plain reading of the statutory provisions on the basis of golden rule of interpretation of Statutes, sub-so (a) under S. 29-D shall have to read with sub-so (b) in order to achieve the desired result of the legislative intent. Sub-so (a) does not have any independent existence of its own by reason of clarification as included in sub-so (b'). As such Mrs. Mukherjee's submissions shall have to be considered with the provision of s. 530 of the Companies Act. Sub-so (a) does not have any independent existence of its own by reason of clarification as included in sub-so (b'). As such Mrs. Mukherjee's submissions shall have to be considered with the provision of s. 530 of the Companies Act. Section 530 however, expressly laid down that the priorities as mentioned in S. 530 shall be subject to the exception under s. 529(a). Section 529(a) provides Over-riding preferential payments: (i) Notwithstanding anything contained in any other provision of this Act or any other law for the timebeing in force, in the winding up of a company(a) Workmen's dues; and (b) Debts dues to a secured Creditors to the extent such debts rank under Clause (c) of the proviso to sub-so (1) of S. 529 pari passu with such dues, shall be paid in priority to all other debts. (ii) The debt payable under Clause A and Clause B of sub-so (1) shall be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportions". 10. In this context the true purport and intent of s. 530 of the Act, 1956 ought also to be considered. The relevant extract of which is set out herein below Section 530. "Preferential payments--In a winding up, subject to the provisions of S. 529(a), there shall be paid in priority to all other dues. . . . . . ". 11. The legislative intent is therefore, clear and categorical in respect of payment of Government dues vis-a-vis the payment of dues of the workmen and that of the secured creditors in the event of a winding up of the company. While it is true that in the facts of the matter under consideration the company has not suffered any order of winding up but the plight of the employees are such that this Court has no option left with it but to direct sale of assets of the company. The situation is akin to the situation envisaged under the provisions of the Companies Act and in our view, no differentiation can be had as regards sale of assets of a company 'in liquidation and sale as regards the assets of M/s. Mohini Mill in the peculiar facts of the matter under consideration. The situation is akin to the situation envisaged under the provisions of the Companies Act and in our view, no differentiation can be had as regards sale of assets of a company 'in liquidation and sale as regards the assets of M/s. Mohini Mill in the peculiar facts of the matter under consideration. It is more or less in the nature of distress sale in order to save the employment opportunities, the employees themselves have been able to locate and find a purchaser with whom there is existing a Memorandum of Understanding. 12. Be it noted here, that during the pendency of the matter before this Court for quite some time no body has shown any interest whatsoever but when the final order for sale is about to be passed one Mr. Singhania offered to buy the unit with a matching amount, this Court however, thought it fit to ask the new offerer to pay something more than the purchaser as named above and Mr. Kapur, appearing for Singhanias offered an additional sum of Rs. 10 lakhs and wanted inspection of the mill. It is placed on record that such an inspection did take place on two occasions with Mr. Singhania's experts and engineers. It is also placed on record that this Court directed Mr. Singhania to bring some amount of money in Court to prove his bona fide since apparently Mr. Singhania had not had any past experience in the matter of running of mills. On the next date however, when the matter was taken up for hearing Ms. Pathardia, appearing for Mr. Singhania and being the junior of Mr. Kapur submitted that his client had taken inspection but unfortunately has not been able to bring any money in Court though however, the cheque book was lying with Singhania's representative, who is authorised to issue a cheque for Rs. 5 lakhs as against 10 per cent of the purchase price as directed on an earlier occasion. In our view question of acceptance of payment of Rs. 5 lakhs as against 10 per cent of the purchase price as directed on an earlier occasion. In our view question of acceptance of payment of Rs. 5 lakhs by cheque at this juncture does not arise neither the offer seems to be having any substantial difference more so by reason of the fact that the purchaser with whom the employees have already executed a Memorandum of Understanding named above has already undertaken the liability to pay the municipal rates and taxes and the other electricity dues including some other statutory dues which the new offerer is not inclined to pay as such for a difference of Rs. 10 lakhs question of allowing Mr. Singhania, in our view, to purchase the unit does not arise. The employees are satisfied with the purchaser named above and already arrived at an understanding with purchaser. The employees have reposed some amount of confidence on to the purchaser and the purchaser has also entered a solemn understanding with the employees. Furthermore, there is no definite evidence of Mr. Singhania's inclination to run the mill neither the bona fide have been established by reason of the failure to deposit the money as directed by this Court noted above. In that view, question of consideration of the offer of Mr. Singhania at this juncture does not and cannot arise. 