Gujarat High Court
Liquidator Petrofils Cooperative ... vs Rashtriya Mazdoor Union on 8 July, 2021
Author: Sonia Gokani
Bench: Sonia Gokani, Gita Gopi
C/LPA/2704/2010 IA ORDER DATED: 08/07/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
MISC. CIVIL APPLICATION (FOR RECALL) NO. 2 of 2020
In R/LETTERS PATENT APPEAL NO. 2704 of 2010
In R/SPECIAL CIVIL APPLICATION NO. 1855 of 2001
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RASHTRIYA MAZDOOR UNION Versus LIQUIDATOR PETROFILS COOPERATIVE LIMITED ========================================================== Appearance:
MR RAJESH P MANKAD for the PETITIONER(s) No. LD SR. ADV. MS.MANISHA LAV KUMAR WITH ROHAN LAVKUMAR for the RESPONDENT(s) No. ========================================================== CORAM:HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MS. JUSTICE GITA GOPI Date : 08/07/2021 IA ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI)
1. This application is preferred seeking to recall the oral judgment and order passed by this Court on 25.03.2013 in Letters Patent Appeal No.2704 of 2010 arising from Special Civil Application No.1855 of 2001 in Letters Patent Appeal No.2703 arising from Special Civil Application No.3105 of 2002.
2. The applicant is a registered trade union, registered under the Trade Union Act, 1926 and is engaged in Page 1 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 advancing the causes of employees employed by different organization/industries in the State of Gujarat and the members of the applicant union are citizen of India, who are entitled to the fundamental rights enshrined in Part-III of the Constitution of India including protection under relevant legislation.
3. The respondent is the Liquidator appointed for the purpose of liquidation of Petrofils Co-operative Limited, a Co-operative Society registered under Multi State Co-
operative Societies Act, 1984.
4. The applicant seeks to revive Misc. Civil Application No.1 of 2020 dated 11.03.2020 in as much as the reply to the notice dated 19.12.2019 issued by the applicant-union through the advocate ventilating the grievances of the applicant-Union, has not been given. The approach of the Liquidator according to the Union, is illegal, unjust and his conduct is contrary to the settled principles of law. This has deprived the beneficiary workmen of their rights and therefore, the prayers are sought for recalling the Page 2 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 directions contained in the oral judgment dated 25.03.2013 in Letters Patent Appeal Nos.2703 and 2704 of 2010 and allied matters, whereby the Court quashed the oral judgment passed in Special Civil Application No.1855 of 2011 dated 10.08.2010.
Brief facts:
5. The applicant Union is the petitioner of the employees of the Erstwhile Petrofils Co-operative Limited, before the company went into liquidation in the year 2001.
An award came to be passed by the Industrial Tribunal, Vadodara on 12.06.1999 in IT (Reference) No.26 of 1992, whereby it declared all the workmen as "permanent workmen" w.e.f. 1996 and they were further availed of all necessary benefits as were being paid to the permanent workmen of the company.
5.1 The company in the liquidation chose not to comply with the award passed by the Tribunal. It also closed its activities and published a notice with an option for the employees for Voluntary Separation Scheme (the "VS Scheme" for short). These applicants-employees were not Page 3 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 permitted to opt for the said scheme and therefore being aggrieved by such action of the company, they approached this Court by preferring Special Civil Application No.1855 of 2001.
Order in Special Civil Application No.1855 of 2001 by learned Single Judge:
5.2 The Court after hearing learned advocates on both the sides and on realising that the company has gone into liquidation and Official Liquidator is already appointed, directed on dated 10.08.2010 that the Official Liquidator shall ascertain the claims of the members of the petitioner-union and thereafter shall make necessary payment to the workmen on ascertaining that the sufficient fund is available with the Official Liquidator and if the funds are not available, the payment should be subject to the final outcome in the writ petition pending before the Court being Special Civil Application No.3105 of 2002.
Order in Special Civil Application No.3105 of 2002: Page 4 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021
C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 5.3 In Special Civil Application No.3105 of 2002 preferred by the Erstwhile Company after liquidation challenging the Award of Tribunal on the very day, the Court passed the following order:
"1. The petitioner-Company had filed Civil Application No.1399/2008 seeking some amendment. The said application came to be disposed of by this Court vide order dated 11.03.2008. In Para 8 of the said order, it has been observed as under;
"8. I have considered the explanation given by the applicant in the present application in paragraphs 2 and 3 and also considered the submissions made by Dr.Sinha as to whether the Liquidator is legally entitled to challenge the award in question when the order of winding up was passed on 11.4.2001 and the petition was filed by the Company on 18.6.2001. Therefore, this application for amendment filed by the Company is not maintainable in law because the Company is not legally entitled to challenge the award after passing of the winding up order on 11.4.2001. It is open for the Official Liquidator to file such application in the present proceedings pointing out the facts that now he is Page 5 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 incharge of the Company and to be joined as party in the main petition as this application is filed by Company for amendment which has not been granted. It is open for the Official Liquidator to move application to be joined as party in the proceedings if it is permissible under law. The learned Advocate Dr.Sinha is objecting aforesaid observation of this Court, that Official Liquidator has no legal right to file such application. The objection raised by learned Advocate Dr.Sinha can be considered as and when such occasion arises. Therefore, present application filed by Company is rejected."
