Debt Recovery Appellate Tribunal - Madras
Tamilnadu Textile Corporation Ltd. vs The South Indian Bank Ltd. And Ors. on 30 July, 2002
Equivalent citations: II(2003)BC34
ORDER
A. Subbulakshmy, J. (Chairperson)
1. The Tamilnadu Textile Corporation Ltd. is the appellant in this appeal. Originally suit was filed by the Bank in Sub-Court, Sivaganga and decree was passed only as against the borrower respondents 2 to 4 in the appeal.
2. When the EP was filed, the appellant was also added as party in the EP since the Textile Mill was taken over by the Tamilnadu Textile Corporation Ltd. as per Tamilnadu Act No. 81/1986. After formation of DRTs, the mailer which was pending in Civil Court was transferred to DRT-2, Chennai and DRT-2, Chennai issued Recovery Certificate under Section 31 (A) of the Act in accordance with the decree passed by the Civil Court.
3. In the Recovery Certificate issued by the DRT-2, Chennai, the Tamilnadu Textile Corporation Ltd. is the 5th respondent but was not at all a party to the decree passed by the Civil Court. As the company was taken over by the Tamilnadu Textile Corporation Ltd. and the Tamilnadu Textile Corporation Ltd. was added as 5th respondent in Recovery Certificate and the 5th respondent, the Tamilnadu Textile Corporation Ltd. has preferred this appeal as against the issuance of the Recovery Certificate by the DRT-2, Chennai.
4. Now the matter has come up for consideration for waiver of amount under Section 21 of the Act.
5. The Counsel for the appellant submits that under the Act 81 of 1986 passed by the Tamilnadu Government every person having a claim against the owner of the textile undertaking shall prefer such claim before the Commissioner within thirty days from the specified date under Section 20 of the Act. Provided that if the Commissioner is satisfied that the claimant was prevented by sufficient cause from preferring the claim within the said period of thirty days he may entertain the claim within a further period of thirty days but not thereafter.
6. The specified date for preferring the claims was fixed as 10.8.1987 as per G.O. Ms. No. 199, Handlooms, Textiles and Khadi Department dated 25.7.1987 and this was published in the Tamil Nadu Government Gazette in an extraordinary issue dated 25.7.1987 to Section 2 of Part II, Publicity inviting claims to be made to the Commissioner of Payments for Somasundaram Super Spinning Mills, Muthanendal, Pasumpon Muthuramalingam District.
7. So date was fixed as 10.8.1987. So, it is evident from the GO that the claim date was fixed as 10.8.1987. The claim ought to have been filed within 30 days from that date i.e. on or before 10.9.1987. The proviso further provides for an extended period of 30 days from that date and even if applying the extended period the last date for filing the claim expired on 10.9.1987. The respondent Bank preferred the claim on 28.9.1987 within the further grace period of 30 days.
8. The claim petition was rejected by the Commissioner of Payments by his order dated 6.10.1987. Aggrieved against that order the Bank has preferred writ petition in the High Court of Madras in WP 194/88 and the writ petition was dismissed for non-prosecution on 8.1.1997.
9. The Tamil Nadu Act, 81/1986 provides with regard to the prior liabilities. Section 6 deals with this. As per Section 6 of the Act 1986 :
"(1) Every liability, other than the liability specified in Sub-section (s), of the owner of the textile undertaking, in respect of any period prior to the appointed day, shall be the liability of such owner and shall be enforceable against him, and not against the Government or Textile Corporation.
(2) Any liability arising in respect of--
(a) loans advanced by the Central Government or a State Government, or both to the textile undertaking (together with interest due thereon) after the management of such undertaking had been taken over by the Central Government;
(b) amounts advanced to the textile undertaking (after the management of such undertaking had been taken over by the Central Government) by the Textile Corporation together with interest due thereon, shall on and from the appointed day, be the liability of the Government and shall be discharged, for and on behalf of that Government by the Textile Corporation as and when repayment of such loans or amounts becomes due and payable.
(3) For the removal of doubts, it is hereby declared that--
(a) save as otherwise expressly provided in this Act, no liability, other than the liability specified in Sub-section (2) in relation to the textile undertaking in respect of any period prior to the appointed day shall be enforceable against the Central Government or the State Government or the Textile Corporation.
(b) No award, decree or order of any Court, Tribunal or other authority in relation to the textile undertaking passed after the appointed day in respect of any matter, claim or dispute, in relation to any matter not referred to in Sub-section (2), which arose before that day, shall be enforceable against the Central Government or the State Government or the Textile Corporation.
(c) No liability incurred by the textile company or any owner thereof in respect of the textile undertaking, before the appointed day for the contravention of any provision of law for the time being in force, shall be enforceable against the Central Government or the State Government or the Textile Corporation.
10. Sub-section (2) of Section 6 clearly states that only liability arising in respect of loans advanced by the Central Government or a State Government or both the Textile Undertaking can be taken as liability after takeover by the Tamilnadu Textile Corporation Ltd. and with regard to the other liabilities of the Company it can made under Section 20 of the Act and the present claim over the mill ought to have been made under Section 20 of Act. The Bank which made claim under Section 20 of Act has failed in its attempt and this claim was rejected by the Commissioner and the writ petition was also dismissed. So far the liability to the Bank is concerned the claim ought to have been made before the Commissioner under Section 20 of the Act and that claim was not preferred properly and it was rejected.
11. Sub-section (3) of Section 6 clears all doubts and it is specifically stated in Clause (3)(b) no award, decree or order of any Court, Tribunal or other authority in relation to the textile undertaking passed after the appointed day in respect of any matter, claim or dispute, in relation to any matter not referred to in Sub-section (2), which arose before that day, shall be enforceable against the Central Government or the State Government or the Textile Corporation.
12. The case on hand is the decree was passed and prior to taking over of the mill by the Tamilnadu Textile Corporation Ltd. So, as per Section 6 every liability other than the liability specified in Sub-section (2) shall be enforceable against the erstwhile owner of the Mill and not against the Government or Textile Corporation. So, something requires to be considered in this appeal with regard to the liability to the Bank and in such circumstances I feel that the benefit under the proviso under Section 21 of the Act can be extended to the appellant and the appellant is entitled for waiver of deposit amount as contemplated under Section 21 of the Act.
13. Register this as Regular Appeal (RA) and post this appeal on 22.8.2002.