Kshitij Infraventures Pvt. Limited v. State of Telangana
2025-04-29
NAGESH BHEEMAPAKA
body2025
DigiLaw.ai
ORDER : NAGESH BHEEMAPAKA, J. This Writ Petition is filed to interdict the 3 rd respondent Tribunal from proceeding with trial/enquiry in connection with M.P. No. 4 of 2019 filed by the 4 th respondent and consequently to hold that the Tribunal has no jurisdiction to try and adjudicate the same. 2. The brief facts of the case are: Petitioner company was formed through a Scheme of Arrangement sanctioned by this Court on 01.09.2015 in Company Petitions No. 175 to 178 of 2015, demerging from M/s Maheshwari Megaventures Ltd. The latter came into existence following the amalgamation of M/s Ashish Developers and Builders and M/s RKM Builders Pvt. Ltd. under orders dated 22.03.2005 in C.P.Nos. 201, 202, and 203 of 2004. M/s Dewan Bahadur Ramgopal Mills (DBR Mills) began operations in 1920 on a leased property at Lower Tank Bund, Hyderabad, owned by Chenai family. The property later became the subject of a Compromise Decree dated 20.10.1967 in O.S.No. 38 of 1967 on the file of the Chief Judge, City Civil Courts, Hyderabad, granting ownership to Mrs. Khorshed Shapoor Chenai. DBR Mills faced financial difficulties and was declared a sick unit under Section 15(1) of the Sick Industrial Companies Act, 1985. The mill defaulted on rent payments, prompting an eviction suit, O.S.No. 69 of 2003, filed by Mrs. Chenai. The suit was resolved through a compromise, allowing Mrs. Chenai to retain Acs.6.00 and transferring Acs.16.00 to tenant. Petitioner facilitated this settlement and became a party to the eviction suit as Plaintiff No. 2. Before the compromise, Mrs. Chenai had executed an Agreement of Sale on 03.12.1998, transferring Acs.22.5 to M/s Ashish Developers and Builders (now petitioner). Subsequently, petitioner entered a Development Agreement with DBR Mills on 15.03.1999 to develop Acs.16.00, contingent on settling the monetary claims of mill workers. The compromise agreement became void with the dismissal of SLP Nos. 5163-5164 of 2022 by the Hon’ble Supreme Court on 18.04.2022. Consequently, DBR Mills remained a tenant, and Mrs. Chenai retained ownership of the entire leased property. Mrs. Chenai executed registered sale deeds for Acs.6.00 in favour of petitioner under Document Nos. 1349 and 1350 of 2009 on 27.10.2006 and 28.10.2006. Meanwhile, petitioner entered Section 12 (3) Agreement with six workers’ unions on 07.03.2017 to settle claims at Rs.7 lacs per worker, conditional on specific terms.
Chenai retained ownership of the entire leased property. Mrs. Chenai executed registered sale deeds for Acs.6.00 in favour of petitioner under Document Nos. 1349 and 1350 of 2009 on 27.10.2006 and 28.10.2006. Meanwhile, petitioner entered Section 12 (3) Agreement with six workers’ unions on 07.03.2017 to settle claims at Rs.7 lacs per worker, conditional on specific terms. Petitioner contends that the agreement dated 07.03.2017 is not Section 12 (3) settlement under the Industrial Disputes Act , as they were not the employer of the workers. Additionally, the agreement's enforceability was invalidated by objections from DBR Mills’ management. Based on the agreement, the 4th respondent initiated proceedings before the 3rd respondent Tribunal under Section 11 of the Industrial Disputes Act in MP No. 4 of 2019, seeking an award of Rs.49,00,000/- plus 12% annual interest. Petitioner argues, the Tribunal lacks jurisdiction, as there is no employer-employee relationship between the parties. Petitioner therefore, challenges the enforceability of the settlement under Section 33-C (1) of the Act, invoked by the 2nd respondent to issue a recovery certificate and initiate criminal proceedings. It is also stated the 3 rd Respondent Tribunal, through order dated 22.09.2023 in I.A.No. 13 of 2021 in MP No. 4 of 2019, directed petitioner to deposit Rs.49,00,000/- within four months. The order was stayed by this Court in Writ Petition No. 1956 of 2024 on 31.01.2024, however, the Tribunal continues to proceed with the matter, prompting the present Writ Petition. Petitioner asserts that settlement dated 07.03.2017 does not fall within the purview of the Act, rendering the Tribunal without jurisdiction to adjudicate MP No. 5 of 2019. 3. During the hearing, I.A.No. 2 of 2024 was taken out to substitute the name of the 4th respondent as ‘DBR Mills Employees’ Mazdoor Union (Regd. No. B-1986) represented by its President, Harry Francis, S/o Nayagam, R/o 6-3-244, Hastinapur Colony, 8 th Cross, Sainikpuri, Secunderabad’ in the place of ‘DBR Mills Telugunadu Employees’ Union (Regd. No. B- 1634)(Affiliated to TNTUC) represented by its General Secretary at 6-6-269/27, Arun Jyothi Colony, Bansilalpet, Secunderabad. The said Application was unopposed, therefore, ordered on 15.07.2024. 4.