2. Today, learned counsel Mr. M. S. Rao, appearing on behalf of the petitioner - Company, when asked whether any application for being joined as a party in the present proceedings has been filed by the Office of the Official Liquidator, he stated that no such application has been filed.
3. In view of the above, no further orders are required to be passed in this matter. Consequently, the petition stands rejected. Rule is discharged. Interim relief, if any, stands vacated."
Order in Letters Patent Appeal Nos.2703 & 2704 of Page 6 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 2010:-
5.4 Both these orders dated 10.08.2010 were challenged by the company-Petrofils Cooperative Ltd (in liquidation), the Court noticed the inter connected questions and therefore, they were simultaneously decided. On 25.03.2013, the Division Bench passed the following order in Letters Patent Appeal No.2703 and 2704 of 2010 and allied matters:
"4. The learned Single Judge, in Special Civil Application No.3105 of 2002 was guided by the fact that earlier the order was passed by the learned Single Judge in Civil Application No.1399 of 2008 dated 11.3.2008, whereby it was observed by the learned Single Judge that the application was not granted, but it would be open to the Official Liquidator/Liquidator to file such application in the present proceedings, pointing out the fact that now he is In-charge of the company and is to be joined as party in the main petition. As no such application was preferred by the appellant, the petition came to be rejected by the learned Single Judge.
5. In Special Civil Application No.1855 of 2001, it appears that since the other Special Civil Application came to be dismissed, the learned Single Judge, without further Page 7 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 examining the aspect as to whether the award can stand in law or that the award would be applicable to which type of workers or that which benefits are to be granted to particular workers, has directed for implementation of the award of the Tribunal.
6.It is in this light and factual background, we have to consider the matter.
7. The learned Counsel appearing for both the sides, after arguments, suggestions and counter suggestions, have agreed for the following aspects:-
(a) The applicant, through its Liquidator, may be permitted to prefer Letters Patent Appeal and leave be granted.
Hence, we grant leave to prefer Letters Patent Appeal No.2703 of 2010 to the applicant therein. Hence, the application shall stand disposed of.
(b) The second agreement is that the Liquidator of the company be permitted to be joined as petitioner No.2 in the main Special Civil Application No.3105 of 2002. In view of the aforesaid agreement, we find that Civil Application No.1803 of 2013 deserves to be allowed. Hence, ordered accordingly.
8.By virtue of the order passed in Civil Application No.1803 of 2013, the amendment shall stand allowed even in the main Special Civil Application No.3105 of 2002.
9.It is further agreed by the learned Counsel appearing for Page 8 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 both the sides that as there was default on the part of the appellant for not filing the application well in time, which resulted into the dismissal of Special Civil Application No.3105 of 2002, appropriate cost as this Court may find it proper be awarded to the respondent.
10.We find that, considering the facts and circumstances, appropriate cost should be of Rs.25,000/- in each of the matters, total Rs.50,000/-. It is also the fact that on account of the order passed in Special Civil Application No.3105 of 2002, the learned Single Judge passed another order in conformity thereof in Special Civil Application No.1855 of 2001. It appears to us that in both the main matters, the question of legality and validity of the award and the implementation thereof is not examined, it would be just and proper if the orders of the learned Single Judge, which are impugned in both the Letters Patent Appeals are set aside and the main Special Civil Applications are heard on merits and the questions raised are decided in accordance with law. The learned Counsel for both the sides have no objection for remand of the matter to the learned Single Judge on condition that appropriate cost is awarded to the respondent to be paid by the appellant. Since there is agreement by both the sides, we find that elaborate discussion would not be required on the said aspect.
11.In view of the aforesaid observations and discussion, the impugned orders passed by the learned Single Judge in Special Civil Application No.3105 of 2002 and Special Civil Page 9 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 Application No.1855 of 2001 are set aside with the further direction that the main Special Civil Application Nos.3105 of 2002 and 1855 of 2001 shall be heard in accordance with law, but both on condition that the applicant - appellant pays the cost of Rs.25,000/- in each of the matters, total Rs.50,000/- to the respondent within a period of two weeks from today. After the amount of cost is paid and the condition is complied with, it will be open to either side to move the learned Single Judge for early hearing of Special Civil Application No.3105 of 2002 and Special Civil Application No.1855 of 2001. It is observed that the rights and contentions of both the sides in respective petitions shall remain open and the rights shall not be prejudiced by any of the observations made or concessions given in the present appeals."
5.5 By way of Misc. Civil Application (for recall) No.1 of 2020 in Letters Patent Appeal No.2703 and 2704 of 2010 and allied matters, the Union approached this Court. This Court on 11.03.2020 after hearing both the sides passed the following order:
"1. ***
2.The brief facts leading to the present application are as follows:-
2.1. It is the grievance on the part of the applicant that there had been a challenge to the award in Reference (IT) Page 10 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 No. 26 of 1992 passed on 12.03.1999 belatedly by filing Special Civil Application No. 3105 of 2002 ignoring the fact that once the society was ordered to be wound-up, if at all, the award is to be challenged, it ought to have been challenged by the Official Liquidator. This Court (Coram:-
K.S.Jhaveri, J.) dismissed the petition being SCA No. 3105 of 2002 keeping it open for the Official Liquidator to challenge the award in question.
2.2. The applicant - union preferred the Miscellaneous Civil Application for revival of SCA No. 3105 of 2002 which was allowed and the petition was restored with a permission to the Official Liquidator to carry out the amendment.
