Bombay High Court
Cyber Infosystems & Technologies ... vs The State Of Maharashtra & Anr. : on 29 November, 2011
Bench: S.A. Bobde, V.K. Tahilramani
sk 1 wp8104.10
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
APPELLATE SIDE
WRIT PETITION NO.8104 OF 2010
Cyber Infosystems & Technologies Pvt. Ltd. : Petitioner
V/s.
The State of Maharashtra & Anr. : Respondents
ig ....
Mr.Venkatesh Dhond, Senior Advocate, with Mr.Rishbh Agarwal and
Mr.A. Chaturvedi i/b. Paras Kuhad & Asso. For the petitioner.
Ms M.P.Thakur, Asstt. Govt. Pleader for respondent no.1.
Mr.P.P.Chavan with Ms Shyamali Gadre for respondent no.2.
....
CORAM : S.A. BOBDE AND
SMT.V.K.TAHILRAMANI,JJ.
DATE : NOVEMBER 29, 2011.
ORAL ORDER (Per S.A.Bobde,J.)
Rule, returnable forthwith.
The learned counsel for the respective respondents waive service.
Heard finally by consent of parties.
2. The petitioner has challenged the Government Resolutions dated
30.10.2007 and 12.1.2009 issued by the Industries, Energy and Labour
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Department of the Government of Maharashtra prohibiting development
of properties transferred from companies unless all the legal dues of the
workers have been paid and the Labour Commissioner, Mumbai,
Maharashtra State, has passed a N.O.C. The second Resolution imposes
an additional condition that till balance dues of the workers are paid fully,
no N.O.C. from the Government will be given for the
residential/commercial development on the concerned lands and also for
any transfer by selling or on rental basis/auction. The petitioner has
sought alternate relief that it be declared that the petitioner is not liable to
submit any N.O.C. since they are auction purchasers of property.
3. The petitioner-company is the auction purchaser of a property of
a company in liquidation called "Sharda Textiles" The petitioner was
adjudged the highest bidder in an auction held on 28.2.2008 by the
Official Liquidator. The terms and conditions of sale, inter alia, provided
as follows:-
"9. The dues of all creditors and workers shall be
settled in accordance with the provisions of the
Companies Act, 1956 and the Companies (Court)
Rules 1959 by the Official Liquidator, High Court,
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Bombay."
Clause 10 which provides for the consequence of non-payment reads as
follows:-
"10. If the purchaser does not pay the balance of
the purchase money in the manner and within the
time specified by the Official Liquidator or in other
respect fails to perform these conditions or any of
them, the earnest money deposit shall stand
forfeited and the Official Liquidator, High Court,
Bombay shall resell the said property in public
auction and subject to such conditions and in such
manner as the Court shall think fit and proper and
the defaultee purchaser shall forgo all the claims to
the property or to any part of the sum for which it
may be subsequently sold."
The petitioner was put in possession of the property on 12.4.2008.
Under the sale, the Liquidator has agreed to transfer the un-expired
portion of the lease earlier held by the company in liquidation to the
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petitioner. Accordingly, the petitioner called upon the respondent-MIDC,
who is the original lessor, for transfer of the said unexpired portion. The
MIDC has refused to do so on the ground that under the aforesaid G.Rs.,
a purchaser is required to produce a No-Objection Certificate from the
Commissioner of Labour which the petitioner-company does not have.
4. Mr.Dhond, the learned counsel for the petitioner, has submitted
that the insistence of the MIDC that the petitioner should produce a
N.O.C. from the Labour Commissioner that there are no outstanding dues
of M/s.Sharda Textiles, which is the company in liquidation, is
unjustified. In any case, according to the learned counsel for the
petitioner, the G.Rs. dated 30.10.2007 and 12.1.2009 which require the
production of a N.O.C. to the above effect are illegal. The submission on
behalf of the petitioner is that the G.Rs. are illegal in that they are
contrary to the scheme of the Companies Act, 1956, in particular section
529-A, which provides the procedure for disbursement of the dues of the
workmen which rank pari passu with the dues of a secured creditor. By
the Government Resolution dated 30.10.2007, it is laid down that the
Government has decided that dues of workers in closed
establishments/companies should be paid since it is found that most of the
closed establishments/companies/mills, etc., in the State have started
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development of the land without paying the legal dues of their workers.