No. B-1986) represented by its President, Harry Francis, S/o Nayagam, R/o 6-3-244, Hastinapur Colony, 8 th Cross, Sainikpuri, Secunderabad’ in the place of ‘DBR Mills Telugunadu Employees’ Union (Regd. No. B- 1634)(Affiliated to TNTUC) represented by its General Secretary at 6-6-269/27, Arun Jyothi Colony, Bansilalpet, Secunderabad. The said Application was unopposed, therefore, ordered on 15.07.2024. 4. Respondent No. 2 - Assistant Commissioner of Labour-III, Hyderabad, filed counter-affidavit asserting that the question of jurisdiction raised by petitioner has already been settled under the provisions of the Industrial Disputes Act , particularly Section 12 (3), which governs the role of conciliation officers and their duty to report to the appropriate Government regarding disputes or settlements arising in the course of conciliation proceedings. It is submitted that there is no issue of jurisdiction with respect to their actions, as the provisions of the Act are fully supportive of the position taken, therefore, the Writ Petition is without merit. It is further stated that Writ Petition is not maintainable under the Writ of Prohibition, particularly because the relief sought by petitioner does not fall within the scope and grounds on which a writ of prohibition can be granted. This respondent brings to the attention of this Court the well- established principles for issuing a writ of prohibition. He urges to take into consideration several critical factors, such as: (a) severity of harm that would be caused by the excess of power if the writ is not issued, (b) availability of an adequate remedy on appeal, and (c) effectiveness of writ of prohibition as a remedy when no other adequate remedy exists. These factors do not support issuance of a writ of prohibition, as petitioner has failed to establish any prima facie case for the relief sought, as such, Writ Petition should be dismissed. It is further stated that petitioner’s primary contention regarding the jurisdiction of the Joint Commissioner of Labour is entirely without merit. Petitioner argues that settlement dated 07.03.2017 cannot be considered a settlement under Section 12 (3) of the Industrial Disputes Act and that the 3 rd respondent Tribunal therefore, lacks jurisdiction to enforce it.
It is further stated that petitioner’s primary contention regarding the jurisdiction of the Joint Commissioner of Labour is entirely without merit. Petitioner argues that settlement dated 07.03.2017 cannot be considered a settlement under Section 12 (3) of the Industrial Disputes Act and that the 3 rd respondent Tribunal therefore, lacks jurisdiction to enforce it. This respondent clarifies that Section 12 (3) of the Industrial Disputes Act , which deals with the duties of conciliation officers, clearly provides that if a settlement of a dispute is arrived at during the course of conciliation proceedings, the conciliation officer must send a report to the appropriate Government, along with a memorandum of the settlement signed by the parties involved in the dispute. Provisions of Section 12 (3) are clear and unambiguous, and that conciliation officer’s duty to report the settlement to the Government does not depend on the nature or specific terms of the settlement, as claimed by petitioner. It is contended that petitioner’s objection regarding lack of jurisdiction of the Joint Commissioner of Labour under Section 12 (3) is a baseless argument that should not be accepted by this Hon’ble Court. In addition, it is stated that proceedings before the Tribunal, which were initiated by the 4th respondent, are fully valid and legal. Petitioner, after having executed the Memorandum of Settlement dated 07.03.2017, is precluded from challenging the proceedings initiated by the respondents under Section 33-C (2) of the Industrial Disputes Act . The respondent further clarifies that petitioner has no legal standing to question the orders passed in a petition filed under Section 11 of the Act, particularly after obtaining recovery certificate under Section 33C(1) of the Act. In this context, Respondent No. 2 reiterates that petitioner’s attempt to challenge the jurisdiction of the 3rd respondent Tribunal is misplaced and legally-untenable. Furthermore, Respondent No. 2 explains that Section 33-C(1) permits a workman to make an Application to the appropriate Government for recovery of money due under a settlement or Award. Respondent No. 2 submits that the 4th respondent, having filed an Application under Section 33-C(1), obtained a recovery certificate for the amounts due to 142 workmen. The Certificate was issued by the appropriate authority, and it is now incumbent upon the Court to proceed with the recovery of the amounts in the same manner as arrears of land revenue.