2.3. The Special Civil Application No. 1855 of 2001 was filed by the applicant - union which was permitted to submit claim in view of liquidation and the liquidator was directed to register the claim. It was done by 155 workmen on 01.08.2004 amounting to Rs. 9,99,91,663.00/- (Rupees Nine Crores Ninety Nine Lakhs Ninety One Thousand Six Hundred Sixty Three).
2.4. The grievance on the part of the applicant is that despite the directions issued by this Court, the liquidator did not carry out the amendment in SCA No. 3105 of 2002.
This Court therefore on 10.08.2010 rejected the SCA No. 3105 of 2002 filed by the employer and the petition preferred by the union being SCA No. 1855 of 2001 seeking Page 11 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 enforcement and implementation of the award was allowed and the respondent - liquidator was directed to accept the claim on the basis of the award and make payment in accordance with law.
2.5. The further grievance on the part of the applicant - union is that since then the applicant - union has been pursuing respondent - liquidator to register the claim submitted by the union vide communication dated 01.08.2004 and make payment, however, the liquidator preferred two Letters Patent Appeals against oral order dated 10.08.2010 passed in SCA Nos.3105 of 2002 and 1855 of 2001.
2.6. This Court vide its oral judgment dated 25.03.2013 disposed of both the appeals being LPA Nos. 2703 and 2704 of 2010 with a direction to the liquidator to pay the applicant - union Rs. 25,000/- as cost in each appeal and set aside both the orders dated 10.08.2010 passed in SCA Nos. 3105 of 2002 and 1855 of 2001. The directions issued by this Court are as follows:-
"11. In view of the aforesaid observations and discussion, the impugned orders passed by the learned Single Judge in Special Civil Application No.3105 of 2002 and Special Civil Application No.1855 of 2001 are set aside with the further direction that the main Special Civil Application Nos.3105 of 2002 and 1855 of 2001 shall be heard in accordance with law, but both on condition that the applicant - appellant pays the cost of Rs.25,000/- in each of the matters, total Page 12 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 Rs.50,000/- to the respondent within a period of two weeks from today. After the amount of cost is paid and the condition is complied with, it will be open to either side to move the learned Single Judge for early hearing of Special Civil Application No.3105 of 2002 and Special Civil Application No.1855 of 2001. It is observed that the rights and contentions of both the sides in respective petitions shall remain open and the rights shall not be prejudiced by any of the observations made or concessions given in the present appeals."
3. According to the applicant, the award in Reference (IT) No.26 of 1992 has not been decided on merits and the award stands as it is, as on today. Since the Official Liquidator has been permitted to challenge the award after payment of cost, the liquidator ought to have moved to the learned Single Judge for consideration of the matter on merits. Till date, the award remains inoperative and therefore, it was a duty of the liquidator to grant benefit of award to the 155 workmen for which the claim had been lodged and the disbursement ought to have taken place. 3.1. According to the applicant, notice came to be issued to the Official Liquidator on 19.12.2019 which has been not replied to. Several correspondences addressed directly by the union to the Official Liquidator also has remained unnoticed and therefore, the grievance is raised that except 155 workmen, rest all have been paid as there is sufficient fund available with the liquidator, therefore, the Court need to recall its order.
Page 13 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021
4. We have heard learned advocate Mr. Mankad, who has urged that the workmen have waited for sufficient number of years. Almost 7 years have passed, the Official Liquidator could have approached this Court seeking to revive those matters. Since the same has not been done, the only option the workmen had, to approach this Court. He urged this Court to issue direction of disbursement.
5. On due consideration of pleadings and submissions as also noticing the huge time gap and also considering the fact that no reply has been given by the Official Liquidator who otherwise was permitted to make a request in SCA Nos. 3105 of 2002 and 1855 of 2001, without issuance of notice to the other side and without entering into any other aspects on merits, the petitioner is permitted to once again address a communication reminding the respondent of pendency of their claim. Let the respondent reply to the notice given on 19.12.2019 within two weeks from the date of receipt of copy of this order.
6. In the event of the same being not replied to or the grievance of the workmen being continued, the petitioner shall be permitted to revive the present application to enable this Court to enter into the merits of the matter and adjudicate."
6. By way of the present application, it is the grievance on the part of the applicant that the management and Page 14 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 official liquidator did not respond at all to the communication sent pursuant to the directions of this Court and therefore, it has been constrained once again to approach this Court with the following prayers:
"4...
(A) Hon'ble Court be pleased to allow present MCA and further be pleased to direct revival of Misc. Civil Application (For Recall) No.1 of 2020 in R/Letters Patent Appeal No.2704 of 2010 in R/Special Civil Application No.1855 of 2001 in the interest of justice with further direction to the registry of this Hon'ble Court to place file proceedings of Misc. Civil Application (For Recall) No.1 of 2020 in R/Letters Patent Appeal No.2704 of 2010 in R/Special Civil Application NO.1855 of 2001 consideration and direction on merit.
