Chennai Yettrumathi Valaga Uzhiyargal Matrum Pothu Thozhilalar Sangam, Rep. by Its General Secretary Vs. the Development Commissioner, Mepz Special Economic Zone and Heous and ors. - Court Judgment

M. Sathyanarayanan, J.

1. The writ petitioner is the appellant and aggrieved by the dismissal of the writ petition, has filed this writ appeal.

2. The facts in brief, which are necessary for the disposal of this writ appeal are as follows:

The petitioner Union claims that it represent the interest of the workers who are working in the campus of Madras Export Processing Zone (MEPZ), at Tambaram and it also represents the workmen of M/s. Nova Electro Magnetics Limited.

3. The said company became sick and sought a reference before the BIFR, which appointed the third Respondent viz., Industrial Development Bank of India (IDBI), as the Operating Agency to examine the viability of the proposals and for formulation of a scheme for rehabilitation. The BIFR vide orders dated 6.5.2001, issued directions and one such direction was for preparation of a rehabilitation scheme.

4. M/s. Nova Electro Magnetics Limited, aggrieved by the orders passed by the BIFR, preferred an appeal before the AIFR and the said appeal was also dismissed.

5. In the meanwhile, the first Respondent herein forwarded a letter dated 24.11.2003 to the Commissioner of Labour, stating that they are contemplating to initiate eviction proceedings in terms of Public Premises (Eviction of Unauthorised Occupants) Act, 1971 against the above said company. The first Respondent also requested the Commissioner of Labour to intimate about the statutory dues of the workers of M/s. Nova Electro Magnetic Limited so as to enable the first Respondent and the Bankers/Financial Institutions who are charge holders on the assets to know about the same and consider the claim as per law. The 6th Respondent viz., the Assistant Commissioner of Labour, Chennai in turn informed the petitioner's Union about the proposed action to be taken by the first Respondent. The petitioner Union in response to the said communication, sent number of representations requesting for the settlement of the workers' dues.

6. The petitioner Union also filed C.P. No. 519 of 1997 under Section 33-C(2) r/w Section 33-C(5) of the Industrial Disputes Act, before the Labour Court, Chennai for computation of the money value of the benefits due and payable by the Management to the workmen of the above said company and the same is pending adjudication. The petitioner Union also filed a suit in O.S. No. 627 of 2007 on the file of the Court of District Munsif, Tambaram, restraining the Management of the above said company from removing the machineries and raw-materials from the premises and it was decreed ex parte on 23.10.1997.

7. The petitioner Union also submitted a representation to the third Respondent herein who was appointed as the Operating Agency of the BIFR to settle the dues of the workmen of the above said company and there was no response forthcoming from them. It is the specific case of the petitioner that the petitioners dues etc., would workout to Rs. 2,48,21,430.96 and since the entire assets of the Company had been taken away by the second Respondent and the business was also closed, it is to be presumed that the company had gone into liquidation. In view of the same, and in terms of Section 529A of the Companies Act, their dues will have first charge over the assets of the company. For the said reasons, the petitioner Union come forward to file a writ petition for the issuance of the Mandamus directing the Respondents 1 to 3 not to remove the machineries and raw-materials from the premises of the above said company without making concrete provision for the settlement of statutory dues of the workmen.

8. This Court had initially granted interim orders for a period of two weeks.

9. The first Respondent viz., MEPZ, had filed its counter stating that the premises is a Custom bonded Central Government Industrial asset, taken on lease by 100% Export Oriented Industrial Units and their occupation is regulated by Public Premises (Eviction of Unauthorised Occupants) Act, 1971. It is also governed by Foreign Trade (Development and Regulation) Act, 1992 and the Special Economic Zones Act, 2005 and the statutory rules made thereunder.

