1 FARAD CONTINUATION SHEET NO. IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD 14. WP/4161/2009 (MAHARASHTRA STATE CO-OPER ATIVE BANK LIMITED AURANGABAD V/S THE COLLECTOR, AURANGABAD AND ORS.) -------------------------------------------------- Office notes, office Memoranda of Court’s or Coram,appearances, Court’s orders Judge’s or directions and Registrar’s orders Orders Mrs.Vaishali D.Jadhav Patil, Adv., for the petitioner. Mr. V.G.Shelke, AGP for respondent State. Mr. R.R.Imale, Adv., for R. Nos. 5 to 12, 14 to 22, 24 & 25. Mr.Vijay Jagtap, Adv., h/f Mr. D.R.Kale Patil, Adv., for respondent no.4. Mr.R.K.Temkar, Adv., for R.26. ... CORAM: K.U.CHANDIWAL, J. DATE:26/10/2010 1. Heard. On 6th July, 2009, after hearing the learned Counsel for the petitioner, ad interim relief in terms of prayer clause (C) was granted, which still operates. 2. The controversy revolves to payment of arrears to the employees of respondent no.4 sugar factory amounting to Rs. 14,50,925/-. The question of 2 discharging this liability is coined in the present writ petition. 3. The petitioner Bank submits, by virtue of a mortgage deed executed by respondent no.4 on 23rd Dec.,2004, all the properties, including land Gat No. 169, situated at Mudalwadi is subject of charge of petitioner Bank and since the charge being first and prominent, keeping the same intact, there could not have been orders passed by the learned Deputy Collector, Aurangabad, treating the liability of respondent no.4 towards the employees to be a liability in terms of Maharashtra Land Revenue Code. The orders of learned Sub Divisional Officer dt.15.6.2009 are questioned by the Bank. 4. It is not now in controversy that the affairs of respondent no. 4 Sugar Factory are taken over on lease by respondent no.26 and the factory is conducted by respondent no.26 on the terms agreed between 3 respondent nos. 4 and 26 and petitioner Bank. It is also not in controversy that the regular wages of the employees are paid and, to some extent, the backwages or arrears are cleared. Both the Counsel inform that the present liability is in between Rs. 10,00,000/- (Rs.ten lacs) to Rs. 11,00,000/0 (Rs.eleven lacs). 5. Learned Counsel for the petitioner, by referring to the judgment of the Division Bench of this Court in a group of writ petitions (W.P.No.5293/2010 and others) dt.6.7.2010 submits that the liability of the unsecured creditors like the employees will not be protected and treated as land revenue having precedence over the charge of the petitioner Bank, in terms of exercise of Section 169 of M.L.R. Code. It was informed, the recovery is not the recovery of arrears of land revenue but the manner of recovery of land revenue is made applicable to the recovery of the dues of the employees. 4 6. Learned Counsel for the petitioner also took recourse to the judgment in the matter of Union of India and others Vs. SICOM Ltd. & Anr. (2008 DGLS (Soft.) 1410 :2009(2) SCC 121). The observations of Apex Court, in para 7 and 11, which read as under, were coined: " The High Court, upon consideration of a large number of decisions opined that despite the fact that the dues of the appellant were recoverable as land revenue in terms of Rule 213(2) of the Central Excise Rules read with Section 32(g) and Section 151 of the Maharashtra Land Revenue Code, 1966, the same by itself would not mean that a first charge of the appellant- corporation would give way thereto. It was held : "30. Turning to provisions of Section 169 of the Code, sub-section (1) provides that the arrears of land revenue due on account of land shall be paramount charge on the land and every part thereof and shall have precedence over any other debt demand or claim whatsoever, whether in respect of mortgage, judgment- decree, execution or attachment, or otherwise however, against any land or the holder thereof, sub-section (2) provides that claim of the State Government to any monies other than arrears of land, revenue but recoverable as a revenue demand under Chapter II shall have priority over all unsecured claims against any land or holder thereof. 5 11. Generally, the rights of the crown to recover the debt would prevail over the right of a subject. Crown debt means the debts due to the State or the king; debts which a prerogative entitles the Crown to claim priority for before all other creditors. [See Advanced Law Lexicon by P. Ramanatha Aiyear (3rd Edn.) p. 1147]. Such creditors, however, must be held to mean unsecured creditors. Principle of Crown debt as such pertains to the common law principle. A common law which is a law within the meaning of Article 13 of the Constitution is saved in terms of Article 372 thereof. Those principles of common law, thus, which were existing at the time of coming into force of the Constitution of India are saved by reason of the aforementioned provision. A debt which is secured or which by reason of the provisions of a statute becomes the first charge over the property having regard to the plain meaning of Article 372 of the Constitution of India must be held to prevail over the Crown debt which is an unsecured one. It is trite that when a Parliament or State Legislature makes an enactment, the same would prevail over the common law." 7. There cannot be a quarrel on the legal proposition as has been enunciated by above referred two judgments. The moot question is whether the employees who have rendered their valuable life effecting in uplifting of respondent no.4 sugar factory to function, should be made to wander for their legitimate dues for years together. It is a matter of record, few of them 6 have retired, few have bereaved and their family is waiting for the fruits. Since sugar factory ( respondent no.4) is taken over by respondent no.26 by virtue of inter se arrangement, some share to the extent of Rs.1750/- per bag of the manufactured bag is paid by respondent no.4 or respondent no.26 to the petitioner and the rest of the amount is utilized by respondent no.4. This aspect is not in controversy. Since respondent no.4 or respondent no.26 have sufficient means to discharge the liability of the employees who are respondents in the present petition, respondent no.4 or, for that purpose, respondent no.6 or, the petitioner cannot obliterate the same though petitioner asserts its rights as a first charge on the agricultural property, however, the petitioner, as a Bank will also be not permitted to gainsay that it does not owe any responsibility to the wages of the employees and allow a short 7 cut method. 8. The procedure that has been adopted by the learned Sub Divisional Officer at this stage cannot be faulted. The procedure in terms of Section 169, though there being charge of the petitioner Bank, will be taken care of by the competent authorities. The purchaser of the agricultural properties will be carrying said risk to meet the liabilities of the petitioner even if he enters into auction transaction of the land Gat No. 169 situated at Mudalwadi. 9. In the result, I find that the order under challenge dt. 12.6.2009 need not be questioned. This is more so as the powers in the writ under Article 227 of the Constitution of India are to be sparingly used as is highlighted in number of judgments and, particularly, in recent judgment reported in the matter of State of Haryana V. Manoj Kumar 8 reported in (2010) 4 SCC 350. This position of law is even indicated before 50 years in A.I.R. 1954 S.C. 215 ( Vol.41 C.N.48) ( Waryam Singh and another V. Amarnath and another) wherein the Constitution Bench of the Apex Court has indicated scope of exercise of Article 227 of the Constitution of India. 10. Taking survey of all the facts, the order under challenge needs no interference, however, following arrangement is made. (a) Respondent nos. 4 and 26 collectively shall ensure to discharge the liability payable to the employees who are respondent nos. 5 to 25 in the writ by and from adjusting payment to be made out of the sale of sugarcane or any other by-product of respondent no.4. This arrangement is to be made within three months from today. If the respondent nos. 4 and 26 fail to comply, this arrangement, 9 the property - land Gat No.169, Mudalwadi, to be put on auction as per the provisions of Section 169 of Maharashtra Land Revenue Code, informing the public at large, as has been done with the charge of the petitioner Bank, which is to be discharged by such purchaser. With above clarification, writ petition dismissed. No costs. (K.U.CHANDIWAL) JUDGE ... AGP/4161-09wp