(B) Hon'ble Court be pleased to entertain and allow the present Application and further be pleased to hold and declare that the respondent Official Liquidator by not acting in compliance and in conformity with the direction contained in oral judgment dated 25.03.2013 in Letters Patent Appeal No.2703 of 2010 and 2704 of 2010 has lost right to perusing the proceedings of Special Civil Application No.3105 of 2002 and in such a circumstances direction issued by learned Single Judge vide order dated 10.08.2010 in Special Civil Application No.1855 of 2001 needs to be restored, be pleased to recall the direction of Page 15 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 setting aside the oral order dated 10.08.2010 in SCA No.1855 of 2001 and further be pleased to direct respondent Official Liquidator to immediately disburse the amount by an account payee cheque in favour of the concerned workman listed at ANNEXURE-C towards their claim in accordance with the award and Hon'ble Court will be further pleased to direct the Official Liquidator to make above payment with interest at commercial rate since the learned Liquidator has intentionally delayed the proceedings and acted in hostile discrimination while dealing with the workers claim.
(C) During the pendency and final disposal of the present application Hon'ble Court will be pleased to direct the Official Liquidator to place on record of the present proceedings the details of claims received, admitted, funds received and or realised and available funds for disbursement with in the time bound schedule and place the compliance report on the record of the present proceedings within time bound schedule.
(D) Hon'ble Court be pleased to award the cost of the present Application.
(E) Any other and further orders which your Honour deems just and proper to meet the ends of justice may kindly be granted."
7. This Court issued the notice on 12.02.2021 and Page 16 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 learned advocate, Mr.Rohan Lavkumar filed his appearance for the Official Liquidator and sought time to file reply.
Affidavit-in-Reply:-
8. Affidavit-in-reply is filed by the respondent-Liquidator of Petrofils Co-operative Limited, who has opposed this Misc.Civil Application. According to it, the appointment of the Liquidator is mandated to take into his custody all the property, effects and actionable claims to which the Multi- State Co-operative Society is or appears to be entitled to. He may take such steps as may be necessary or expedient to prevent loss or deterioration or damage to such property effects and claims. He has also given the details of Sections 89 and 90 of the Multi-State Co-operative Societies Act, 2002 and also further has referred to Rule 28 of the Multi-State Co-operative Societies Rules, 2002 detailing as to the procedure to be adopted by the liquidator.
"Section 89. Liquidator.
(1) *** (2) A liquidator shall, on appointment, take into his custody or under his control all the property, effects and Page 17 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 actionable claims to which the multi-State co-operative society is or appears to be entitled and shall take such steps as he may deem necessary or expedient to prevent loss or deterioration of, or damage to, such property, effects and claims and he may carry on the business of the multi-State co-operative society so far as may be necessary with the previous approval of the Central Registrar.
3.***
4.*** Section 90. Powers of liquidator.
(1) Subject to any Rules made in this behalf, the whole of the assets of a multi-State co-operative society in respect of which an order for winding up has been made, shall vest in the liquidator appointed under Section 89 from the date on which the order takes effect and the liquidator shall have power to realise such assets by sale or otherwise. (2) (c). to investigate all claims against the multi-State co- operative society and subject to the provisions of this Act, to decide questions of priority arising between claimants; (2) (d). to pay claims against the multi-State co-operative society, including interest up to the date of winding up according to their respective priorities, if any, in full or rateably, as the assets of the society may permit;... (2) (g). to give such directions in regard to the collection and distribution of the assets of the multi-State co-operative society as may appear to him to be necessary for winding up the affairs of that society;
Rule 28 (b). The liquidator shall, as soon as the order of winding up of the multi-State Co-operative Society takes effect, publish by such means as he may, think proper, a notice, requiring all claims against the multi-state cooperative society, the winding up of which has been ordered, to be submitted to him within two months of the publication of the notice. ...
Rule 28 (c) The liquidator shall investigate all the claims Page 18 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 against the multi-state Co-operative Society and decide questions of priority arising between claimants." 8.1 Rule 29 of the Multi-State Co-operative Societies Rules, 2002 speaks of application of assets of the multi- state cooperative society. According to the Liquidator, all such orders passed by the Liquidator under Section 90 of the Multi-State Co-operative Societies Act, 2002 shall be executed according to the law for the time being in force for the recovery of arrears of land revenue. The Liquidator has power to execute the orders passed by him as arrears against land revenue and Section 117 Multi-State Co- operative Societies Act, 2002 speaks of the bar of jurisdiction of civil Courts in such matters since all matters concerning the winding up and dissolution of a multi-state co-operative society need to be considered by the liquidator alone. It is his duty to assimilate all assets of the co-operative society, consider various recoveries to be made by the society, pass and enforce necessary orders of such recoveries. He must invite claims and is required to adjudicate these claims and determine a priority of creditors as contemplated under Section 90 (c) of the Multi-State Co-operative Societies Act, 2002, after such Page 19 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 adjudication and assimilation as well as liquidation of assets, the Liquidator would proceed to distribute payments to these creditors in accordance with the priority determined under Section 90(c) of the Act. These orders of determining priority as well as distribution of assets according to this reply, are appealable under Section 99 of the Act. The Act being the complete code in itself for winding up and liquidation of the co-operative society, no other Act shall need to be looked into. 8.2 It is further urged that the present Misc. Civil Application prays for revival of Misc. Civil Application No.1 of 2020 and also to recall the judgment and order dated 25.03.2013 passed in Letters Patent Appeal No.2703 and 2704 of 2010 and therefore that itself is not maintainable. The application also does not deserve to be allowed on merits.
