Kerala High Court
The Karnataka Bank Limited vs State Of Kerala on 25 February, 1987
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON
MONDAY, THE 21ST DAY OF MAY 2012/31ST VAISAKHA 1934
WP(C).No. 34148 of 2008 (M)
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PETITIONER:
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THE KARNATAKA BANK LIMITED,
REPRESENTED BY T.B.MOHAN RAO,BRANCH MANAGER,
ERNAKULAM BRANCH, CHELOOR BUILDINGS, M.G.ROAD,
ERNAKULAM -682 016.
BY ADVS.SRI.P.B.SURESH KUMAR
SRI.K.N.SASIDHARAN NAIR
RESPONDENTS:
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1. STATE OF KERALA, REPRESENTED BY THE
CHIEF SECRETARY TO GOVERNMENT,
GOVERNMENTSECRETARIAT,
THIRUVANANTHAPURAM-695001.
2. THE DISTRICT COLLECTOR, ERNAKULAM-682030.
3. THE SPECIAL TAHSILDAR (REVENUE RECOVERY),
FORT KOCHI, ERNAKULAM-682001.
4. M/S. FANCY FOODS,REPRESENTED BY ITS
PARTNER A.R.ABDULLA, M/S. FANCY FOODS, SUI CENTRE,
XIII/.2, MOULANA AZAD ROAD, KOCHI 682 002.
5. V.R.RAMESH, VADAKKETHARA HOUSE,
7/219 (12/135),SANTO GOPALAN ROAD, KOOVAPPADAM,
KOCHI 682 002.
6. BELILNDA MARIE D ALMEDIA, MAG DALE,
THEREBHAGAM,PALLURUTHY,KOCHI 682006.
7. ELSIE THOMAS, THAYYIL HOUSE,
CHERIYAKADAVU,KOCHI 682 008.
8. SUNITHA THANKAPPAN, POOKAI THAKKAL HOUSE,
KANNAMALI P.O.,KOCHI 682 008.
(CONTD.....)
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WP(C).No. 34148 of 2008 (M)
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9. E.M.MARY, EDAVAZHIKKAL HOUSE,
KUMBALANGI P.O.,KOCHI 682 007.
10. SARALA T.P., THEKKEVELIYIL HOUSE,
KUMBALANGI P.O.,KOCHI 682 007.
11. M.K.MANI, KOOVALAM NIKATHIL HOUSE,
KMP NAGAR, PALLURUTHY, KOCHI 682 006.
12. RAJAMMA DAS, VELIPPARAMBIL HOUSE,
CHERIYAKADAVU, KANNAMALI,KOCHI 682 008.
13. K.X.PHILO, C/O. K.X.GEORGE,
KUTTIKKATTU HOUSE, EAST PANDIKKUDY, KOCHI 682 002.
14. T.K.AZEEZ, 13/119, ARIPPAKKAPARAMBU,
PANAYAPPILLY, KOCHI 682 002.
15. T.S.NAZAR, 13/108, KOCHANGADI,
KOCHI 682 002.
16. A.V.NAZAR, 13/107,ARIPPAKKAPARAMBU,
PANAYAPPILLY, KOCHI 682 002.
17. C.R.SUNIL DATH,13/177,
ANJARAMMURIPARAMBIL,KOCHANGADI,KOCHI 682 002.
18. T.P.HUSSAIN, 18/877B,
WATER LINE ROAD, PALLURUTHY, KOCHI 682 006.
19. T.K.UBAID, 4/21, M.A..S.S. ROAD,
KOCHI 682 002.
20. T.K.ASHRAF, 13/119,
ARIPPAKKAPARAMBU, PANAYAPPILLY, KOCHI 682 002.
21. C.M.ALIBABA, 13/308,
KOCHANGADI, KOCHI 682 002.
22. P.L.MAYURNATH,KAMALALAYAM,
XIV/1511, NEAR CHAKKANATTU TEMPLE ,KOCHI-682002.
23. G.M.GOPAKUMAR, GURUVASAM HOUSE,
PASNNITHODU PALAM, PALLURUTHY, KOCHI-682005.
24. K.K.RADHAKRISHNAN,
GOMATHY SADANAM, PATTANAKKAD P.O.,CHERTHALA-688524.
