Over 2 lakh Indian cases. Search powered by Google!

Case Details

B & C MILLS STAFF UNION versus REGISTRAR OF CO

High Court of Madras

Case Law Search

Indian Supreme Court Cases / Judgements / Legislation

Judgement


B & C Mills Staff Union v. Registrar of Co-operative Societies - W.P.No. 12003 of 2004 [2003] RD-TN 729 (27 August 2003)



IN THE HIGH COURT OF JUDICATURE AT MADRAS



DATED: 27/08/2003

CORAM

THE HONOURABLE MR. JUSTICE A.K. RAJAN

W.P.No. 12003 of 2004

1. B & C Mills Staff Union

(Regd.No.2399)

rep. by its General Secretary

60, Krishnadoss Road

Chennai 12.

2. Madras Labour Union

(Regd.No.722)

rep. by its General Secretary

R. Audikesavalu

176, Strahans Road

Chennai 12.

3. T.Amirtharaj

T.No.Material Dept.1,

New No.206 (Old No.85)

P.V.Koil Street

Royapuram

Chennai 13. .. Petitioners -Vs-

1. Registrar of Co-operative Societies

NVN Maaligai, 170, Periyar EVR High Road

Chennai 10.

2. Deputy Registrar of Co-operative Societies (Credit) Chennai 20.

3. B&C Mills Employees Co-operative Society Ltd., rep by its Official Liquidator

48, Cooks Road

Chennai 12.

4. General Manager _ Pers. & HRD

M/s. Binny Ltd

106, Armenian Street

Chennai 1. .. Respondents PRAYER : Petition filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Mandamus as stated therein. For Petitioners : Mr. NGR Prasad,SC

for M/s. Row & Reddy

For Respondents : For R1 & R2 :: Mr. R.Chandrasekaran, G.A. For R3 :: Mr. M.S.Palaniswamy For R4 :: Mr. V.Ayyadurai :O R D E R



The prayer in the writ petition is to issue a Writ of Mandamus to direct respondents 1 to 3 to recover the amounts due to the third respondent/Society from the fourth respondent/Management as per the Notice, dated 25.6.2003 and the subsequent deductions and consequently refund the interest to the workers/members as per the Resolution of the Board of Directors, dated 15.2.2001 as re-stated by the Resolution of the General Body of the third respondent/Society on 20.5.2002 along with the surplus amount with the third respondent Society and pass such other orders or directions as may be deemed fit and proper, award costs and thus render justice.

2. The contents of the affidavit are as follows: (i) The petitioners, three in number, are filing the writ petition seeking for a direction to respondents 1 to 3 to recover the amounts due to the third respondent/society from the fourth respondent/ Management as per the notice dated 25.6.2003 read with letter dated 10.11.2 003. B&C Mills is the oldest textile Mills in the whole of Asia, more than 137 years old. The first petitioner Union is the first Trade Union in India and it was responsible for enactment of Trade Union Act, 1926. B&C Mills became one of the Units of Binny Limited due to amalgamation in 1969. The employees of B&C Mills formed B&C Mills Employees Society in the year 1927. By virtue of an agreement, B& C Mills used to deduct the dues of the employees from the monthly wages and remit it to the society. The fourth respondent/Management did not remit the amounts, so deducted, from May 1996 onwards. Therefore, the interest payable by the Society to the Central Co-operative Bank accumulated. (ii) While so, on 15.6.1996, the Mills suspended its operation. In 1998, a settlement under Section 12(3) of the Industrial Disputes Act was reached between the employees and the Mills; many agreed to go on Voluntary Retirement; for them, the terminal benefits were paid in two instalments. While paying the terminal benefits, the Mills deducted the dues payable by the workers to the co-operative Society. But, the Mills did not remit the same to the Society. Under Section 48 of the Tamil Nadu Co-operative Societies Act, 1983, read with Rule 69 of the Tamil Nadu Co-operative Societies Rules 1988 -

"whatever amounts that are deducted will have to be remitted within 7 days, failing which it will carry 22 interest, i.e. 19% interest by Society + 3% as per the statute."