8.3 According to the Liquidator, in the year 1992, certain contract labourers of erstwhile Petrofils Co-operative Limited sought regularisation as permanent workers. By Page 20 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 award dated 12.03.1999, the Labour Court allowed the I.T. Reference No.26 of 1992. This was carried in appeal by both the sides challenging the decision which otherwise resulted in favour of the workers .
8.4 The contract labourers were represented by the Rashtriya Mazdoor Union, Vadodara, the applicant herein, who had filed Special Civil Application No.1855 of 2001, wherein it had sought the direction against the Liquidator to pay and continue to pay the wages to the workmen and members of the applicant and also sought the direction to receive the benefits available to permanent and regular employees and also the benefits of Voluntary Separation Scheme.
However, on the other hand, the Petrofils Co- operative Limited filed Special Civil Application No.3105 of 2002 challenged the said Award. The financial difficulties faced by the Petrofils Co-operative Limited in the year 2000 led to the Government of India floating a voluntary separation scheme instead of opting for retrenchment. Page 21 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021
C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 The permanent and regular employees opting for the same were to be entitled to receive an ex-gratia payment equivalent to 45 days for each year of service within the society. This was exercised in favour of those permanent employees on the rolls of the company as on 18.12.2000. The scheme was valid for three months and was closed on 17.03.2001 prior to the order of liquidation. 8.5 According to the respondent, Petrofils Co-operative Limited was largely owned by the Government of India under the aegis of Ministry of Chemicals & Fertilizers. Since it was not doing well financially, the Government of India recommended the winding up of the Multi State Co- operative Society on 20.11.2000 and eventually, it was ordered to be wound up on 11.04.2001 by the Government of India and the Liquidator was appointed under Section 80 of the Act along with all the powers. 8.6 Thus, the scheme was published and finalized and brought into effect on 11.04.2001, however, and the Liquidator by then had already been appointed. Therefore, vide order dated 10.02.2004 of this Court passed in Page 22 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 Special Civil Application Nos.1855 of 2001 and 3105 of 2002, the applicant was directed to lodge its claim before the Liquidator.
8.7 It is, therefore, urged that neither the Liquidator nor the applicants have approached learned single judge for hearing of the Special Civil Applications. The Liquidator has not revived the Special Civil Applications even if revived, he would not be able to make payments on account of pendency of various matters relating to the collection, liquidation and sale of various assets. The sale of assets is sub - judice and the fund would be available for disbursement only in the future and unless, it is crystallized, the Liquidator will not be in a position to determine the priority of the creditors and disbursed the amount. With the approval of the Asset Sale Committee, the assets of the co-operative society have been sold and such sale was challenged by virtue of Review Application as grossly undervalued and ultimately, the sales have been set aside by the Court.
8.8 It is challenged by the asset purchasers in Avani Page 23 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 Infrastructure vs. the Collector & Ors in SLP No.34950-52 of 2015 and the Apex Court has ordered status quo to be maintained by all the parties from 06.01.2016. Following is the list of litigation pertaining to sale of assets:
Sr No. Particulars SLP No. 1. Avani Infrastructure v. Collector and ors. 34950-52 of 2015 2. Prestige Infrastructure v. State of Gujarat 34962-64 of 2015 and ors. 3. Aspire Confra Pvt. Ltd. v. State of Gujarat 34955-57 of 2015 and Ors. 4. Collector v. Liquidator, Petrofils Co-op. 36252 of 2015 Ltd. And Ors. 5. State of Gujarat v. Liquidator, Petrofils Co- 36240 of 2015 op Ltd., and ors. 6. GIDC v. Liquidator,Petrofils Co-op. Ltd., 912 of 2016 and ors. 7. Collector Bharuch v. Liquidator, Petrofils 18386 of 2016 Co-op and ors. 8. M/s.Ganesh Infrastructure v. Liquidator, 2879 and 2880 of 2018 Petrofils Co-op Ltd., and ors.
8.9 It is, therefore urged that the applicant is seeking to mislead this Court by circumventing the liquidation process.
8.10 According to the respondent, there are about 5028 claims raised in the present society amounting to approximately 1067 Crore and additionally the Page 24 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 Government Loan amounting to Rs.143 Crore. They are all subject to the outcome of the litigation pertaining to the sale of the assets by the Assets Sale Committee and unless those proceedings are completed, the liquidator is not in a position to ascertain the corpus available with him. The Liquidator has a corpus i.e. less then 1/3 of the claim filed and further more, the corpus also is subject matter of litigation. It is denied vehemently that the Liquidator has paid the dues of other workmen. Many of the matters have been disposed of by the Court of various workmen with a direction that such claim can be filed before the Liquidator, some of which are specified in the reply itself.
8.11 In Special Civil Application No.7446 of 1991 an employee of erstwhile Petrofils Co-operative Limited challenged the dismissal and removal by an order dated 21.03.2001, he was reinstated with claim of 25% back wages. He preferred contempt petition being Misc. Civil Application No.1346 of 2001. When it was pointed out that the Liquidator has already been appointed by an order Page 25 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 dated 26.02.2002, the Court directed the applicant to lodge his claim before the Liquidator.