25. K.R.RAJESH, KIDANGANNOOR MALAYIL HOUSE,
MEMPRA, CHERIYANADU P.O.,CHENGANNUR-689121.
26. TITUS JOSEPH, PARAKKATTIL HOUSE,
KANNAMALY P.O.KOCHI-682006.
(CONTD.....)
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WP(C).No. 34148 of 2008 (M)
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27. KERALA STATE ELECTRICITY BOARD,
REPRESENTED BY ITS SECRETARY,
KERALA STATE ELECTRICITY BOARD,
VAIDHYUTHI BHAVAN,
THIRUVANANATHAPURAM-695001.
BY ADV. SRI.P.P.THAJUDEEN, SC, K.S.E.B
BY ADV. SRI.H.B.SHENOY
BY ADV. SRI.B.ASHOK SHENOY
BY ADV. SMT.LAKSHMI B.SHENOY
BY ADV. SRI.ABU MATHEW
BY ADV. SRI.ANIL KURIAN THOMAS
BY ADV. SRI.THOMAS P.MAKIL
BY ADV. SRI.C.K.KARUNAKARAN, SC FOR KSEB
BY ADV. SRI.SAJEEVKUMAR K.GOPAL,SC,KSEB
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 12-04-2012,
THE COURT ON 21-05-2012 DELIVERED THE FOLLOWING:
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WP(C).No. 34148 of 2008 (M)
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APPENDIX
PETITIONER'S EXHIBITS:
EXT.P1:- COPY OF THE MEMORANDUM OF DEPOSIT OF TITLE DEED RELATING TO
THE CREATION OF MORTGAGE REFERRED TO ABOVE DATED 25.02.1987.
EXT.P2:- COPY OF THE ORDER PASSED BY THE HONOURABLE DEBTS RECOVERY
TRIBUNAL IN O.A.NO.276/2003, DATED 18.06.2004.
EXT.P3:- COPY OF THE JUDGMENT OF THIS HONOURABLE COURT IN W.P(C)
NO.30452/2006 DATED 04.12.2007.
EXT.P4:- COPY OF THE SALE NOTICE PUBLISHED BY THE THIRD RESPONDENT
DATED 11.12.2007.
EXT.P5:- COPY OF THE SALE NOTICE PUBLISHED BY THE THIRD RESPONDENT
DATED 06.05.2008.
EXT.P6:- COPY OF THE ORDER OF THE LABOUR CURT, ERNAKULAM IN CLAIM
PETITION NO.31/2003.
EXT.P7:- COPY OF THE ORDER OF THE LABOUR COURT, ERNAKULAM IN CLAIM
PETITION NO.10/2006.
EXT.P8:- COPY OF THE AWARD OF THE INDUSTRIAL TRIBUNAL, ALAPPUZHA IN ID
NO. 19/2004 DATED 714/2006.
EXT.P9:- COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER TO
THE SECOND RESPONDENT DATED 06.10.2008.
RESPONDENT'S EXHIBITS:
EXT.R3(A):- COPY OF THE PROCEEDINGS DATED 20.02.2008 OF THE DISTRICT
COLLECTOR.
//TRUE COPY//
PA TO JUDGE
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P.R. RAMACHANDRA MENON J.
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W.P(C) No. 34148 of 2008
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Dated, this the 21st day of May, 2012
JUDGMENT
The petitioner Bank has approached this Court seeking for a direction to be given to the respondents 2 and 3 to disburse the sale proceeds pursuant to Exts. P4 and P5 to the petitioner, less the arrears of sales tax and electricity charges due from the 4th respondent/defaulter within a time limit.
2. The challenge is with regard to the non-disbursement of the balance amount, after satisfying the extent over which the State has got priority right and in more particular, not to reckon the dues to the workers, in view of the fact that, there is no preference to the claim of the workers of the 4th respondent/defaulter, being a 'partnership firm' constituted under the Indian Partnership Act and not a company registered under the Indian Companies Act, so as to have attracted Section 529A of the said Act.
