... 1 ... IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.2182 OF 2005 WRIT PETITION NO.2182 OF 2005 WRIT PETITION NO.2182 OF 2005 Dilip T. Khandar ...Petitioner Vs. The State of Maharashtra & Ors. ...Respondents ALONGWITH ALONGWITH ALONGWITH WRIT PETITION NO.1417 OF 2005 WRIT PETITION NO.1417 OF 2005 WRIT PETITION NO.1417 OF 2005 Vasant Shripad Samant ...Petitioner Vs. The State of Maharashtra & Ors. ...Respondents ALONGWITH ALONGWITH ALONGWITH WRIT PETITION NO.1689 OF 2005 WRIT PETITION NO.1689 OF 2005 WRIT PETITION NO.1689 OF 2005 Vijay R. Naik ...Petitioner Vs. The State of Maharashtra & Ors. ...Respondents ALONGWITH ALONGWITH ALONGWITH WRIT PETITION NO.1764 OF 2005 WRIT PETITION NO.1764 OF 2005 WRIT PETITION NO.1764 OF 2005 Ramchandra N. Warkhandkar ...Petitioner Vs. The State of Maharashtra & Ors. ...Respondents ALONGWITH ALONGWITH ALONGWITH WRIT PETITION NO.1856 OF 2005 WRIT PETITION NO.1856 OF 2005 WRIT PETITION NO.1856 OF 2005 Bhagwan Ganpat Phatak ...Petitioner Vs. The State of Maharashtra & Ors. ...Respondents ALONGWITH ALONGWITH ALONGWITH WRIT PETITION NO.1857 OF 2005 WRIT PETITION NO.1857 OF 2005 WRIT PETITION NO.1857 OF 2005 Suresh N. Abuvala ...Petitioner Vs. The State of Maharashtra ...Respondents ALONGWITH ALONGWITH ALONGWITH WRIT PETITION NO.1911 OF 2005 WRIT PETITION NO.1911 OF 2005 WRIT PETITION NO.1911 OF 2005 Ramakant Shankar Parab ...Petitioner Vs. The State of Maharashtra & Ors. ...Respondents ... 2 ... ALONGWITH ALONGWITH ALONGWITH WRIT PETITION NO.2032 OF 2005 WRIT PETITION NO.2032 OF 2005 WRIT PETITION NO.2032 OF 2005 M.B. Narkar ...Petitioner Vs. The State of Maharashtra & Ors. ...Respondents ALONGWITH ALONGWITH ALONGWITH WRIT PETITION NO.2048 OF 2005 WRIT PETITION NO.2048 OF 2005 WRIT PETITION NO.2048 OF 2005 R.M. Kanchan ...Petitioner Vs. The State of Maharashtra & Ors. ...Respondents ALONGWITH ALONGWITH ALONGWITH WRIT PETITION NO.2176 OF 2005 WRIT PETITION NO.2176 OF 2005 WRIT PETITION NO.2176 OF 2005 Kundlik Mahadeo Mohan ...Petitioner Vs. The State of Maharashtra & Ors. ...Respondents ALONGWITH ALONGWITH ALONGWITH WRIT PETITION NO.2283 OF 2005 WRIT PETITION NO.2283 OF 2005 WRIT PETITION NO.2283 OF 2005 Pandurang Tukaram Bhagat ...Petitioner Vs. The State of Maharashtra & Ors. ...Respondents ALONGWITH ALONGWITH ALONGWITH WRIT PETITION NO.2410 OF 2005 WRIT PETITION NO.2410 OF 2005 WRIT PETITION NO.2410 OF 2005 Prabhavati D. Kahar ...Petitioner Vs. The State of Maharashtra & Ors. ...Respondents ALONGWITH ALONGWITH ALONGWITH WRIT PETITION NO.2411 OF 2005 WRIT PETITION NO.2411 OF 2005 WRIT PETITION NO.2411 OF 2005 D.K. Kesarkar & Ors. ...Petitioners Vs. The State of Maharashtra & Ors. ...Respondents ALONGWITH ALONGWITH ALONGWITH WRIT PETITION NO.2617 OF 2005 WRIT PETITION NO.2617 OF 2005 WRIT PETITION NO.2617 OF 2005 P.R. Desai ...Petitioner Vs. The State of Maharashtra & Ors. ...Respondents ... 3 ... AND AND AND WRIT PETITION NO.2829 OF 2005 WRIT PETITION NO.2829 OF 2005 WRIT PETITION NO.2829 OF 2005 Barkatali K. Surani ...Petitioner Vs. The State of Maharashtra & Ors. ...Respondents .... Shri P. M. Patel for the Petitioner. Shri S.M. Dandekar, A.G.P. with Ms Madhubala Kajale, A.G.P., Shri Milind More, A.G.P. and Ms M.M. Jadhav, A.G.P. for the Respondent Nos.1 and 2. Ms Meena Doshi with Ms Jaya Joyeel for Respondent Nos.3, 5 and 6. Shri S.M. Shah with Shri R.C. Master & Shri Y.R. Mishra for Respondent No.4. CORAM : CORAM : CORAM : SMT. RANJANA DESAI AND SMT. RANJANA DESAI AND SMT. RANJANA DESAI AND SHRI A. S. OKA, JJ. SHRI A. S. OKA, JJ. SHRI A. S. OKA, JJ. DATE ON WHICH JUDGMENT DATE ON WHICH JUDGMENT DATE ON WHICH JUDGMENT IS RESERVED : DECEMBER 19,2005. IS RESERVED : DECEMBER 19,2005. IS RESERVED : DECEMBER 19,2005. DATE ON WHICH JUDGMENT IS PRONOUNCED: JANUARY 13, 2006. DATE ON WHICH JUDGMENT IS PRONOUNCED: JANUARY 13, 2006. DATE ON WHICH JUDGMENT IS PRONOUNCED: JANUARY 13, 2006. JUDGMENT: JUDGMENT: JUDGMENT: (PER A.S.OKA, J): (PER A.S.OKA, J): (PER A.S.OKA, J): 1. Rule. The learned A.G.P. waives service for the first and second Respondent. Ms Meena Doshi, Advocate waives service for the third, fifth and sixth Respondent. Shri Y.R. Mishra waives service for fourth Respondent. Considering the facts and circumstances of the case, these Petitions are taken up for hearing forthwith. ... 