(Prayer: Writ petition filed under article 226 of Constitution of India for issuance of writ of Certiorarified Mandamus calling for the records of the dated 23.8.2004 passed by the 2nd respondent in T.A.No.68 of 1996 on the file of the Debt Recovery at Chennai and quash the same and further direct the Respondents to disburse the award amount of the petitioners as per G.O./D/No. 1167 of Industry Labour and Employment Department dt.19.12.1996.)

Dr. Anita Sumanth, J.

1. This Writ Petition has been filed by 48 petitioners challenging order dated 23.08.2004, passed by the Recovery Officer of the Debt Recovery Tribunal I (in short ‘DRT’/’Tribunal’).

2. Ms.Ramya, learned counsel appearing for the petitioners assails the order of the DRT, particularly the computation of the amount due to the petitioners under that order. She would submit that the computation is contrary to the mandate of law and that there is no justification set out in the order either for the award of interest at the rate of 24.75%, or the amount awarded for upkeep and maintenance of the mortgaged assets. She would submit that there is no justification in having accorded priority for re-payment to the UCO Bank, arrayed as R3 in the matter and that such priority is contrary to law.

3. Per contra, Ms.J.Nathiya, learned counsel appearing for the contesting respondent, i.e., UCO Bank/R3 would defend the order pointing out that interest has been awarded not only to the Bank but also to the workmen. There is no error in the computation under the impugned order and hence the Writ Petition ought to be dismissed. That apart, the Writ Petition is also hit by laches insofar as the order has been passed in August, 2004, whereas the Writ Petition has been instituted 2 long years thereafter and without any explanation for the delay.

4. She points out to Section 30 of the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) which provides for an effective appellate remedy. Hence, the Writ Petition cannot be maintained having been instituted long after the expiry of the appeal time.

5. We have heard both learned counsel and perused the available papers. The petitioners numbering 48 were employees in the Dharmapuri Steel Casting Pvt. Limited (in short ‘company’). The company had gone into liquidation and various claims had been made in the process of liquidation.

6. We are concerned in this matter in regard to two sets of claims, one by the UCO Bank, admittedly a secured creditor and second by the employees of the company (referred to as ‘workmen’). A set of 153 workers had approached the 3rd Additional Labour Court, Chennai seeking repayment of dues and under O.D.No.1167 dated 19.12.1996 issued by the Labour and Employment Department, the Government ordered repayment of the amounts specified under the annexure to that order, to the 153 workmen named in that order. Out of 153 workmen, 48 are before us as petitioners.

7. We have perused the impugned order. The matter has been referred to the Recovery Officer by the DRT. The Recovery Officer has gone into the facts in detail and has chronicled the amounts due to the secured creditor Bank/R3 and the workmen. The basis of the computation essentially, are the claims in various litigations initiated by the Bank and the amounts awarded by the Labour Court. Interest has also been awarded at the rate of 12% on the amounts claimed, both in the case of the secured creditor as well as the workmen.

8. We thus find no merit in the contention of the learned counsel for the petitioners regarding interest, as the amount taken into account for computation of the amounts to be repaid includes interest in both cases.

9. A specific argument has been raised in regard to the amount for upkeep and maintenance of mortgaged property, in respect of which I.A.No.520 of 2002 had been filed before the DRT and accepted to the extent of Rs.7.43 lakhs (approx.). We find nothing untoward in the inclusion of this amount in the total computation as it stands to reason that expenses would have incurred by the secured creditor in the upkeep and maintenance of the mortgaged properties. Moreover, we do not find that the amount included, is disproportionate.

10. Ultimately, the apportionment has been made having regard to Section 529A of the Companies Act, 1956, which we extract below:

                   529A. OVERRIDING PREFERENTIAL PAYMENTS (1) Notwithstanding anything contained in any other provision of this Act or any other law for the time being in force, in the winding up of a company –

                   (a) workmen's dues ; and

                   (b) debts due to secured creditors to the extent such debts rank under clause (c) of the proviso to sub-section (1) of section 529 pari passu with such dues, shall be paid in priority to all other debts.

                   (2) The debts payable under clause (a) and clause (b) of sub-section (1) shall be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportions.

11. The provision requires the apportionment of the amounts paripassu and equally, qua the secured credit and the workmen. In the present case, the computation is as follows:

                   CALCULATION SHEET Amounts due to the applicant Bank:-

                   1. Suit Claim in TA 68/1996 10351676

                   2. Interest @ 12% from 11.08.1987 to 31.01.2002 (5284 days) on the suit claim 17982988

                   3. Suit claim in CS NO.1115/1994 1202114

                   4. Interest @ 24.75% on Rs.5,33,897 from 01/8/1995 to 31.01,2002 (2374 days) in CS No.1115/1994 859450

                   5. Suit claim in CS NO.1086/1996 452918

                   6. Interest @ 24.75% from 27/7/95 to 31.01.2002 (2379 days) in CS No.1086/1996 730628

                   7. Cost awarded in C.S.No.1086/1996 16405

                   8. Suit Claim in OS NO.7239/1999 368900

                   9. Interest @ 12% from 20/7/98 to 31.01.2002 (1291 days) in OS No. 7239/1996 156575

                   10. Cost awarded in OS No.7239/1996 38049

                   11. Amount claimed in IA 520/2002 for upkeep & Maintenance of the mortgaged property 743663

                   Total Amount 32903366

                   Amount due to Workmen:

                   1. Amount awarded by 3rd Addl Labour Court, Madras 5125227

                   2. Interest @ 12% from 29.12.1989 to 31.1.2002( 4416 days) on the above award 7440987

                   3. Amount awarded by Labour Court, Coimbatore 824176

                   4. Interest @ 12% from 29.4.1991 to 31.1.2002. (3928 days) on the above award 1064339

                   Total Amount 14454729

                   Aggregate of the dues of the workmen and the bank 47358095

                   Total Sale Proceeds available for disbursement 7208745 14454729

                   Workmen's share _______ X 7208745 2200267 47358095 32903366

                   Bank's Share _________ X 7208745 5008478 47358095

12. The formula adopted, the components of the amounts and the computation have been correctly determined and we find no error in the same.

13. In light of the aforesaid discussion, this Writ Petition is dismissed. R4 to R39 have been impleaded on 31.07.2024. In light of our order dismissing the Writ Petition, M.P.No.1 of 2011 seeking impleadment of 221 persons as respondents (workmen) is unnecessary and the same is dismissed. No costs.