Thus, B & C Mills became liable to pay interest on the amount due to the Society from the date of deduction from the salaries of the employees. In the meanwhile, the second respondent passed an order dated 6.1.2004 to wind up the Society and appointed a Liquidator. The second respondent/Deputy Registrar (Credit) issued a Recovery Notice, dated 25.6.2003 to the fourth respondent to pay a sum of Rs.11,34,5 0,913.14 within seven days, failing which it would be recovered under the Tamil Nadu Revenue Recovery Act, 1864. While so, the Board of Directors passed a resolution to waive the interest due from 15.6.1996 ; a resolution was also passed by the General Body of the Society. While so, the fourth respondent came under the BIFR in 1993. Pursuant to the Orders of this Court, the BIFR sanctioned the scheme. Thereafter, the fourth respondent/Management remitted about Rs.7.94 crores out of 11.3 crores due to the third respondent/Society; out of this, Rs.5 crores was appropriated by the Central Co-operative Bank in which Rs.3 crores represented the interest portion alone. The members and the Society paid interest for no fault of theirs, but due to the fault of the fourth respondent. Even thereafter, the fourth respondent had deducted from other workers their dues towards Society and had withheld the same. If the amounts deducted from the workers have been paid, the workers will be entitled to get refund of the interest accumulations deducted from them. On the date of filing the writ petition, a sum of Rs.4.5 crores remained to be paid to the Society by the fourth respondent. Respondents 1 to 3 were not taking any steps to recover the amounts due to the Society from the fourth respondent. Therefore, the present writ petition.

3. It is stated in the counter, filed by respondents 2 and 3, that, the Official Liquidator has taken charge of the third respondent. The second part of the prayer of the petitioners is untenable and the refund of interest and surplus amount to the members of the liquidated society is not permissible under the provisions the Tamil Nadu Cooperative Societies Act. The loan amounts recovered from the members of the Co-operative Society to the extent of Rs.1,51,13,044.34 upto February 2001 were not paid to the Society by the fourth respondent. The elected Board of the Society as well as t he petitioners have not taken any effective steps till 24.5.2001 to recover the amount from the Management. The loans availed by the members of the Society were used to be deducted from the salary drawn, by the Management and remitted to the Society. But, from May 1996, the fourth respondent did not remit the amounts recovered from the workers to the Society. When the terminal benefits of the workers were paid, the fourth respondent deducted the dues to the Society, but did not remit the same to the Society. After sanctioning of the Scheme by the BIFR, the fourth respondent remitted a sum of Rs.7,84,17,647.35/- to the Society, which represents the amount recovered upto September 2003. A sum of Rs.20 ,646 is still due and payable by the fourth respondent. Hence, a demand notice was issued for the repayment of that amount. As on 30.11.2003, the fourth respondent has to pay a sum of Rs.4,37,25,698.02 to the Society with further interest at 22 per annum. The remittance of Rs.7,84,647.34 is only a part payment. By letter dated 25.11.200 3, the fourth respondent was informed that there is still a balance of Rs.4,36,50,989.02 with further interest and several notices were sent to the fourth respondent demanding payment. Respondents 2 and 3 will have to take follow up action against the fourth respondent to recover the said sum with interest according to law.

4. In the counter filed by the fourth respondent it is stated as follows:

The fourth respondent has been declared as Sick Unit as per the scheme framed by this Court in W.P.No.14856 of 2003; the said scheme is now under implementation. This Court issued a direction including sale of land and provided for method of settling various other claims under the supervision of the BIFR. Since, the third respondent is under liquidation, the writ petition is not maintainable. The fourth respondent had already paid the entire amounts due to the third respondent/Society, which was evident from the communication of the Liquidator, and therefore, no relief can be granted in favour of the petitioners. The further relief seeking to refund the interest to the members of the Society is unsustainable. Therefore, the writ petition is not maintainable.

5. Besides, affidavit and counter affidavits, supplemental counter affidavit and reply affidavit have also been filed by the parties.

6. Heard both sides.

7. The arguments of the learned counsel for the fourth respondent is that the writ petition is not maintainable since the third respondent/Society is already under liquidation.

