Madras High Court
S.Manoharan vs The Tahsildar on 22 September, 2021
W.A. No.500 of 2013
IN THE HIGH COURT OF JUDICIATURE AT MADRAS
DATED : 22.09.2021
CORAM :
THE HONOURABLE MR.JUSTICE T.RAJA
and
THE HONOURABLE MRS.JUSTICE T.V.THAMILSELVI
W.A.No.500 of 2013 and M.P. No.1 of 2013
S.Manoharan ... Appellant
versus
1.The Tahsildar,
Coimbatore North,
Coimbatore 641 018.
2.The District Collector,
Coimbatore 641 018.
3.V.Mylsamy
4.S.Rajagopal
5.P.Ramasamy
6.M.Meenakshi Sundaram ... Respondents
(R6 suo motu impleaded as party respondent
vide order of Court dated 03.09.2013
made in W.A. No.500 of 2013)
Prayer: Appeal filed under Clause 15 of the Letters Patent against the
order dated 05.03.2013 made in W.P. No.5384 of 2013.
1/17
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
For Appellant : Mr.V.Karthic,
Senior Counsel for
Mr.R.Syed Mustafa
For Respondents : Mr.V.Manoharan,
Government Advocate
for R1 and R2
Ms.V.S.Usharani for R3 to R5
Mr.P.Ebenezer Paul for R6
JUDGMENT
(Judgment of this Court was delivered by T.RAJA,J.)
This writ appeal has been directed against the impugned order
dated 05.03.2013 passed in W.P. No.5384 of 2013.
2.Mr.V.Karthic, learned senior counsel representing for
Mr.R.Syed Mustafa, learned counsel appearing for the appellant
submitted that the appellant's father A.Somasundaram was doing
business for more than 35 years in fabrication of engineering goods in
the name and style of 'M/s.Everest Engineering Works' as his
proprietary concern and for the purpose of expansion of business and
to meet out the additional capital requirement, the sole proprietary
concern was converted into a partnership firm on and from
22.01.1986 with five partners including the writ petitioner/appellant
as a partner in the firm. However, the said partnership firm availed of
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
advances aggregating to Rs.15 lakhs from various individual bankers
numbering 98, who have filed O.S. No.210 of 1986 against his father
and seven others before the Principal Subordinate Judge, Coimbatore
for a direction to the defendants therein to deliver the industry of
M/s.Everest Engineering Works along with all its assets and business
to an administrator or a body of administrator to administer and run
the same until all its creditors are paid in full or until it is wounded
up or in the alternative to appoint an administrator or a body of
administrator from among the creditors to make an inventory; take
possession of all the assets of the defendants therein; take the
accounts; make a list of creditors of the firm; sell the assets by
public sale and distribute the sale proceeds to all the creditors as per
law. In the said suit, the learned Principal Subordinate Judge,
Coimbatore, by an order dated 09.07.1986 in I.A. No.367 of 1986 in
O.S. No.210 of 1986, appointed one K.K.Ramasamy as an
Administrator to administer M/s.Everest Engineering Works.
Subsequently, the Administrator, after taking possession and control
of the affairs of M/s.Everest Engineering Works, resigned in the year
1989. After the resignation of the Administrator, the unsecured
creditors filed an Interlocutory Application in I.A. No.364 of 1989 in
O.S. No.210 of 1986 seeking for a preliminary decree. Finally, a
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
preliminary decree dated 28.08.1989 was passed by the learned
Principal Subordinate Judge, Coimbatore, appointing three senior
advocates/respondents 3 to 5 as Mugavars to take possession,
dispose of the assets and properties of M/s.Everest Engineering
Works and settle all the creditors from the sale proceeds. During the
pendency of the O.S. No.210 of 1986 before the learned Principal
Subordinate Judge, Coimbatore, the Mugavars sought permission to
bring the personal property of the partners of M/s.Everest
Engineering Works for public auction. Pursuant to the dismissal of the
same, C.R.P. Nos.1118, 1119 and 1309 of 2000 were filed before this
Court. Finally, a compromise was arrived at between the parties and
a joint memo with certain terms of compromise to implement the
compromise order was filed on 18.03.2001.