Respondent No. 2 submits that the 4th respondent, having filed an Application under Section 33-C(1), obtained a recovery certificate for the amounts due to 142 workmen. The Certificate was issued by the appropriate authority, and it is now incumbent upon the Court to proceed with the recovery of the amounts in the same manner as arrears of land revenue. He emphasizes that recovery proceedings are consistent with the provisions of the Act and no other forum or court has been approached for recovery of the amounts mentioned in the certificate. Respondent No. 2 also highlights the specific duties of conciliation officers under Section 12 of the Industrial Disputes Act . Section 12 (3) mandates that if a settlement is reached during conciliation proceedings, the officer must send a report to the appropriate Government, along with a memorandum of the settlement signed by the parties. He refers to the settlement dated 07.03.2017, which was completed under Section 12 (3) of the Act, and submits that proceedings before Respondent No. 2 were concluded as per the statutory provisions. However, after the execution of the settlement, certain parties, including the 4th respondent, approached the Tribunal for enforcement of settlement. As a result, Respondents 1 and 2 have no further involvement in the matter, and proceedings are now in the hands of the Tribunal. In conclusion, it is stated that Writ Petition filed is not maintainable, as the Tribunal has requisite jurisdiction to entertain and adjudicate the case. 5. The 4 th respondent filed counter contending on similar lines as that of the 2 nd respondent. This respondent contends that petitioner has not appropriately named respondent Union in the proceedings, instead retained respondent No. 4 from Writ Petition. This, according to the respondent, undermines the legitimacy of Petition. He emphasized that petitioner acquired rights over DBR Mills and its land and their assertions were previously submitted verbatim before the Tribunal and references proceedings in O.S. No. 69 of 2003 (previously O.S. No. 1201 of 1995) before the XIII Additional Chief Judge, City Civil Court, Hyderabad. These proceedings resulted in a compromise decree on 03-04-2003, which was upheld by a Division Bench of the Hon’ble High Court of Andhra Pradesh on 12-04-2004 in CCCA Nos. 350, 74, 329, and 131 of 2003. Subsequent appeals in SLP Nos. 13630 and 13633 of 2005 were dismissed by the Hon’ble Supreme Court on 21-08-2005 and 24-08-2005.
These proceedings resulted in a compromise decree on 03-04-2003, which was upheld by a Division Bench of the Hon’ble High Court of Andhra Pradesh on 12-04-2004 in CCCA Nos. 350, 74, 329, and 131 of 2003. Subsequent appeals in SLP Nos. 13630 and 13633 of 2005 were dismissed by the Hon’ble Supreme Court on 21-08-2005 and 24-08-2005. The trial court eventually dismissed the suit on 28-04-2015 for non- compliance with procedural requirements, including payment of court fees. It is argued that petitioner’s Memorandum of Settlement dated 07-03-2017, executed under Section 12 (3) of the Telangana Industrial Disputes Act , 1947, remains valid and binding. This settlement, endorsed by the Joint Commissioner of Labour, Hyderabad, agreed upon resolving worker claims for arrears, among other issues, with specific terms for payment, including Rs. 7,00,000 in two installments. The respondent refutes the petitioner’s claim that this settlement became unenforceable following the dismissal of SLP Nos. 5163-5164 of 2022 on 18-04-2022, stating that the petitioner negligently failed to secure favorable orders. It is reiterated that Memorandum of Settlement remains enforceable, emphasizing that DBR Mills’ appeal dismissed in 2004 predates the settlement by over a decade. Respondent notes that petitioner voluntarily undertook to resolve worker claims despite being fully aware of ongoing litigations. He adds that petitioner failed to honor the agreed payments and neglected its obligations, including employment assurances to eligible workers, thereby compelling the respondent Union to approach the Tribunal. It is highlighted that petitioner’s delay tactics and lack of transparency have caused undue harassment to the Union. Despite being aware of dismissal of SLPs, petitioner failed to inform the Tribunal and instead proceeded to file Writ Petition No. 2011 of 2024, securing interim stay orders without notifying the Tribunal. This respondent underscores petitioner’s failure to substantiate its claims with credible efforts to comply with the settlement’s terms. He further asserts that petitioner’s conduct, including filing of multiple writ petitions seeking identical relief, is a misuse of judicial process. The respondent concludes by requesting dismissal of this Writ Petition citing prolonged suffering endured by the Union and its members due to the petitioner’s actions. 6. Heard Sri N.Sreedhar Reddy, learned counsel for petitioner, learned Government Pleader for Respondents 1 and 2 and Sri Ch. Omarnathan, learned counsel for the 4th respondent. 7.