13. Turning attention now on the Mrs. Mukherjee's contention as regards the claim of the Central Government, it is to be noted that the Central Government has advanced the money to National Textile Corporation in terms of obligation to run the mill after taking over the management. There was an obligation to run the mill but such running has been a disasterous running of the mill because of the sufference of huge Joss every year. The issue as regards the disasterous running of the mill need not be dealt with at this juncture since the same is not the subject matter of this appeal but the fact remains that the obligations cannot be decreed in any way. The statute namely the Industrial (Development & Regulation) Act in effect provides that the amount of money lent and advanced ought to be recovered from the sale proceed but that by itself cannot be taken recourse by reason of the specific provision under the Companies Act as noted above. The Secured Creditors shall 'also have to be paid. The statute namely the Industrial (Development & Regulation) Act in effect provides that the amount of money lent and advanced ought to be recovered from the sale proceed but that by itself cannot be taken recourse by reason of the specific provision under the Companies Act as noted above. The Secured Creditors shall 'also have to be paid. It is noted here further that the secured creditors are outside the purview of winding up, be it noted here that the management of this particular mill was taken over under Industrial (Development & Regulation) Act, 1951 and in terms of s. 29-D debts incurred by the authorised persons shall be preferential debt within the meaning of s. 530 of the Companies Act, 1956. For convenience's sake s. 29-D is set out herein below: "29-D. Debts incurred by the authorised person to have priority. Even debt arising out of any loan obtained by the authorised person for carrying on the management of, exercising functions of control in relation to, an industrial undertaking or part thereof the management of which has been taken over under s. 18-A. or s, 18-AA or s. 18-F A.(a) shall have priority over all other debts, whether secured or unsecured, incurred before the management or such industrial undertaking was taken over: (b) shall be a preferential debt within the meaning of s. 530 of the Companies Act, 1956 (l to 1956); and such debts shall rank equally among themselves and be paid in full out of the assets of the industrial undertaking unless such assets are insufficient to meet them in which case they shall abate in equal proportions". 14. Section 530 of the Companies Act deals with preferential payments in the event of there being a winding up of the company but the amendment to s. 530 under the Companies (Amendment) Act, 1985 has expressly made it subject to s. 529A inserted by the Amendment Act, 1985. 15. The legislative intent for incorporating s. 529A is clear and categorical in the statement of objects and reason of the Amendment Act, 1985. 15. The legislative intent for incorporating s. 529A is clear and categorical in the statement of objects and reason of the Amendment Act, 1985. It has been stated that since the resources of the companies constitute a major segment of the material resources of the community, the common good demands that the ownership and control of the resources of every company be so distributed in the unfortunate event of its liquidation that workers, whose labour and effort constitute an indivisible but easily perceivable part of the activities of the company are not deprived of their legitimate right to participate in the product their labour and effort. 16. The scope and purport of the section therefore is that the workmen ought not to be deprived of their legitimate dues. While it is true that no winding up order has been passed and the company not in liquidation but under the' peculiar facts of the matter under consideration, in our view this concept of labour welfare ought also to be introduced in the instant matter as otherwise there would be total deprivation which cannot be permitted by the Law Courts specially on the wake of 21st century and in view of the legislative changes introduced by the Amendment Act of 1985. Having due regard to the concept of justice and having a scrutiny over the legislative intent in the matter of winding up of the company, in our view, in the factual matrix, it is only fair and reasonable that the employees' dues ought not to be put into such a state so that they are deprived of their legitimate dues. How would be the employees contribution to the provident fund be realised-What would happen to the employees who have already reached the age of superannuation Would they be completely deprived of any benefit whatsoever-The concept of justice does not warrant such a state of affairs. How would be the employees contribution to the provident fund be realised-What would happen to the employees who have already reached the age of superannuation Would they be completely deprived of any benefit whatsoever-The concept of justice does not warrant such a state of affairs. As a matter of fact, the same is opposed to this concept; A person who has devoted his entire time and energy for the mill and have spent years of service in the mill and the mill, as a matter of fact, has obtained some benefit out of such a contribution-Would the Law Courts be justified in depriving this particular employee to go away without any further provision-How would one live after his retirement-This is a social problem and Law Courts cannot turn a deaf ear and a blind eye to such a problem more so when the effort of the Courts of Law is to proceed on the basis of fairness and justice to all. 17. Roscopound stated that laws stress upon the social purpose and that legal order must be flexible as well as stable. It must be overhauled, continually and reviewed continually according to the changes in the social life which it is to govern. If we seek for a principle we must seek the principle of change no less than the principle of stability. It is a product of civilisation of the peoples. 18. In that perspective, Law Courts must rise up to the occasion and come in aid of the person seeking the assistance of the Law Courts. Law cannot be inflexible-The element of flexibility being the basic criterion of a legal order; if law looses its flexibility, it will lose 'its usefulness to the society at large which cannot be permitted in a civilized world. 19. The contextual facts depict that the mill was under Government management for quite some time and now the Government has chosen to denotify such management the original owners being the share-holders of the company they are maintaining a delightful silence but what would be the plight of the employees or the plight of the secured creditors would the assets of the company be allowed to be dwindled and the benefit of the same be obtained by others. The answer obviously cannot be in the affirmative. Needless to record however, that it is the employees. The answer obviously cannot be in the affirmative. Needless to record however, that it is the employees. only who are protecting the assets to its last bid and till now there is no dissipation of assets and it is on this factual backdrop that the employees have been able to locate a purchaser who is prepared to run the mill with the existing staffs provided however, the mill is otherwise free from encumbrance. Would the Law Courts be justified in refusing such a sale on the ground of a technicality in the factual context or Law Courts would be justified in allowing the same so that the employees can once again get their employment back and lead a life with two square meals which is otherwise not available to them at present? Mr. Somnath Chatterjee, appearing for the employees, informed this Court that from the date of de-notification till date about 15 cases of self-killing have been taken recourse to being unable to manage and provide food and shelter to the other members of the family. This is the state of affairs which is prevailing in regard to this particular mill. Law Courts cannot, in our view, be a passive spectator to such a situation on the contrary ought to take this opportunity of inviting the offerer to run the mill so as to able to put the employees about 2,500 in number lead the life of human-being rather than suffer the hunger. 