3.Learned senior counsel, soliciting our notice to the
Compromise Memo dated 18.03.2001, submitted that pursuant to the
direction passed by this Court with a view to give a quietus to the
issue, the petitioners therein have come forward with the compromise
proposals, wherein it has been stated that the properties of
M/s.Everest Engineering Works have to be sold one after another by
the State Bank of India for the best price by private negotiations and
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
out of the eight properties, four have been sold by the Mugavars and
with regard to remaining four properties, the Debt Recovery Tribunal
has ordered for sale through private negotiations and out of which
one property has already been sold and thereupon, the entire sale
proceeds have been transferred to the secured creditor, the State
Bank of India and except a sum of Rs.5,00,000/-, the remaining
amount was in the fixed deposit with the Coimbatore City Co-
operative Bank Ltd., Coimbatore in the joint names of the Mugavars.
Learned senior counsel, while explaining para 2 of the above Memo,
submitted that after discharging the liability to the secured creditors
(the State Bank of India) in full by the sale of firm's properties, the
remaining amount will be handed over to the Mugavars for
disbursement to the unsecured creditors in accordance with the
preliminary decree and as per the memo, to the extent of the unpaid
balance to the unsecured creditors in terms of the preliminary decree,
the personal properties of A.Somasundaram will be disposed of as per
the list annexed thereto. When the Compromise Memo dated
18.03.2001 was accepted by this Court vide order dated 09.04.2002
passed in C.R.P. Nos.1118, 1119 and 1309 of 2000, based on the
same, the house properties were sold in public auction. After paying
the amount due to the creditors, State Bank of India, Coimbatore and
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
unsecured creditors, Rs.4,66,000/- was
kept in the Savings Bank Account No.11688 in the Coimbatore City
Co-operative Bank, Dr.Nanjappa Road, Coimbatore.
4.Again drawing our attention to counter affidavit filed by
respondents 3 to 5 dated 08.04.2013, learned senior counsel
submitted that in addition to Rs.4,66,000/-, which is lying in the
Savings Bank Account No.11688 in the Coimbatore City Co-operative
Bank, Dr.Nanjappa Road, Coimbatore, a sum of Rs.2,32,36,000/- is
remaining in the credit of the Savings Bank Account maintained by
the Mughavars in Bank of Baroda, Ram Nagar Branch, Coimbatore
and the aforementioned amount is readily available for disbursement
to the workers. Now, the right of a workman is a statutory right,
which would have a preference over any other claim or charge
against the firm because the Hon'ble Apex Court by its order dated
18.11.1991 had also reiterated the same, while disposing the Special
Leave Petition in S.L.P. No.17850 of 1991 filed by the workers,
thereby, preserving the rights of the workmen against the firm's
property.
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
5.Drawing our notice to the list of properties shown in page
No.165 of the Additional Typed Set I, learned senior counsel
submitted that as item Nos.10, 11 to 14, which are landed properties,
have not been sold by respondents 3 to 5, they are also available for
meeting out the dues of the 315 workers, who are to be paid the
legal dues.
6.Learned senior counsel suggested that since respondents 3 to
5, after selling certain property of the firm, have deposited the
amount derived from the land, namely, Rs.2,32,36,000/-, in their
Savings Bank Account, the said amount and the interest accrued
thereon, lying in the Bank of Baraoda, Ram Nagar Branch,
Coimbatore, are more than sufficient to settle the dues of the
workers. Therefore, the Labour Court, Coimbatore may be directed to
take up this matter and dispose of the same, by disbursing the
amount to the workers, as per the Table shown in page No.144 of the
Additional Typed Set I, after issuing notice to the fifth respondent,
the workers, who are alive and also the legal heirs of the demised
workers, if any. Learned senior counsel undertakes to furnish the
names and correct addresses of the legal heirs of the demised
workers.
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
7.Learned senior counsel fairly submitted that the Bank of
Baroda, Ram Nagar Branch, Coimbatore may be directed to hand over
the amount available in their credit to the fifth respondent as and
when required by the fifth respondent, so as to enable the Labour
Court, Coimbatore to disburse the amount to all the workers. Learned
senior counsel requested us to consider the remuneration payable to
the fifth respondent, since respondents 3 and 4 died during the
pendency of the matter.
