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2012 DIGILAW 1562 (BOM)

Maharashtra State Co-operative Bank Ltd. v. District Collector

2012-08-16

ANOOP V.MOHTA

body2012
Judgment : Heard by consent of parties finally in view of urgency shown at admission stage. 2. The impugned order is passed by the Collector/Respondent No.1 dated 5 July 2012 pursuance to the order passed by this Court in Writ Petition No.291/2012 dated 1 March 2012. 3. The basic events as recorded in the earlier order are as under: “3 By the present writ petition, the Petitioner who has advanced loans to Respondent No.3 sugar factory, which are outstandinggggg, had challenged the order dated 27.09.2011 passed by the Assistant Commissioner of Labour under Section 33C(1) of the Industrial Disputes Act, 1947 and the further order passed by the Tahsildar, Taluka Haveli on 12.12.2001 attaching the stock of sugar bags to the extent of 82092 quintal. The further action of the proposed auction of the said sugar bags is also challenged. 4. The Petitioner claims that the entire stock of sugar of Respondent No.3 Karkhana has been pledged with the Petitioner by the Karkhana by executing various Deeds of Pledge, which are annexed to the Petition and that in terms of the Deeds of Pledge, the Petitioner is in possession of the pledged sugar bags. On account of the order of the attachment, the godowns in which the sugar is stored have been sealed by the Tahasildar. 5. Perusal of the impugned recovery certificate shows that apart from holding that the dues of the workers are to the extent of 14,01,09,606.49/-, the Assistant Commissioner of Labour has also directed that the said dues should be recovered under the provisions of MLR Code, 1966 by sale of sugar bags and other movable or immovable property of the karkhana. This part of the order dated 27.07.2011 is clearly beyond the scope of power conferred on the appropriate Government under Section 33C(1). 8. It is therefore directed that the Tahsildar shall sell the attached sugar by public auction with adequate notice to the Petitioner bank and Respondent No.3 Karkhana. The Petitioner bank will not only be entitled to participate in the auction but will be also entitled to bring buyers so that adequate price can be fetched in the auction. After the auction is completed and the amount is recovered, the Tahsildar, Haveli shall deposit the entire amount of sale proceeds with the Petitioner bank, which shall be retained separately under a no lien account earning interest. 9. After the auction is completed and the amount is recovered, the Tahsildar, Haveli shall deposit the entire amount of sale proceeds with the Petitioner bank, which shall be retained separately under a no lien account earning interest. 9. The question regarding priority and claim of the Petitioner and Respondent no.2 will thereafter be adjudicated by the Collector, Pune under Section 218 of the Maharashtra Land Revenue Code, 1966. The Collector, Pune will consider the claims of both the parties or any other party, in case any other party makes any claim, and thereafter make a final order in accordance with law after taking into consideration the provisions of Indian Contract Act, Industrial Laws and the judgments of the High Court and Supreme Court operating in the field relating to the subject matter. This exercise shall be completed by the Collector on or before 31.05.2012. All the rival contentions of the Petitioner and Respondent No.2 in that regard are kept open. 10. In case the Collector comes to a conclusion that the dues of the workmen cannot be paid through the sale proceeds of sugar, which is directed to be auctioned, the Collector will be free to proceed to consider the request of the Union to recover the amount from the other properties of karkhana. However, if the Collector proceeds to do so, the Collector will have to consider the objection of the Petitioner Bank, since the Petitioner bank claims to have mortgage in respect of immovable property and also claims to have charge over the movable property of karkhana. Even when the Collector considers the claim of Respondent No.2 Union in such a situation, the Collector shall hear the Petitioner and any other creditors of Respondent No.3 karkhana and thereafter pass an appropriate order of adjudication under Section 218 of the Maharashtra Land Revenue Code, 1966 in accordance with law.” 4. The Respondent No.1/Collector, therefore, attached the sugarcane by auction with adequate notice to the Petitioner and Respondent No.2/Karkhana. The auction was held. The amount of Rs.20,71,53,925/-has been recovered. The said amount admittedly is lying with the Petitioner/Bank. 5. The Respondent No.1/Collector, therefore, attached the sugarcane by auction with adequate notice to the Petitioner and Respondent No.2/Karkhana. The auction was held. The amount of Rs.20,71,53,925/-has been recovered. The said amount admittedly is lying with the Petitioner/Bank. 5. As directed, the Collector, based upon the material available and by considering the case of all the parties, exercised his discretion, considering the equity and the pendency of the claim by the Petitioner as well as the crystalized amount of labourers/workers pursuance to the order passed by the Collector under Section 33C(1) of the Industrial Disputes Act, 1947 (for short, the ID Act). By the said order, the Collector has ordered to pay Rs.11,05,44,925/-towards the wages due as per the Recovery Certificate as referred above. The direction was to transfer the balance amount of Rs.9,66,09,000/-lying with the Petitioner/Bank in view of their demand. 