IMPORTANT POINT
Labour Court as per the provisions of Section 35 of Securitization Act has no jurisdiction under B.I.R. Act to prohibit the secured creditor from exercising the powers as conferred under the Securitization Act.

Jayant Patel, J.—The interesting question arises for consideration in the present petition is the status of the workers of a Company whose properties are taken over by secured creditor under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “Securitization Act”) and the unit of the Company is closed. Incidentally, the question also deserves to be considered about the presence of such secured creditor in the proceedings initiated by the workers where the unit is closed for recovery of their wages or the protection of the rights before the appropriate forum.

2. The short facts of the case appear to be that the petitioner is a nationalized Bank having security interest over the mortgaged properties of the respondent No. 2 Company. As the loan amount for the mortgaged properties was not paid, as per the petitioner-Bank, the debt was classified as Non-Performing Assets (N.P.A.). Consequently on 29.10.2007, notice under Section 13(2) of the Securitization Act was issued. Thereafter, as per the petitioner, the respondent No. 2 Company did not pay the amount, and therefore, the possession of the properties by way of a measure under Section 13(4) of the Securitization Act was taken over. It is the case of the petitioner that the possession is taken over of the properties, which were mortgaged with the petitioner and there are other properties of the Company also. Respondent No. 2 Company, which was the borrower approached the Debts Recovery Tribunal for challenging the action of the petitioner under the Securitization Act by preferring appeal under Section 17 of the Act. No injunction was granted by D.R.T. in such proceedings .against the disposal of the properties by the petitioner in capacity as the secured creditor. At that stage, respondent No.1, claiming as the status of the representative of the Union, invoked the power of the Labour Court under Section 79 of the Bombay Industrial Relations Act, 1946 (hereinafter referred to as “B.I.R. Act”) and prayed for the relief, inter alia, that until prior permission is obtained under Section 250 of the Industrial Disputes Act, 1946 (hereinafter referred to as “I.D. Act”), the factory may not be closed or illegal closure may not be enforced. In such proceedings, incidentally prayers were also made, but the pertinent aspect is that the petitioner herein, who is secured creditor was impleaded as opponent No. 2 in such proceedings before the Labour Court being No. 13 of 2008. The petitioner appeared in such proceedings and submitted an application Ext. 8 for deletion as opponent No.2. It may also be recorded that in the proceedings before the Labour Court, respondent No. 1—Union also submitted an application for temporary injunction under Section 119(d) of B.I.R. Act for interim relief, contending inter alia, that the workers have to recover about Rs. 95,96,000 from the Company, and therefore, until such amount is deposited with the Labour Court, the properties of the Company may not be transferred or alienated. The Labour Court heard the application Ex. 8 of the petitioner for deletion as party and after hearing both the sides, was pleased to pass the order on 3.5.2008, whereby the application of the petitioner herein has been rejected. The petitioner apprehended that the Labour Court may pass the order below the application for temporary injunction prohibiting it from exercising the power under Securitization Act as the secured creditor and at that stage, the petitioner has approached this Court by the present petition for challenging the order dated 3.5.2008 passed by the Labour Court, and it is also prayed by the petitioner to direct the Labour Court to delete the name of the petitioner from the proceedings of Application No.13 of 2008. The petitioner has also prayed for appropriate writ to direct the Labour Court not to interfere in the proceedings under Securitization Act by the petitioner.

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