ORDER

Heard Ms. Kiran Suri, learned counsel for the appellant in support of this petition and Mr. Raghupathy, learned counsel appearing for the respondent Trade Union.

2. This special leave petition seeks to challenge the judgment and order dated 6.12.2009 rendered by a Division Bench of the Karnataka High Court in Writ Appeal No.1382/2009 whereby the writ appeal filed by the respondents was allowed, and the order passed by the learned Single Judge of the High Court dismissing Writ Petition No.4529/2009 filed by the respondent was set aside.

3. The short facts leading to the present special leave petition are this wise: The respondent No.1 is a Trade Union registered under the Trade Unions Act, 1926 and was representing the workmen of the industrial concern known as Mysore Panel and Boards Pvt. Ltd. This company closed down its manufacturing activities sometime in January, 2002, leaving some 83 workmen jobless. Consequent upon the closure of the said company, there were various statutory and legal dues of the workmen, and for that purpose they filed Applications under Section 33- C of the Industrial Disputes Act, 1947 as well as under the Payment of Gratuity Act. Those applications were allowed by the concerned authorities. Thus, one Application was allowed by order dated 4.3.2005 for a claim of Rs.4,71,781/-, another Application was allowed by the order dated 30.8.2005 for a claim of Rs.16,66,585/- and the third Application filed under the Payment of Gratuity Act was allowed by order dated 13.9.2005 for a sum of Rs.7,78,696/-, resulting into total dues of Rs.29,17,062/-. Having waited sufficiently, the respondent Trade Union wrote to the Deputy Commissioner of the Mysore District, Mysore by its letter dated 28.8.2008 seeking recovery of these amounts.

4. It so transpired that the Deputy Commissioner, Mysore District was not quick enough in taking the necessary steps, whereas the petitioner Corporation which had its claim against this company, proceeded to sell the leasehold rights of the company for realizing the amount of Rs.24,00,000/-. The claim of the workmen as aforesaid was for Rs.29,17,062/-. Fearing that the amount recovered by the sale of the leasehold rights of the company will seriously erode the dues of workmen, the respondents filed a writ petition before the High Court. The first prayer in the writ petition was for issue of a writ

of mandamus or direction to the Deputy Commissioner, Mysore District to take immediate steps to proceed against the Company for recovery of statutory and legal dues of the workmen as arrears of land revenue by selling the assets of the Company. Prayer (b) of the writ petition was to seek writ of mandamus or direction or order to the Karnataka State Financial Corporation, which is the petitioner herein, not to appropriate the sale proceeds from the sale of machinery and other assets (realized pursuant to the public auction) and to apportion the same to satisfy the claims of the workmen in accordance with law.

5. The learned Single Judge of the Karnataka High Court dismissed this writ petition, though the appeal therefrom was allowed by a Division Bench of the High Court. Being aggrieved by the judgment and order passed by the Division Bench of the High Court, the present special leave petition has been filed by the petitioner.

6. The submission of Ms. Kiran Suri, learned counsel for the appellant Corporation is that under Section 29 of the State Financial Corporations Act, 1951, the Financial Corporation has a right to take over the management or possession of the properties or both of the industrial concern, and this right has precedence over all other claims. She relies upon Section 31 of the said Act which gives special provisions for enforcement of the claims of the Financial Corporation. Ms. Suri criticises the judgment of the High Court which looked into the proviso to Section 529 of the Companies Act, 1956 under which the dues of the workmen are given a precedence. The submission of Ms.