High Court of KeralaSingle Judge2014-06-26Writ petition disposed with directions to re-ex...

OP (DRT) No. 6 of 2011 (O) – P.R. Prabhakaran, T.M. Girija, K. Vijaya Kumari, I. Geetha, Alexamma, T.P. Sunny, K.S. Unnikrishnan v. The Recovery Officer, Debts Recovery Tribunal, Panampilly Nagar, Kochi; HDFC Bank Ltd; ESI Corporation; Microwave Products (India) Ltd.

Case / Petition Number:OP (DRT) No. 6 of 2011 (O)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: K. Vinod Chandran
Judgment Date: 2014-06-26
Court Decision / Holding: Ext.P11 is set aside. The Recovery Officer is directed to re-consider the applications of the petitioners and any other employee within two months, allowing them to present their claims and passing orders with reasons for grant or rejection, detailing amounts awarded. The writ petition is disposed of with costs to be borne by the parties.
Final Disposition: Writ petition disposed with directions to re-examine and re-issue orders regarding employee dues within two months, with due opportunity to claimants and reasoned orders, and costs to the parties.

Parties to the Case

Appellants / Petitioners

P.R. Prabhakaran
T.M. Girija
K. Vijaya Kumari
I. Geetha
Alexamma
T.P. Sunny
K.S. Unnikrishnan

Respondents

The Recovery Officer, Debts Recovery Tribunal, Panampilly Nagar, Kochi
HDFC Bank, Head Office, Kaloor, Kochi
ESI Corporation, Near North Railway Station, Ernakulam
M/S Microwave Products (India) Ltd., represented by its Chairman, Dilip S. Dahanukar

Legal Representation & Advocates

Counsels for Petitioners

• Adv. SMT. P. Usha Kumari

Counsels for Respondents

• Sri. T. Rajesh, Senior Counsel for HDFC Bank Ltd.
• Sri. P. Sankarankutty Nair, Senior Counsel for ESI Corporation

Case Synopsis & Summary

The petitioners, employees of M/s Microwave Products (India) Ltd., challenge the distribution of sale proceeds after the company’s equity/assets were auctioned under a recovery certificate issued to the bank. The State had asserted a first charge for sales-tax dues, a priority recognized as binding (as in Central Bank of India v. State of Kerala and others, 2009 (4) SCC 94). Some employees had earlier secured relief from Labour Court (Ext. P1). A bank-initiated writ petition led to Ext. P4, where the Division Bench sustained the State’s first charge and waived half of the interest due, directing that the waived amounts be retained for pro-rata distribution to employees. The petitioners challenge Ext. P11, Recovery Officer’s order, arguing Ext. P4’s directive to satisfy employees’ dues was intended to cover all employees adjudicated and not just two named individuals. The court finds Ext. P4’s scope encompassing all employees, not merely the two parties. It sets aside Ext. P11, directing the Recovery Officer to re-examine claims, within two months, allowing employees to present claims and issuing reasoned orders detailing grants or rejections, with costs borne by the parties. The writ petition is disposed with these directions.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners contend that Ext. P4’s directions in the earlier writ matter mandated settlement of employees’ dues arising from adjudicated claims and that Ext. P11’s denial of payment is impermissible. They urge that the order should ensure all eligible employees receive their due amounts from the sale proceeds, with due process and reasoning in the recovery claims, instead of restricting relief to a few individuals.