10. In terms of the provisions of the above said Acts and rules, if the companies/firms established inside the MEPZ, failed to fulfil its export obligations as per the licence issued to them and/or committed default in payment of lease/rent in respect of public premises leased to them, they are liable to be evicted. It is further averred in the counter by the first Respondent that the company viz., M/s. Nova Electro Magnetics Limited, a licensee under the first Respondent for manufacture and export of Video Cassettes, Video magnetic tapes and Video housing, had accumulated the rental arrears of Rs. 52,56,771/-, and water consumption charges of Rs. 63,068/- as on 30.6.2003. The first Respondent had also cancelled the lease of 11.88 acres granted in favour of the above said company vide order dated 12.5.2003. It is further averred that the company within a period of five years, had failed to fulfil their export obligations and also failed to renew their licence and left with no other option, the first Respondent had initiated proceedings for their eviction and it is also averred in the counter by the first Respondent that the banks had also initiated proceedings under SARFAESI Act and properties have also been sold and sale certificates have been issued in favour of third parties.

11. The third Respondent viz., the Industrial Development Bank of India, had filed its counter taking the legal plea that the wages to the workmen and other dues if any, are the liability of the employer company i.e. M/s. Nova Electro Magnetics Limited, and not that of the secured creditors. It is further averred that only in the event of the company being in liquidation, in which case, the provisions of Section 529A of the Companies Act, 1956 would come into operation and consequently, the dues of the workmen will have the first charge on the assets of the Company. Admittedly, the company is yet to be wound up and therefore, the third Respondent contended that it is not open to the petitioner Union to claim the dues of the workmen by way of first charge over the secured assets. On facts of the case, the third Respondent contended that in view of the default committed by the company, proceedings under SARFAESI Act were initiated by issuance of notice under Section 13(2) of the Act, on 19.10.2005 and after obtaining the consent of the other secured creditors, possession of the secured assets were taken by the Authorised Officer of IDBI Ltd. on 19.12.2005.

12. For sale of the assets, bids from bidders were received and one bidder viz., M/s. Annam Steels Private Limited became the successful bidder in respect of the properties in question and the said sale was confirmed and sale certificate was issued on 15.2.2006. A sum of Rs. 839 lakhs were realised by way of sale and it has to be distributed among the banks, who had advanced loans in favour of the company. Therefore, for the said reasons, the third Respondent prayed for dismissal of the writ petition.

13. Annam Steels Private Limited filed its counter stating among other things that it is a bona fide purchaser of valuable movable assets in good faith and it has also been issued sale certificate on 15.2.2006 by the third Respondent and they also removed part of the machineries on 9.3.2006 upon permission granted by the second Respondent. Therefore, prayed for the dismissal of the writ petition.

14. M/s. Cognizant Technology Solutions India Private Limited who was also are of the purchasers of the assets of the company, had filed counter praying for dismissal of the writ petition.

15. The learned Judge after taking into consideration the rival submissions, has dismissed the writ petition vide order dated 21.4.2006, on the ground that without imploding the company viz., M/s. Nova Electro Magnetics Limited, the writ petition cannot be entertained and citing the said reasons, had dismissed the writ petition.

16. The petitioner Union, aggrieved by the dismissal of the writ petition, had filed this writ appeal.

17. Mr. N.G.R. Prasad, learned Counsel appearing for the appellant would submit that in terms of Section 13(9) of the SARFAESI Act, the workers of the company viz., M/s. Nova Electro Magnetics Limited, are to be treated as secured creditors and consequently, the dues payable to them being the first charge over the secured assets of the company. It is further contended that the third Respondent ought to have taken into consideration the plight of the workmen especially under the provisions of Section 25F of the Industrial Disputes Act and should have set apart some portion of the realised money for payment payment of workmen dues.

18. The learned Counsel appearing for the appellant in support of his submissions, has placed reliance upon the following decisions:

1. 2006 (4) L.L.N. 41 (FB) Gowri Spinning Mills (Private) Ltd. v. Assistant Provident Fund Commissioner, Salem and Anr.

2. 2008 (3) L.L.N 290 (DB) Palani Andavar Cotton and Synthetic Spinners, Ltd. v. Solyraj and Ors.

3. : 2005 (4) CTC 469 (SB) PNL Depositors' Welfare Association v. Union of India and Ors., as confirmed by the order dated 27.3.2007 made in W.A. No. 1788 of 2006 batch etc.

19. In 2006 (4) L.L.N. 41 (FB) Gowri Spinning Mills (Private) Ltd. v. Assistant Provident Fund Commissioner, Salem and Anr., the issue arose for consideration was whether action to recover the dues payable under the provisions of EPF Act is maintainable and the employer, who is sought to be proceeded as against the Industrial Company in respect of whom, a proceeding is pending under Sick Industrial Companies (Special Provisions) Act, 1985.