6. The Petitioner, therefore, challenge the order on various grounds, including the reason for not providing the details as to how and under what circumstances the Collector has awarded the crystalized amount to the labourers/workers and rest of the amount to the Bank by overlooking their undisputed claim as of today. 7. The learned counsel appearing for the Management/Respondent No.4 basically contended that the Petition as filed is not maintainable in view of alternate remedy available to the Petitioner referring to Sections 218, 247 and 248 of Maharashtra Land Revenue Code, 1966. The contention was also that the Petitioner/Bank's amount is not crystalized and the amount of labourers/workers has been crystallized by the Competent Authority under Section 33. In a way, there is no serious dispute so far as the Management is concerned with regard to the impugned order and the distribution of the amount so awarded. 8. Insofar as the submission revolving around the alternate remedy, I am not inclined to accept the say in view of the clear provisions of the ID Act, specifically Section 33C, which provides and permit the workmen to take appropriate proceedings for recovery of money from their point and once the amount is fixed after due adjudication and accordingly Certificate is issued by the Competent Authority, the Collector need to proceed to recover the said amount in the same manner as per the provisions of the Land Revenue Code. Even otherwise, considering the provisions of ID Act and the purpose and object is to get the due money at the earliest. Even otherwise, considering the provisions of ID Act and the purpose and object is to get the due money at the earliest. The provision so provided to invoke the power and jurisdiction of the Collector under the Maharashtra Land Revenue Code, in no way, is stated to be the provisions which are applicable when the Collector has passed the order in view of the certificate issued by the Authorities under the ID Act. The workmen/labourers will have no remedy but to challenge the order by filing a Writ Petition. To say that the alternate remedy as available under the Maharashtra Land Revenue Code will hamper and/or affect and affect and delay the recovery though there is a certificate issued by the Competent Authority. I am inclined to observe that the contention that there is alternative remedy available is incorrect and not acceptable. The affected party, against such order, have no alternative remedy, whichever way it comes and whichever party is affected by the order, but to challenge the same by invoking the Articles of Constitution of India and by filing Writ Petition as done in the present case. Early recovery of due amount is the requirement and, therefore, once the appropriate Authority has crystalized the amount, the only question remain so far as the Collector is concerned to see that by following the due procedure of law, the amount should be recovered as early as possible as "an arrears of land revenue" from the employer and/or management against whom the appropriate certificate is issued. 9. The learned counsel appearing for the Petitioner has strongly relied upon the Apex Court decision in Central Bank of India vs. Siriguppa Sugars & Chemicals Ltd. and ors., (2007) 8 SCC 353 )and contended that the Petitioner being a Bank and in view of the agreed position of pledgement of the sugar, they have a right not only to retain but to take steps to recover the amount due and payable by the management, but definitely subject to following the due procedure of law. 10. The proposition of law so settled is not in dispute. The question is applicability of the law, in the present facts and circumstances of the case, including the fact of issuance of notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets And the Enforcement of Security Interest Act, 2002 (SARFAESI Act). 10. The proposition of law so settled is not in dispute. The question is applicability of the law, in the present facts and circumstances of the case, including the fact of issuance of notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets And the Enforcement of Security Interest Act, 2002 (SARFAESI Act). Admittedly, the Petitioner issued such notice dated 24 October 2011, referring to the outstanding amount on the said date covering all types of loans including pledging, hypothecation etc. The amount due and payable as per this notice is Rs. 35,35,00,000/-approximately. Admittedly, the notice provides the intimation also to the State of Maharashtra being sovereign guarantee for the loan. 11. Admittedly, the Respondent/management have huge assets covering movable as well as immovable properties. They have also offered to sell the land to the extent of 122 acres of land with the Petitioner and the said offer was made to the Petitioner and the Petitioner granted no objection to sell the land with riders that Bank will lay down floor price below which land cannot be sold and the entire sale proceeds has to be deposited with it. There is no serious dispute that the