W.P.(C) No. 34148 of 2008 : 2 :
3. The 4th respondent herein had availed substantial financial assistance from the petitioner Bank, creating mortgage over various properties by depositing title deeds, as early as on 25.02.1987, as borne by Ext. P1 memorandum executed in this regard. When the 4th respondent turned to be a chronic defaulter with regard to the repayment, there was no other alternative for the petitioner Bank, but to approach the DRT Ernakulam by filing an original application, seeking for realization of the due amount, which was ordered in favour of the Bank as per Ext. P2 decree dated 18.06.2004 enabling the Bank to realize a sum of Rs.6,97,84,382.23 plus interest. The recovery certificate was also caused to be issued to the petitioner in this regard.
4. There was some other sister concerns as well, of the 4th respondent, who had availed similar financial assistance from the petitioner Bank creating mortgage over the various properties. Since there was default on their side also, after completing the requisite steps, proceedings were being W.P.(C) No. 34148 of 2008 : 3 : pursued by the Bank for realization of the due amount causing the concerned property to be sold in public auction. It was with this intent that the petitioner Bank sought for the help of the Revenue Authorities, for issuing a location certificate. The said request was turned down by the Revenue authorities, stating that, huge arrears were due from the 4th respondent in respect of sales tax liability. It was also pointed out that, the industry was closed down, without complying with the statutory requirements, by issuing closure notice and payment of closure compensation to the workers concerned, resulting in huge arrears as flowing from Exts. P6 and P7 Orders passed by the Labour Court, Ernakulam in C.P. 31 of 2003 and C.P. 10 of 2006 respectively and also as per Ext. P8 Award passed by the Industrial Tribunal, Alappuzha in I.D. 19 of 2004 towards the salary arrears, leave surrender benefits, denial of notice pay/compensation and such other heads.
5. Met with the stand taken by the revenue authorities, the petitioner approached this Court by filing W.P. No. 30452 W.P.(C) No. 34148 of 2008 : 4 : of 2006 which culminated in Ext. P3 judgment. As per the said verdict, the writ petition was disposed of, directing the revenue department to proceed with sale, for realization of the amount due to the State in respect of which the State was having priority charge. In respect of such other items, where the State was having no priority, 'location certificate' was directed to be issued, so as to enable the petitioner Bank to proceed with further steps in respect of such items. Pursuant to the said verdict, the concerned property was subjected to sale by the 3rd respondent and the sale was notified to be held on 27.12.2007 vide Ext. P4 proclamation. In the sale conducted 27.12.2007, the property was bid by a person by name Vijay Kumar, who offered to purchase the same for Rs.2,21,00,000/- and remitted 15 % of the bid amount (to the tune of Rs. 33,15,000/-) as prescribed under Section 49(3) of the Kerala Revenue Recovery Act. But the successful bidder did not turn up thereafter to remit the balance amount and in the said circumstances, the amount already remitted towards W.P.(C) No. 34148 of 2008 : 5 : 15 % of the bid amount was 'forfeited' and the property was re-notified for sale, vide Ext. P5. This time, i.e. on 18.06.2008, the property was sold to the highest bidder for a total sum Rs.1,94,000,00/- (i.e. 27 lakhs less than the amount quoted in the sale proceedings held on 27.12.2007). On satisfaction of the entire amount of Rs.1,94,00,000/- pursuant to Ext. P5, the sale was confirmed and sale certificate was issued in favour of the successful bidder.
6. On completion of the sale as above, the petitioner filed Ext. P9 representation before the second respondent/District Collector referring to the actual facts and figures and seeking to disburse the entire sale proceeds pursuant to the sale held on 18.06.2008, after appropriating the sales tax arrears and electricity charges in arrears from the amount recovered/forfeited, pursuant to the aborted sale held on 27.12.2007. In spite of filing the said representation on 06.10.2008, since nothing was transpired for quite long, the petitioner has approached this Court by filing the above W.P.(C) No. 34148 of 2008 : 6 : writ petition.
7. The third respondent has filed counter affidavit dated 25.04.2009, referring to the arrears due from the 4th respondent and its sister concerns, the particulars of sale of other landed properties and machinery and the amounts procured therefrom and also the details of amounts adjusted under different heads and the balance outstanding.