8. The contention of the petitioners is that as per Sec.12(3) settlement, entered into between the employees and the Management, the employees were permitted to go on Voluntary Retirement and they were paid their terminal benefits in two instalments. At the same time, the dues payable to the third respondent/Society was deducted from the terminal benefits paid to the employees. As per the rules, that amount should have been remitted within seven days from such deduction. But, it was not done. Hence, the said amount is repayable with interest.

9. The contention of the fourth respondent is that the interest is payable only to the third respondent/ Society, which is controlled by respondents 1 and 2. In the earlier writ petition, they agreed to framing of scheme for repayment. Further, the interest is not payable, since the scheme does not provide for payment of interest. Further, as per the Letter of Demand made on 12.5.2004, the balance of Rs.20 ,646/- has been paid already. Therefore, the entire amount has been discharged by the fourth respondent. It is for the first respondent to take a decision on the question of waiver of interest. The entire balance of Rs.4,36,50,989.02 represents only the penal interest of 3 payable for default in repayment. That can be waived by the first respondent. Therefore, that amount is not payable to the third respondent.

10. The writ petition has been filed by three petitioners the first petitioner is B&C Mills Staff Union, a registered society, the second petitioner is Madras Labour Union, another registered society, and the third petitioner is an individual. In the affidavit in support of the writ petition it is stated that "all the petitioners are the members of the third respondent/Society". From that it appears that respondents 1 and 2, "B&C Mills Staff Union" as well as "Madras Labour Union", are also the members of the third respondent society. The prayer in the writ petition is "to direct respondents 1 to 3 to recover the amounts due to the third respondent from the fourth respondent and after such recovery to refund the amount to the workers/ members as per the Resolution of the Board of Directors, dated 15.2.2001".

11. From the facts stated above, the amount is payable to the third respondent/Society. Therefore, only the third respondent has got a right to claim that amount or to take any action for recovery of that amount. Now, the third respondent is under liquidation, and the Liquidator has assumed charge, and it is for him to take any action. Petitioners 1 and 2 herein, namely, two different registered societies, are different persons in law, and they cannot take up the cause of the third respondent when it is now under the control of the Official Liquidator. The power of the Official Liquidator in law is well known. Therefore, petitioners 1 and 2 have no locus standi to file the writ petition and the same is liable to be dismissed as not maintainable.

12. The third petitioner is the Member of the third respondent/ Society. On that score, he has filed the writ petition. The prayer in the writ petition is "to direct respondents 1 to 3 to recover the amounts due to the third respondent/Society from the fourth respondent/ Management as per the Notice, dated 25.6.2003". Therefore, what is sought to be enforced is the notice issued. It is not a statutory right. Further, the prayer is to enforce Sec.12(3) Settlement, entered into between the employees of the fourth respondent and the fourth respondent. That is only a contractual right. Such a contractual right cannot be enforced by resorting to Article 226, which is an extraordinary power conferred on the High Court to enforce the statutory right. As per Sec.12(3) Settlement, the petitioners should approach only the Labour Court or the Industrial Tribunal, as the case may be. Further, the prayer is ALSO "to refund the amounts as per the resolution of the Board of Directors, dated 15.2.2001 as re-stated by the Resolution of the General Body of the third respondent/Society on 20.5.20 02 along with the surplus amount to the third respondent/Society". The action sought to be enforced is not a statutory right. Therefore, the writ petition is not maintainable.

13. In view of this legal position, this Court is not going into the other arguments advanced by either parties as it is unnecessary. Therefore, the writ petition is dismissed as not maintainable. No costs. Consequently, WPMP No.14050 of 2004 and WVMP No.983 of 2004 are closed. Index: Yes

Internet: Yes

pb

To

1. Registrar of Co-operative Societies

NVN Maaligai, 170, Periyar EVR High Road

Chennai 10.

2. Deputy Registrar of Co-operative Societies (Credit) Chennai 20.




Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

Advertisement

dwi Attorney | dui attorney | dwi | dui | austin attorney | san diego attorney | houston attorney | california attorney | washington attorney | minnesota attorney | dallas attorney | alaska attorney | los angeles attorney | dwi | dui | colorado attorney | new york attorney | new jersey attorney | san francisco attorney | seattle attorney | florida attorney | attorney | london lawyer | lawyer michigan | law firm |

Tip:
Double Click on any word for its dictionary meaning or to get reference material on it.