value of the land is about Rs.1 crore per acre. The Petitioner, therefore, has taken all necessary steps and has been proceeding to recover the dues as recorded above since long. 12. The entitlement of the Petitioner, based upon the pledge and/or pledgment, is not much in dispute. However, it is always subject to the proceedings which they have initiated to recover the amount from the management. The disputes of the alleged amount so claimed, even if any, just cannot be gone into. The parties will take appropriate steps in accordance with law. 13. An intervention Application being Civil Application (Stamp) No.20334/2012 filed by Sugarcane growers/agriculturists, who have been regularly providing the sugarcane to Respondent No.4/management. Their entitlement and claim is governed by the provisions of Essential Commodities Act, 1955 and the Sugarcane (Control) Order, 1966 framed under Section 3 of the Act. 14. 13. An intervention Application being Civil Application (Stamp) No.20334/2012 filed by Sugarcane growers/agriculturists, who have been regularly providing the sugarcane to Respondent No.4/management. Their entitlement and claim is governed by the provisions of Essential Commodities Act, 1955 and the Sugarcane (Control) Order, 1966 framed under Section 3 of the Act. 14. The learned counsel appearing for the Applicants/sugarcane growers submitted that the Order so passed by the Collector is contrary to the provisions of the Act and the Order passed by the; Commissioner of Sugar dated 16 August 2011, whereby it is crystalized the amount due and payable by the management to the extent of Rs.10,83,63,890/-read with 15% interest specifically ordered to recover the said amount as the land revenue. The Authority, as recorded above, for recovery of such amount, though certified by the Labour Commissioner and by the Commissioner of Sugar, is the Collector. Therefore, there was no question of passing such order by overlooking the clear order and direction issued in favour of the agriculturists. 15. Admittedly, the Applicants/Intervenors were not party before the Collector. They were not even party to the earlier Writ Petition. They have their own remedy to recover the amount due and payable and as already directed to prosecute and proceed with the same. The issue is whether by this order, the Commissioner of Sugar's order though specifically excludes the pledged goods, in the present case, the sugar, can be taken note of. Admittedly, the amount so recovered after due attachment though by the Bank in view of the pledgment of the sugarcane, but pursuance to the order passed by the High Court, can be distributed or its distribution can be effected by this order. 16. We are not here to decide the rights of the sugarcane growers or agriculturists. Their crystalized right under the provisions so referred above is subject to those provisions. In view of the exclusion so referred above, as admittedly the amount so recovered is out of the sale proceeds of the sugarcane (movable property) so sold, the order dated 16 August 2011 itself, if excludes the same, then in my view, there is no question that the Collector cannot proceed and/or ought to have been taken note of the order so passed by the Commissioner of Sugar. Both these remedies are referred. Both these remedies are referred. Merely because the Collector is the Authority, but in view of the order passed, I see there is no reason that the Collector cannot proceed to pass appropriate order by overlooking the order passed by the Commissioner of Sugar in question. Therefore, there was no question of issuing notice to the intervenor and as admittedly, they were not party before the Collector, there is no question now to entertain their intervention Application. The Intervention Application is therefore, rejected. 17. The submission of the learned counsel appearing for the Petitioner that there is no basis whatsoever provided and/or given by the Collector to distribute the amount as done in the present case. I am inclined to accept the reasoning so given in the facts and circumstances for simple reason that the amount so far as the workmen are concerned, in view of the certificate so issued under Section 33C(1) of the ID Act has been crystalised. As there was no specific challenge sofar as the claim of the Petitioner is concerned, with regard to their entitled, based upon the pledged agreement and admitted fact of pledgment of the sugarcane and their action of attachment and sale of their dues, as per the direction given by the High Court, still I am inclined to observe that in view of the recorded position, the distribution of the amount so done by the Collector, considering the fact that the dues of the workers/labourers for whatver may be the reason, admittedly, need to be given priority. The amount, as recorded above, has been crystalised. Noone has disputed the said certificate. The workers' payment, in the background and even otherwise, in my view, also just cannot be retained and/or postponed only because the Petitioner/Bank has claim of more than Rs.35,35,00,000/-as recorded above. The day to day requirement and need of the workers just cannot be overlooked. The workers are huge in number. The Petitioner's claim admittedly being a Bank just can wait to recover their amount. As noted, the management has no objection