8. The 27th respondent/Kerala State Electricity Board has filed a counter affidavit, stating that, the 4th respondent was a High Tension Consumer (HT consumer), who turned to be a defaulter in respect of the monthly charges from 09/2002 onwards, resulting in disconnection of the power supply on 11.12.2002 and the subsequent dismantling on 27.09.2003. It is stated that an amount of Rs.6,32,093/- was due to the KSEB towards the arrears of current charges from 09/2002 and interest thereon upto 30.10.2003. It is also stated that the Electricity Board is declared as an institution coming within the purview of Section 71 of the Kerala Revenue Recovery Act, W.P.(C) No. 34148 of 2008 : 7 : for realization of the amount due to the Board by resorting to the machinery under the RR Act, as per the notification dated 15.04.1969 issued by the Government. It has been further pointed out in paragraph 5 of the counter affidavit that, as per clause 15(d) of the Regulation relating to Conditions of Supply of Electrical Energy, all dues to the Board from a consumer, shall be the first charge on the assets of the consumer and all dues including the penalties shall be realized from the consumer as public revenue due on land. With reference to the said provision, it is contended that this liability will prevail over the contractual charge created in favour of the petitioner Bank, more so, when he Regulation relating to Conditions of Supply of Electrical Energy have been held as Statutory in character, as per the decisions rendered in Hyderabad Vanaspathi Limited Vs. Andhra Pradesh State Electricity Board [(1998) 4 SCC 470] and Asokan Vs. KSE Board (2000 (1) KLT 432). Referring to the mandate given in Sherry Jacob Vs. Canara Bank (2004(3) KLT 1089), it is W.P.(C) No. 34148 of 2008 : 8 : contended that the statutory first charge will prevail over any charge or right created in favour of a mortgagee/secured creditor.
9. During the pendency of the proceedings, the writ petition was caused to be amended by the petitioner by filing I.A. No. 3260 of2011. The third respondent has filed another counter affidavit, referring to some additional liabilities as well, of the 4th respondent. It is pointed out that the contention of the petitioner that, 15 % of the bid amount remitted by the defaulter bidder by name Vijaya Kumar (who effected 15 % of the bid amount and failed to remit balance 85 %) on 27.12.2007 should be clubbed to the sale price fetched on 18.06.2008 cannot be accepted, by virtue of specific stipulation under Section 49 (3) of the Kerala Revenue Recovery Act, providing for 'forfeiture' of the said amount, in case of failure in depositing the balance amount. A sum of Rs.97,601/- is also stated as in arrears as reported by the Recovery Officer, Assistant EPF Commissioner, Sub Regional W.P.(C) No. 34148 of 2008 : 9 : Office, Kaloor towards the P.F. dues, to be deducted from the sale proceeds along with such other dues.
10. The learned counsel for the petitioner submits that the petitioner Bank does not propose to dispute the priority right of the State to have the sales tax arrears and similar right of the EPF authority to have the due amount under the EPF Act to be deducted and that the dispute is with regard to the sustainability of the claim of other authorities like KSEB, Corporation dues and also the workers' dues ordered as per Exts. P7 to P9. The learned counsel submits that the Industrial Disputes Act does not confer any priority right in favour of the 'Workmen' over the assets belong to their 'Employer' and this being the position, the rights of the secured creditor have to prevail over those of the former. It is also pointed out that the 4th respondent establishment was only a 'partnership firm' constituted under the relevant provisions of the Indian Partnership Act and not a Company under the Indian Companies Act to have attracted the W.P.(C) No. 34148 of 2008 : 10 : situation covered by Section 529A of the Companies Act, whereby the workers of Company, on winding up get a preferential right over the secured creditor. Reliance is sought to be placed on the decision rendered by this Court in Basheer Vs. Pearl Food Products (2006 (2) KLT 346) and Sasidharan Pillai Vs. Indian Overseas Bank (2011 (1) KLT 137), explaining the scope of such relative rights. It is also pointed out by the learned counsel that the Revenue is not justified in forfeiting the amount of Rs.33,15,000/- procured towards 15 % of the total sum of Rs. 2,21,00,000/-, for which bid was knocked down on 27.12.2007. Since the bidder did not remit the balance amount and further since the subsequent sale held on 18.06.2008, pursuant to Ext. P5 proclamation, fetched only a sum of Rs. 1,94,00,000/-, both these amounts have to be added together and the amounts recoverable by virtue of the priority rights are to be appropriated under the respective heads and the balance amount has to be released to the petitioner. The learned W.P.(C) No. 34148 of 2008 : 11 : counsel also submits that the total liability covered by Ext. P2 decree is nearly Rs. 7 crores; whereas the amount generated by way of sale of the property concerned is only a meagre one.
