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2012 Supreme(MP) 468
IN THE HIGH OF MADHYA PRADESH
Sujoy Paul, J.
Textile Mazdoor Congress v. State of M.P. and others
Writ Petitions (S) No.1024 of 2008, 766 of 2012 and 1177 of 2012 (Gwalior);
Decided on 31.8.2012.
Prashant Sharma for petitioner in Writ Petition No.1024/08(S);
Praveen Newaskar, Deputy Government Advocate for respondents No.1 to 3/State in Writ Petition No.1024/08(S);
R.K. Goyal for respondent No.4 in Writ Petition No.1024/08(S), for respondents in Writ Petition No.766/12 and for respondent No.1 in Writ Petition No.1177/12;
Ms. Nandita Dubey for petitioner in Writ Petition No.766/12 and in Writ Petition No.1177/12 for respondent No.2;
Rishabh Shah for petitioner in Writ Petition No.1177/12.
Headnote:(1) Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2000 -- Ss.13(2) and 13(4) -- loan granted by IFCI to Company -- not repaid -- movables auctioned and sale certificate issued by financial institution -- no notice affixed in industry premises about any dues or attachment -- purchaser was not informed by IFCI or PF Organization -- such purchaser is bona fide purchaser. [Para 21
(2) Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2000 -- Ss.8B and 11(2) -- Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 -- S.2(e) -- dues of provident fund of employees against borrower company -- movables of company auctioned by financial institution -- financial institution is liable for payment of such dues and not purchaser -- right of employees -- not extinguished or waived by inaction of PF Organization.
Held : The contribution cannot be recovered from the auction purchaser who is a bona fide purchaser. The ultimate control on the affairs was in the hands of financial institution. The pleadings of financial institution is reproduced which shows that still there exists property (movable and immovable) of the erstwhile employer from where recovery of contribution can be made.
The said contribution can be recovered only from IFCI Ltd. Writ Petition (C) No.36175/2005 and 21344/2010; Decided on 6.12.2010, Kerla High Court relied on.
The PF Organisation has a right to recover this amount as a first charge from IFCI Ltd. So far the stand of the IFCI is that amount received from sale proceed is already distributed amongst the members of consortium, in the considered opinion of this Court, this cannot be a ground to escape from the statutory liability to repay the same. It is for the IFCI Ltd. to repay the amount by recovering it from members of consortium or by selling the remaining land or property of the erstwhile industry M/s. C.T. Cotton Yarn Ltd. Merely because amount received from sale is distributed by the leader of the consortium, will not be of any help to the financial institution. Thus, in my considered opinion, the IFCI Ltd. is under a legal obligation to fulfil requirement of the PF contribution. (2009)10 SCC 123, AIR 2010 SC 868, (2011)10 SCC 727 and AIR 2012 SC 11 followed.
The liability to pay contribution has not come to an end because the erstwhile employer M/s. C.T. Cotton Yarn Ltd. is closed down and property is auctioned. IFCI Ltd. is under a legal obligation to pay the same. The auction purchaser is under no obligation to fulfil the aforesaid statutory requirement.
¼1½ foRrh; vkfLr;ksa dk izfrHkwfrdj.k vkSj iquxZBu vkSj izfrHkwfr fgr izorZu vf/kfu;e] 2000 && /kkjk 13¼2½ rFkk 13¼4½ && vkbZ-,Q-lh-vkbZ- }kjk daiuh dks _.k iznku fd;k x;k && ykSVk;k ugha && foRrh; laLFkk }kjk py laifRr uhyke dh xbZ rFkk fodz; izek.k&i= tkjh fd;kx ;k && fdlh izdkj ds cdk;k ;k dqdhZ ds fo”k; esa m|ksx ifjlj esa dksbZ lwpuk&i= fpidk;k ugha && dzsrk dks vkbZ-,Q-lh-vkbZ- ;k Hkfo”; fuf/k laxBu }kjk dksbZ lwpuk ugha nh xbZ && ,slk dzsrk ln~Hkkfod dzsrk gSA ¼iSjk 21
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dfFkr vfHknk; dsoy vkbZ-,Q-lh-vkbZ- ls olwy fd;k tk ldrk gSA fjV ;kfpdk lh dz-36175@2005 rFkk 21344@2010] fu.khZr fnukad 6-12-2010] dsjy mPp U;k;ky; voyafcrA
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1. These writ petitions are interconnected and, therefore, with the consent of parties were analogously heard. The brief facts necessary for adjudication of these matters are as under :
Writ Petition No.1177/2012 :
The petitioner is an auction purchaser namely M/s. Mahendra Metal. M/s. C.T. Cotton Yarn Ltd., Malanpur could not repay the loan to the financial institution, IFCI Ltd. (respondent No.2), therefore, respondent No.2 invoked the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002) and took possession of the property of respondent No.3 company, thereafter the said property was put to sale by following the due process of law. The present petitioner is the auction purchaser of the property. The petitioner has paid full and final payment of Rs.560.00 lacs to respondent No.2. As per the schedule fixed by respondent No.2 for inspection of movables, the petitioner visited the respondent No.3’s factory premises where movables were situated. At the time of inspection or even thereafter till 30.11.2011, the petitioner did not find any attachment notice or order in this regard affixed by respondent No.2, the EPF Organisation constituted under the provisions of Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter called ‘EPF Act’).
2. On 4.12.2009, the authorised officer of respondent No.2 issued a sale certificate in favour of the petitioner. The sale certificate is filed as Annexure A. In the certificate, it is mentioned that the sale price is Rs.560.00 lacs excluding liabilities, in respect of the movables which sold in full and handed over the delivery and possession of the items listed therein. The petitioner, accordingly, took possession of the respondent No.3 company. The Assistant Commissioner, Central Excise and Custom, Division Gwalior had filed Writ Petition No.1200/2010 for recovery of their dues under the Central Excise Act, 1944. The dues were claimed pursuant to the aforesaid Act and the attachment referred in the said writ petition against the petitioner. The matter was considered by this Court and it was made clear by this Court that respondent No.3 therein (present petitioner) is entitled to receive possession of the plant and machinery as per the sale certificate. It is reported by learned counsel for the petitioner that after getting possession of the land pursuant to order dated 28.4.2010, the respondent No.3 therein had no role to play in the said writ petition. The petitioner, accordingly, took possession and had removed approximately 70% movables from the factory premises. It is the case of the petitioner that the officers of respondent No.1 visited the factory premises and put up a board stating that factory is under attachment since 2006. The petitioner made an effort to lodge a complaint against the aforesaid action of respondent No.1 but the said report was not recorded by the police authorities.
3. On 1.12.2011, the petitioner received a letter dated 1.12.2011, wherein respondent No.1 had claimed that the machinery belonging to respondent No.3 company were under attachment of respondent No.1 since 2006 and, therefore, dealing with these machineries by present petitioner is completely illegal and impermissible. It is further stated in the letter that respondent No.1 came to know that the machineries have been purchased by the petitioner and, therefore, petitioner is liable to deposit entire sale proceed received by the petitioner out of sale of machineries with respondent No.1.
4. In response to letter dated 1.12.2011 (Annexure D), the petitioner replied on 9.12.2011 stating that the said letter is illegal and there was nothing on movables/machineries/factory premises by way of notice or notice board to show any kind of attachment by respondent No.1. Since taking possession pursuant to sale letter w.e.f. December, 2009 till 1st December, 2011, no officer/agent of respondent No.1 had ever visited
