A development agreement holder can be held liable for workers' claims under a binding settlement, even if not classified as an employer under the Industrial Disputes Act.

ORDER :

NAGESH BHEEMAPAKA, J.

Heard Sri N. Sreedhar Reddy, learned counsel for petitioner and learned Government Pleader for Labour on behalf of respondents.

2. This Writ Petition is filed challenging the proceedings in Crl.M.P.No. 1722 of 2023 on the file of Court of Hon'ble XII Additional Metropolitan Magistrate, Hyderabad, initiated by the 2^nd respondent under Section 33-C (1) of Industrial Disputes Act, 1947 and consequently to quash the same by declaring them to be illegal, arbitrary and without jurisdiction.

3. It is the case of petitioner that it came into existence by virtue of the orders passed by this Court dated 01-09-2015 in Company Petition Nos. 175 to 178 of 2015, whereby a Scheme of Arrangement of Demerger was sanctioned. Under this Scheme, M/s Maheshwari Megaventures Limited was the demerged company and M/s Kshitij Infraventures Private Limited was the resultant entity. It is further stated that M/s Maheshwari Megaventures Limited itself came into existence by virtue of the Orders of Amalgamation passed by this Court dated 22-03-2005 in Company Petition Nos. 201, 202 and 203 of 2004 concerning the amalgamation of M/s Ashish Developers and Builders and M/s RKM Builders Private Limited. It is stated that M/s Diwan Bahadur Ramgopal Mills (referred to as ‘DBR Mills’) commenced its operations in 1920 at Tank Bund Area in Hyderabad after entering into a lease deed with landowners, namely Chenai family. The land in question eventually devolved upon Mrs. Khorshed Shapoorchenai, vendor of petitioner, pursuant to a Compromise Decree dated 20-10-1967 in Civil Suit No. 38 of 1967 instituted by Mrs. Freny Rashid Chenai, mother-in-law of Mrs. Khorshed Shapoorchenai, on the file of the Chief Judge, City Civil Court, Hyderabad.

It is further stated that subsequently, the mill became financially unsustainable, was declared a sick unit under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, and failed to remit lease rentals to the landowner, Mrs. Khorshed Shapoorchenai. This led to initiation of eviction proceedings for recovery of possession and damages. Eventually, the dispute culminated in a compromise, wherein petitioner came to be impleaded as Plaintiff No.2 in O.S.No. 69 of 2003, filed for eviction and damages, and facilitated a settlement between the original landowner and tenant DBR Mills. Under the terms of compromise, Mrs. Khorshed Shapoorchenai agreed to retain Acs.6.00 and relinquished her rights over Acs.16.00 in favour of the tenant, M/s DBR Mills, in order to amicably resolve the dispute. It is averred that M/s DBR Mills, in turn, executed a Development Agreement with petitioner for the development of Acs.16.00 of the land. Further, petitioner’s predecessor, M/s Ashish Developers and Builders, entered into an Agreement of Sale dated 03-12-1998 with Mrs. Khorshed Shapoorchenai for purchase of the entire extent of Acs.22.5 by paying full sale consideration. It was based on this Agreement petitioner was impleaded as Plaintiff No.2 in O.S.No. 69 of 2003. Petitioner asserts that, while functioning as M/s Maheshwari Megaventures Limited, it entered into a Development Agreement dated 15-03-1999 with M/s DBR Mills Ltd. for development of the land admeasuring Acs.16.00 on which mill was situated. In consideration thereof, petitioner undertook the responsibility to settle the monetary claims payable to workers of DBR Mills. However, the said compromise entered into among petitioner, DBR Mills and landowner Mrs. Khorshed Shapoorchenai could not be effectuated and stood frustrated due to the conduct of DBR Mills, rendering it null and void and incapable of being enforced. Consequently, DBR Mills continued as a tenant at sufferance, and the ownership of the entire leasehold property reverted to Mrs. Khorshed Shapoorchenai.

It is also mentioned that, out of the total land admeasuring Acs.22.00, registered conveyance deeds were executed by Mrs. Khorshed Shapoorchenai in favour of petitioner in respect of A