A Full Bench of this Court in the said decision had taken into consideration the provisions of EPF Act and Section 22 of SICA and held as follows:

In the light of the provisions of the EPF Act, and the Scheme framed there under, it is to be viewed that the rights of the employees under the Scheme are protected and the proceedings under the EPF Act do not come within the purview of the provisions of Section 22(1) of the SICA. An amendment to the EPF Act was made by Act 33 of 1988 in terms whereof proviso to Section 14B where an employer makes default in payment of any contribution to the fund, the Central Provident Fund Commissioner has been authorised to recover the damages by way of penalty not exceeding the amount of arrears. However, under the proviso appended thereto, the Central Board has been empowered to reduce the quantum of damages that may be required to be paid by a company in relation to an undertaking which is a sick industrial undertaking and in respect of which the scheme for rehabilitation has been sanctioned by the BIFR, subject to such terms and conditions as may be specified under the scheme. Parliament thus as a matter of legislative policy has enacted that the employer be granted a waiver of damages payable under Section 14B where the undertaking of the employer is a sick industrial undertaking and the scheme for its rehabilitation has been sanctioned. There again, it must be noticed that the eligibility to grant waiver under Section 14B is subject to those conditions which have been prescribed therein. Parliament having thus amended the EPF Act had taken within its purview the position of a sick industrial undertaking, the extent of the immunity which have been conferred upon such undertaking with reference to provident fund dues under the Act, must be confirmed to what has been legitimised by Parliament. The extent of the immunity or exemption cannot be extended beyond what was allowed in terms of the amendment to the EPF Act.

20. In 2008 (3) L.L.N 290 (DB) Palani Andavar Cotton and Synthetic Spinners, Ltd. v. Solyraj and Ors., the question arose for consideration was whether the prayer under Section 22 of SICA is attracted for passing any order under Section 17B of the Industrial Disputes Act, 1947 and it has been held as follows:

The question of grant of wages under Section 17B normally does not arise in case the employer reinstates the workman, but may challenge the award subject to reinstatement or if challenges part of the award, relating to payment of wages, etc., except reinstatement. Only in case the employer does not implement the award of reinstatement by filing a petition before the High Court or the Supreme Court, the employer is supposed to comply with the mandate of Section 17B. The mandate under Section 17B of Industrial Disputes Act cannot be flouted on the ground of Section 22 of SICA.

21. In : 2005 (4) CTC 469 (SB) PNL Depositors' Welfare Association v. Union of India and Ors., proceedings were initiated by Indian Bank under SARFAESI Act against the 7th Respondent therein viz., M/s. New Horizon Sugar Mills Ltd., which controls the 6th Respondent. Puduvai Pradesa Sarkarai Aalai Thozhilalar Sangm had also filed a writ petition praying to quash the tender notice issued by the Indian Bank for sale of the assets of the said company under the SARFAESI Act.

22. On behalf of the said Union, it has been contended that since rehabilitation measure available to any sick industries under the 'SICA Act' has been done away with under the SERFAESI Act. Therefore, such safeguards contemplated under the SICA Act should be read into Section 13(4)(b) and (c) of the SERFAESI Act and it was also contended on behalf of the Union that every secured creditor while invoking its power under Section 13(4) of the SERFAESI Act, ought to have explored the possibility of rehabilitation of the sick industry either by way of lease, assignment or through its own management before resorting to the extreme measure of selling the industry for the purpose of recovering its dues and the financial institutions ought to have considered whether such alternative measures would serve the purpose for recovering their dues.

23. The learned Judge of this Court in the said decision, has taken into consideration various decisions including the decision rendered by the Hon'ble Supreme Court of India reported in 2003 (2) SCC 205 Allahabad Bank v. Canara Bank and Anr. and held that if the submissions made by the learned Counsel appearing for the union is accepted then it would run contrary to the very object of the SARFAESI Act and defeat all its purposes and it would also run contrary to the ratio laid down by the Hon'ble Supreme Court of India in Mardia Chemicals Ltd. case reported in : 2004 (4) SCC 311 : 2004 (2) CTC 759. However, the learned Judge on the facts of the case found that in pursuant to the sale, a sum of Rs. 50.20 Crores have been secured and admitted liability of the Indian Bank was to the tune of Rs. 30 Crores and therefore, held that the balance amount should be set apart for distribution in the event of any necessity arising for such distribution by virtue of Section 25FF of the Industrial Disputes Act, 1947.