8.The case of the writ petitioner/appellant is that appellant's
father A.Somasundaram was doing business for more than 35 years
in fabrication of engineering goods in the name and style of
M/s.Everest Engineering Works as his proprietary concern and for the
purpose of expansion of business and to meet out the additional
capital requirement, the sole proprietary concern was converted into
a partnership firm on and from 22.01.1986 with 5 partners including
the writ petitioner/appellant as a partner in the firm. However, the
said partnership firm availed of advances aggregating to Rs.15 lakhs
from various individual bankers, numbering 98, who have filed O.S.
No.210 of 1986 against his father and 7 others before the Principal
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
Subordinate Judge, Coimbatore for a direction to the defendants
therein to deliver the industry of M/s.Everest Engineering Works
along with all its assets and business to an administrator or a body of
administrator to administer and run the same until all its creditors are
paid in full or until it is wounded up or in the alternative to appoint an
administrator or a body of administrator from among the creditors to
make an inventory; take possession of all assets of the defendants
therein; take the accounts and make a list of creditors of the firm;
sell the assets by public sale and distribute the sale proceeds to all
the creditors as per law.
9.However, the learned Principal Subordinate Judge,
Coimbatore, by an order dated 09.07.1986 in I.A. No.367 of 1986 in
O.S. No.210 of 1986, had appointed one K.K.Ramasamy as an
Administrator to administer M/s.Everest Engineering Works. Pursuant
to the same, the Administrator took possession and control of the
affairs of M/s.Everest Engineering Works. After the resignation of the
Administrator in the year 1989, the unsecured creditors filed an
Interlocutory Application in I.A. No.364 of 1989 in O.S. No.210 of
1986 seeking for a preliminary decree. Finally, a preliminary decree
dated 28.08.1989 was passed by the learned Principal Subordinate
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
Judge, Coimbatore, appointing three senior advocates/respondents 3
to 5 as Mugavars to take possession and dispose of the assets and
properties of M/s.Everest Engineering Works and to settle all the
creditors from the sale proceeds.
10.During the pendency of the O.S. No.210 of 1986 before the
learned Principal Subordinate Judge, Coimbatore, the Mugavars
sought permission to bring the personal property of the partners of
M/s.Everest Engineering Works for public auction. Pursuant to the
dismissal of the same, C.R.P. Nos.1118, 1119 and 1309 of 2000 were
filed before this Court. Finally, a compromise was arrived at between
the parties and a joint memo with certain terms of compromise to
implement the compromise order was filed on 18.03.2001. This Court,
by order dated 09.04.2002, ordered to dispose of the properties of
M/s.Everest Engineering Works, as per the balance sheet dated
22.01.1986, in order to settle the dues of the creditors of M/s.Everest
Engineering Works. Thereafter, the learned Principal Subordinate
Judge, Coimbatore, by an order dated 26.04.2007 made in I.A.
No.154 of 2007 and in C.F.R. No.7797 of 2007, inter alia ordered the
Mugavars to sell such properties and to settle 50% of the dues of the
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
depositors and to deposit the balance into the Bank.
11.Accordingly, the Mugavars sold certain properties of the firm
as per the list therein. In respect of the gratuity claim of certain
erstwhile workers of M/s.Everest Engineering Works, revenue
recovery proceedings were initiated against the firm and writ
petitions in W.P. Nos.18686 to 18694 of 2007 were filed challenging
the revenue recovery proceedings. Pending the said writ petitions,
the father of the writ petitioner/appellant passed away on
30.01.2010. While dismissing the above writ petitions, this Court by
an order dated 15.02.2012, has held that in the absence of any
challenge to the substantive proceedings, mere recovery proceedings
cannot be questioned on any other grounds and if the petitioner's
property cannot be proceeded with, it is for the Tahsildar to identify
the other properties of the writ petitioner/appellant and issue
appropriate notice to those who are holding the company or those
who are in control of the company's property and proceed
accordingly.
12.After the death of his father, the writ petitioner/appellant
filed an application in I.A. No.125 of 2010 in O.S. No.210 of 1986 on
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
the file of the learned Subordinate Judge, Coimbatore to record the
death of his father and the appellant is the sole legatee under the
Will executed by his father on 21.04.2006 and the same was allowed.