11. The learned counsel appearing for the workers arrayed as respondents 5 to 26 submits that, the term 'workman' as defined under Section 2 (s) of the Industrial Dispute Act does not discriminate workers in an industry, whether it is a Partnership firm or a Company. For this reason itself, the mandate contemplated under Section 529A of the Companies Act creating preferential right towards the workmen's dues has to be read into in the given circumstances as well so as to protect the rights and interest of the workers, who happen to be the weaker section in the society, having lost their needs to win the bread and butter, due to closure of the industry and whose rights stand crystallized as per Exts. P6 to P8.
W.P.(C) No. 34148 of 2008 : 12 :
12. The learned standing counsel appearing for the KSEB submits, with reference to the counter affidavit, that, by virtue of clause 15 (d) of the Regulations relating to the Conditions of Supply of Electrical Energy and its statutory character as declared in (1998) 4 SCC 470 (cited supra) and 2000 (1) KLT 432 (cited supra), the arrears payable to the Board are having priority status. It is also pointed out that the prayers raised by the petitioner Bank itself is only to disburse the balance amount after appropriating the sale tax arrears and the electricity amount and as such, any submission made to the contrary during the course of arguments, without any pleadings and prayers is not liable to be entertained.
13. The learned Government Pleader seeks to assert the stand already taken in the counter affidavits filed by the third respondent and seeks to sustain 'forfeiture' of the amount of Rs.33,15,000/- generated in the aborted sale held on 27.12.2007 (by way of 15% of the bid amount, effected by W.P.(C) No. 34148 of 2008 : 13 : the defaulter bidder).
14. After hearing all the parties concerned, this Court finds that, there is no challenge at all with regard to the sale involved and the dispute is with regard to the appropriation of the amount procured by way of sale. With regard to the prayer of the petitioner Bank to club the amount of Rs. 33,15,000/-obtained in the aborted sale held on 27.12.2007 (by way of 15 % of the bid amount) to the sale proceeds procured on 18.06.2008, pursuant to Ext. P5 sale proclamation, it is to be noted that the steps for conducting the sale were pursued in tune with Ext. P3 judgment passed by this Court in W.P.(C) No. 30452 of 2006 preferred by the Bank. There is no case for the petitioner Bank that any of the statutory requirement as contemplated under the Revenue Recovery Act/Rules was not been complied with or that, Ext. P5 sale proclamation was defective in any manner. It also remains a fact that, pursuant to the sale held on 27.12.2007, the highest bidder bid the property for Rs. W.P.(C) No. 34148 of 2008 : 14 : 2,21,00,000/- and he deposited 15 % of the bid amount then and there in conformity with Section 49(3) of the Act. Section 49 (3) of the Kerala Revenue Recovery Act reads as follows:
49 (3) A sum of money not less than fifteen per cent of the bid amount of the immovable property shall be deposited by the person declared to be the purchaser with the officer conducting the sale immediately after such declaration and where the remainder of the purchase money is not paid within thirty days of the sale, the money deposited shall be liable to forfeiture.