Contentions of Respondents

The respondents argue that Ext. P4’s reliefs pertain to the named parties in the Writ Appeal and related orders; they maintain the Recovery Officer’s order aligns with the scope of Ext. P4 and the earlier proceedings, and that individual adjudication and payment should follow established orders.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Central Bank of India v. State of Kerala and others	2009 (4) SCC 94	Positive	Cited to affirm the State’s first charge on sale proceeds overruling any contrary contention and to support the priority in recovery proceedings.
HDFC Bank v. Microwave Products (India) Ltd.	Common Order in DRC OA K-55/99	Mentioned Only	Ext.P9 is referenced as the common order in a related matter; not treated as binding authority in the current decision.
W.A No.1661 of 2009	W.A 1661/2009	Mentioned Only	Mentioned in context of the prior writ appeal; not relied upon as a binding principle in the present order.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** # **THURSDAY, THE 26TH DAY OF JUNE 2014/5TH ASHADHA, 1936** ## **OP (DRT).No. 6 of 2011 (O)** ## **--------------------------I.A.NO.1092/2010 IN DRC NO.1629 IN OAK.NO. 55/1999 OF DEBTS RECOVERY TRIBUNAL, ERNAKULAM** **......** **PETITIONERS:** **---------------------** **1. P.R.PRABHAKARAN, PANDARI HOUSE, THEKKUMURI P.O., PUTHENCHIRA, THRISSUR DIST.** **2. T.M.GIRIJA, KOLATHAPILLY HOUSE, PUTHENCHIRA-680 682, THRISSUR DIST.** **3. K.VIJAYAKUMARI, KOLATHAPILLY HOUSE, PUTHENCHIRA-680 682, THRISSUR DIST.** **4. I.GEETHA, IMPARATTIL HOUSE, KAZHUR P.O.-680 734, VIA MALA, THRISSUR DIST.** **5. ALEXAMMA, THENAMPARAMBIL HOUSE, SNEHAGIRI, KURUVILASSERY P.O., VIA-MALA, THRISSUR DIST-680 735.** **6. T.P.SUNNY, THENAMPARAMBIL HOUSE, SNEHAGIRI, KURUVILASSERY P.O., VIA-MALA, THRISSUR DIST-680 735.** **7. K.S.UNNIKRISHNAN, KOLATHAPILLY HOUSE, PUTHENCHIRA - 680 682, THRISSUR DIST.** ## **BY ADV. SMT.P.USHAKUMARI** **..2/-** **Kss** **..2....** ## **OP(DRT)NO.6/2010 (O)** ## **RESPONDENTS:** - **----------------------------** **1. THE RECOVERY OFFICER, DEBT RECOVERY TRIBUNAL, PANAMPILLY NAGAR, KOCHI-682 036.** **2. HDFC BANK, HEAD OFFICE, KALOOR, COCHIN-682 017.** ## **3. ESI CORPORATION,** ## **NEAR NORTH RAILWAY STATION, ERNAKULAM.** **4. M/S.MICROWAVE PRODUCTS (INDIA) LTD., REP. BY ITS CHAIRMAN, DILIP S.DAHANUKAR, RESIDING AT SREE SADAN, ML-DAHANUKAR MARG, MUMBAI - 444 111.** **R2 BY ADV. SRI.T.RAJESH, SC, HDFC BANK LTD. R3 BY ADV. SRI.P.SANKARANKUTTY NAIR, SC, ESI CORPN** **THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION ON 26-06-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Kss** ## **OP(DRT)NO.6/2011 (O)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXT.P1: TRUE COPY OF THE ORDER DATED 29/01/2008 IN CLAIM PETITION NO.78/2003 BEFORE THE LABOUR COURT,ERNAKULAM.** **EXT.P2: TRUE COPY OF THE STATEMENT SHOWING THE CLAIM OF THE PETITIONERS FILED BEFORE THE 1ST RESPONDENT.** **EXT.P3: TRUE COPY OF THE LETTER DATED 5/08/2008 SHOWINIG THE CLAIM OF THE PETITIONERS FILED BEFORE THE 1ST RESPONDENT.** **EXT.P4: TRUE COPY OF THE JUDGMENT IN W.A.NO.1661/2009 DATED 15/12/2009 OF THE HON'BLE HIGH COURT OF KERALA.** **EXT.P5: TRUE COPY OF THE EXTRACT OF THE RELEVANT PAGES SOF THE BALANCAE SHEET REGARDING PROVISION FOR ACCRUING LIABILITY.** **EXT.P6: TRUE COPY OF THE REPRESENTATION DATED 5/09/2002 FILED BEFORE THE EMPLOYEES, MICROWAVES PRODUCTS INIDA LTD., TO THE EXECUTIVE DIRECTOR OF THE LORD KRISHNA BANK (HDFC BANK).** **EXT.P7: TRUE COPY OF THE LETTER DATED 8/08/2008 BY THE DIRECTOR, MICROWAVE PRODUCTS (INDIA) LTD. TO THE MANAGER OF THE HDFC BANK.** **EXT.P8(A): TRUE COPY OF THE ID CARD NO.1703549 (T.M.GIRIJA) ISSUED BY ESI CORPORATION.** **EXT.P8(B): TRUE COPY OF THE ID CARD NO.1703671 (VIJAYAKUMARI) ISSUED BY ESI CORPORATION.** **EXT.P8(C): TRUE COPY OF THE ID CARD NO.54 1703551 (I GEETHA) ISSUED BY ESI CORPORATION.** **EXT.P8(D): TRUE COPY OF THE ID CARD NO.54 874162 (T.P.SUNNY) ISSUED BY ESI CORPORATION.** **..2/-** **Kss** **..2....** ## **OP(DRT) NO.6/2011 (O)** **EXT.P8(E): TRUE COPY OF THE ID CARD NO.1702838 (K.S.UNNIKRISHNAN) ISSUED BY ESI CORPORATION.