4 ... 2. These Petitions can be disposed of by a common judgment. These Petitions have been filed by the ex-employees of Kohinoor Mills Company Ltd. The Petitioners in these Petitions filed separate complaints under the Maharashtra Recognition of Trade Unions And Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred to as the said Act of 1971) for recovery of salary and other reliefs. The complaints were allowed by the Industrial Court on different dates. Separate Recovery Certificates were issued by the Industrial Court in different amounts on the basis of the final orders passed in the complaints. The details of the recovery certificates are as under: ---------------------------------------------------------- Sr. Writ Name of the Date on which Amount No. Petition Petitioner recovery cert- No. ificate is issued ---------------------------------------------------------- 1. 2. 3. 4. 5. ---------------------------------------------------------- 01. 2182/2005 Dilip T.Khandhar 10.01.2005 Rs.5,63,786.90 02. 1417/2005 Vasant S.Samant 7.01.2003 Rs.1,33,722.00 03. 1689/2005 Vijay R.Naik 17.12.2004 Rs.2,69.038.00 04. 1764/2005 Ramchandra N. Warkhandkar 04.11.2004 Rs.5,91,562.98 05. 1856/2005 Bhagwan G. Pathak 27.12.2004 Rs.5,86,865.88 06. 1857/2005 Suresh N. Abuvala 17.12.2004 Rs.1,24,826.58 07. 1911/2005 Ramakant S. ... 5 ... Parab 26.05.2005 Rs.4,81,411.81 08. 2032/2005 M.B.Narkar 23.03.2005 Rs.1,48,289.00 09. 2048/2005 R.M.Kanchan 26.05.2005 Rs.2,13,162.25 10. 2176/2005 Kundalik M. Mohan 17.12.2004 Rs.4,59,281.69 1. 2. 3. 4. 5. ---------------------------------------------------------- 11. 2283/2005 Pandurang T. Bhagat 20.01.2005 Rs.4,65,015.92 12. 2410/2005 Prabhavati D. Kahar 13.11.2002 Rs.3,85,413.92 13. 2411/2005 i.D.K.Kesarkar 24.05.2005 Rs.0,01,270.76 ii.R.D.Salgaonkar Rs.0,12,387.82 iii.S.C.Gupta Rs.0,10,527.60 14. 2617/2005 P.R.Desai 20.01.2005 Rs.3,23,405.30 15. 2829/2005 Barkatali K. Surani 21.12.2004 Rs.2,30,534.59 ---------------------------------------------------------- 3. The grievance in these Petitions is that though the second Respondent-Collector was under an obligation to execute and enforce the recovery certificates and recover the amount payable to the Petitioners, no steps have been taken by the second Respondent. The third and fifth Respondent are the wholly owned subsidiaries of the National Textiles Corporation Ltd. which is a Government of India Undertaking. By the Textile Undertakings (taking over of Management) Act, 1983 (hereinafter referred to as the said Act of 1983) the fourth Respondent-Union of India ... 6 ... took over management of thirteen Cotton Textile Undertakings mentioned in the first schedule to the said Act of 1983. The management of the Textile Undertakings of the Kohinoor Mills Company Ltd. was also taken over by the fourth Respondent-Union of India and was vested in the third Respondent as the custodian for day to day management. In the year 1995, the Textiles Undertakings (Nationalisation) Act, 1995 (hereinafter referred to as the said Act of 1995) was enacted. By the said enactment, thirteen Cotton Textile Undertakings mentioned in the first schedule of the said Act of 1983 were nationalised and the ownership thereof was vested with the fourth Respondent which was transferred in favour of the fifth Respondent. 4. The facts of these Petitions show a very sorry state of affairs. By way of illustration, a reference is made to the facts of the case in Writ Petition No.2182 of 2005. The Petitioner was in the employment of an undertaking of Kohinoor Mills Co. Ltd. In this case, grievance of the Petitioner was that though he did not participate in the strike of mill workers from 18th January, 1982 onwards, he was not assigned any work although he reported for the duty. The Petitioner in the said Petition filed a complaint under the said Act of 1971 in the year 1990. The said complaint was allowed by ... 