Madras High Court
M/S. New Horizon Sugar Mills Ltd vs Union Of India on 27 March, 2007
Bench: P.Sathasivam, N.Paul Vasanthakumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated:- 27.03.2007 Coram:- The Hon'ble Mr. Justice P.SATHASIVAM and The Hon'ble Mr. Justice N.PAUL VASANTHAKUMAR Writ Appeal Nos.1788 & 1919 of 2005, 1142 to 1144, 1209, 1342 to 1345 of 2006 & 293 of 2007 and WP Nos.44991, 45805 of 2006 & 1460 of 2007 and Miscellaneous Petition Nos.1 to 8 of 2006 & 1 of 2007 in W.A. No.1142 of 2006; 1 of 2006 in WA No.1143 of 2006; 1 of 2006 in WA No.1144 of 2006; 1/06 in WP No.44991 of 2006; 2 of 2006 in WP.45805 of 2006; 1698, 1799 & 1803 of 2006 - - - - - W.A. No.1142 of 2006:- M/s. New Horizon Sugar Mills Ltd., Ariyur, Kandamangalam P.O., Pondicherry - 605 102. Rep. by its Director V.Kannan. ... Appellant vs. 1. Union of India, Rep. by the Secretary to Government, Ministry of Finance, New Delhi - 110 001. 2. Indian Bank, Rep by its Chief Manager, 288, Mahatma Gandhi Road (II Floor), Pondicherry-605 001. 3. The Authorised Officer, Indian Bank, 288, Mahatma Gandhi Road (II Floor), Pondicherry-605 001. 4. M/s. E.I.D. Parry Limited, Head Office, Dare House, 234, N.S.C. Bose Road, Chennai 600 001. 5. Indian Renewable Energy Development Agency Limited, rep. by its Asst. General manager, Core-4A, East Court, Ist Floor, Indian Habitat Centre Complex, Lodhi Road, New Delhi 110 003. (R5 impleaded as party respondent vide order of court dt.19.09.2006, made in MP. Nos.6, 2 and 2 of 2006) ... Respondents W.P. No.45805 of 2006:- 1. T.Sethurajan 2. G.Muthusamy 3. G.Balasubramanian 4. T.Shanmugham 5. R.Manikannan 6. M.S.Mariyanayagam 7. L.Ramamurthy 8. L.Sivarajan 9. A.Tajkhan 10. E.Subramnian 11. M.Govindarajan 12. S.Athimoolam 13. T.Kabirdas 14. G.Ramakrishnan 15. D.Ramakrishnan 16. M.Elumalai 17. B.Mahalingam All Ex - Employees of Harizon Sugar Mills Ltd., Ariyur, Pondicherry. ... Petitioners vs. 1. The Commissioner of Labour, Pudhucherry. 2. Puduvai Pradesa Sarkarai Aali Thozhilalar Sangam (RTU 606/88) CITU, Rep. by its Vice-President Ariyur Post, Pondicherry - 605 102. ... Respondents W.A. No.1142 of 2006:- Appeal against the Judgment of the learned single Judge, dated 23.08.2006, made in W.P. No.1897 of 2006. W.P. No.45805 of 2006:- Petition under Article 226 of the Constitution of India for the issuance of a writ of mandamus directing the first respondent to consider the claim of the petitioners in accordance with the directions in W.P. Nos.24834 and 30532 of 2005 and disburse legal dues to them. Mr.P.S.Raman, Senior Counsel for M/s.Gupta Ravi for appellant in W.A. Nos.1142 to 1144 of 2006 and R-1 in W.A. No.1342 of 2006. Mr.G.Rajagopalan, Senior Counsel for M/s.Gupta & Ravi for appellant in W.A. No.1209 of 2006. Mr.K.Kannan, for appellant in W.A. Nos.1342 to 1345 of 2006 and R2 in WA Nos.1143 & 1144/206. Mr. T.R. Rajagopalan, Senior Counsel for Mr.T.R.Rajaraman, for appellant in WA Nos.1788, 1919/05 and for petitioner in WP.44991 of 2006. Mr.B.Ravi, for Mr.R.Subramanian, for petr. in WP Nos.45805 of 2006 & 1460 of 2007. Mrs.Hemalatha, for petitioner in M.P.8 of 2006 in WA.1142/06. Mr.P.V.S.Giridhar, for petitioner in M.P. No.1 of 2007 in WA. No.1142 of 2006. Mr.CK.Chandrasekaran, for M/s.Row & Reddy, for Petitioner in WAMP No.1799 of 2006. Mr.T.Murugesan, Govt. Pleader (Pondicherry) for Pondicherry Government in all matters. Mr.A.L.Somayaji, Sr. Counsel for Mr.T.S.Gopalan Associates for R3 in W.A. No.1209 of 2006. Mr.V.Ajay Kumar, for R1 in WA No.1209/2006. Mr.V.T.Gopalan, Senior Counsel for Mr.Jayesh L.Dolia, for R4 in W.A. No.1209 of 2006 (for Indian Bank in all W.As. and W.Ps.) Mr.Rangarajan, for R-5 in WA No.1142/2006. Mr.P.Wilson, Assistant Solicitor General of India for R-1 in W.A. No.1142 and R2 in W.A. No.1342 of 2006. COMMON JUDGMENT
(Judgment of the Court, delivered by P.SATHASIVAM, J.) To begin with, let us comment that, in these matters, particularly in the Writ Appeals, we are considering the challenge made by the rival contestants to the orders passed by three learned single Judges of this Court, viz., F.M.Ibrahim Kalifullah, J. (F.M.I.K., J.), Dharma Rao Elipe, J. (D.R.E., J.) and A.Kulasekaran, J. (A.K., J.). Since the issues raised in the Writ Appeals and the Writ Petitions are interlinked to each other, they are being disposed of by the following common Judgment. Before proceeding ahead, we point out that inasmuch as the decision in the main matters would encompass the fate of the Miscellaneous Petitions filed for interim orders/clarification/impleading etc., we are not separately dealing with the same.
2. Genus of the controversies is traceable to the financial impairment of M/s. New Horizon Sugar Mills Private Limited (hereinafter referred to as 'the Mill'), Ariyur, Pondicherry; hence, after outlining the factual scenario in a compact manner relating to the said aspect covering vital details, let us enumerate the challenge/claim of the respective parties in their Appeals/Petitions and discuss the merits or otherwise thereof.