24. M/s. New Horizon Sugar Mills Ltd., aggrieved by the decision taken in the above cited decision, had preferred writ appeals and so also some of the Respondents.

25. A Division Bench of this Court, vide order dated 27.3.2007,made in W.A.Nos.1788 of 2005 etc., batch, after taking into consideration the availability of the excess amount for satisfying the dues of the secured creditor, was of the view that no interference is warranted and therefore, upheld the order of the learned Judge.

26. Per contra, Mr. N.V. Srinivasan, learned Counsel appearing for the Respondents 2 and 3 and other counsel appearing for the Respondents viz., R4 to R7 were made their submissions based on the counter affidavit filed by the respective Respondents.

27. The third Respondent viz., IDBI, has filed its counter and would submit that the company viz., M/s Nova Electromagnetic Ltd., approached the BIFR and submitted its proposal for rehabilitation and the BIFR in turn appointed the third Respondent as the Operating Agency to consider the point of the revival of the unit and viability for the restoration of the operation. The BIFR after taking into consideration the report submitted by the Operating Agency and after taking into consideration the other materials available on record including the decisions arrived at in joint meetings between the company and the creditors, had rejected the scheme of the company and the said order on appeal was confirmed by the AIFR. The company challenging the vires of the same, had also filed W.P. No. 11331 of 2003.

28. It is further contended by the third Respondent in its counter that it has been decided to invoke the provisions of the SERFAESI Act for bringing the assets of the company for sale and accordingly notice under Section 13(2) of the Act was issued on 19.10.2005 and possession of the assets were also taken after obtaining consent from other secured creditors and notice was also published in the news dailies on 20.12.2005 and the company was also issued with notice and failed to respond to the same. Thereafter, a decision has been taken to sell the assets of the company by way of private treaty in which, six parties had participated and ultimately the properties were sold in favour of the 7th Respondent herein and the total price realised from the sale of movable and immovable properties was aggregating a sum of Rs. 839 lakhs. It is further contended that the entire sale proceeds are liable to be appropriated to satisfy the dues of the secured creditors and the claim of the appellant Union can be considered only in terms of the first proviso to Section 13(9) of the SERFAESI Act. The said provision would come into operation only in the case of company being in liquidation and the amount realised from the sale of the secured assets shall be distributed in accordance with the provisions of Section 529A of the Companies Act, 1956.

29. It is also contended by the third Respondent that in respect of the company viz., M/s. Nova Electromagnetic Limited, order of winding up is yet to be passed and consequently, the claim of the appellant in terms of Section 529A of the Companies Act cannot be considered. The 7th Respondent so also issued with sale certificate on 15.2.2006 and hence for the said reasons, prayed for the dismissal of the writ appeal.

30. Mr. N.G.R. Prasad, learned Counsel appearing for the appellant in response to the submissions made on behalf of the Respondents, had drawn the attention of this Court to the order dated 13.7.2007 passed by BIFR and in paragraph No. 10 of the order it has been stated as follows:

After considering the submissions made and the material on record, the Bench noted that as IDBI, secured creditor, had already taken action Under Section 13(4) of SARFAESI, the present reference stands abated in terms of the third proviso to Section 15(1) of SICA. IDBI shall note that the workers' dues will have to be paid from out of the sale proceeds of the company's assets.

Therefore, the learned Counsel appearing for the appellant would contend that in view of the above said orders passed by the BIFR, the third Respondent viz., IDBI, is to be directed to pay the workers dues out of the sale proceeds realised.

31. The court has carefully considered the submissions made by the learned Counsel appearing on either side and also perused the typed set of documents and the decisions cited.