7 ... the Industrial Court by the order dated 21st December, 1999. The Industrial Court held that the Petitioner was entitled to arrears of salary from 01st July, 1990 and directed the third, fifth and sixth Respondents herein to provide work to the Petitioner and to pay salary with all benefits from 01st January, 1990. As the said order was not complied with, the Petitioner was compelled to file an Application under section 50 of the said Act of 1971 claiming salary for the period from 01st July, 1990 to 31st July, 2000. After the said Application was contested by the third, fifth and sixth Respondents, on 03rd December, 2004 the Industrial Court allowed the Application and held that the Petitioner was entitled to Rs.05,63,786.90/-. A certificate of recovery was issued on 10th January, 2005 by the Registrar of the Industrial Court to recover the said amount from the third, fifth and sixth Respondents in the same manner as arrears of land revenue. In the meanwhile, in July 2005 a valuable property of the Kohinoor Mill No.3 was sold by the fifth Respondent by a public auction. It is an admitted position that the property of the said Mill was sold for consideration of Rs.421 crores. The Petitioners in other Petitions have also suffered the same agony. The recovery certificates in all these petitions have been issued during the period between January 2003 to June 2005. The prayer made in the Petitions is for directing ... 8 ... the first and second Respondents to recover the amounts as per the recovery certificate with interest at the rate of 18 percent per annum. The prayer made in the alternative is that the third, forth, fifth and sixth Respondents be directed to pay the amounts covered by the recovery certificate with the interest thereon at the rate of 18 percent per annum from the date on which the amount became payable. 5. One Suresh Shankar Keer has filed affidavit in reply on behalf of the third, fifth and sixth Respondents in companion Writ Petition No.2282 of 2005. The said affidavit is filed in common to all the Petitions. It is admitted in the said reply that the management of the three mills owned by the Kohinoor Mills Company Ltd. was taken over under the said Act of 1983 with effect from 18th October, 1983 and the said mills have been thereafter nationalised under the provisions of said Act of 1995 and are presently owned by the fifth Respondent-National Textile Corporation (Maharashtra North) Ltd. It is also stated that the fifth Respondent is a wholly owned subsidiary of the National Textile Corporation Ltd., which is a Government of India undertaking. It is stated in affidavit in reply that the fifth Respondent has been declared as a sick Industrial Company under section 3(1)(o) of the Sick Industrial ... 9 ... Companies (Special Provisions) Act, 1985 by the B.I.F.R. It is stated that the Kohinoor Mills No.2 and 3 have been closed pursuant to the permission for closure granted by the appropriate Government under order dated 04th April, 2002. It is stated that in the said two mills as well as in the Kohinoor Mills No.1 modified Voluntary Retirement Schemes have been offered to the employees. It is stated in the affidavit in reply that in response to the intimation received from the Collector for payment in accordance with recovery certificates, from May 2005 to November 2005, the fifth Respondent has paid monthly instalments of a sum of Rs.15 lacs to the Collector. It is stated that property of Kohinoor Mills No.3 has been sold for consideration of Rs.421 crores. Even after the sale, there is a shortfall of Rs.38 crores. It is stated that after considering the payment of monthly instalments of Rs.15 lacs paid from May 2005 onwards, now only a sum of Rs.42 lacs is currently outstanding towards the dues of the workmen and the Respondent No.5 was prepared to pay the amount of Rs.42 lacs in monthly instalments of Rs.15 lacs. It is stated that except in case of some Petitioners in all other cases, after filing of the Petitions the principal amounts have been paid. By the said affidavit in reply, time of four months has been sought to pay the entire outstanding amount. It is stated that the Petitioners in these Petitions are not ... 