8.12 Special Civil Application No.9380 of 2001 has been preferred by the union of employee for seeking payment of arrears and wages. These contract workers were not directly employed by Co-operative Society, but various contractors engaged by the society sought payment directly from the Petrofils Co-operative Limited as the principal employer. The Court vide its order dated 06.08.2002 had taken note of the liquidation of the Co- operative Society and it also noticed that the union had lodged its claim before the Liquidator. It recorded the statement of the Liquidator that only after the claims of the parties were determined, would the Liquidator distribute funds to the various creditors. It further directed to the Liquidator to ascertain the claim of the applicant- union and in the event, the said claim was found to be genuine, the Liquidator was to release the funds from the disposal of its assets in appropriate proportion to the said workers.
Page 26 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 8.13 Special Civil Application No.3196 of 2001 was filed by the Gujarat Employees Petrofils Congress, which pertained to the wage revision and payment of those wages for the period 1992 to 1996 subject to the settlement arrived at in the year 1996. This settlement was not the subject matter of the liquidation and no proceedings challenging the same were pending at the time when the order of liquidation is passed. They were the permanent employees and had participated in the V.S.Scheme. The said settlement had not been challenged, but was effectively implemented.
According to the opponent, this is juxtaposed to the present case where award is subject to the challenge before the Court and the interim orders pertaining to the same have already been passed. Therefore, in peculiar facts and circumstances, the High Court directed the payment of difference of revisional wages to those permanent employees. It is further submitted that the claim of the applicant lodged before the Liquidator would be adjudicated and the amount would be disbursed, if the Page 27 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 applicant is found entitled once the assets of Petrofils Co- operative Limited are crystallized and the money is in the account of Petrofils Co-operative Limited, free for disbursement. It is further the say that in various matters the Hon'ble Supreme Court is seized with the matters where sale of such undertaking is subject to challenge and Liquidator is unable to determine the corpus available in order to disburse the money amongst various claimants.
9. So far as the present case is concerned, by an order dated 10.02.2004 passed in Special Civil Application Nos.3105 of 2002 and 1855 of 2001, the Court permitted to lodge the claim with the Liquidator, the order also restrained the Liquidator from making payment without permission of the Court. Hence, by virtue of the order dated 10.02.2004 the Liquidator would not be in a position to make such payment. He would be able to do it after the priority of the creditors is determined, recoveries and final settlement of the assets in the hands of the Liquidator is moved. In the matters where the Hon'ble Supreme Court has passed the order of status quo, the Page 28 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 petitions if are decided against the Liquidator, the amount need to be refunded to the buyers of those various assets. Hence, until those petitions are conclusively determined, the priorities cannot be settled. The applicant has already lodged his claim before the Liquidator, who shall be adjudicating the same and disbursing the funds. Their apprehension that the claims have either been denied or rejected is completely unfounded, the said claims will be adjudicated in accordance with law and money will be disbursed to the said workmen in terms of the priorities. 9.1 It is also further urged that there are no reasons given for recalling the order dated 25.03.2013 passed in Letters Patent Appeal Nos.2703 and 2704 of 2010 and therefore also the present application deserves to be set aside.
10. Affidavit-in-rejoinder has been filed denying all the aspects. It is the say of the applicant that the present applicant-union is attempting to implement the award dated 26.03.1999, passed by the Industrial Tribunal, Page 29 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 Vadodara in Reference (IT) No.26 of 1992, which remained undisturbed and is in operation even today. By judgment and order dated 25.03.2013 the Division bench permitted Official Liquidator to revive that petition being Special Civil Application No.3105 of 2002. Challenging the said award; however, the Liquidator has not revived the petition being Special Civil Application No.3105 of 2002 and thus the award is in operation even today and hence, the Misc. Civil Application seeking direction for recalling the order or directing compliance of award dated 12.03.1999 in Reference (IT) No. 26 of 1992.
10.1 According to the applicant, certain contract labourers of erstwhile Petrofils Co-operative Limited sought regularisation as permanent workers is not correct, the dispute referred for adjudication is "Shree Ghanshyambhai Ramanbhai Patel and other 159 workers (as per schedule) casual workers who have completed service of one year should be made permanent with all benefit or not." This was the case decided by the Industrial Tribunal and daily wagers of Page 30 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 Petrofils Co-operative Limited and similarly placed and those junior to the concerned workers have been granted permanency benefits and on the basis of such evidence of witnesses, the Industrial Tribunal has allowed the Reference by recording the finding of fact in favour of the workmen.
10.2 The Petrofils Co-operative Limited is ordered to be wound up on 11.04.2001 and the challenge has been made to the award by way the Special Civil Application No.3105 of 2002 by Petrofils Co-operative Limited and the reply to this from the applicant-union that it was not maintainable in the instance of Petrofils Co-operative Limited in view of the winding up order dated 11.04.2001. Therefore, the Court permitted the Official Liquidator to make necessary amendment for making challenge viable, however, nothing was done and therefore, the Court rejected the petition. Once again the Official Liquidator has been given an opportunity and was permitted to make necessary amendments. The use of word 'contract labourers' has been highly objected as according to the Page 31 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 applicant, the applicant-union had filed Special Civil Application No.1855 of 2001 for enforcement of award dated 12.03.1999 in Reference (IT) No.26 of 1992 as also for the benefit under the V.S.Scheme and similar consequential benefits. The Liquidator also was joined as a party in Special Civil Application No.1855 of 2001, thus this application being Special Civil Application No.1855 of 2001, which was claimed against the erstwhile Petrofils Co-operative Limited, in view of winding up was prayed against Official Liquidator. It also requested for extension of V.S. Scheme which was not given to the applicants. The V.S. Scheme was introduced on 18.12.2000 and continued till 17.03.2001 despite the award of permanency with all benefits and despite the demand for implementation of the direction in the award, the extension of V.S. Scheme was not accepted for the applicants and therefore, they had sought to move Special Civil Application No.1855 of 2001 for relief of enforcement of directions contained in the award and extension of benefit under the V.S. Scheme.