3. The Mill availed credit facilities on 25.05.1983 from Indian Bank, Pondicherry, to the tune of Rs.26,50,00,000/- by offering their land and building situate at Ariyur as security. The Directors of the Mill viz., V.Kannan and V.Baskaran, who stood as guarantors for due repayment of the loan amount, also offered their personal properties as collateral security. The Mill did not fulfil its obligations and committed default in repayment of the loan amount. The Bank, after declaring the loan account of the Mill as 'non performing asset', initiated proceedings by issuing notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short SARFAESI Act). The said notice was challenged by the Mill by filing writ petition in W.P. No.33700 of 2004 before this Court. By Order dated 06.12.2004, the said Writ Petition was disposed of with a direction to the Mill to repay the entire loan amount in three instalments. In the same order, this Court clarified that, in default, the Bank was entitled to proceed against the Mill in accordance with law. Since the Mill committed default even in payment of the first instalment, the Bank proceeded further and, after fulfilling the statutory formalities under Section 13 sub-clauses (2) and (4) of the SARFAESI Act, took possession of the property offered as security. Thereafter, the Bank initiated further steps for auction sale. In the auction proceedings, M/s. E.I.D. Parry (India) Limited (in short Parry Ltd.) was the successful bidder. The said auction was challenged by way of several writ petitions by other Banks and agencies to safeguard and protect their respective claims against the Mill, however, on 12.07.2005, all the Writ Petitions including the one filed by the workers/employees of the Mill were dismissed. In respect of the Writ Petition filed by Pondicherry Nidhi Limited (PNL) Depositors' Welfare Association, the Court disposed of the same, directing the Association to work out their remedies under the provisions of the Reserve Bank of India Act (in short RBI Act) as well as the Pondicherry protection of Interests of Depositors in Financial Establishments Act, 2004 (Act No. 1 of 2005).
On receipt of Sale Confirmation Letter from the Bank, the purchaser, viz., EID Parry Ltd., remitted the entire balance amount within the prescribed time and also fulfilled all other formalities for getting the Sale Certificate registered in their favour.
While so, on the basis of a complaint received from one of the depositors, alleging that M/s.V.Kannan and V.Baskaran, said to be the major shareholders of M/s.PNL Nidhi Limited and Directors of the Mill, misappropriated a sum of Rs.12.5 crores belonging to PNL Nidhi Limited and diverted the amount for their own trade, a case was registered and, in the criminal proceedings, the Chief Judicial Magistrate, Pondicherry, ordered for attachment of various properties standing in their name and one Sivapriyai. In the meanwhile, the Government of Pondicherry, on receipt of a number of complaints, in exercise of the powers conferred under the provisions of Act 1 of 2005, issued a notification in G.O. Ms. No.12, Department of Revenue and Disaster Management, dated 18.02.2006, ordering attachment of the properties acquired by M/s. PNL Nidhi Limited. In view of the Order passed by the Chief Judicial Magistrate and because of the action of the Pondicherry Government for attaching the properties standing in the names of M/s.Kannan and Baskaran and also the properties acquired by PNL Nidhi Limited, the successful bidder/Parry Limited could not get the Sale Certificate registered in respect of the property ie., land and building comprised in R.S. Nos.7/2 and 118, measuring 3.99 and 13.10.00 hectares in Ariyur Village, purchased by them in the auction sale. Aggrieved by the same, Parry Ltd. filed W.P. No.6453 of 2006 for quashing G.O. No. Ms. No.12, dated 18.02.2006, of the Pondicherry Government and for a direction to the District Registrar, Registration Department, Pondicherry, to register the Sale Certificate in their favour in respect of the properties purchased by them in the auction sale. Similarly, Indian Bank also filed W.P. No.5389 of 2006, seeking the relief of quashing the very same Government Order and to permit them to comply with the provisions of the SARFAESI Act for registering the Sale Certificate in favour of Parry Limited. The very same Bank, questioning the order dated 18.02.2005 passed by the Chief Judicial Magistrate in Crime No.31 of 2004, filed C.R.P. No.1352 of 2005. The Mill also filed W.P. No.1897 of 2006, praying for the issuance of appropriate direction to Indian Bank to forthwith return to them such sums as would be due from out of the total sale consideration, after deducting the cost charges, expenses and dues of the Bank incurred as on 01.01.2005, the date on which the possession of property offered as security was taken over, and return the remaining documents of title pertaining to the movable and immovable properties belonging to the mill after lifting the Bank's charge. The Mill filed another Writ Petition in W.P. No.8797 of 2006 challenging the validity of G.O. Ms. No.12 dated 18.02.2006.
Major shareholders of PNL Nidhi Limited, Pondicherry, and Directors of the Mill viz., M/s.V.Kannan and V.Baskaran, filed two Writ Petitions in W.P. Nos.9713 and 10052 of 2006, wherein, they challenged the validity of G.O. Ms. No.12 dated 18.02.2006 and also the provisions of Act 1 of 2005.
Apart from the above Writ Petitions, M/s.Indian Renewable Energy Development Agency Limited (In short IREDA), New Delhi, and M/s. Arunachalam Sugar Mills Limited, Pondicherry, filed W.P. Nos.7076 and 8800 of 2006 respectively, challenging the validity of G.O.Ms. No.12 dated 18.02.2006.
D.R.E., J. heard CRP(PD) No.1352 of 2005 filed by Indian Bank and all other writ petitions of the Mill, Indian Bank, Parry Limited, IREDA and the Directors of the Mill, and, by order dated 23.08.2006, lifted the order of attachment passed against the properties viz., land and building comprised in R.S. Nos.7/2 and 118 measuring 3.99 and 13.10.00 hectares in Ariyur Village, Villianur Sub Registration District, Pondicherry, which are the subject matter of CRP No.1352 of 2005 and W.P. No.5389 of 2006 and the land of an extent of 120 acres and 070 cents in Mallapambady Village, Thiuvannamalai District, which is the subject matter of W.P. No.7076 of 2006 and excluded those lands from the orders passed by the Chief Judicial Magistrate and the Government of Pondicherry. In the same order, the learned Judge directed the District Registrar, Registration Department, Pondicherry, to register the Sale Certificate issued in favour of Parry Limited and directed the petitioner in WP No.1897 of 2006 to approach the Tribunal under Section 17 of the SARFAESI Act if they so desire for refund of the excess amount alleged to have been retained by the Indian Bank. The learned Judge also clarified that insofar as the properties which are included in the impugned orders, it is open to all the parties concerned to approach the Designated Court under Act 1 of 2005 for appropriate relief.
3-A. Questioning the above said common order, the Mill and its Directors have filed W.A. Nos.1142 to 1144 of 2006 and the Pondicherry Non-Banking Investors Protection Association (for PNL) preferred W.A. Nos. 1342 to 1345 of 2006. The learned Judge, while upholding the validity of Act No.1 of 2005, limited its operation to Unincorporated Institutions. Aggrieved by the said conclusion, Government of Pondicherry, has preferred Writ Appeal No.293 of 2007.