10 ... entitled to claim interest as there is no deliberate failure on the part of the concerned Respondents in paying the amount. 6. On behalf of the Collector of Bombay one Ananda Bhandare, Tahsildar in his office has filed an affidavit in reply in Writ Petition No.2182 of 2005. In the said affidavit in reply, the details of the recovery certificates received by the office of the Collector and the details of the payments made till the date of filling affidavit have been set out. It is stated that Kohinoor Mills have been granted monthly instalments of Rs.15 lacs by the Collector of Bombay with effect from May 2005. One more affidavit has been filed by one Parshuram Kale, Tahsildar, Labour Dues Recovery, in the Writ Petition No.2048 of 2005 setting out the fact that instalments at the rate of Rs.15 lacs per month have been fixed. It is stated in the said affidavit that by a letter dated 14th December, 2005 he has informed the Kohinoor Mills to pay full amount of arrears within a period of seven days. It must be mentioned here that this Court had issued oral directions to the Collector, Mumbai to place on record the order granting instalments in favour of the Respondents. Accordingly, xerox copies of the certain correspondence are placed on record in that behalf by the learned A.G.P. There is a letter dated 04th April, 2005 ... 11 ... send by the fifth Respondent to the Collector of Mumbai. In the said letter, the fifth Respondent has referred to the proceedings before B.I.F.R. It is stated that the fifth Respondent has serious constraints of funds. It is stated that the fifth Respondent will approach N.T.C. Delhi( Its holding Company) to release necessary funds. Therefore, a request was made to grant monthly instalments of Rs.4 lacs. On the said letter there is an endorsement made by the Collector to the following effect: "We get lots of request on Lokshahi Deen. Ask them to deposit atleast Rs.15 lacs/month in this case." It must be noted here that request made on 04th April, 2005 is as regards recovery of labour dues amounting to Rs.100.17 lacs as per various recovery certificates issued by the Labour and Industrial Courts, Mumbai. The Tahsildar, Labour Dues Recovery in the office of the Collector of Mumbai issued reply dated 15th April, 2005 under the directions of the Collector of Mumbai. In the said reply a request was made to the fifth Respondent to deposit sum of Rs.15 lacs per month. 7. The learned Counsel appearing for the Petitioners in all these Petitions has invited our ... 12 ... attention to various decisions of this Court as regards dues of the workers in Kohinoor Mills. He pointed out that inspite of directions given from time to time by this Court, there is a persistent default in payment of dues. He submitted that the first and second Respondents have failed to perform their statutory obligation of recovery of the dues payable to the Petitioners by executing recovery certificates issued in favour of the Petitioners. He placed reliance on various decisions of the Apex Court and this Court to which a reference will be made later on. The learned Counsel appearing for the third, fifth and sixth Respondents submitted that the fifth Respondent is under financial constraints and there is no deliberate default on the part of the said Respondent. The learned Counsel submitted that since there is no deliberate default, order for payment of interest cannot be passed. She also pointed out that concerned Labour Court/Industrial Court has not directed payment of interest and hence, there is no clause relating to payment of interest in the recovery certificates. She submitted that in a Petition under Article 226 of the Constitution of India, this Court cannot award interest in absence of any direction issued in that behalf by the concerned Labour or Industrial Court. She also pointed out that the second Respondent has no power under Maharashtra Land Revenue Code, 1966 ... 