MADANLAL TANTIA OF BOMBAY Vs. COLLECTOR OF BOMBAY

JUDGEMENT

(1.) THE question involved in this petition under Article 226 of the Constitution of India is whether the provisions of Section 49 (3) of the Maharashtra Co-op. Societies Act, 1960 under which the employer deducts certain agreed and stipulate amounts to be paid to the workers' society from their wages is applicable and if so whether the Directors of a company which has entered into an agreement contemplated by Section 49 of the said Act are personally liable under section 49 (3) of the said Act read with Section 267 of the Maharashtra Land Revenue Code, 1966.

(2.) THE facts giving rise briefly to this petition are as follows :

(3.) IN case the said instalments are paid regularly and arrears are wiped out, the Employer requests the Credit Society relaxation in the rate of interest by 1. 1/4% in the amount of Rs. 2,36,661. 00 shown in the balance sheet of the Society for the year ending June, 1978 being the interest due at the rate of 15%. This concession is being given by the Management Committee to the Credit Society by this agreement subject to the approval of the General Body of the employer. 5. to 7. . . . 8. In view of this agreement, the Credit Society agrees to withdraw its application pending with the Collector, Bombay. 9. Apart from this, the Credit Society further agrees to withdraw its application for sanction to file criminal complaint under the provisions of the Co-operative Societies Act, 1960. However, in case the employer commits default in complying with terms and conditions of this agreement, the Society is at liberty to file a fresh application requesting the State of Maharashtra for sanction to prosecute under the provisions of Section 146 (c) to 149 (b) etc. of the Maharashtra co-op. Societies Act, 1960. " the above narration of the agreement therefore indicates that the employer had entered into an agreement under Section 49 of the Societies Act of 1960 voluntarily; that as an employer it was agreed that they will deduct certain amounts every month from the wages of individual employee and pay the amount to respondent. No. 2 society which was a credit society of the workmen. Under the said agreement it was further conceded that the company respondent No. 5 had collected huge amounts from the salary of the employees (3000 approximately) and after collecting the amount the same has not been remitted to the workers' society. In the circumstances, the recovery proceedings were taken pursuant to the order of the Deputy registrar, Co-operative Societies, dated February 5, 1979. Under the said agreement it was agreed that the society will be paid every month Rs. 60,000/- on or before 14th day of each month. This agreement appears to have been entered into respondent No. 5 company and the 2nd respondent society because the credit society of the workmen was keen to receive the amounts which constituted hard earned wages of all the employees. By the said agreement, application for sanction to file a criminal complain was withdrawn. However, liberty was granted to file a fresh application for sanction to prosecute under Sections 146 (c) and 149 (b) of the Societies Act of 1960. (e) It is the case of the petitioner that by February 20, 1981 the entire amount which was claimed under the orders of the Deputy Registrar, Co-operative Societies, dated February 5, 1979 and which amount had become an amount of Rs. 10,87,782. 69 was paid by the company except the balance amount of Rs. 68,000/- (approximately) which according to the company was paid by the company on or about February 20, 1981. According to the petitioners, the amount which is sought to be recovered under the impugned recovery proceedings was only towards the interest and the amount sought to be recovered of Rs. 10,87,782. 69 (approximately) was exaggerated amount. According to the learned counsel for the petitioners, although no specific amount has been mentioned in the petition, the company, according to Mr. Dhanuka, in any event was not liable to pay the said amount of Rs. 10,87,782. 69 but only an amount of 5,20,566. 65 (approximately) as on October 29, 1986 which as of date, according to the learned counsel, would be about Rs. 9 lacs. This statement was made in view of the question posed to mr. Dhanuka as to what, according to the petitioner, was the liability as of date. At this stage, it may be mentioned that the petitioners have refused to pay even the amount which, according to them, is payable i. e. approximately Rs. 9 lacs. At this state it may be noted that the petitioners herein in the petition have not disclosed the names of the Directors or the managers who were responsible to deduct and remit the amounts to the society under Section 49 of the said Act. This court cannot lose sight of the fact that under Article 226 of the Constitution of India, this Court has to consider the equities apart from the questions of law. (g) To complete the narration of facts, as mentioned hereinabove, on October 18, 1983 the 5th respondent company was taken over under the provisions of the Textile Undertakings (Taking over of Management) Act, 1963 by the 6th respondent and in the circumstances the agreement dated April 13, 1980 remained unfulfilled as alleged. 2-A. At the outset, it may be stated that petitioner Nos. 1, 2 and 3 have filed this petition on the ground that they were Directors of respondent No. 5 company at the relevant time. The petition proceeds on the basis that they were in ultimate control of the establishment. There is no averment to the contrary. There is no averments in the petition that they were not the nominated directors. There is no averment in the petition to the effect that the nominated Directors were some other persons and not the petitioner Nos. 1, 2 and 3. In the absence of any allegation to the contrary, this Court has to proceed on the basis that the petitioners were in ultimate control of the affairs of the establishment. 3. Mr. Dhanuka, the learned counsel appearing on behalf of the petitioners, submitted as follows :