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2006 Supreme(All) 29
[2006(3) 224 (All)(LB)]
ALLAHABAD HIGH COURT
(Lucknow Bench)
BEFORE : DEVI PRASAD SINGH, J.
M/S. SWADESHI POLYTEX LTD., GHAZIABAD .....Petitioner
Versus
BOARD OF REVENUE, U.P. LUCKNOW AND OTHERS .....Respondents
(Writ Petition No. 5160(M/S) of 2005, decided on 3rd January, 2006)
Counsel :
N.K. Seth and Sudeep Seth for the Appellant; Umesh Chandra Pandey, Vijay Sinha, Dr. L.P. Mishra, H.G.S. Parihar, Smt. Alka Varma and C.S.C. for the Opposite Parties.
Headnote:(A) U.P. Industrial Peace (Timely Payment of Wages) Act, 1978—Section 3(1)—Wages—Non-payment of wages to workers—Employer-company closed due to financial crisis—Recovery of dues of wages—Recovery certificate issued therefor—Legality of—Can be subject of review by High Court under its writ jurisdiction. [Para 20]
(B) Interpretation of judgment—Guidelines—It should not be read in peace meal, but whole judgment should be read. [Para 21]
(C) Writ petition—Challenging proceedings for auction and sale of property—Filed by party aggrieved—Maintainable, as that party has right to approach Court—Earlier writ petitions in same matter, related to proceedings of initial stages—Not a bar—Plea of bar found misconceived. [Constitution of India, Article 226]. [Paras 21 and 24]
(D) U.P. Zamindari Abolition and Land Reforms Act, 1950—Sections 279, 280, 284, 287-A, 294, 327 and 341—U.P. Zamindari Abolition and Land Reforms Rules, 1952, Rules 235, 236, 239 to 246, 272, 272-A, 273-A, 278, 281 to 283 and 285(c)—Code of Civil Procedure, 1908, Order XXI, Rules 54, 84, 85 and 86—Recovery proceedings—Initiation of, for arrears of wages or other dues—Provisions relating to empowering authorities to recover it as land revenue—Are mandatory in nature—Must be complied with—Procedural requirements also have statutory force—Non-compliance with these requirements—Renders all proceeding invalid—Several other necessary factors related thereto—Highlighted. [Paras 29 to 31 and 43]
(E) Wages—Recovery proceedings to recover its arrears of wages—Initiated by District Authorities—Legality of—Notice of citation and demand—Issued on 11-1-2005 and date of auction and sale was fixed for 2-5-2005—Publication of auction and sale was done only in one newspaper—Sale proclamation did not contain evaluation of properties—Only area of vacant land was given—Notice was alleged to have been served on watchmen and not on petitioner-defaulter company (employer)—This notice was not even thirty days notice—Thirty days be counted from date of service of notice—Entire facts lead to conclusion that neither adequate publicity was done nor notice was served in accordance with law—Authorities acted in hasty and arbitrary manner for conducting auction of property, violating mandatory requirements of law—As such, auction and sale of property—Illegal and null in eyes of law. [Paras 44 to 47, 49, 51, 52 and 54 to 58]
(F) Recovery proceedings—For arrears of wages—Objection against—Can be filed by employer if auction and sale of property is conducted in violation of statutory law and no notice is served on him in accordance with law. [U.P. Zamindari Abolition and Land Reforms Rules, 1952, Rule 285-I—Code of Civil Procedure, 1908, Order XXI, Rule 54—Constitution of India, Article 14]. [Paras 61, 63 and 64]
(G) Recovery proceedings—For arrears of wages—Violation of statutory provisions—Effect—Arrears of wages of employees—Recovery of—Proceedings initiated by District authority in exercise of powers relating to recovery as land revenue—No opportunity of hearing was given to employer—Proceedings conducted in hasty and arbitrary matter, violating statutory provisions of law—Illegal—Auction and sale, thus, quashed—Costs of Rs. 50,000/- imposed on authorities. [Paras 67 to 75]
Hon’ble Devi Prasad Singh, J.—Whether non-compliance of provision contained in Chapter X Section E of U.P. Zamindari Abolition and Land Reforms Rules, 1952 (in short hereinafter referred as the Rules) shall render the auction and sale of a property illegal and void, is the question involved for adjudication in the present proceeding ? Apart from Rules the provision contained in Order XXI Rule 54 of Code of Civil Procedure and the provision contained in Chapter X readwith Section 327 of the U.P. Z.A. and L.R. Act, 1950 (in short hereinafter referred as the Act) and certain other statutory provisions have been invited the attention of this court for interpretation which relates to procedure for recovery of dues as arrears of land revenue.
2. M/s Swadeshi Polytex Limited (hereinafter referred to as the SPL) is a company incorporated under the provisions of the Companies Act, 1956 (hereinafter referred to as the Companies Act) and has its registered office at Kavi Nagar, Industrial Area, Ghaziabad. While 33.609% of the shares were held by Swadeshi Cotton Mills Company Limited, Kanpur, (an unit of National Textile Corporation a Government of India enterprises) 28.0218% share are held by M/s Paharpur Cooling Towers Ltd. the 15.290% of the shares are held by the Financial Institutions and the remaining 23.0922% shares are held by the general public PCT is also a company incorporated under the provision of the Companies Act and has its registered office at Kolkata, Swadeshi Cotton Mills. Ltd. Kanpur, as stated above, held 33.609% share of SPL but by virtue of nationalisation, the shares of Swadeshi Cotton Mills Limited, were transferred in the name of National Textile Corporation Limited, (hereinafter referred to as NTC’).
From the evidence on record (Annexure -34). it borne out that CMD, National Textile Corporation Ltd. is holding charge of the petitioner company and has taken steps by pursuing the Central Government for the rehabilitation of the petitioner company.
3. According to petitioner’s counsel, Shri N.K. Seth, petitioner company was doing well till 1996-1997 but on account of financial crisis and under certain compelling circumstances it was closed on 30th September, 1998. The SPL could not pay wages to the workers and application was filed on 28-12-1999 before Deputy Labour Commissioner Ghaziabad for payment of wages of December 1998 to September, 1999. Again application was filed in the month of February, 2000 by respondent No. 8 in pursuance to provision contained in Uttar Pradesh Industrial Peace (Timely Payment of Wages) Act, 1978. In response to application submitted by respondent No. 8/workers, recovery certificate was issued under sub-section (1) of Section 3 of the 1978 Act. According to petitioners counsel the recovery certificate was issued ex-parte as no notice was served on occupier of the company in pursuance to provision contained in Section 4 of the 1978 Act. An objection was filed under Rule 285 (i) of the Rules which was dismissed by the Commissioner, Meerut Division, Meerut. A revision against the order passed by the Commissioner, Meerut Division, Meerut, was also dismissed by Board of Revenue. Feeling aggrieved, the present writ petition has been preferred by the petitioner. The facts and pleadings as argued and relied upon by the parties are discussed hereinafter.
4. Under the above facts and’ circumstances, application submitted by respondent No. 8 under 1978 Act was allowed by Deputy Labour Commissioner, Ghaziabad in pursuance to power conferred under sub-section (1) of Section 3 of the 1978 Act, copies of the recovery certificates have been filed as Annexures 3 to 7 to the writ petition. When the amount could not be satisfied and wages could not be paid on the reference made by the Deputy Labour Commissioner, the district authorities had proceeded ahead to recover the dues in pursuance to recovery certificate issued by the Deputy Labour Commissioner as arrears of land revenue. The copies of deman