4. Even prior to the decision by the learned Judge (D.R.E., J.) in the above mentioned proceedings, another set of writ petitions came to be filed before this Court. PNL Depositors' Welfare Association, Pondicherry; Pondicherry Branch of Indian Bank; Bank of Baroda, Pondy Branch; Puduvai Pradesa Sarkarai Aalai Thozhilalar Sangam (in short Sangam), Greata Enterprises & Developers (P) Limited and Pondicherry State Co-operative Bank filed separate Writ Petitions to safeguard their interests and for issuance of appropriate directions. F.M.I.K., J., by Order dated 12.07.2005, (case law reported in 2005 (4) CTC 469 - PNL Depositors' Welfare Association v. Union of India), after going into the respective claims of the parties with reference to the provisions of SARFAESI Act, Sick Industrial Companies (Special Provision) Act, 1985; Pondicherry Act (Act 1 of 2005) and the provisions of the Industrial Disputes Act, Section 25FF in particular, disposed of those Writ Petitions. As regards the rights of the workmen, the learned Judge held that the members of the workers' association / workers either individually or thorough Union are entitled for the benefits available under Section 25-FF of the Industrial Disputes Act as against the Mill and Parry India Limited by virtue of the prescription made under Section 13(6) of the SARFAESI Act. In the same order, the learned Judge permitted the members of the Depositors' Association and others to avail the provisions of SARFAESI Act as well as Pondicherry Act for necessary reliefs.
5. Questioning the directions, particularly in para No.41 of the Judgment of F.M.I.K., J., Parry Limited filed W.A. No.1788 of 2005 and the Commissioner of Central Excise, Pondicherry, preferred W.A. No.1919 of 2005, pleading superiority of the Department's claims over others as against the Mill and its properties.
6. Puduvai Pradesa Sarkarai Aalai Thozhilalar Sangam; the Authorised Officer, Indian Bank and Ariyur Sugar Mills Staff Welfare Union through its Secretary, filed W.P. Nos.24834 of 2005, 30532 of 2005 and 36900 of 2005 respectively, praying for appropriate directions. By Common Order, dated 07.12.2005, A.K., J., appointed Justice K.P.Sivasubramaniam, J., a retired Judge of this Court, as Commissioner to go into the claims of the workmen. In the same Order, the learned Judge directed the Indian Bank to deposit Rs.6 crores on 08.12.2005 in a no-lien account in the Indian Bank, Pondicherry Main Branch. Questioning the said Order, the Mill filed W.A. No.1209 of 2006.
7. We have carefully considered the rival contentions projected at length by the respective counsels and meticulously examined the orders passed by the learned single Judges and the relevant provisions of the SARFAESI Act, Pondicherry Act (Act No.1 of 2005), the Industrial Disputes Act and the R.B.I. Act.
8. Pausing here, we point out that, after deciding the issues involved in the above appeals, we will proceed to deal with the connected Writ Petitions.
9. A combined and collective consideration would lead us to approach the issues involved in the Appeals in the following dimensions, viz., (I) Whether the claim of the Mill to return the balance amount lying with the Indian Bank and also their specific claim that properties not covered by the notice under Section 13(2) of the SARFAESI Act be returned are acceptable particularly when numerous claims have been made by various Associations/Agencies/individuals as against the Mill and its properties and those claims remain unsettled?;
(II) Whether the order passed by A.K.,J. appointing a Commissioner to go into the claims of the workers' Unions warrants interference?;
(III) Whether E.I.D. Parry (India) Limited is justified in pleading that when transfer of an Undertaking takes place from one employer to another, it dis-entitles the workmen to receive compensation?;
(IV) To what relief the Depositors' Investors' Association and other agencies (Central Excise Department / IREDA) are entitled to in their claims against the Mill and its properties?;
(V) Whether the Pondicherry Protection of Interests of Depositors in Financial Establishments Act, 2004, (Act No.1 of 2005) is constitutionally valid so as to uphold the validity of G.O.Ms. No.12 dated 18.02.2006?
10. Coming to the first issue, it is not in dispute that the Mill, after getting credit facilities from Indian Bank, M.G.Road, Pondicherry, to the tune of Rs.26,50,00,000/-, committed default in repayment of the loan amount. The Bank, after declaring the loan account of the Mill as non-performing asset, proceeded further by issuance of notice under Section 13(2) of the SARFAESI Act. Pursuant to the orders of this Court, ultimately, the properties viz., land and building of the Mill, which were offered as security, were sold in public auction. The sum secured from the auction sale was Rs.50.20 crores and the secured debt to the Indian Bank was around Rs.30 crores. According to the Mill, after discharge of the loan amount, they are entitled to the balance of the sale consideration. It is their grievance that, instead of returning the balance amount to them, Indian Bank started disbursing the amounts due to various persons without specific instruction or consent of the Mill. Learned Judge (D.R.E., J.), taking note of the fact that SARFAESI Act itself provides for appropriate remedy by way of appeal, permitted the Mill and other Claimants to approach the Tribunal (D.R.T.) under Section-17 of the SARFAESI Act.
As said earlier, action was initiated by Indian Bank under Section 13(4) of the SARFAESI Act. Section-17 of the Act pertains to 'Right to Appeal'. Sub-Section(1) thereof makes it clear that any person including borrower, aggrieved by any of the measures referred to in sub-Section(4) of Section 13 taken by the secured creditor or his authorised officer under Chapter-III, may make an Application along with such fee to the Debts Recovery Tribunal (D.R.T.) having jurisdiction in the matter within forty-five days from the date on which such measures had been taken. Sub-Section(2) makes it clear that the Tribunal shall consider whether any of the measures referred to in sub-Section(4) of Section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of the Act and the Rules made thereunder. Sub-section(3) specifies that, if the Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in sub-section(4) of Section 13, taken by the secured creditor are not in accordance with the provisions of the Act and the Rules and require restoration of the management of the business to the borrower or restoration of possession of the secured assets to the borrower, it may by order, declare the recourse to any one or more measures referred in sub-section(4) of Section 13 taken by the creditors assets as invalid and restore the possession of the secured assets to the borrower or restore the management of the business to the borrower. Sub-section(5) mandates that any application made under sub-section (1) shall be dealt with by the Tribunal as expeditiously as possible and disposed of within sixty days from the date of such application. Sub-section(6) provides that for any reason if the application is not disposed of by the D.R.T. within a period of four months as specified in sub-section (5) any party to the application may make an application to the appellate Tribunal for appropriate direction for expeditious disposal of the application pending before the D.R.T. and the appellate tribunal may make an order for expeditious disposal of the pending Application by the D.R.T. In the light of the above provisions prescribing detailed procedure giving various remedies, we are in entire agreement with the conclusion arrived at/direction issued by Dharma Rao Elipe, J. In fact, Mr.P.S.Raman, learned Senior Counsel appearing for the Mill fairly stated that they would be satisfied if they are allowed to approach the Tribunal to project their grievance. While allowing so, we make it clear that the main and specific grievance of the Mill that the properties not covered by the notice under Section 13(2) of the SARFAESI Act be returned to them may also be agitated before the Tribunal, whereupon, the Tribunal shall adjudicate the said issue along with other pleas, if any, in the background of pendency of claims against the Mill and its assets. In such circumstances, W.A. No.1142 of 2006 is dismissed with liberty to the Mill to approach the D.R.T. for appropriate relief.