** **EXT.P9: TRUE COPY OF THE COMMON ORDER DTD. 18/01/2010 IN DRC NO.1629 IN OA K -55/99 IN THE MATTER OF HDFC BANK Vs.M/S.MICROWAVE PRODUCTS (INDIA) LTD.** **EXT.P10: TRUE COPY OF THE CLAIM PETITION IN DRC NO.1629/LKB/TCR DATED 29/03/2010 FILED BEFORE THE RECOVERY OFFICER.** **EXT.P11: TRUE COPY OF THE ORDER DATED 12/05/2010 IN IA NO.1092/10 IN DRC NO.1629 IN O.A.K 55/1999 BEFORE THE RECOVERY OFFICER.** **EXT.P12: TRUE COPY OF THE LETTER DATED 17/03/2011 OBTAINED AND RIGHT TO INFORMATION ACT TO THE PETITIONERS COUNSEL FROM THE DEPUTY LABOUR OFFICER, O/O. THE DISTRICT LABOUR OFFICER.** **EXT.P13: TRUE COPY OF THE STATEMENT FILED BEFORE THE ASSISTANT PROVIDENT FUND COMMISSIONER.** ## **RESPONDENT'S EXHIBITS: N I L** **/TRUE COPY/** **P.A.TO JUDGE** **Kss** ## **K. VINOD CHANDRAN, J.** ## **===================== O.P (DRT) No. 6 of 2011 ====================== Dated this the 26[th] day of June, 2014** ## **J U D G M E N T** The petitioners are employed in the 4[th] respondent Company, which Company was sold in auction, conducted by the 1[st] respondent herein, pursuant to a certificate of recovery issued to the 2[nd] respondent. The sale proceeds while remaining with the 1[st] respondent, a claim of prior charge was raised by the State, with respect to sales-tax dues. The first charge of the State is declared unequivocally in **Central Bank of India v. State of Kerala and others** in **[2009 (4) SCC 94]** . 2. Some employees were before the Labour Court with a Claim Petition, which was allowed in Ext.P1. Two of them were impleaded in a Writ Petition filed by a Bank, a secured creditor; which was taken over by the 2[nd] respondent, against the claim of first charge raised by the State. The O.P (DRT) No. 6 of 2011 **2** State filed an appeal as W.A No. 1661 of 2009, from the judgment in the Writ Petition which was disposed of on 15.12.2009 as per Ext.P4 judgment. The Division Bench of this court sustained the first charge of the State, but, however directed that 50% of the interest claimed be waived, since huge amounts were due to the employees as arrears of salary, retrenchment benefits ect. 2. In Ext.P4, it was also directed that, the amounts which were waived by the Division Bench, from the interest due to the State, should be retained with the 1[st] respondent for pro-rata distribution to the employees. The operative portion of Ext.P4 specifically computed Rs.11,44,437.50/as the amounts so retained and directed that it, “should be first utilized to meet the employee's liability and balance, if any should be credited to the Bank account, along with the remaining amount”. The petitioners herein are aggrieved by Ext.P11 order of the 1[st] respondent, which declined the payment to the petitioners herein, for reason only of the O.P (DRT) No. 6 of 2011 **3** direction in Ext.P4 being confined to Sri. A.O. Thomas and Sri. P.D Jose, who were sole party respondents in the Writ Appeal disposed of by Ext.P4. Such a view evidently is erroneous, since this Court by Ext.P4 judgment specifically directed the 'employee's dues' to be settled, which would take in all the employees of the Company, whose dues have been adjudicated and settled by a competent forum. In such circumstance, what remains is the only question of verifying the orders by which such claims were settled and the identification of the individual employees. 3. Ext.P11 shall stand set aside and the Recovery Officer shall re-consider the applications made by the petitioners herein, as also any other employee in accordance with the observations herein above. This shall be done within two months of the production of a certified copy of this judgment. The employees shall be given an opportunity to put forth their claims and the 1[st] respondent shall pass orders in each individual claim detailing the O.P (DRT) No. 6 of 2011 **4** amounts granted and the reasons therefore or otherwise with reasons for rejection. Writ Petition disposed of with the above directions. Parties to suffer their costs. Sd/- **K. VINOD CHANDRAN, JUDGE** SB // True Copy // P.A To Judge.