Debt Recovery Appellate Tribunal - Madras
Central Bank Of India vs Kirlampudi Sugar Mills And Ors. on 26 April, 2002
Equivalent citations: III(2003)BC33
ORDER
A. Subbulakshmy, J. (Chairperson)
1. The third party petitioners (Kirlampudi Sugar Mills Staff & Workers Union) filed IAs 245 and 246/2001 before Debts Recovery Tribunal (DRT), Hyderabad to implead them as defendant No. 4 in the Original Application (OA) No. 267/2000 and direction that the sale proceeds of the properties mentioned in 'C Schedule properties were not to be appropriated towards the dues of the applicant Bank in that OA.
2. The DRT, Hyderabad, dismissed those IAs by its order dated 27.9.2001 but the Tribunal directed that an amount of Rs. 13,20,034/- awarded by the Deputy Commissioner of Labour-II, Eluru, from out of the sale proceeds to be deposited in a fixed deposit to the credit of the OA to enable the third party petitioners to work out their remedies before Recovery Officer after the disposal of the OA and the Writ Petition No. 2782/2001.
3. These appeals are directed by the appellant Bank as against the direction issued by the learned Presiding Officer, with regard to set aside the direction issued in IAs 245 and 246/ 2001 in OA 267/2000 on the file of DRT, Hyderabad and allow the appellant Bank to appropriate Rs. 13,20,034/- to the credit of OA.
4. The Counsel for the appellant Bank submitted that the order passed by the learned Presiding Officer, DRT, Hyderabad, directing to deposit Rs. 13,20,034/- in a fixed deposit is not sustainable and it. is liable to set aside.
5. The amount Rs. 13,20,034/- is the salary amount to be paid to the workers of the Sugar Mills.
6. The Counsel for the appellant Bank further submitted that there was lock-out in that mills and the salaries of the workers were not paid and the workers moved to the Labour Court and obtained award for a sum of Rs. 13,20,034/- and the learned Presiding Officer, DRT, Hyderabad issued direction with regard to that amount to be kept in a fixed deposit. He further submitted that the Respondent's Mills are working and as it is a working unit, there is no need to keep the amount awarded by the Labour Court in a Fixed Deposit and the Sugar Mills can pay the salaries of the workers from other resources and thus the amount of Rs. 13,20,034/-cannot be appropriated towards the sale amount of pledged sugar and only in case of winding-up of the company, this kind of recovery proceedings arises and so the order passed by the learned Presiding Officer, DRT, Hyderabad is liable to be set aside.
7. On the other hand the Counsel for the respondents submitted that the amount of Rs. 13,20,034/- is the salary amount due to the workers and it is statutory liability on the part of the Sugar Mills to pay the salary to its workers and so the order passed by the learned Presiding Officer, DRT, Hyderabad is sustainable.
8. The respondent's Sugar Mills obtained loan from the Bank but it did not repay the loan amount, hence, the Bank brought the pledged sugar to sale and it was sold for a sum of Rs.
1,84,31,4607-.
9. The amount due from the defendants to the Bank is Rs. 2,57,48,825.50 P.
10. It is seen from the records that the award by the Labour Court is challenged in the Writ Petition, in the High Court of Andhra Pradesh, in WP 278272001 and it is still pending.
11. The amount which has been directed by the DRT, to be kept in a Fixed Deposit is the amount to be paid to the workers as salaries.
12. The payment of salary to the workers is the statutory liability on the part of the Sugar Mills.
13. The Counsel for the appellant Bank submitted that as per Section 529 of the Companies Act, only in case of winding-up of the company, the salary of the workers is set apart and the Sugar Mills are running and the Sugar Mills can very well pay the salaries to their workers and for paying their salaries to their workers, it need not be appropriated from this pledged sugar's sale amount. He also relies upon the AIR 1991 Bombay 370, State Bank of India v. The Podar Mills Limited and Ors., wherein it has been held that under Section 520A, winding-up proceedings has no application in case of Secured suit against company for realisation of money advanced.
14. Even though, the Sugar Mills are running, the payment of salary to its workers being a statutory liability, the Sugar Mills are under an obligation to pay the salaries to its workers.
15. It is seen from the records that apart from the pledged sugars, other properties have also been mortgaged to the Bank towards this loan amount for realisation of the balance loan amount. The appellant Bank is entitled to proceed against that mortgaged properties.
16. The amount of Rs. 13,20,034/- representing the salary amount to the workers due by the Sugar Mills being a statutory liability and which is also covered by the award passed by the Labour Court, the order passed by the learned Presiding Officer, DRT, Hyderabad, directing to deposit the amount of Rs. 13,20,034/- in a Fixed Deposit to the credit of the OA to enable the third party petitioners to work out their remedies before the Recovery Officer after disposal of OA and the Writ Petition in WP-2782/2001 is perfectly justified.
17. I see no error in the order passed by the learned Presiding Officer, DRT, Hyderabad. The appeals (MA-1138 and 114/2001) are dismissed.