Page 32 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 10.3 It is further urged that the Division Bench while disposing of the Letters Patent Appeal No.2703 of 2010 challenging the order dated 10.08.2010 in Special Civil Application No.3105 of 2002 and Letters Patent Appeal No.2704 of 2010 challenging the order dated 10.08.2010 in Special Civil Application No.1855 of 2001, with an intention to grant one more opportunity to Official Liquidator to challenge the award on merit, quashed the order passed by the learned Single Judge, but the fact remains that the award dated 12.03.1999 in Reference (IT) No.26 of 1992 directing permanency with all benefits remained in operation even-after quashing of order dated 10.08.2010 and hence, it was obligatory on the part of the Official Liquidator to pursue their petition as permitted by the Division Bench and take the challenge to the award to its logical end. He has failed to do that and the order remains in operation even today. The applicant will not be in a position to revive the Official Liquidator's petition so long as the award was in operation, the applicant-union continued to represent orally and in person for implementation and since it failed in its effort, it has Page 33 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 moved this application for recalling the order and appropriate directions. The applicant-union has lodged the claim by Lodging No.2448 on 09.08.2004 after the order directing the lodgment of the claim, the direction is on Liquidator not to disburse the claim without the permission of the Court, but the grievance on the part of the applicant is that the Liquidator is sitting on the claim by just issuing the Lodging number, he ought to have adjudicated the claim and passed appropriate orders of accepting or rejecting in view of the statutory provisions. 10.4 In Special Civil Application No.1855 of 2001 the Liquidator was directed to process the claim and make the payment; however, the fact remains that the Liquidator after the liquidation disbursed the amount and settled various claims including of workers in the year 2014. 10.5 On other litigation, it is the say of the applicant that the Special Civil Application No.3196 of 2001 filed for enforcement of award in Reference Case No.79 of 1994 for declaration of entitlement and for disbursement of Page 34 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 claim of workers who were either similarly situated or junior to the present workmen, payments have been made in the year 2014 itself.
10.6 It is further the say of the applicant that the claim amount as lodged vide claim No.2448 on 09.08.2004 to the concerned workmen in the present case under the RTI dated 27.02.2014 issued by Under Secretary to the Government of India, dated 22.05.2015 issued by Director, Ministry of Chemicals & Fertilizers, which proves the payment to workers and financial institutions during the pendency of litigations pending as claimed by liquidator. The oral order dated 12.03.2015 has been passed by this Court in Special Civil Application No.14977 of 2014 directing payment of gratuity to employee Shree Krishna Agrawal.
10.7 It is, therefore, emphatically urged that reply dated 18.06.2012 given by Chief Advisor to Official Liquidator under the Right to Information Act to one Shri K.H. Savani which suggested that in the year 2012, Page 35 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 Rs.265.51 crore were available and therefore, after disbursement of workers dues and dues of IDBI in the year 2014 and 2015 the liquidator still has sufficient funds and it cannot deny the claim of workers in the present case under the pretext of pendency of litigation before Apex Court. It is wrong to say that until the matters pending before the Apex Court are settled and or disposed of, the Liquidator is uncertain about the total corpus available for the purpose of liquidation and disbursement. The claims of the members of the present applicant-union and concerned workmen has been registered in the year 2004, the subsequent settlement and the payment of claims registered in the year 2014 amounts to the unfair and discriminatory labour practice.
11. We have extensively heard the learned advocate, Mr.Rajesh Mankad and learned senior advocate, Ms.Manisha Lavkumar appearing with learned advocate, Mr.Rohan Lavkumar for the Liquidator. Along the line of the respective pleadings fervently and vociferously both the sides have argued before this Court.
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12. We have noticed without reiterating what has been referred by way of a pleadings that the reason for recall of the judgment and order is because there is no effort made on the part of the Liquidator to pursue Special Civil Application No.3105 of 2002. It is quite clear that 159 casual workers who completed service of one year demanded permanency with all benefits. As that was not acceptable to the erstwhile Petrofils Co-operative Limited, the dispute was raised and the reference made for adjudication was for giving them permanency and other benefits. They were daily wagers and they have been granted permanency and other benefits in Reference (IT) No.26 of 1992 by the Industrial Tribunal.
13. The erstwhile Petrofils Co-operative Limited was ordered to be wound up on 11.04.2001. The V.S. Scheme was in effect for the period from 18.12.2000 to Page 37 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 17.03.2001. As there was no availment of the benefits under the V.S. Scheme to the workers of present applicant
- Uion, despite the award in Reference (IT) No.26 of 1992, the applicant approached this Court by way of Special Civil Application No.1855 of 2001 for enforcement of the award dated 12.03.1999, the order of winding up of the Petrofils Co-operative Limited was 11.01.2001 and therefore, the application was also filed with the permission of the Court to join the Liquidator as a party in Special Civil Application No.1855 of 2001.