11. Now, let us take up Issue Nos.II and III together for consideration.
11-a. Before the learned Judge (A.K., J.), the Sangam filed W.P. No.24834 of 2005, directing the Indian Bank to deposit a sum of Rs.6 crores from out of the sale proceeds realized pursuant to the tender notification with the Commissioner of Labour, Pondicherry, who, in turn, may be directed to compute and disburse the amounts due to the workers of the Mill. The Authorised Officer, Indian Bank, Pondicherry, filed W.P. No.30532 of 2005 seeking for a direction to the Collector of Pondicherry to take control of the securities and hand over vacant possession of land and building, plant and machinery of the Mill at Ariyur village, Pondicherry. Ariyur Sugar Mills Staff Welfare Union through its Secretary filed W.P. No.36900 of 2005 for a direction to the Indian Bank, Pondicherry, to deposit a sum of R.9,70,00,0000/- from and out of the sale proceeds realized pursuant to the tender notification, and direct the Commissioner of Labour to compute and disburse the arrears of salary to the workmen of the Mill from June 2004 onwards and to deposit the remaining amount with the Life Insurance Corporation, Vellore.
11-b. While hearing the abovementioned three Writ Petitions, the learned Judge appointed Justice K.P.Sivasubramniam, a retired Judge of this court, to go into the claims of the workmen and to submit his report within a fixed period. In the same order, the learned Judge directed the Indian Bank to deposit initially a sum of Rs.6,00,00,000/- on 08.12.2005 in a no-lien account of the Indian Bank, Pondicherry Main Branch. Mr.G.Rajagopalan, learned Senior Counsel appearing for the Mill in W.A. No.1209 of 2006 contended that, without determining the issue as to whether the appellant/Mill is liable for payment of compensation and other benefits for the period subsequent to the date of taking possession of the factory premises by Indian Bank, the learned Judge erred in directing the Bank to deposit Rs.6,00,00,000/- in a no lien account towards settlement of dues to the workmen. In other words, according to him, the learned Judge completely failed to note that the issue as to whether Section 25FF of the I.D. Act would apply to acquisition and sale of secured assets under the SARFAESI Act and whether the liability for payment of compensation would be on the purchaser or on the erstwhile owners of the undertaking is a question that can be gone into only in a properly raised industrial dispute and it was not open to the learned Judge to exercise the jurisdiction straightaway under Article 226 of the Constitution of India. He also contended that the Mill was not even afforded an opportunity of hearing before appointing a retired Judge as Commissioner for settlement of dues to the workmen. In any event, when the dues payable to the workers has been clearly specified, the entire liability for payment of dues to the workers would only be that of the purchaser and not that of the appellant, hence, the order of the learned Judge (A.Kulasekaran, J.) is erroneous and liable to be set aside. On the other hand, learned counsel appearing for the workmen/Union submitted that the appellant participated in the proceedings before Justice K.P.Sivasubramaniam, hence, now they cannot claim that they were not aware of the order of this Court and question the adjudication by a retired Judge of this Court.
11-c. On a perusal of the order of A.K., J., we find that only on the submissions made by the counsel on either side, K.P.S., J. was appointed as Commissioner instead of entrusting the work to the Commissioner of Labour. Therefore, we see no justification in the contention of the learned Senior Counsel that the Court did not take up the exercise of determining the issue before deciding to appoint the Commissioner and that there was violation of the principles of natural justice. Further, it is not in dispute that, after the order of A.K., J. the appellant Mill participated in the enquiry before K.P.S., J.
11-d. Now, the vital aspect to be analysed is the claim of the workmen and various Unions for compliance of Section 25FF. In order to find out an answer to the claim of the workmen and justifiability of the direction of A.K., J., it is useful to refer to Section 25FF of the Industrial Disputes Act, which reads as under:-
" 25FF. Compensation to workmen in case of transfer of undertakings.-- Where the ownership or management of an undertaking is transferred, whether by agreement or by operation of law, from the employer in relation to that undertaking to a new employer, every workman who has been in continuous service for not less than one year in that undertaking immediately before such transfer shall be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched:
Provided that nothing in this sections shall apply to a workman in any case where there has been a change of employers by reason of the transfer, if--
(a) the service of the workman has not been interrupted by such transfer;
(b) the terms and conditions of service applicable to the workman after such transfer are not in any way less favourable to the workman than those applicable to him immediately before the transfer; and
(c) the new employer is, under the terms of such transfer or otherwise, legally liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer. "
11-e. Now, let us refer to the order of Kalifullah, J. in W.P. Nos.9834 of 2005 etc. Batch. (reported in 2005 (4) CTC 469). While considering the claim of PNL Depositors' Welfare Association, Puduvai Pradesa Sarkarai Aalai Thozhilalar Sangam, Indian Bank, Government of Pondicherry and others, the learned Judge elaborately analysed the issue relating to relief under Section 25FF of the I.D. Act read with Section 13(6) of the SARFAESI Act. As rightly observed by the learned Judge so long as the rights of the workmen by virtue of their service put in the erstwhile management continue to enure to their benefit by virtue of Section 25FF of the I.D. Act vis-a-vis Section 13(6) of the SARFAESI Act, there cannot be any grievance to be redressed insofar as the workmen of the Mill are concerned. It is also not in dispute that the Indian Bank realised a sum of Rs.50.20 crores and the secured debt payable to the Bank was around Rs.30 crores. In those circumstances, the learned Judge observed that the workmen of the Mill are entitled to their claim under Section 25FF from and out of the excess amount lying in the hands of Indian Bank.
11-f. At this juncture, it is relevant to mention here the claim of the appellant in WA No.1788 of 2005, who is very much aggrieved of the direction in paragraph No.41 of the Judgment of Kalifullah, J. After finding that the prayer of the writ petitioner therein (the Sangam in WP No.10060 of 2005) as couched in the Writ Petition cannot be granted, the learned Judge concluded, "..... However, it will have to be held that the members of the petitioner as well as the other workmen represented by the fifth respondent union or any other union are entitled for the benefits available under Section 25-FF of the I.D. Act as against the third and fourth respondents by virtue of the prescription made under Section 13(6) of the SARFAESI Act."
The reference made to third and fourth respondent relates to the Mill and Parry Limited respectively. Admittedly, the Mill has not even filed Appeal against the said order of Kalifullah, J. No doubt, E.I.D. Parry Limited filed appeal in W.A. No.1788 of 2005. In such circumstances, the order of Kalifullah, J. dated 12.07.2005 made in W.P. No.10060 of 2005 has become final insofar as the appellant-the Mill is concerned. Accordingly, the Mill cannot question the direction of the learned Judge for disbursal of dues under Section 25FF of the Act.