32. In : (2000) 4 SCC 406 Allahabad Bank v. Canara Bank, the issue arose was relating to the impact of the provisions of The Recovery of Debts Due to Banks and Financial Institutions (RDB) Act, 1993, on the provisions of the Companies Act, 1956 and also the decision with regard to non winding up order visa-vis the dues payable to other creditors and it has been held as follows:

Alternatively, the Companies Act, 1956 and the RDB Act can both be treated as special laws, and the principle that when there are two special laws, the latter will normally prevail over the former if there is a provision in the latter special Act giving it overriding effect, can also be applied. Such a provision is there in the RDB Act, namely, Section 34 of the RDB Act, the said Act overrides the Companies Act, to the extent there is anything inconsistent between the Acts.

Therefore, it has to be held that at the stage of adjudication under Section 17 and execution of the certificate under Section 25 etc. the provisions of the RDB Act, 1993 confer exclusive jurisdiction on the Tribunal and the Recovery Officer in respect of debts payable to banks and financial institutions and there can be no interference by the Company Court under Section 442 read with Section 537 or under Section 446 of the Companies Act, 1956. In respect of the monies realised under the RDB Act, the question of priorities among the banks and financial institutions and other creditors can be decided only by the Tribunal under the RDB Act and in accordance with Section 19(19) read with Section 529-A of the Companies Act and in no other manner. The provisions of the RDB Act, 1993 are to the above extent inconsistent with the provisions of the Companies Act, 1956 and the latter Act has to yield to the provisions of the former. This position holds good during the pendency of the winding-up petition against the debtor Company and also after a winding-up order is passed. No leave of the Company Court is necessary for initiating or continuing the proceedings under the RDB Act, 1993.

Where the defendant company is a company against which no winding-up order is passed, the company, in our view, is like any other defendant and if in such a situation a question of priority arises before the Tribunal, in respect of any monies realised under the RDB Act, as between the bank or financial institutions on the one hand and the other creditors on the other, it will, in our opinion, be necessary for the Tribunal to decide such questions of priority bearing in mind principles underlying Section 73 of the Code of Civil Procedure. Section 22 of the RDB Act, in our view, gives sufficiently wide powers to the Tribunal and the Appellate Tribunal to decide such questions of priorities, subject only to the principles of natural justice. This Court has explained that the powers under Section 22 are wider than those of civil courts and the only restriction on its powers is that principles of natural justice have to be followed.

But under Section 73 CPC, sharing in the sale proceeds (here, sale proceeds realised under the RDB Act) is permissible only if a person seeking such share has obtained a decree or an order of adjudication from the Tribunal and has also complied with other conditions laid down under Section 73. In the present case, Canara Bank is not in a position to invoke the principles underlying Section 73 CPC because it has not yet obtained any decree or adjudication of its debt from the Tribunal. Nor has it complied with other provisions underlying Section 73 CPC. Hence no relief can be granted on the basis of the said principles.

Section 19(19) gives priority to all 'secured creditors' to share in the sale proceeds before the Tribunal/ Recovery Officer cannot, in our opinion, be accepted. The said words are qualified by the words 'in accordance with the provision of Section 529-A'. Hence, it is necessary to identify the above limited class of secured creditors who have priority over all others in accordance with Section 529-A.

Secured creditors fall under two categories. Those who desire to go before the Company Court and those who like to stand outside the windingup.

The first category of secured creditors mentioned above are those who go before the Company Court for dividend by relinquishing their security in accordance with the insolvency rules mentioned in Section 529. The insolvency rules are those contained in Sections 45 to 50 of the Provincial Insolvency Act. Section 47(2) of that Act states that a secured creditor who wishes to come before the official liquidator has to prove his debt and he can prove his debt only if he relinquishes his security for the benefit of the general body of creditors. In that event, he will rank with the unsecured creditors and has to take his dividend as provided in Section 529(2). Till today, Canara Bank has not made it clear whether it wants to come under this category.

Therefore, as per the ratio laid down in the above cited decision in the event of non passing of the winding up order, the adjudication has to be made with regard to the priority on the basis of the principles underlying under Section 73 of the C.P.C. Under Section 73 of C.P.C. sharing in the sale proceeds is permissible only if a person seek a share obtained a decree or an adjudication from the Tribunal and also as complied with other conditions laid down under Section 73 of C.P.C.