Section 49 (3) clearly mentions that, after depositing 15% of the bid amount/on the date of sale (towards the mandatory deposit), if the balance is not remitted by the successful bidder, within 30 days of sale, the money so deposited shall liable to be forfeited. Sub Section 5 of Section 49 enables the property to be resold, if the purchaser refuses to deposit of the due amount, which says that all loss and expenses on said resale shall be recoverable from the defaulter purchaser and if the second sale is for a still higher price than the first sale the difference shall be the property of the defaulter. W.P.(C) No. 34148 of 2008 : 15 :
15. The power to forfeit part of sale consideration (15 % of the bid amount deposited on the date of sale) in conformity with Section 49(3) of the Revenue Recovery Act is not under dispute. In fact the said amount actually belonged to the highest bidder in the sale conducted on 27.12.2007 and the petitioner Bank cannot have any right or interest over the said amount when the sale did not take place. There is no challenge against the competency of the State to forfeit by virtue of the statutory prescription and the person, if at all to be aggrieved, can only be the bidder who deposited the said amount and lost the same due to forfeiture, since the balance was not deposited within the prescribed time. The only right of the Bank is to cause further proceedings to be pursued for 're-sale' and the right to realize the additional expenditure if any, in this regard, in accordance with law. Above all, the petitioner Bank has not chosen to challenge the vires of Section 49 (3) of the Revenue Recovery Act providing for forfeiture to the extent as prescribed therein. The said W.P.(C) No. 34148 of 2008 : 16 : provision having been incorporated in the enactment brought about by virtue of the specific power vested with the State under the relevant entry to List II (State list) of the 7th schedule to the Constitution of India and in so far as there is no challenge to the statutory prescription providing for forfeiture, there is absolutely no merit in the contentions raised by the petitioner Bank that the amount of Rs. 33,15,000/- deposited by the defaulter bidder on 27.12.2007 pursuant to Ext. P4 sales proclamation cannot be forfeited. So also, there is no merit or bonafides in the contentions of the petitioner Bank that the said amount is liable to be added together with the sale consideration procured in the sale conducted on 18.06.2008 pursuant to Ext. P5 notification. No provision in this regard is there to carry forward the said amount, to be clubbed with the amount procured in the re- sale, under the Revenue Recovery Act. Existence of any such provision or any enabling judicial precedents in this regard is brought to the notice of this Court. This being the position, W.P.(C) No. 34148 of 2008 : 17 : the contention raised by the petitioner in this regard is devoid of any merit and the same is rejected.
16. However, coming to the case projected by the petitioner that there is no priority right in respect of the amount covered by Exts. P7 to P8 verdicts passed by the Labour Court/Industrial Tribunal in favour of the workers concerned, this Court finds that there is considerable force in the submission. There is no dispute to the factual position that the 4th respondent is only a 'Partnership firm' registered under the Indian Partnership Act and not a Company registered under the Indian Companies Act 1956. It is only in the case of a workers of a Company, on winding up, the Statute confers priority rights on the amount payable to the workers by virtue of stipulation under Section 529 (A) of the Companies Act. There is no such provision either in the Indian Partnership Act or in the Industrial Disputes Act. True, the Industrial Disputes Act does not call for any distinction between the workers of a Partnership firm and that of a W.P.(C) No. 34148 of 2008 : 18 : Company or that of a Proprietorship concern - which is an industry. The term 'workman' as defined under 'Section 2 (s)' of the Industrial Dispute Act is applicable throughout, wherever the employer is an industry. But the priority right is something, which has to be recognized by virtue of a specific provision in the Statute and no where in the Industrial Dispute Act, does it recognize or stipulate that the amount payable to the workers will have any such priority rights. As such, this Court cannot but hold that the amount payable to the workers (respondents 5 to 26) as per Exts. P6 to P8 is not liable to be deducted from the sales consideration of Rs. 1,94,00,000/- procured in the sale conducted on 18.06.2008, in view of the priority right of the secured creditor Bank.
17. The petitioner Bank itself having admitted in Ext. P9 representation and also by virtue of the specific 'prayer', as amended, to disburse the due amount after setting off the amounts payable to the KSEB and the Sales Tax arrears, it is not open to the Bank to take a 'U turn' and contend that the W.P.(C) No. 34148 of 2008 : 19 : amount payable to the KSEB is not liable to be deducted for want of priority right. Such a contention raised during the course of hearing, without any pleading and prayers, is thoroughly wrong and baseless and hence is rejected; more so, in view of Clause 15(d) of the Regulations relating to Conditions of Supply of Electrical Energy, declaring that, all dues to the Board from a consumer shall be the 'first charge' on the assets of the consumer and in view of the dictum in (1998) 4 SCC 470 (cited supra) and 2000 (1) KLT 432 (cited supra) holding that the Regulations relating to Conditions of Supply of Electrical Energy are of statutory character.
18. The learned counsel for the petitioner during the course of hearing fairly conceded, with reference to the contents of the counter affidavit dated 26.03.2011 filed by the 3rd respondent, that there is an arrears of Rs.97,601/ from the 4th respondent towards the EPF dues, that there is no objection for the petitioner Bank to have the amount payable W.P.(C) No. 34148 of 2008 : 20 : to the EPF authorities to be deducted by virtue of their priority right, as clearly mentioned under the EPF Act.
