The court affirmed that a party cannot evade liability for workers' claims based on technicalities, as obligations from employment contracts remain intact under the Industrial Disputes Act.

ORDER :

NAGESH BHEEMAPAKA, J.

Heard Sri A.K. Jayaprakash Rao, learned counsel for petitioner and learned Government Pleader for Labour on behalf of Respondents 1 and 2 and Sri K.V. Satya Ramachandra Rao, learned counsel on behalf of the 4th respondent.

2. The Writ Petition filed by Petitioner challenging the proceedings initiated by Respondent No.2 under Section 33-C(1) of the Industrial Disputes Act, 1947 (for short, ‘the Act’) against Petitioner and its properties in CRLMP No. 1722 of 2023 on the file of the Hon’ble XII Additional Chief Metropolitan Magistrate, City Criminal Courts at Nampally, Hyderabad. These proceedings were initiated for recovery of a sum of Rs. 30,38,00,000/- (Rupees thirty crores thirty-eight lakhs only) which was declared payable to the employees of Petitioner under a Certificate for Recovery No. B/55/2021 dated 03.01.2023. This certificate was issued based on an alleged settlement between various recognized Employees’ Unions and Respondent No.3. Petitioner contends that these proceedings are illegal, arbitrary, and not maintainable against Petitioner, hence, seeks to quash them.

According to Respondent No.2, Petitioner company, DBR Mills, located in Tank Bund area of Hyderabad, started its operations in 1920 and later, faced financial difficulties. It was declared as Sick Industrial Company under Section 15(1) of the Sick Industrial Companies Act, 1985. After a series of litigations, Respondent No.3 entered into a Development Agreement with Petitioner on 15-03-1999, where Respondent No.3 allegedly undertook to settle monetary claims of workers of the mill, as per the terms of the agreement. Furthermore, Respondent No.2 contends that under two registered documents executed by Mrs. K.S. Chenai (bearing Document No.1349 of 2009 dated 27-10-2006 and Document No.1350 of 2009 dated 28-10-2006), Respondent No.3 acquired Acs.6.00 guntas of Petitioner’s land, making it the absolute owner, with full rights to deal with it. Respondent No.2 also claims that Respondent No.3, exercising its ownership over the land, entered into a statutory settlement with the workers of DBR Mills under Section 12(3) of the Industrial Disputes Act, 1947.

On 07-03-2017, Respondent No.3 allegedly entered into a settlement with several trade unions of DBR Mills, wherein Respondent No.3 agreed to pay Rs. 7,00,000/- each to 434 workers, amounting to Rs.30,38,00,000/- in total. However, Respondent No.3 allegedly failed to comply with the terms of this settlement. Following a representation from 142 out of the 434 workers requesting recovery of amounts payable to them under the settlement, Respondent No.2 issued Certificate for Recovery of Rs. 30,38,00,000/- against Respondent No.3 and filed CRLMP against Petitioner (Opposite Party No.1) and Respondent No.3 (Opposite Party No.2) for recovery of amount as prescribed under Section 421(1) of the Criminal Procedure Code. It is important to note that Government of Andhra Pradesh amended Section 33-C of the Industrial Disputes Act, empowering the Chief Judicial Magistrate or Chief Metropolitan Magistrate to recover money owed to workers as the result of a settlement of an industrial dispute, in the same manner as a fine imposed by criminal courts. Under Section 421(1) of the Criminal Procedure Code, procedure for recovering such fine amounts includes issuance of a warrant for attachment and sale of any immovable property belonging to the offender.

Respondent No.2 invoked this section to recover settlement amount from the properties of Petitioner company, despite Petitioner being neither a party to settlement nor to proceedings before Respondent No.2. Petitioner contends that proceedings initiated against it are illegal because it was not involved in the settlement between Respondent No.3 and the workers and was never made a party to the related agreements.

Petitioner submits that Respondent No.2 wrongly presumed the validity of Development Agreement dated 15-03-1999 and the rights of ownership conferr