33. In : (2000) 7 SCC 291 A.P. State Financial Corporation v. Official Liquidator, A.P. State Financial Corporation had invoked the provisions of Section 29 of the State Financial Corporation Act, 1951 against two companies and since both companies were in liquidation, had filed two applications under Section 446(1) of the Companies Act R/w Section 29 and 46 of the State Financial Corporation Act, 1951 before the learned Company Judge for staying out side the liquidation proceedings. The learned Judge had granted an order to A.P. State Financial Corporation subject to certain conditions and two appeals were preferred and those appeals were also dismissed. The A.P. State Financial Corporation being aggrieved by the same, preferred appeals before the Hon'ble Supreme Court of India. The Hon'ble Supreme Court of India in the said decision, has held as follows:

The Act of 1951 is a special Act for grant of financial assistance to industrial concerns with a view to boost up industrialisation and also recovery of such financial assistance if it becomes bad and similarly the Companies Act deals with companies including winding up of such companies. The proviso to Sub-section (1) of Section 529 and Section 529-A being a subsequent enactment, the non-obstante clause in Section 529-A prevails over Section 29 of the Act of 1951 in view of the settled position of law. We are, therefore, of the opinion that the above proviso to Sub-section (1) of Section 529 and Section 529-A will control Section 29 of the Act of 1951. In other words the statutory right to sell the property under Section 29 of the Act of 1951 has to be exercised with the rights of pari passu charge to the workmen created by the proviso to Section 529 of the Companies Act. Under the proviso to Sub-section (1) of Section 529, the liquidator shall be entitled to represent the workmen and force (sic enforce) the above pari passu charge. Therefore, the Company Court was fully justified in imposing the above conditions to enable the Official Liquidator to discharge his function properly under the supervision of the Company Court as the new Section 529-A of the Companies Act confers upon a Company Court the duty to ensure that the workmen's dues are paid in priority to all other debts in accordance with the provisions of the above section. The legislature has amended the Companies Act in 1985 with a social purpose viz. to protect dues of the workmen. If conditions are not imposed to protect the right of the workmen there is every possibility that the secured creditor may frustrate the above pari passu right of the workmen.

The High Court's opinion that it was not necessary for the Financial Corporation to approach this Court for permission to stay outside the winding-up proceedings was uncalled for as the power under Section 29 of the Act of 1951 can be exercised subject to the above provisions of the Companies Act.

34. The decisions relied on by the learned Counsel appearing for the appellant are not applicable to the facts and circumstances of the case. In 2006 (4) L.L.N. 441 (cited supra) in the light of the provisions of the EPF Act and the scheme framed there under, it has been held that the proceedings under EPF Act, do not come within the purview of Section 22(1) of the SICA Act and the amendment for EPF Act was also made wherein the proviso to Section 22(1) was introduced and in terms of the said Act Provident Fund Commissioner was authorised to recover the damages.

35. In 2008 (3) L.L.N. 290 (cited supra) recovery of back-wages under Section 17B of the Industrial Disputes Act vis-a-vis Section 22 of the SICA had arose for consideration and it has been held that since the back-wages under Section 17B of the ID Act has been quantified, it cannot be flouted on the ground of Section 22 of the SICA Act.

36. In : 2005 (4) CTC 469 (cited supra), the submission made on behalf of the petitioner therein to explore the possibility of alternative measures for revival of the company came up for consideration and it has been held that if such a course is adopted then it would run contrary to the object of the SERFAESI Act and the ratio laid down in Mardia Chemicals Ltd. case reported in : 2004 (4) SCC 311. The facts of the said case would also disclose that a sum of Rs. 50.20 Crores were realised by way of sale under SERFAESI Act and after appropriation, a sum of Rs. 30 Crores as surplus amount was available and therefore, it was directed to be set apart for distribution in the event of any necessity arisen by virtue of Section 25FF of the Industrial Disputes Act. The said decision reported in : 2005 (4) CTC 469 (cited supra) was also affirmed by the Division Bench of this Court vide Judgment dated 27.3.2007, made in W.A.Nos.1788 of2005 batch etc.