13 ... (hereinafter referred to as the said Code) to recover the interest on arrears of land revenue and hence the fifth Respondent is not liable to pay interest. 8. The learned A.G.P. appearing for the State relied upon the affidavit in reply and the documents which were produced in this Court . The learned A.G.P. did not dispute that no steps contemplated by the said Code on the basis of recovery certificates such as attachment of the property of the Kohinoor mills or of the fifth Respondent have been taken by the Collector. The learned A.G.P. submitted that the default is on the part of the fifth Respondent. 9. We have considered the submissions. The fifth Respondent has offered to pay the entire amount payable to the Petitioners as per the recovery certificates. Therefore, now the only questions for our consideration are whether any time deserves to be granted in favour of the fifth Respondent to comply with the recovery certificates and whether the Respondents are liable to pay interest to the Petitioners. 10. Though the liability to pay the principal amount is not disputed by the fifth Respondent, it will be necessary to refer to the relevant provisions of law. ... 14 ... The said Act of 1983 came into force on 18th October, 1983. Under section 3 of the said Act of 1983, from 18th October, 1983, the management of the Textile Undertakings specified in the second column of the first schedule of the said Act of 1983 was vested in the Central Government. In the second column of the first schedule of the said Act of 1983, names of Kohinoor Mills No.1, Kohinoor Mills No.2, and Kohinoor Mills No.3 owned by the Kohinoor Mills Co. Ltd. have been included. It appears that under section 4 of the said Act of 1983, the fourth Respondent-Union of India appointed the third Respondent as the custodian of all three units of the Kohinoor Mills. The third Respondent is a subsidiary of National Textile Corporation Ltd. which is a Government of India undertaking. The said Act of 1995 was brought into force with effect from 01st April, 1994. By virtue of section 3 of the said Act, the right, title and interest of the owner in relation to every Textile Undertaking including undertakings of Kohinoor Mills as defined in the said Act of 1983 was transferred to and vested absolutely in the fourth Respondent-Union of India. As per sub section 2 of section 3 of the said Act of 1995, every Textile Undertaking vested in the fourth Respondent by virtue of section 3 immediately stood transferred to and vested in the National Textile Corporation. Sub section 2 of section 5 of the said Act of 1995 provides that any ... 15 ... liability arising in respect of the wages, salaries and other dues of the employees of the Textile Undertaking in respect of any period after the management of such Undertaking had been taken over by the Central Government under the said Act of 1983 shall on and from 01st April, 1994 be the liability of the fourth Respondent-Union of India and shall be discharged for and on behalf of the fourth Respondent by the National Textile Corporation as and when the repayment of such amounts becomes due and payable. It is pertinent to note that under the said Act of 1983 the management of the Textile Undertakings of all the three Kohinoor Mills vested in the Central Government with effect from 18th October, 1983. Thus, any liability arising in respect of the wages, salaries and other dues of the employees of the Kohinoor Mills became the liability of the fourth Respondent-Union of India and was required to be discharged for and on behalf of the fourth Respondent by the National Textile Corporation. It is pertinent to note that under section 6 of the said Act of 1995, the National Textile Corporation is empowered to transfer any Textile Undertaking to its subsidiary Textile Corporation and in case of such transfer all the liabilities of the National Textile Corporation under sub section 2 of section 5 are to be discharged by such subsidiary Textile Corporation. That is how the fifth Respondent which is a wholly owned subsidiary of the ... 