sk 1 wp8104.10 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE WRIT PETITION NO.8104 OF 2010 Cyber Infosystems & Technologies Pvt. Ltd. : Petitioner V/s. The State of Maharashtra & Anr. : Respondents .... Mr.Venkatesh Dhond, Senior Advocate, with Mr.Rishbh Agarwal and Mr.A. Chaturvedi i/b. Paras Kuhad & Asso. For the petitioner. Ms M.P.Thakur, Asstt. Govt. Pleader for respondent no.1. Mr.P.P.Chavan with Ms Shyamali Gadre for respondent no.2. .... CORAM : S.A. BOBDE AND SMT.V.K.TAHILRAMANI,JJ. DATE : NOVEMBER 29, 2011. ORAL ORDER (Per S.A.Bobde,J.) Rule, returnable forthwith. The learned counsel for the respective respondents waive service. Heard finally by consent of parties. 2. The petitioner has challenged the Government Resolutions dated 30.10.2007 and 12.1.2009 issued by the Industries, Energy and Labour sk 2 wp8104.10 Department of the Government of Maharashtra prohibiting development of properties transferred from companies unless all the legal dues of the workers have been paid and the Labour Commissioner, Mumbai, Maharashtra State, has passed a N.O.C. The second Resolution imposes an additional condition that till balance dues of the workers are paid fully, no N.O.C. from the Government will be given for the residential/commercial development on the concerned lands and also for any transfer by selling or on rental basis/auction. The petitioner has sought alternate relief that it be declared that the petitioner is not liable to submit any N.O.C. since they are auction purchasers of property. 3. The petitioner-company is the auction purchaser of a property of a company in liquidation called “Sharda Textiles” The petitioner was adjudged the highest bidder in an auction held on 28.2.2008 by the Official Liquidator. The terms and conditions of sale, inter alia, provided as follows:- “9. The dues of all creditors and workers shall be settled in accordance with the provisions of the Companies Act, 1956 and the Companies (Court) Rules 1959 by the Official Liquidator, High Court, sk 3 wp8104.10 Bombay.” Clause 10 which provides for the consequence of non-payment reads as follows:- “10. If the purchaser does not pay the balance of the purchase money in the manner and within the time specified by the Official Liquidator or in other respect fails to perform these conditions or any of them, the earnest money deposit shall stand forfeited and the Official Liquidator, High Court, Bombay shall resell the said property in public auction and subject to such conditions and in such manner as the Court shall think fit and proper and the defaultee purchaser shall forgo all the claims to the property or to any part of the sum for which it may be subsequently sold.” The petitioner was put in possession of the property on 12.4.2008. Under the sale, the Liquidator has agreed to transfer the un-expired portion of the lease earlier held by the company in liquidation to the sk 4 wp8104.10 petitioner. Accordingly, the petitioner called upon the respondent-MIDC, who is the original lessor, for transfer of the said unexpired portion. The MIDC has refused to do so on the ground that under the aforesaid G.Rs., a purchaser is required to produce a No-Objection Certificate from the Commissioner of Labour which the petitioner-company does not have. 4. Mr.Dhond, the learned counsel for the petitioner, has submitted that the insistence of the MIDC that the petitioner should produce a N.O.C. from the Labour Commissioner that there are no outstanding dues of M/s.Sharda Textiles, which is the company in liquidation, is unjustified. In any case, according to the learned counsel for the petitioner, the G.Rs. dated 30.10.2007 and 12.1.2009 which require the production of a N.O.C. to the above effect are illegal. The submission on behalf of the petitioner is that the G.Rs. are illegal in that they are contrary to the scheme of the Companies Act, 1956, in particular section 529-A, which provides the procedure for disbursement of the dues of the workmen which rank pari passu with the dues of a secured creditor. By the Government Resolution dated 30.10.2007, it is laid down that the Government has decided that dues of workers in closed establishments/companies should be paid since it is found that most of the closed establishments/companies/mills, etc., in the State have started sk 5 wp8104.10 development of the land without paying the legal dues of their workers. The second G.R. dated 19.1.2009 also deals with the same situation and states that where there are proposals for development of open lands of industries which have closed down, it is necessary to first pay legal dues of all the workers who are working at that time in such industries. Further, it is mandatory for the concerned management/ proprietor/developer to obtain N.O.C. from the Commissioner of Labour that no legal dues of workers are pending. The Government Resolution is made applicable with retrospective effect to all companies/ factories/establishments/mills intending to make changes in their land for residential/commercial purpose or intending to make transfer/sale through lease/auction. Ex facie, these Government Resolutions do not cast any duty on the purchaser of such land to obtain a N.O.C. The intention seems to be to make it necessary for the establishment intending to develop land once used for industrial purposes for commercial purposes, particularly when they intend to make a transfer or sale. The Government Resolutions do not purport to bind the purchaser of the land obviously because the workers of the closed industrial unit who may have not been paid their dues have no legal relationship of workmen and employer with the purchaser of the property. The purchaser of land would normally have no relationship with the workmen of the transferor industrial unit or sk 6 wp8104.10 company. There is none in this case. In any case, the Government Resolutions do not expressly apply to an auction purchaser of land of a company in liquidation when it is sold by way of an auction by the Official Liquidator under the Companies Act. There seems to be good reason why the Government Resolutions have not been made applicable to the case of an auction purchaser of the land of a company in liquidation and that is the express provision made in section 529-A of the Companies Act for payment of workers’ dues. It must be borne in mind that the purpose of the Government Resolutions is to ensure that the workers’ dues are paid before the employer transfers the land for development for commercial purposes. This purpose is ensured by the salutary provision of section 529-A of the Companies Act which provides that the dues of workmen shall rank pari passu with the dues of a secured creditor and shall be paid in priority to all other debts. Thus, Parliament having by law provided for the payment of the dues of workers of a company in liquidation, a Government Resolution cannot impose a condition on the purchaser of the property of a company in liquidation that he should first produce a N.O.C. from the Labour Commissioner that there are no dues payable to the workmen of the company in liquidation. A company in liquidation ceases to have any disposing powers over its property in liquidation. These powers are vested to the Official Liquidator who is sk 7 wp8104.10 bound by the statute to discharge the liabilities of the company. Thus, though the issue does not arise directly in this case, it is doubtful if even the company in liquidation or the Official Liquidator can be called upon to produce such a N.O.C. The Government Resolutions do not expressly apply to a purchaser of land of a company in liquidation. There is no reason to make the Resolutions applicable by implication. 5. Thus, the MIDC is not entitled to call upon the petitioner to obtain a N.O.C. that the dues of the workers of Sharda Textiles, the company in liquidation, have been cleared. It is not possible to accept the submission of Ms Thakur, the learned Asstt. Govt. Pleader for the respondent no.1, that the MIDC is entitled to rely on Government Resolutions and call upon the petitioner to obtain a N.O.C. since the Government Resolutions are issued to protect the interest of workers. 6. In the circumstances, the respondent no.2 MIDC is directed to proceed, in accordance with law, and grant the un-expired portion of the land of Sharda Textiles to the petitioner, subject to compliance with the terms of sale. sk 8 wp8104.10 7. Rule is made absolute in the above terms. (S.A. BOBDE, J.) (SMT.V.K.TAHILRAMANI,J.)