CONTINENTAL TEXTILE MILLS LIMITED Vs. BHARAT K PATEL

JUDGEMENT

(1.) This Miscellaneous Civil Application under Art. 226 of the Constitution of India read with Order 47, Rules 1 and Sec. 151 of C.P.C. is preferred by the petitioner Continental Textile Mills Limited, a Company incorporated under the provisions of the Companies Act, 1956, having its registered office at New Delhi, to review or recall the order of this Court (Coram : S. D. Pandit, J.) dated 13-8- 1998 and 28-8-1998 in Special Civil Application No. 3418 of 1998 and to restore the Special Civil Application to its original number, on the ground that the said orders have been obtained from this Court by the first respondent Shri Bharat K. Patel, Proprietor of Anmol Sales in collusion with respondent No. 2 Shri A. S. Mann, General Manager, Continental Textile Mills Limited, Ahmedabad by practising and perpetuating fraud.

(2.) The petitioner-Company engaged itself in manufacturing textiles in the city of Ahmedabad. The say of the petitioner-Company is that on account of financial difficulties and market conditions in the year 1992, the Company was forced to close down its manufacturing activities and other allied business. In these circumstances the workmen employed by the Company were not paid wages, as such one Divyapal along with other workmen filed a Special Civil Application before this Court which has been registered as Special Civil Application No. 1243 of 1998 and the same is pending hearing. A recovery application was also filed by the workmen employed by the petitioner-Company being Recovery Application No. 1471 of 1997. The Labour Court by order dated 27-8-1997 directed the petitioner-Company to pay a sum of Rs. 22.10 crores subject to adjustment of Rs. 1,00.13,602.00 if recovered and or paid pursuant to the order passed in the Recovery Application No. 2545 of 1995 and 2953 of 1995. Thus, the petitioner came under a heavy financial pressure and it decided to search a person who could take over the Company by purchasing the shares of the Chairman Mr. C. L. Verma, and other directors of the Company, their friends and relatives. On 16-2-1998 the first respondent Mr. B. K. Patel approached the Company by addressing a letter. By the said letter the first respondent expressed his interest in purchasing the property of the Company. He also agreed to pay bank dues plus Rs. 3 crores in full take over of the Mill. The said letter remained under consideration of the Company for long. Mr. C. L. Verma, Chairman of the Company, addressed a confidential letter dated 3-7-1998 to the second respondent Mr. A. S. Mann, introducing the first respondent Mr. Bharat K. Patel. As the said letter has material bearing on the controversy involved in the present Special Civil Application, it would be convenient to reproduce the same in extenso.

(3.) A perusal of the letter shows that the first respondent was authorised to negotiate with the workman of the petitioner-Company to settle the dispute. The authority to negotiate was restricted by various conditions including condition Nos. and 2 referred in the letter. In any case on the basis of this letter it cannot be said that the Company in any way had agreed to transfer the management or equity shares of the Company in the name of Mr. Bharat K. Patel. Even no inference can be drawn that there was any agreement to sell the property to Mr. Bharat K. Patel. It appears that in order to ascertain the bona fides of the first respondent a clause was introduced whereby Mr. Patel agreed to give a cheque of Rs. 1 crore in the name of the Company payable on 14-7-1998 at Ahmedabad. It was also agreed that Mr. Patel will hand over on 6-7-1998 a bank draft for a sum of Rs. 21 lakhs payable in the name of the Company which shall be returned to him immediately on encashment of the cheque of Rs. 1 crore on 14-7-1998 or on any other date as per his wishes. It is stated that the said cheque was dishonoured as per the communication dated 20-7-1998 of the U.C.O. Bank. The cheque was redeposited on 8-10-1998 and it was again dishonoured as per communication of the Bank dated 12-10-1998. Reverting to the controversy with respect to payment of wages to the workmen, one Sonaji Kalaji filed a Special Civil Application which was registered as Special Civil Application No. 3418 of 1998 out of which the present Miscellaneous Civil Application has arisen. The said Special Civil Application was filed seeking direction to the Collector, Ahmedabad. to initiate and complete the recovery proceedings within a stipulated period. The say of the petitioner is that the notice of the said Special Civil Application was not served upon any of its directors or at the registered office of the Company. The Company was served through respondent No. 2, i.e., its General Manager at Ahmedabad. An affidavit was filed in the said Special Civil Application on behalf of the District Collector, Ahmedabad by one P. T. Sadhu, Mamlatdar, Arrears (Recovery), Ahmedabad, stating that on receipt of the recovery certificate of Rs. 6,63,44,602.15 Ps. a notice was issued to the Company under Sec. 125 of the Bombay Land Revenue Code on 23-3-1998, but the same returned "unserved". He attributed the delay in recovery to the director Mr. C. L. Verma as he had gone to America for by-pass surgery. On 13-8-1998 the Collector himself appeared before this Court (Coram : S. D. Pandit, J.) and assured that proper steps would be taken for the recovery of the amount in accordance with the provisions of the Land Revenue Code. Thus, the Court passed an order on 13-8-1998 wherein it was made clear that under the provisions of the Land Revenue Code, it will be open for the Collector to attach and sell the portion of the property which is sufficient to recover the amount under the certificate. It was, however, stated by Mr. A. S. Mann on behalf of the Company that the employees are trying to negotiate and trying to get maximum price for the property. Considering all facts and circumstances of the case the Court directed the Collector to take appropriate steps to see that there is recovery and payment of all dues under the certificate to the workmen, within eight weeks. The Court gave liberty to the employer to approach the Collector and satisfy him that whatever proposal they have got. The Court fixed eight weeks time for the recovery.