While so, the first respondent, without adverting to the earlier
demand notice dated 04.05.2012 and his representation dated
21.08.2012 and without adverting to the observations of the order
dated 15.02.2012 passed by this Court in W.P. Nos.18686 to 18694 of
2007, had issued a demand notice dated Nil.02.2013 under the
Revenue Recovery Act requiring the appellant and three others to pay
a sum of Rs.2,20,16,955/- towards the payment of gratuity to the
workers, failing which, the properties owned by the appellant and
three others would be attached and brought for sale so as to realise
the said amount. Therefore, the writ petitioner/appellant has
preferred the above W.P. No.5384 of 2013.
13.Since the learned Single Judge, refusing to entertain the
above writ petition on the ground that the petitioner cannot institute
a separate writ petition when his father lost the battle before this
Court, dismissed the same by observing that the Tahsildar can
proceed against the properties of the appellant in terms of the
Revenue Recovery Act, the appellant is before this Court.
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
14.After hearing Mr.V.Karthic, learned Senior Counsel,
representing for Mr.R.Syed Mustafa, learned counsel appearing for
the appellant, Mr.V.Manoharan, learned Government Advocate
appearing for R1 and R2, Ms.V.S.Usharani, learned counsel appearing
for R3 to R5 and Mr.P.Ebenezer Paul, learned counsel appearing for
R6, we are inclined to accept the suggestions made by the learned
Senior Counsel while disposing of this appeal. Accordingly, this
appeal stands disposed of with the following directions:
a)As the issue was pending for consideration from the year
1989, to avoid further delay, this Court hereby directs the Registry to
transfer this case bundle to the file of the Principal Labour Court,
Coimbatore immediately;
b)The Bank of Baroda, Ram Nagar Branch, Coimbatore is
directed to hand over the amount along with interest accrued as on
today available in their credit to the fifth respondent as and when
required by the fifth respondent;
c)The Principal Labour Court, Coimbatore, after receiving the
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
amount from the fifth respondent along with interest accrued as on
today, shall disburse the same to the workers as per the Table shown
in page No.144 of the Additional Typed Set I, which is tabulated
hereunder:
S.No. TABLE Description of the Table Amount in Rs.
1. TABLE-C As per the award of the Labour 15,73,869.00
Court dated 07.12.1993 (in
respect of wages, compensation
and bonus for 205 workers)
2. TABLE-D As per the award of the Labour 9,02,078.00
Court dated 16.9.1992 (in respect
of wages, compensation and
bonus for 8 workers)
3. TABLE-F As per the award of the Gratuity 47,89,374.00
Authority + Interest under
Section 8 of the Payment of
Gratuity Act (in respect of 225
workers)
4. TABLE-G Gratuity + Interest under Section 15,39,780.00
8 of the Payment of Gratuity Act
payable to 90 workers who had
not approached the Gratuity
Authority
5. TABLE-H Wages, Compensation and Bonus 9,49,846.00
payable to 104 workers who had
not approached the Labour Court
Total 97,54,947.00
d)Since respondents 3 and 4 are no more, the Principal Labour
Court, Coimbatore is directed to pay a sum of Rs.5,00,000/- (Rupees
Five Lakhs only) to the fifth respondent towards remuneration from
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
and out of the funds available in the Bank of Baroda.
e)As submitted by the learned senior counsel that since list of
properties shown in page No.165 of the Additional Typed Set I,
namely, item Nos.10, 11 to 14, which are landed properties, have not
been sold by respondents 3 to 5, they are also available for meeting
out the dues of the 315 workers, the Principal Labour Court,
Coimbatore is permitted to make use of the same for disbursing the
amount to the workers, if needed.
f)The Principal Labour Court, Coimbatore is directed to dispose
of the matter within a period of three months from the date of receipt
of a copy of this order.
Consequently, connected M.P. is closed. No costs.
[T.R.,J.] [T.V.T.S.,J.]
22.09.2021
vga
To
1.The Tahsildar,
Coimbatore North,
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
Coimbatore 641 018.
2.The District Collector,
Coimbatore 641 018.
https://www.mhc.tn.gov.in/judis
W.A. No.500 of 2013
T.RAJA,J.
and
T.V.THAMILSELVI,J.
vga
W.A.No.500 of 2013 and M.P. No.1 of 2013
22.09.2021
https://www.mhc.tn.gov.in/judis