20. Turning attention on the contention of Mrs. Mookherjee once again as regards priority, in our view, in the factual metrix of the matter under consideration we regard our inability to accept the contention. While it is true that substantial amount of money has been made over to NTC for the purpose of management of the mill ought to discharge its obligation to the people in general but that does not mean that the employees would be completely denuded of their rights to receive payment and to obtain the benefits or the fruits of their services. The assistance rendered by the Union of India cannot be termed to be a mere financial assistance as such, but with a corresponding obligation to run the mill and to implement the industrial policy of the Government. The assistance rendered by the Union of India cannot be termed to be a mere financial assistance as such, but with a corresponding obligation to run the mill and to implement the industrial policy of the Government. Be it noted here that the Industrial (Development and Regulation) Act has been engrafted for industrial growth and activity which affects the country as a whole and as such the amount of money already spent cannot be said to be constituting a charge having priority over all other debts more so by reason of the specific provision in the Companies Act as laid down in s. 529-A of the Act of 1956. 21. In the premises we are unable to accept the contention of Mrs. Mookherjee that the Central Government ought to be paid in priority over all other debts. 22. In fine, therefore, the offer of M/S. Santex Mills Ltd. for the sale of the mill as a going concern at Rs. 4.50 crores is accepted. This Court records its appreciation for the reasonable attitude taken by the nation alised banks as also other financial institutions in the matter of payment of its dues. The workers also, though originally placed before the Court a total claim of Rs. 8 crores 50 lakhs 75 thousand (8.50,75,000) have agreed to accept Rs. 1.50 crores in full settlement of their dues and this Court records its appreciation in that regard as well. In that view of the matter, this appeal is disposed of in the manner following:- The sale of Mohini Mill be completed in favour of M/s. Santex Mills Ltd. within a period of one week from the date hereof at a price of Rs. 4.50 crares and out of the sale proceeds the employees would be entitled to receive a sum of Rs. 1.50 crores and the balance sum of Rs. 3 crores be made available to the financial institutions to be appointed in terms of the consortium agreement. It is recorded that the sale shall be free from all encumbrances and the purchaser will be entitled to obtain free-hold title over and in respect of mill premises excepting however, the playground. The sum of Rs. 3 crores as directed above would constitute full payment of the dues of the banks and other financial institutions and the latter will not have any further c1a'im against the mill. The sum of Rs. 3 crores as directed above would constitute full payment of the dues of the banks and other financial institutions and the latter will not have any further c1a'im against the mill. It is placed on record that the purchaser shall run the mill in terms of the Memorandum of Understanding already arrived at by and between! the employees and the purchaser and the said Memorandum of Understanding shall form part of this order. 23. Shri Ashim Ghosh, a member of the Bar is appointed as a receiver over the entire premises and would be entitled to receive the sale proceed from the purchaser as detailed below and would pay 50 per cent of the first instalment to the employees immediately thereafter and the balance 50 per cent to the banks and the financial institutions named above, jointly and shall continue to pay in the same proportion until however, the dues of the employees are liquidated and after liquidation of the dues of the employees made available, the balance would be made over the banks and other financial institutions. It is placed on record that a sum of Rs. 21 lakhs is still lying in the hands of the joint receiver who happened to be the Bank Manager and the latter is directed to make over the sum to the receiver appointed herein and who is in turn to pay the same to the Central Government through the Joint Secretary, Ministry of Law, Justice & Company Affairs at Calcutta. The receiver shall also effect the sale of the property being the play-ground in terms of the valuation report upon proper advertisement, being published in at least three local daily newspapers of which two should be English Dailies and one in Bengali. The sale however, of the play ground shall be subject to confirmation of this Court. It is further ordered that the entire sale proceed from out of the sale of the land shall be paid to the Central Government excepting however, that the sum of Rs. 25,000/- be made available to the receiver as his remuneration from out of the sale proceed of the land and pay the balance to the Central Government. It is further ordered that the entire sale proceed from out of the sale of the land shall be paid to the Central Government excepting however, that the sum of Rs. 25,000/- be made available to the receiver as his remuneration from out of the sale proceed of the land and pay the balance to the Central Government. Upon payment of the sale proceeds the Central Government will accept the same in terms of this order and the Central Government shall accept the same in full and final settlement of its dues. 24. There shall be no order as to cost. Suhas Chandra Sen, J.: I agree. Appeal disposed of.