The second G.R. dated 19.1.2009 also deals with the same situation and
states that where there are proposals for development of open lands of
industries which have closed down, it is necessary to first pay legal dues
of all the workers who are working at that time in such industries.
Further, it is mandatory for the concerned management/
proprietor/developer to obtain N.O.C. from the Commissioner of Labour
that no legal dues of workers are pending. The Government Resolution is
made applicable with retrospective effect to all companies/
factories/establishments/mills intending to make changes in their land for
residential/commercial purpose or intending to make transfer/sale through
lease/auction. Ex facie, these Government Resolutions do not cast any
duty on the purchaser of such land to obtain a N.O.C. The intention
seems to be to make it necessary for the establishment intending to
develop land once used for industrial purposes for commercial purposes,
particularly when they intend to make a transfer or sale. The Government
Resolutions do not purport to bind the purchaser of the land obviously
because the workers of the closed industrial unit who may have not been
paid their dues have no legal relationship of workmen and employer with
the purchaser of the property. The purchaser of land would normally
have no relationship with the workmen of the transferor industrial unit or
sk 6 wp8104.10
company. There is none in this case. In any case, the Government
Resolutions do not expressly apply to an auction purchaser of land of a
company in liquidation when it is sold by way of an auction by the
Official Liquidator under the Companies Act. There seems to be good
reason why the Government Resolutions have not been made applicable
to the case of an auction purchaser of the land of a company in liquidation
and that is the express provision made in section 529-A of the Companies
Act for payment of workers' dues. It must be borne in mind that the
purpose of the Government Resolutions is to ensure that the workers'
dues are paid before the employer transfers the land for development for
commercial purposes. This purpose is ensured by the salutary provision
of section 529-A of the Companies Act which provides that the dues of
workmen shall rank pari passu with the dues of a secured creditor and
shall be paid in priority to all other debts. Thus, Parliament having by
law provided for the payment of the dues of workers of a company in
liquidation, a Government Resolution cannot impose a condition on the
purchaser of the property of a company in liquidation that he should first
produce a N.O.C. from the Labour Commissioner that there are no dues
payable to the workmen of the company in liquidation. A company in
liquidation ceases to have any disposing powers over its property in
liquidation. These powers are vested to the Official Liquidator who is
sk 7 wp8104.10
bound by the statute to discharge the liabilities of the company. Thus,
though the issue does not arise directly in this case, it is doubtful if even
the company in liquidation or the Official Liquidator can be called upon
to produce such a N.O.C. The Government Resolutions do not expressly
apply to a purchaser of land of a company in liquidation. There is no
reason to make the Resolutions applicable by implication.
5.
Thus, the MIDC is not entitled to call upon the petitioner to obtain
a N.O.C. that the dues of the workers of Sharda Textiles, the company in
liquidation, have been cleared. It is not possible to accept the submission
of Ms Thakur, the learned Asstt. Govt. Pleader for the respondent no.1,
that the MIDC is entitled to rely on Government Resolutions and call
upon the petitioner to obtain a N.O.C. since the Government Resolutions
are issued to protect the interest of workers.
6. In the circumstances, the respondent no.2 MIDC is directed to
proceed, in accordance with law, and grant the un-expired portion of the
land of Sharda Textiles to the petitioner, subject to compliance with the
terms of sale.
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7. Rule is made absolute in the above terms.
(S.A. BOBDE, J.)
(SMT.V.K.TAHILRAMANI,J.)