11-g. Mr.T.R.Rajagopalan, learned Senior Counsel, by drawing our attention to the decisions of the Supreme Court reported in 1962 (II LLJ) 621 Anakapalla Co-op. Agl. & Indusl. Soc. v. Its Workmen & 1997 (1) SCC 562 Bhola Nath Mukherjee vs. Govt. of W.B., contended that as per Section-25FF, it is the transferor to satisfy the claim of the workmen and not the transferee - E.I.D. Parry Limited. We are of the view that there is no need to go into the said aspect since, admittedly, excess amount is available from and out of the auction sale proceeds and that, in view of the fact that the claim of the workmen have to be considered more particularly in the light of the information that the transferee company viz., E.I.D. Parry Limited, has not absorbed all the workmen and retained only a few that too as fresh entrants, the learned Judge (Kalifullah, J.) is fully justified in safeguarding the interest of the workmen and we concur with the direction issued in para No.41 of His Judgement.
11-h. As rightly pointed out, the direction given by A.Kulasekaran, J. in W.P. Nos.36900 of 2005 etc., dated 07.12.2005, was consequent and a sequel to the judgment of Justice Kalifullah. We have already pointed out that the Mill, first of all, has not challenged the order of the learned Judge by way of Appeal and secondly, they participated in the proceedings before K.P.Sivasubramaniam,J.
11-i. We are also informed that sale of the properties of the Mill was subject to the workmen's claim and that, in view of the same, the appellant Mill is liable to satisfy the claim of the workmen. Whatever it may be, in the light of the relevant provisions of the Acts and that of the factual scenario particularly the transaction between the Institutions, the claim of the purchaser viz., Parry Limited, that the balance sale proceeds belong to them cannot be accepted. No doubt, the balance amount can be distributed to persons, who are all entitled from and out of it, through the mechanism/machinery provided under the SARFAESI Act; however, in view of the specific provision viz., Section 25FF of the I.D. Act, and of the fact that admittedly excess amount is lying in the hands of the Indian Bank that too after discharge of their entire loan amount, amongst others, dues to the workmen are to be settled at first. Accordingly, we are of the view that the retrenchment compensation could be be paid out of the balance sale proceeds. We find no infirmity in the order of the learned single Judges (Kalifullah, J. and A.Kulasekaran, J.), calling for interference. Once again, we make it clear that the purchaser EID Parry (India) Limited cannot have any grievance against the claims of the workmen on the balance sale proceeds lying with the Indian Bank and that if they have any other grievance, they are at liberty to approach the Debts Recovery Tribunal.
11-j. Before concluding the above issues, it is pertinent to point out that the Commissioner (K.P.S., J.) has filed a Memo dated 07.03.2006, which speaks of the commendable work done by him. It is also seen from the Memo that the learned Commissioner felt it difficult to proceed further due to non cooperation by some of the parties. In this regard, the learned Commissioner remarked and concluded thus, " Though the issue of procuring the records with police protection and bringing them to Chennai would appear to be a simple matter, there is no determination on the part of some of the parties to successfully complete the proceedings due to their direct or indirect commission or omission resulting in non cooperation.
............
In the above backdrop, I have no other alternative except to place the records on file of the Court for appropriate orders as the Hon'ble Court may deem fit in the circumstances. The assignment given to me having become in-operative, may be withdrawn. I would await orders of the Court on this memo and subsequently send the entire file under sealed cover and as the assignment has not been completed, I would be returning part of the amount paid by the bank as initial remuneration."
11-k. In view of the above, we are of the view that in order to determine the rights and liabilities between the workmen/Unions and the Management, the proceedings in this regard have to be directed to be dealt with by the Commissioner of Labour, Puducherry, for identification, eligibility, computation and disbursal of the claims /amounts. Inasmuch as a thorough analysis has been done by the Commissioner Justice K.P.Sivasubramaniam on core aspects, the Memo filed by him be taken as part of records by the Commissioner of Labour in the process of his assignment.
11-l. Consequently, W.A. No.1788 of 2005 filed by E.I.D. Parry against the Order of F.M.I.K., J. deserves to be dismissed. W.A. No.1209 of 2006 preferred against the order of A.K., J. is also liable to be dismissed, of course with the modification that instead of the Commissioner (KPSJ), the Labour Commissioner will take up the task of deciding the claims of the workmen.
12. Coming to Issue No.IV relating to the claim of other agencies, let us first consider the claim of the Commissioner of Central Excise, Pondicherry. We have been informed that the Writ Appeal (W.A. No.1919 of 2005) filed by the Excise Department and the connected Miscellaneous Petition (WAMP No.1803 of 2006), listed before us for cosnideration, had already been disposed of and that, in the separate order, dated 05.12.2006, passed in the Miscellaneous Petition ie., W.A.M.P. No.1803 of 2006, the Registry was directed to release a sum of Rs.88,56,460/- in favour of the Excise Department from and out of the amount deposited by Indian Bank. Hence, there is no need to render a finding in respect of the said matter/s. However, it is now represented that some more amount is due to the Central Excise Deparment. In view of the representation made, we permit the Department to move the Tribunal in respect of their remaining claims, if any. Other aggrieved Agency, viz., IREDA, is also permitted to approach the Tribunal for appropriate relief. In view of the effective remedy available under Pondicherry Act 1 of 2005, Depositors/appellants in W.A. Nos.1342 to 1345 of 2006 are directed to approach the designated court under the Act.
13. Now let us consider the remaining issue relating to validity of the Pondicherry Protection of Interests of Depositors in Financial Establishments Act, 2004, (Act No. 1 of 2005) and G.O. Ms. No.12, Department of Revenue and Disaster Management, dated 18.02.2006. The object of the Act was to protect the interest of depositors in Financial Establishments in the Union Territory of Pondicherry. Inasmuch as the impugned enactment is on par with Tamil Nadu Act viz., the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997, (Tamil Nadu Act 44 of 1997) and the provisions of the Tamil Nadu Act have been upheld initially by one of us (P.Sathasivam, J. as single Judge) in M/s.Thiru Muruga Finance and others v. State of T.N. and another (2000-3-L.W.-298), and recently by a Full Bench of this Court in the decision reported in 2007-1-L.W. 892 (S.Bagavathy v. State of Tamil Nadu and another), we are of the view that there is no need to mention all the details relating to Pondicherry Act No.1 of 2005. We verified various definitions including 'competent authority', 'Deposit', 'Designated Court', 'Financial Establishment', etc., which are in pari materia with the Tamil Nadu Act except some slight variation in the language used.
13-a. In Thiru Muruga Finance, after referring to various provisions of the the Tamil Nadu Act, the challenge relating to the constitutionality of the same, power of the State Government in enacting such law, and after finding that the State Legislature is competent to enact Tamil Nadu Act 44 of 1997, one of us upheld the validity of the Tamil Nadu Act, dismissing all the Writ Petitions.