16 ... National Textile Corporation is liable to discharge liability arising in respect of wages, salaries and other dues of the employees of the Kohinoor Mills. 11. It will be necessary to refer to section 50 of the said Act of 1971 which reads as under: "50. Recovery of money due from employer:- Where any money is due to an employee from an employer under an order passed by the Court under Chapter VI, the employee himself or any other person authorised by him in writing in this behalf, or in the case of death of employee, his assignee or heirs may, without prejudice to any other mode of recovery, make an application to the Court for the recovery of money due to him, and if the Court is satisfied that any money is so due, it shall issue a certificate for that amount to the Collector, who shall, proceed to recovery the same in the manner as an areas of land revenue: . Provided that, every such application shall be made within one year from the date on which the money became due to the employee from the employer: . Provided further that, any such application may be entertained after the expiry of the said period ... 17 ... of one year, if the Court is satisfied that the applicant had sufficient cause for not making the application within the said period." In all these cases, recovery certificate under section 50 of the said Act of 1971 have been issued after the final orders were passed by the Industrial Court on the complaints filed by the Petitioners for payment of salary and other dues. The Applications for recovery certificates were made against the third, fifth and sixth Respondents as the said Respondents failed to pay the money due to the Petitioners on the basis of the final orders passed on the complaints. Under section 50 of the said Act of 1971, the Collector is under an obligation to proceed to recover the amount mentioned in the recovery certificate in the same manner as arrears of land revenue. The Collector has power to recover the land revenue under the provisions of the said Code. Chapter XIV of the said Code incorporates special provisions for land revenue in the city of Bombay. By Maharashtra Act No.30 of 1999 sub section (1) of section 267 of the said Code has been substituted by following which reads as under: "(1) If any land revenue is not paid, at or within, the time when it becomes payable, the defaulter shall ... 18 ... be liable to pay, in addition to such land revenue, interest at the prevailing prime lending rate of interest charged by the State Bank of India (save where, in the case of a lease, the agreement or contract provides for payment of interest at the rate specified therein), and the Collector may, on or after the day following that on which the arrears accrue, cause a notice of demand for such arrears together with interest thereon to be served on the superior holder or on the person in possession, or on both: . Provided that, when the defaulter is in possession of such land for a public purpose, the State Government may, after recording reasons in writing, grant remission in part or in full, from the payment of such interest to such defaulter."; The amended sub section (1) of section 267 of the said Code provides that a defaulter is liable to pay, in addition to such land revenue, interest at the prevailing prime lending rate of interest charged by the State Bank of India and therefore, the Collector has to issue notice for arrears of land revenue together with interest thereon. The State Government has power to grant remission for the reasons recorded from the payment of such