19. In the above facts and circumstances, respondents 2 and 3 are directed to compute the actual amount having priority rights, being arrears towards Sales Tax, Electricity charges payable to the KSEB and arrears payable to the EPF department with interest and such other expenses including the cost of sale proceedings, to have the same deducted from the sum of Rs. 1,94,00,000/- generated by virtue of sale held on 18.06.2008 and disburse the balance amount to the petitioner Bank as expeditiously as possible, at any rate within 'three months' from the date of receipt of a copy of this judgment.
20. Before parting with the case, it cannot but be held that the workers of the 4th respondent firm and their families have been virtually thrown to the streets, because of the closure of the industry, a decade back, without satisfying the mandatory requirements under the relevant provisions of the W.P.(C) No. 34148 of 2008 : 21 : Industrial Disputes Act, in spite of Exts. P6 to P8 verdicts passed by the Labour Court/Industrial Tribunal, which have become final; but still to be satisfied. It is also true that the workers cannot aspire anything from the sale consideration of Rs. 1,94,00,000/- procured on sale of the property of the firm held on 18.06.2008, as held already, for want of any priority right and in view of the better rights of others concerned like the State, KSEB, EPF authorities and the secured creditor Bank. But, it remains a fact that a sum of Rs. 33,15,000/- came to be deposited by the defaulter bidder on 27.12.2007 towards 15 % of the bid amount, which was forfeited by the State under Section 49 (3) of the Kerala Revenue Recovery Act as the balance was not deposited by the concerned bidder. This Court has already held that the State is entitled to forfeit the said amount and has rejected the claim of the petitioner Bank, to have it carried forward to be clubbed with the sale price fetched in the re-sale of the property held on 18.06.2008. Though this Court recognizes such right of the W.P.(C) No. 34148 of 2008 : 22 : State for forfeiture, the plight of the workers and their family, who lost their means of livelihood and the inability to have Exts. P7 to P8 verdicts implemented cannot be lost sight of. The amount of Rs.33,15,000/- came to be forfeited by the State only by virtue of the 'aborted sale' on 27.12.2007; whereas the interest of the State to have the Sale Tax arrears, the amount payable to the EPF authorities and the Electricity Board stand well secured and realized by virtue of the re-sale of the properties conducted on 18.06.2008, leaving the balance to the petitioner Bank - the secured creditor. In other words, the amount of Rs.33,15,000/- came to the hands of the State merely by chance and no loss whatsoever has been resulted to the State in any manner. The entire arrears towards Sale Tax and such other heads having been satisfied, in view of the sale price generated in the re-sale held on 18.06.2008. The workers and their lawful claims are to be left in lurch for want of enabling provision to protect their interest, due to non-existence of priority rights, when the W.P.(C) No. 34148 of 2008 : 23 : entire amount of Rs. 33,15,000/- is appropriated by the State, which came as a boon to the State. It may amount to 'unlawful enrichment' when the rights and interests of the worker class who belong to the weaker section of the society becomes ignored. Considering the mandate given by the Apex Court in Sahakaari Khand Udyog Mandal Ltd. Vs. Commissioner of Central Excise and Customs [(2005) 3 SCC 738] explaining the term 'unjust enrichment', this Court finds that it is the duty of the State to rise to the need of the hour and come to the rescue of such poor folk, who is left without any remedy. Since the State has nothing to loss and a sum of Rs. 33,15,000/- has came to the hands of the State only by chance, this Court earnestly hope that the first respondent State would consider the plight of the workers and would take some remedial measures, in an equitable manner.
21. In the said circumstances, this Court permits the workers of the 4th respondent, who are the respondent 5 to 26 W.P.(C) No. 34148 of 2008 : 24 : in the writ petition, to approach the first respondent by filing a representation in this regard also producing a copy of this judgment within 'one month' from the date receipt of a copy of this judgment; on which event, the first respondent shall consider the same and appropriate orders shall be passed to redress their grievance, at least to some extent as found to be fit, just and proper by the first respondent within 'three months' there after.
The Writ Petition is disposed of.
P. R. RAMACHANDRA MENON, (JUDGE) kmd