13-b. It is brought to our notice that, even after dismissal of the Writ Petition (in Thiru Muruga Finance) challenging the Tamil Nadu Act 44 of 1997, after noticing the decision of a Full Bench of the Bombay High Court in Vijay C.Puljal v. State of Maharashtra (2005 (4) CTC 705), by which the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999, was struck down, placing reliance on the said decision of the Full Bench of the Bombay High Court, a batch of Writ Petitions came to be filed before this Court challenging the provisions of the Tamil Nadu Act both on the grounds of legislative competency, unreasonableness and violative of Articles 14, 19(1)(g) and 21 of the Constitution of Indian as well as violating the principles of natural justice. When those Petitions came up before the Division Bench on 13.11.2006, it was desired by both sides that the matter be heard by a Full Bench as the Maharashtra Act, a statute in pari materia, was already struck down by a Full Bench of the Bombay High Court. Accordingly, the Writ Petitions were posted before Full Bench (consisting of P.D.Dinakaran, P.P.S.Janarthana Raja, and K.Chandru, JJ.). The Full Bench considered the contentions relating to the jurisdiction of the State Government with reference to various entries, provisions of the Companies Act, Reserve Bank Act and Maharashtra Act. After analysing in depth, the Bench concluded that the Tamil Nadu Act does not suffer any legislative competency; nor its provisions are arbitrary and unreasonable, violative of principles of natural justice; nor offends Articles 13, 19(1)(g) and 21 of the Constitution of India and, so holding, dismissed all the Writ Petitions as well as the Writ Appeals questioning the constitutional validity of the Tamil Nadu Act. Insofar as the Writ Petitions challenging the consequential attachment proceedings taken and the criminal action initiated as well as the Civil Miscellaneous Appeals that arose out of the order of the Special Court, in view of the order upholding the Tamil Nadu Act, the Full Bench dismissed those writ petitions as well as the C.M.As. Thus, in view of the authoritative pronouncement by the Full Bench of this Court in respect of Tamil Nadu Act and of the fact that Pondicherry Act No.1 of 2005 and the entire provisions therein are in pari materia with the provisions of the Tamil Nadu Act, the challenge as to the legislative competency and jurisdiction of the Government of Pondicherry in enacting the impugned Act is liable to be rejected. It is made clear that, in view of the machinery provided in the Pondicherry Act, as observed while discussing Issue No.4, members of the Depositors' Associations and all other persons connected with deposits/investment in financial establishments in Pondicherry are free to approach the authority/designated court to vindicate their grievance.
13-c. One other vital aspect to be considered in this perspective is the question raised in the Appeal filed by Government of Pondicherry viz., W.A. No.293 of 2007, with regard to the observation of D.R.E., J. in W.P. Nos.1897 of 2006 etc. The learned Judge, after considering the object of the enactment and various provisions with reference to the power of the Pondicherry Government, ultimately upheld the enactment. However, the grievance of the Pondicherry Government is with reference to the conclusion / observation of the learned Judge viz., 'The impugned enactment was made only in relation to such un-incorporated trading establishments and therefore State Legislature of Pondicherry was having the legislative competence to legislate the impugned Act in respect of those unregistered financial establishments. Further, the above quoted observations squarely applies to the fact situation of the present case. I am, therefore, of the view that the Pondicherry Establishments Act, 2004 (Act 1 of 2005) is valid and not unconstitutional or ultra vires Constitution of India."
13-d. Mr.T.Murugesan, learned Government Pleader for Pondicherry Government, while assailing the conclusion of the learned Judge that the impugned enactment was made only in relation to un-incorporated Institutions, contended that, first of all, no argument was placed by the appellant to arrive at such conclusion. On the other hand, according to him, the submission was that entry 32 of list 2 - State List is only residue of entry 42 in the Central List and that entry 32 also covers incorporated companies.
13-e. Before analysing the above issue, it is useful to refer to the background of the litigation as could be seen from the factual details submitted by the learned Government Pleader. The Pondicherry Police received a complaint from one Boothanathan, Thiuvannainallur, Tamil Nadu, alleging that the amount deposited by him in PNL Nidhi Limited has not been returned. Based on his complaint, a case was registered in Crime No.31 of 2004 on the file of CID Pondicherry and they took up investigation. Subsequently, about 3000 complaints were received and most of the complainants are very aged people, retired government servants, who had invested all their hard earned savings in the financial establishments. On enquiry, it was found that the concerned Nidhi Limited changed the name five times such as Pondicherry Nidhi Limited and PNL Nidhi Limited, however, functioned as one establishment having the same address. Pondicherry Nidhi Limited stands registered with the Reserve Bank of India under Section 45(1) of the R.B.I. Act but PNL Nidhi Limited is unregistered and not recognised as a financial establishment. The promoters of PNL Nidhi Limited by name Kannan and Baskaran are brothers and they were also the Directors of New Horizon Sugar Mills. The funds of the Nidhi were utilized for the purpose of New Horizon Sugar Mills and properties were purchased in the name of New Horizon Sugar Mills, Pondicherry, Arunachala Sugar Mills, Thiruvannamalai, besides land at Kumbakonam, Land and buildings at Pondicherry and Chennai. The investigation conducted by the C.I.D., Pondicherry, shows that the deposits collected from the depositors of PNL Nidhi Limited had been channelised to New Horizon Sugar Mills.
13-f. Coming to the enactment, the power to make law is traceable to Entry-32 of List II. The impugned Act, as rightly pointed out by the learned Government Pleader, does not transgress into the Central Acts like the Companies Act or the R.B.I. Act. The Companies Act does not provide machinery for the purpose to attach the property of the defaulting financial establishments and to disburse the amount to the depositors. As discussed and observed earlier, the provisions of the impugned Act ie., Pondicherry Act, are similar to Tamil Nadu Act 44 of 1997. All the provisions of the Tamil Nadu Act have been found to be constitutionally valid by the Full Bench, hence, we are of the view that there is no need to discuss and elaborate the same once again. Similar contention viz., State Legislature lacks jurisdiction and the Act applies only to un-incorporated Financial Establishments etc., were urged before the Full Bench. After considering relevant entries in respect of List-1 and II and similar provisions in the Tamil Nadu Act, Companies Act and R.B.I. Act, the Full Bench in S.Bagavathy's case, rejected all the contentions. The following conclusions of the Full Bench are relevant, " 116.1. In the instant case, the efforts taken by the State by enacting the impugned Act seeks to plug the loopholes in the existing socio economic scenario as the prevailing legal system is not able to cure the mischief. There is not even a semblance of conflict, what to talk of direct conflict, between the impugned State Act and the Central Acts, viz., Section 45S and 58B(5A) of Reserve Bank of India Act, 1934 or Section 58A of the Companies Act, 1956, as the case may be, to bring about the situation where one cannot be obeyed without disobeying the others. Both the Acts can operate simultaneously as they do not occupy the same field. As the enactments operate in two different fields without encroaching upon each others field, there is no repugnancy. That part, the Court is required to look at the substance by taking into account the entire enactment as a whole and the main objects and the scope and effect of the provisions and incidental and superficial encroachments are to be disregarded. The doctrine of occupied field applies only when there is clash between the Union and the State List within an area coming within the competence of both and if the impugned legislation substantially falls within the power expressly conferred upon the legislature which enacted the law any incidental encroachment in the field assigned to the other legislature is to be ignored [vide J.Ameergani, W/o.Jaheer Hussain v. State & another (2005-2-L.W.(Cri) 606].