37. In so far as the facts of this case are concerned, admittedly, the company viz., M/s Nova Electromagnetic Limited, is yet to be wound up. In fact on the application taken out by the said company before the BIFR, BIFR had also appointed an Operating Agency viz., the third Respondent herein to find out the viability of the proposal submitted for rehabilitation and after taking into consideration the said report and the decision taken in the joint committee meeting, was of the view that the revival may not be possible. The company preferred an appeal before the AIFR and the appeal was also dismissed and the challenge was made to the said order in W.P. No. 11331 of 2003.

38. Therefore, the Respondent after taking into consideration the above said aspect and in consultation with other consortium Banks, had decided to invoke the provisions of SARFAESI Act. After complying with the mandatory formalities contemplated the above said Act, brought the properties for sale and realised a sum of Rs. 839 lakhs. According to the learned Counsel appearing for the IDBI and other banks, the said amount is inadequate to cover the entire dues and no surplus amount is available for further distribution. Even though the appellant Union claims that the workers dues at the time of filing the writ petition are to the tune of Rs. 2.48 Crores, it has not been made clear how the said amount has been quantified. In fact C.P. No. 519 of 1997 filed by the appellant Union before the Labour Court, Chennai under Section 33C(2) of the Industrial Disputes Act for computation of money value payable to the workmen is yet to reach finality. The appellant herein, as per the direction of this Court, also took notice to M/s. Nova Electromagnetic Limited, having its office at New Delhi and it refused to receive notice.

39. The decision heavily relied on by the learned Counsel appearing for the appellant reported in : 2000(7) SCC 291 (cited supra) is also not applicable to the facts of this case as it came to be decided on the facts and circumstances of that case and that apart, winding up proceedings were pending at the time of taking out applications by APSFCL.

40. In the case on hand, the winding up proceedings are yet to take place and consequently, the invocation of Section 529A of the Companies Act does not arise for consideration. The Hon'ble Supreme Court of India in a decision reported in : 2000(4) SCC 406 (cited supra) has also laid down a ratio to the effect that subject to the principles enumerated under Section 73 of C.P.C., there must be a decree or order of adjudication from the Tribunal.

41. As already stated above, the adjudication with regard to the dues of the members of the appellant Union who were workmen of the company viz., M/s. Nova Electromagnetic Limited are yet to take place and the company viz., M/s. Nova Electromagnetic Limited is yet to be wound up.

42. The writ petition came to be dismissed on the primary ground that the company viz., M/s. Nova Electromagnetic Limited, Chennai-45 has not been impleaded as Respondent. Since it was represented that the above said company had shifted its operation to New Delhi, this Court vide order dated 28.01.2009, had directed the appellant herein to serve notice on the above said company having address at Door No. 506, Hemkunt Tower, 98, Nehuru Palace, New Delhi-110 019 and also to the Chennai address of the said company. The private notice taken to the company at New Delhi was returned with an endorsement 'Refused' and the notice taken to the Chennai address was also returned with an endorsement 'Left'. Affidavit of service was also filed to that effect by the appellant.

43. Since the infirmity pointed out in the impugned order has been rectified, the said infirmity no longer survives. But in view of the above cited reasons, the prayer sought for by the appellant Union cannot be granted at present.

44. The conduct of M/s Nova Electro Magnetic Limited, Chennai, in shifting its office to New Delhi and not responding to the notice issued by this Court in our considered opinion, has been purposely done in order to evade its responsibility especially with regard to the payment of workers dues.

45. Hence, M/s Nova Electro Magnetic Limited, represented by its Director, having its business operation at Door No. 506, Hemkunt Tower, 98, Nehuru Palace, New Delhi-110 019, is restrained from alienating or encumbering its assets until they satisfy the dues payable to the workers, who were working in their factory at Chennai. The appellant union is also at liberty to proceed against the above said company by initiating appropriate legal proceedings, including criminal complaint.

46. The Respondents 2 and 3 may also taken into consideration the plight of the workmen and explore the possibility of payment of part of their dues out of the sale proceeds of the assets of the company viz., M/s Nova Electro Magnetic Limited, Chennai.

47. The writ appeal is disposed of on the above terms. But in the circumstances, there will be no order as to costs. Consequently, W.A.M.P. No. 1219 and 1220 of 2006 are closed.