14. What appears is that Special Civil Application No.3105 of 2002 was filed surprisingly by Petrofils Co- operative Limited in the year 2002 after the order of winding up was made in the year 2001 and therefore, the applicant-union challenged that on the ground that it was not maintainable at the instance of Petrofils Co-operative Limited and considering that reply, the Official Liquidator was permitted to make necessary amendments for maintainability of the petition. However, when that was not done, the Court dismissed the petition. Once again by Page 38 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 preferring Misc. Civil Application, that opportunity was made available for making necessary amendments in Special Civil Application No.1855 of 2001, which is for relief of enforcement of direction contained in the award and extension of benefits under V.S. Scheme and therefore, the Division Bench on having found that the question of legality and validity of the award and the implementation thereof was not examined by the learned single judge, set aside the orders of the learned single judge and directed the main Special Civil Application to be heard on merits and all the questions raised were directed to be decided in accordance with law. Both the sides had no objection for remand of the matter to the learned single judge on a condition that appropriate cost be awarded and as there was an agreement on both the sides, the Court chose not to elaborately discuss the said aspect.
15. This Court notices that after the amount of cost is paid to the respondent in each matter, the Division Bench permitted either side to move the learned single judge for Page 39 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 early hearing of Special Civil Application No.3105 of 2002 and Special Civil Application No.1855 of 2001 by keeping the rights and contentions of both the sides open by virtue of the judgment dated 25.03.2013.
16. It is to be noted that this Court in Misc. Civil Application No.1 of 2020 listed for hearing on 11.03.2020 as mentioned hereinabove permitted without issuance of notice to the other side and without entering into the merit, permitted once again to address the communication and reminding the Liquidator of pendency of the claims. It was directed that the Liquidator should reply to the said notice given on 19.12.2019 within a period of two weeks from the date of receipt of copy of order. The petitioner also had been permitted to revive the present application to enable the Court to enter into the merits of the matter, but the liquidator had not complied with the direction and hence, this application.
17. Noticing the chronology of events and bearing in mind the fact that the claims which were subsequent to Page 40 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 the claims lodged by the present applicant have also been attended to and 1/3rd of the total amount is still with the Liquidator as per his own affidavit, with the order of winding up having been made, the Liquidator shall need to follow the Multi-State Co-operative Societies Act, 2002, as also the Multi-State Co-operative Societies Rules, 2002, before it chooses to settle the claim of any parties. So far as the applicant-Union is concerned, it has rightly ventilated the grievance that so far there is no attempt made for revival of Special Civil Application No.3105 of 2002 by the Official Liquidator nor has any heed been paid to their lodgment of claims. At the same time, the Court notices that the applicants themselves after the Division Bench quashed and set aside the order of the learned single judge has not bothered so far to revive that Special Civil Application No.1855 of 2001. Technically and strictly speaking, the award passed in Reference (IT) No.26 of 1992, the award is in operation dated 25.03.2013 for not having been stayed nor having been set aside by any Court, at the same time the Division Bench had directed the matter to be looked at on merits and hence, the union Page 41 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 also could have shown its vigilance in proceedings expeditiously with the matter before the learned single judge.
18. The Court expresses the serious concern over the fact that the Liquidator, who is obligated to also be concerned with the plight of the workmen for whenever being officially appointed at the time of liquidation ought to have been more positive, responsive, vigilant and prompt in carrying out the directions. Eight years have passed since the directions of this Court have not been complied with. The stand taken by the Liquidator appears to be more adversarial and the approach surely should not be of an adversarial litigant so far as the Liquidator is concerned, who is required to examine judiciously the claim of every parties and more particularly, of the applicant where, socioeconomic background of the members of the applicant-union could not have been overlooked by the Liquidator.
18.1 In this background we direct the office rather than Page 42 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021 C/LPA/2704/2010 IA ORDER DATED: 08/07/2021 addressing the issue of recall of the judgment and order of the Division Bench and the question of maintainability of such prayers, by considering the matter holistically that both the Special Civil Application Nos.3105 of 2002 and 1855 of 2001 shall need to be expeditiously addressed and adjudicated. Let the Office place it before the learned single judge within a period of one week from the date of receipt of a copy of this order with a request to the learned single judge for expeditiously attending to both the matters considering the award in Reference (IT) No. 26 of 1992 passed on 12.03.1999. Let no time be wasted, the Court is also unable to accept that there is no fund available because of the stay granted by the Apex Court in some of the matters which have been listed at paragraph No.8.6 in the affidavit-in-reply. 18.2 In such eventuality, the Official Liquidator is not handicapped in moving the Apex Court and making a request for early hearing when the plight of so many workers is at stake.
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19. Resultantly, this application for modification of the judgment and order dated 25.03.2013 passed in Letters Patent Appeal Nos.2703 and 2704 of 2010 is not entertained with a specific direction for expeditiously hearing of both Special Civil Application Nos.3105 of 2002 and 1855 of 2001. In the event of the Official Liquidator not proceed with Special Civil Application No.3105 of 2002 before the learned single judge despite the specific directions, the request on the part of the respondent for its dismissal will be permitted.
20. Both the parties have ensured not to seek any adjournment and as far as possible the same shall be requested to be completed at the earliest. Noticing the inexplicable delay in not attending to the said matters and plight of the workmen, who are waiting for the benefits of the award passed in their favour in the year 1999.
(SONIA GOKANI, J) (GITA GOPI,J) M.M.MIRZA Page 44 of 44 Downloaded on : Thu Sep 02 18:34:13 IST 2021