116.2. In any event, assuming the impugned Tamil Nadu Act incidentally trenches upon the field of legislation of the Central Acts, referred to above, the attack on the ground of occupied filed, much less repugnancy, got cured by the assent of the President to the impugned Act.
117. Even though the acceptance of the deposit would fall within the meaning of Banking as the same is akin to banking in essence and therefore, may also fall within the field of legislation under Entry 45 (banking) of List I in view of the decision in Kanta Mehta v. Union of India, referred supra, we are satisfied that it is enacted, in pith and substance, under Entry I or 32 of List II of VII Schedule to the Constitution of India. Because, it may not be proper for this Court to go into the societal realities, and socio economic disparities, which are in their entirety left for the consideration of the legislature while enacting the impugned Act in the public interest and to regulate the business of the financial establishments. Otherwise, when the financial establishments fold up their tents or become sick and windup, the depositors will have to stand in the queue as unsecured creditors with no umbrella of protection."
13-g. At this juncture, it is also useful to refer to the stand taken by the Advocate General who defended the Tamil Nadu Act before the Full Bench by stating that the Act was intended to realise the deposits made by the public in the financial establishments, whether they are incorporated or un-incorporated, as the Companies incorporated under the Companies Act, 1956 are also roped in by the Tamil Nadu Protection of Interests of Depositors (In Financial Establishments) Amendment Act, 2003 (Tamil Nadu Act 30/2003). The said contention and the stand taken on behalf of the Government of Tamil Nadu were accepted by the Full Bench. We are of the view that the entire reasoning of the Full Bench is applicable to the impugned Act of Government of Pondicherry, accordingly, we hold that the financial establishments referred to in Section 2(d) of the impugned Act cover both un-incorporated and incorporated trading establishments.
13-h. The impugned Act (Act 1 of 2005) is a self-contained Code for the following reasons:-
" A. Section 4(1) enables the Government or the District Magistrate to investigate the complaint of fraudulent transaction involving a financial establishment either suo motu or on complaint.
B. Section 4(2) further provides for attaching the property of the defaulter.
C. As per Section 4(3) attached property shall vest in the competent authority appointed by the Government under Section 5(1) of the Act.
D. Section 5 (3) enables the competent authority to make an application to the special court/designated court for adjudicating any issue or subject matter pertaining to money / property / assets belonging to or ostensibly belonging to a financial establishment.
E. Section 6(2) gives power to the competent authority to take possession of the property attached and to take further action.
F. Section 7 contemplates notice to be issued by the competent authority inviting claims by secured creditors/depositors of financial establishment to submit their claims.
G. Section 8 empowers the competent authority to request the designated court to seek permission for making payment to depositors out of the money realised.
H. Section 10(1) contemplates the appointment of a District Judge as designated court and such appointment shall be made with the concurrence of the Chief Justice of the Madras High Court.
I. Section 9(1) enumerates the powers and functions of the designated court.
J. Section 11 contemplates the issue of notice by the designated court to the financial establishment or to any other person whose property is attached.
Section 11(2) mandates that the designated court shall issue notice to all other persons represented to it as having or being likely to claim any interest or title in the property of the financial establishment.
Section 11(5) contemplates enquiry by the designated court and the designated court shall exercise all the powers of a civil court and to follow the summary procedure for deciding the dispute.
K. Section 15 contemplates an appeal to be preferred to the High Court against the order of the designated court.
13-i. In view of the various aspects adverted to by us, the conclusion/observation of D.R.E., J. to the effect that the impugned enactment was made only in relation to un-incorporated trading establishments is to be clarified/modified to the effect Act No.1 of 2005 enacted by the Pondicherry Government is applicable both to the incorporated and unincorporated trading/financial establishments. In this view of the matter, W.A. No.293 of 2007 filed by the Government of Pondicherry is to be allowed and Writ Appeal Nos.1143 and 1144 of 2006, questioning the validity of Act No.1 of 2005 and that of G.O.Ms. No.12 dated 18.02.2006 are liable to be dismissed.
14. Now, let us deal with the connected Writ Petitions.
15. In W.P. No.44991 of 2006, E.I.D. Parry Limited challenges the proceedings of the Deputy Commissioner of Central Excise, dated 16.11.2006, and also prays for an appropriate direction to the respondents therein to issue Registration certificate to manufacture excisable goods. Learned Senior Counsel for the petitioner fairly states that, in view of the subsequent developments / orders passed, nothing survives for adjudication in the Writ Petition. The above statement is hereby recorded and the writ petition is liable to be dismissed as infructuous.
16. In W.P. No.45805 of 2006, T.Sethurajan and 16 others / ex-employees of the New Horizon Sugar Mills, Ariyur, pray for a direction to the first respondent - the Commissioner of Labour, Pudhucherry, to consider their claims in accordance with the directions in W.P. Nos.24834 and 30532 of 2005. The second respondent/Sangam representing all the employees filed W.P. No.10060 of 2005. It is stated that, in the said writ petition, this Court came to a conclusion that the provisions of the SARFAESI Act cannot take away the benefits conferred on the workmen under Section 25FF of the I.D. Act. It is the grievance of the petitioners that the 2nd respondent-Thozhilalar Sangam claimed legal dues of the employees payable under Section 25FF of the I.D. Act excluding the petitioner and some others. It is further stated that the Labour Commissioner is the competent person to decide the inter-se claims of the petitioners vis-a-vis the 2nd respondent. It is specifically stated that the entitlement under Section 25FF and whether the liability has to be borne by M/s.Horizon Sugar Mills or the auction purchaser is also to be decided by the Labour Commissioner. As rightly pointed out by the learned counsel for the petitioners/workmen, the claim of the employees cannot be decided under the SARFAESI Act as the Act enables a person aggrieved to approach the D.R.T. only when he is aggrieved of any of the measures under Section 13(4) of the Act. As said in the earlier paragraphs, the sale pursuant to Section 13(4) proceedings has been concluded and the amount is lying for disbursement. It is true that right of Appeal has been provided under Section 17 of the Act to any person who has been aggrieved by any of the measures referred in sub-section 4 of Section-13. However, the Industrial Disputes Act, being a special Act, the jurisdiction of the Labour Court is not ousted and the claim of the workmen has to be decided only under the Industrial Disputes Act.
