SARVA SHRAMIK SANGH Vs. BANK OF BARODA

JUDGEMENT

(1.) In this writ petition filed under Article 226 of the Constitution of India, the petitioner - Sarva Shramik Sangh, a Trade Union registered under the provisions of the Trade Unions Act, 1926 has raised a challenge to the order dtd. 23/03/2004 passed by the learned Presiding Officer, Debts Recovery Tribunal-I below Exhibit-25 in Original Application No.125 of 2001 whereby the said application preferred by the workers of Indian Rubber Regenerating Company Limited. seeking their claim towards dues of wages from the sale proceeds of the property of the Company came to be rejected. The petitioner has also challenged the order dtd. 04/10/2005 passed by the learned Chairperson, Debts Recovery Appellate Tribunal in Appeal No.311 of 2024 by which the said appeal filed for challenging the order dtd. 23/03/2004 passed by the Debts Recovery Tribunal came to be dismissed as infructuous. In addition, sale of one of the properties of the Company is also sought to be challenged by the petitioner.

(2.) The facts relevant for considering the challenge raised in the writ petition are that the 3rd respondent - Indian Rubber Regenerating Company Limited - hereinafter referred to as "the erstwhile Company" had obtained financial assistance from the 1 st respondent - Dena Bank which has now merged with the Bank of Baroda - hereinafter referred to as "the Bank". Since the dues of the Bank were not repaid, the Bank filed Suit No.1420 of 1984 invoking the original civil jurisdiction of this Court. The said suit came to be decreed on 26/03/1996 holding the Bank entitled to recover the decretal amount. By an order dtd. 18/12/1984, the Court Receiver was appointed on the hypothecated goods of the erstwhile Company. As the factory premises of the erstwhile Company had also been mortgaged with the Bank, possession of the same was taken in the execution proceedings. Suffice it to observe that the factory premises of the erstwhile Company was sold to the 4th respondent - C.D.S. Construction Company Pvt. Ltd. - hereinafter referred to as "the auction purchaser" on 27/08/2003. The consideration paid by the auction purchaser was Rs.2.00 crores.

(3.) Original Application No.125 of 2001 filed by the Bank against the erstwhile Company was pending before the Debts Recovery Tribunal. On 30/10/2003 the Bank moved an application below Exhibit-37 stating therein that as the Bank had appropriated the sale proceeds received pursuant to the auction in favour of the auction purchaser, the Bank did not desire to proceed further in the said proceedings. The Bank therefore sought permission to withdraw the Original Application and also to discharge the Receiver as appointed. On 23/03/2004 the learned Presiding Officer considered the application below Exhibit-25 preferred by the workers of the erstwhile Company seeking their share in the sale proceeds as well as the application below Exhibit-37 moved by the Bank for withdrawal of the Original Application. By the order passed below Exhibit-25, the learned Presiding Officer held that the erstwhile Company had not been subjected to any winding up proceedings nor was it under liquidation. As the factory premises had been exclusively mortgaged with the Bank, it held that the workmen's dues did not have priority over the amount of the sale proceeds. As the workers did not file any winding up proceedings nor did they seek execution of the Recovery Certificate issued in their favour, they were not entitled to claim precedence over the amount of sale proceeds of the factory premises that had been exclusively mortgaged with the Bank. The application below Exhibit-25 was accordingly rejected.