The respondent concludes by requesting dismissal of this Writ Petition citing prolonged suffering endured by the Union and its members due to the petitioner’s actions. 6. Heard Sri N.Sreedhar Reddy, learned counsel for petitioner, learned Government Pleader for Respondents 1 and 2 and Sri Ch. Omarnathan, learned counsel for the 4th respondent. 7. Upon perusal of the pleadings and material placed on record and having heard learned counsel for the parties, it is clear that petitioner admitted execution of settlement dated 07.03.2017 with six workmen unions, including the 4 th respondent, which was recorded before the Joint Commissioner of Labour. The said settlement forms basis of the relief claimed in M.P. No. 4 of 2019. Petitioner, having participated in the said settlement proceedings and obtained benefits under the Development Agreement dated 15.03.1999 with DBR Mills, cannot now be permitted to resile from the terms of the said settlement. Further, petitioner voluntarily entered into the said settlement, with full knowledge of its obligations, including specific monetary obligation to pay Rs. 7 lacs to each worker. This obligation was integral to the consideration under the development agreement and is enforceable. Petitioner’s contention that it is not an employer and hence, not liable is contrary to the terms voluntarily agreed to and is not tenable. 8. The Industrial Tribunal is empowered under Section 11 of the Industrial Disputes Act to adjudicate disputes involving settlements. The settlement dated 07.03.2017, being recorded during conciliation proceedings, falls within the purview of a settlement under Sections 2(p) and 12 (3) of the Act. Pendency of proceedings under Section 33-C (1) before the Magistrate does not bar jurisdiction of the Industrial Tribunal. Availability of an alternative remedy does not ipso facto oust the Tribunal’s jurisdiction, especially when the reliefs sought arise from a common source ie. Settlement dated 07.03.2017. The Tribunal has jurisdiction to consider the Application filed by the 4 th respondent union. 9. It is pertinent to note that a Writ of Prohibition can be issued only where there is a patent lack of jurisdiction or where the proceedings are a clear abuse of process. Petitioner failed to demonstrate that Tribunal acted without jurisdiction or that proceedings before it are vitiated by any legal infirmity. The conduct of petitioner in executing Settlement, deriving benefit under the development scheme and then disowning its obligations amounts to approbation and reprobation.
Petitioner failed to demonstrate that Tribunal acted without jurisdiction or that proceedings before it are vitiated by any legal infirmity. The conduct of petitioner in executing Settlement, deriving benefit under the development scheme and then disowning its obligations amounts to approbation and reprobation. A party seeking equitable relief under Article 226 must come with clean hands. Petitioner’s conduct disentitles it to any relief under the extraordinary writ jurisdiction of this Court. In light of the above, this Court finds that the 3 rd respondent Tribunal is well within its jurisdiction in proceeding with M.P. No. 4 of 2019, and no ground is made out to interdict such proceedings. The Writ Petition is therefore liable to be dismissed. 10. The Writ Petition is accordingly, dismissed. No costs. 11. Consequently, the interim order granted on 08.07.2024 which was extended from time to time shall stand dissolved automatically.