if due amount is paid to the workers. The Bank, as recorded above, in the present facts and circumstances, is quite secured to recover the amount. The workers are huge in number. The Petitioner's claim admittedly being a Bank just can wait to recover their amount. As noted, the management has no objection if due amount is paid to the workers. The Bank, as recorded above, in the present facts and circumstances, is quite secured to recover the amount. Having once given even no objection to sell the property of the management, it is approximately to the extent of 122 acres of land, apart from the notice so issued under Section 13(2) notice covering the pledges, all types of loans, as they have a remedy available to recover, I see there is no reason to interfere with the order so passed by the Collector. The Collector has exercised his discretion. Then there is nothing on record to justify and/or support the case of such distribution as contended by the learned counsel appearing for the Petitioner, the question still remains of the interference with the order so passed, considering the equity as well as rights of the parties. The Bank's need and/or recovery and as recorded above is quite secured, in my view, just cannot prevail over the need and the requirement of these workers to have their wages and/or salaries to be paid at the earliest. The concerned Commissioner, in my view, the provision so available has already crystalised. The question was only of due payment, based upon the amount already lying with the Bank. The Collector, admittedly not granted the full amount as per the certificate. There is no challenge to that part by Respondent No.3, probably with a view to get the amount as early as possible instead of again waiting for further litigation even from their side. Therefore, the amount so awarded by exercising discretion as recorded above, I am not inclined to accept that it is totally arbitrary, unreasonable and/or without any justification. Once recorded and as there is no serious dispute with regard to the dues of workers to be about Rs.14 crores, the amount of Rs.11 crores and odd and the balance amount to the Bank, in no way, can be stated to be perverse and/or without jurisdiction. 18. Admittedly, the management is a running management. They have various other movable and immovable properties. The liability, if any of any others, can be paid and/or settled and/or recovered in accordance with law. 18. Admittedly, the management is a running management. They have various other movable and immovable properties. The liability, if any of any others, can be paid and/or settled and/or recovered in accordance with law. The urgency of the case is the day to day need of the workers. For the proper functioning of any industry, good relations read with regular payment and salary to the workers is very important and then to face the other litigation and recovery proceedings. 19. The Supreme Court judgment so relied is distinguishable on facts itself. If no other property available, the case of auction of the attached property can be stated to be made out, but it is always subject to determination. Admittedly, the liability as claimed in Section 13(2) notice of SARFASI Act, not yet crystalised. Even if any, still in the present case as the Petitioner is duly secured just cannot be overlooked. It is necessary to note that all these proceedings are not arising out of any liquidation and/or winding up proceedings. The Respondent no.4/management is working and all these employees/labourers are with them The due and proper payment at appropriate time is the solution to continue with the business. I am not inclined to accept the case of the Petitioner that it was without any reason. In view of above and the decision so taken in favour of the labourers/workers, cannot be stated to be unjust and without jurisdiction. The Government has also supported the order by its affidavit. 20. The Court, under writ jurisdiction, in a given facts and circumstances, would have interfered with, only because there are certain lacuna's, but in a situation like this, when the Collector, pursuance to the order passed by this Court and considering the acute need of these workers, granted/distributed the part amount so recorded above, in no way, can be stated to be without jurisdiction. The discretion so exercised, in my view, is well within the purview of law and the record and basically facts and circumstances of the case. 21. Therefore, taking overall view of the matter, for the reasons so recorded above, the Writ Petition is dismissed. There shall be no order as to costs. 22. So far as the Intervenors are concerned, they are free to take appropriate steps in accordance with law. 23. 21. Therefore, taking overall view of the matter, for the reasons so recorded above, the Writ Petition is dismissed. There shall be no order as to costs. 22. So far as the Intervenors are concerned, they are free to take appropriate steps in accordance with law. 23. The learned counsel appearing for the Petitioner submitted to continue the stay already granted by this Court. Considering the reasoning so recorded above, in my view, there is no question now to continue with the stay of the order as already passed. The stay is vacated. The request for continuation of stay is accordingly rejected.