16-a. Inasmuch as we have already directed the Labour Commissioner to go into the claims of the unions for verification / identification / eligibility / computation / distribution of the claims-amount payable to the workers, the petitioners herein are also directed to go before the Commissioner, who shall decide their claims also as directed by us.
17. In W.P. No.1460 of 2007, Sacrur Sugar Mills Employees Co-operative Stores Limited prays for the issuance of a writ of mandamus, directing the second respondent viz., Commissioner, Labour Department, Puducherry, to recover the sums due to the Stores as per the statement of accounts dated 04.12.2006. In the affidavit filed in support of the above Petition, President of the petitioner stores has stated that the society was started at the Mill with the object of purchasing and selling groceries, vegetables etc. at reasonable prices for the benefits of the members. According to the petitioner, the Stores supplied the materials to the employees on credit basis and the 3rd respondent/the Mill had undertaken to recover the amount from the monthly salary of the respective members and pay the same to the petitioner. Till September 2003, they received amounts from the Management, however, from October 2003 to January, 2006, though the Mill had recovered the amount, the same was not paid to the petitioner. It is also stated that they are also standing on par with the employees / Unions and a sum of Rs.12,28,531/- is due for payment. The petitioner made representation to the Registrar of Cooperative Department, Pudhucherry, on 04.12.2006 requesting him to take steps to collect the amount due. In turn, the first respondent wrote a letter to the second respondent / Commissioner, Labour Department, Puducherry, to recover the dues payable to the society from and out of the amount received from the Management. Since no action has been taken, the co-operative Stores has filed the present Writ Petition.
17-a. In view of the specific assertion and of the fact that the petitioner stores was formed for the benefit of the employees of the sugar mill, subject to proof, they are also entitled to their arrears. Accordingly, they are also allowed to approach the Labour Commissioner along with the Unions/employees.
18. Before parting, it is useful to summarise our conclusions on various issues.
In the Appeals and the Writ Petitions, we have considered the claims of the New Horizon Sugar Mills & its Directors, E.I.D. Parry (India) Limited, Central Excise Department, Government of Pondicherry, Workers' Unions/Association/Sangam (Puduvai Pradesa Sarkarai Aalai Thozhilalar Sangam and Ariyur Sugar Mills Staff Welfare Union), individual workers numbering 17 and also that of Sacrur Sugar Mills Employees Co-op. Stores as well as Depositors' / Investors' Associations. In the factual scenario and in the light of the elaborate discussion in respect of the claim of the Mill and Parry Limited, we hold that either of them cannot claim the balance amount lying with the Indian Bank. If they have any grievance, they are at liberty to approach the D.R.T. for appropriate relief. We are in entire agreement with the reasonings and findings rendered by F.M.Ibrahim Kalifullah, J., particularly in respect of the conclusion arrived at regarding the claim of the workers with reference to Section 25FF of the Act. As regards the claims of the Central Excise Department or any other Agency including IREDA, we permit them also to approach the Debts Recovery Tribunal under the provisions of the SARFAESI Act. The Investors / Depositors or their respective Associations are directed to pursue their remedy under Pondicherry Act No.1 of 2005. We uphold the constitutional validity of the Pondicherry Protection of Interests of Depositors in Financial Establishments Act, 2004 (Act 1 of 2005), modifying the order of Dharma Rao Elipe, J. to the effect that the impugned Act would embrace both incorporated and unincorporated trading/financial establishments in its purview. Consequently, validity of G.O. Ms. No.12, Department of Revenue and Disaster Management, dated 18.02.2006, is also upheld. As far as the claims of the workers and their unions as well as Sacrur Society, in modification of the order of A.Kulasekaran, J. in directing the parties/workers to go before the Commissioner appointed by the Court (K.P.Sivasubramniam, J.), we allow them to approach the Labour Commissioner, Puducherry, who shall go into the identity / veracity / eligibility / computation / distribution of their claims-amounts. As observed earlier, the Labour Commissioner shall, along with the materials available before him, take the Memo filed by Justice K.P.Sivasubramaniam (Rtd. Judge ) as a supplement/extra material while deciding the claims. After decision, the Commissioner is at liberty to draw and disburse the amount lying with the Bank and if the Commissioner finds the amount available insufficient/deficit for the purpose of settling the claims or finds the amount in excess after settlement, in either case, he shall approach this Court for appropriate direction to the Bank.
19. In the result, I. W.A. No.1142 of 2006 filed by New Horizon Sugar Mills is dismissed in the light of the observation in paragraph No.10.
II. W.A. No.1788 of 2005 filed by E.I.D. Parry (India) Limited and W.A. No.1209 of 2006 filed by New Horizon Sugar Mills are dismissed. The order of A.Kulasekaran, J., dated 07.12.2005, insofar as it relates to appointment of K.P.Sivasubramaniam, J. as Commissioner, is modified, instead, the task of deciding and disbursing the claims/amounts of the workmen is directed to be taken up by the Commissioner of Labour, Puducherry, who shall complete the task within a period of four months from the date of receipt of copy of this Judgment. If need arises, he is free to seek assistance from the Police Department, Puducherry.
III. In the light of our observation in para No.12, the Excise Department is at liberty to move the Debts Recovery Tribunal relating to their remaining claims. Other Agencies including IREDA are also permitted so, whereupon, the Tribunal shall consider their respective cases without going into the aspect of limitation prescribed in Section 17(1) of the SARFAESI Act. The parties are permitted to lodge their claims, if they so desire, within two weeks from the date of receipt of copy of this order.
IV. W.A. Nos.1342 to 1345 of 2006 filed by the Pondicherry Non-Banking Investors Protection Association (for PNL) are disposed of with liberty to the Association to approach the designated Court under the provisions of Pondicherry Act No.1 of 200.
V. W.A. No.293 of 2007 filed by the Government of Pondicherry is allowed and W.A. Nos.1143 and 1144 of 2006 filed by the Mill and its Directors are dismissed, with modification to the order of the learned single Judge (Dharma Rao Elipe, J.) dated 23.08.2006 that Pondicherry Act No.1 of 2005 would cover in its fold both incorporated and unincorporated trading establishments.
VI. W.P. No.44991 of 2006 filed by E.I.D. (Parry) India Limited is dismissed as infructuous.
VII. W.P. Nos.45805 of 2006 and 1460 of 2007 are allowed to the extent indicated.
In the light of the orders passed in the Appeals and the Writ Petitions, all connected Miscellaneous Petitions stand dismissed.
JI.
Office to note:
i) Forward a copy of the Memo, dated 07.03.06, of the Commissioner / K.P.Sivasubramaniam, J. to the Labour Commissioner, Puducherry, along with copy of this Judgment.
ii) Issue copy of the Judgment not later than Friday (30.3.2007)