High Court Kerala High Court

K. Sreedharan vs Thajudeen Koya And Ors. on 8 December, 1995

Kerala High Court
K. Sreedharan vs Thajudeen Koya And Ors. on 8 December, 1995
Equivalent citations: (1996) IILLJ 249 Ker
Author: K Joseph
Bench: K Joseph


JUDGMENT

K.J. Joseph, J.

1. The petitioner was an employee in the saw mill owned by the first respondent. On May 6, 1987, in the course of employment, he sustained injuries, as a result of which his right palm was cut off. Though it was got stitched, the five fingers of his right hand became paralysed. He, therefore, filed a claim petition before the third respondent under the Workmen’s Compensation Act, 1923 (for short, the Act only). The Third respondent, as per Ext.P1 judgment awarded a compensation of Rs. 24.460/- with 6% interest per annum from June 6, 1987 and in case of failure to deposit the said amount in the court within 30 days from the date of receipt of intimation of the said judgment, revenue recovery steps were directed to be taken against the first respondent under Section 31 of the Act. Instead of complying with Ext.P1, he chose to execute two settlement deeds – Exts.P2 and P3 – in favour of his wife viz., the second respondent transferring the entire properties owned by him. According to the petitioner, Exts.P2 and P3 were executed only to defeat the claim of the petitioner under Ext.P1. Thereafter, the second respondent filed O.S.No. 1033 of 1991 before the Principal Munsiff’s Court, Kollam for a permanent injunction restraining the defendants (Government of Kerala represented by the District Collector, Tashildar, Revenue Recovery, Kollam and the Village Officer, Revenue Recovery, Kollam) from attaching or selling the movables in the plaint schedule building and for proceeding against the properties covered by Exts. P2 and P3 settlement deeds. In the said suit, the petitioner was not made a party. Knowing about the suit, the petitioner had filed an application – I.A.No. 3164 of 1993 – for impleading him as an additional defendant in the suit. The said application was opposed by the second respondent, who was the plaintiff in the case. The learned Munsiff considered the said I.A. and passed Ext.P4 order on July 7, 1994 dismissing the said application and finding that he is not a necessary party to the suit since the suit itself is for a permanent injunction as against initiating revenue recovery proceedings against the plaint schedule properties for the recovery of the amount from a third party. It is thereafter the suit was decreed by the Munsiff on November 8, 1994 without the first defendant as well as the petitioner in the party array. It is the further case of the petitioner that the above suit itself filed by the second respondent is not maintainable under Section 19 of the Act and, therefore, Ext. P5 judgment and decree is invalid and the same is a nullity. It is also the case of the petitioner that the suit itself is a result of the collusion between the first and second respondents with the defendants in the suit to defeat the interest of the creditors of the first respondent, especially the interest of the petitioner herein in whose favour there is a judgment passed by the third respondent awarding compensation to the workman for the injury sustained by him. It is also the case of the petitioner that under Section 14A of the Act, the compensation awarded by the third respondent is having a first charge on the property transferred by the first respondent in favour of the second respondent on the basis of Ext. P2 and P3, settlement deeds. It is also the case of the petitioner that in spite of Ext. P5 judgment respondents 4 to 6 are bound to take recovery steps under Section 31 of the Act against the first respondent and his properties, including the properties transferred as per Exts. P2 and P3, which are now in the hands of the second respondent. He, therefore, prays for a declaration that the petitioner is entitled to recover the amount granted as per Ext.P1 together with interest and penalty from the properties covered by Exts. P2 and P3. He has also prayed for a declaration that Ext.P5 in respect of the property covered under Exts. P2 and P3 is illegal and without jurisdiction as the same is against the provisions of Section 14A and 19(2) of the Act. He has also prayed for a direction to respondents 3 to 6 to immediately recover the amount granted to the petitioner under Ext.P1 and pay the same to the petitioner without any delay. He has also prayed for consequential reliefs.

2. On notice from this Court on behalf of the first respondent, a counter affidavit has been filed, wherein it is stated that the original petition is not maintainable under Article 226 of the Constitution. It is further stated that respondents 1 and 2 are living in very difficult circumstances without any means and the saw mill in question now belongs to the second respondent is not functioning and there is no bona fides in the original petition. It is also stated that the petitioner is ‘hale and hearty’ and none of the grounds stated in the petition are maintainable. It is further stated that the petitioner is bound by Ext.P5 judgment and decree even though he was not impleaded in the suit. It is further stated that Exts.P2 and P3 are bona fide transactions and Ext.P5 has become final and, therefore, the petitioner is not entitled to get any relief. Even though notice was served on the second respondent, she did not file any counter affidavit in the case justifying the transfer of the property by the first respondent in her favour after the award was passed by the third respondent and also in filing the suit before the learned Munsiff without impleading the petitioner as well as her husband the first respondent.

3. I heard counsel for the petitioner as well as the contesting respondents and the Government Pleader.

4. The main question that has to be considered is whether the petitioner had any legal enforceable right against the property transferred by the first respondent in favour of the second respondent wife as per Exts.P2 and P3. Admittedly, the petitioner had sustained the employment injury for which he had filed an application before the 3rd respondent under the provisions of the Act. The matter was contested by the first respondent, who was the employer of the petitioner. On an anxious consideration by the third respondent, he passed Ext.P1 judgment on December 31, 1990 finding that the petitioner had sustained very serious injuries during the Course of employment under the first respondent in the saw mill. Based on the medical evidence adduced before the third respondent, it was also found that the petitioner had lost five fingers of his right hand and with the right hand, the petitioner is unable to carry on any work. After considering the evidence, both oral and documentary, the third respondent found that the petitioner is entitled to get an amount of Rs. 24, 460/- together with interest at 6% per annum from June 6, 1987 onwards. The said award is still subsisting. The first respondent has not paid the said amount so far thereby he had incurred to him the liability to pay penalty also apart from the interest awarded by the third respondent. He has not filed any appeal before this Court, as provided under the Act. He has also not deposited the amount before the third respondent. Therefore, as against the first respondent, there is an award passed by the third respondent making him liable to pay an amount of Rs. 24,460/- with interest at 6% and costs.

5. Even now the said demand is subsisting. There is no case for the first respondent that he has paid the said amount. Admittedly, the third respondent had passed Ext.P1 on December 31, 1990 and Exts.P2 and P3 transfer of properties of the owner in favour of his wife was effected only on April 19, 1991 and April 26, 1991. Under Section 14-A of the Act, the employer as well as his assets are liable to be proceeded against for the amount awarded by way of compensation by the Workmen’s Compensation Commissioner. Section !4-A of the Act is extracted below:

“Compensation to be first charged on assets transferred by employer – where an employer transfers his assets before any amount due in respect of any compensation, the liability wherefore accrued before the date of the transfer, has been paid, such amount shall, notwithstanding anything contained in any other law for the time being in force, be a first charge on that part of the assets so transferred as consists of immovable property.”

6. Therefore, notwithstanding anything contained in any other law for the time being in force, the properties owned by the employer including the properties covered in Exts.P2 and P3 transfer deeds are liable for the amount awarded by the third respondent as per Ext.P1. A statutory first charge had been created over the property under Section 14A of the Act. Admittedly, those

properties originally belonged to the employer viz. the first respondent and he transferred his assets after the amount accrued under the Act by way of compensation to the petitioner. When that being the legal position, such amount shall be a first charge on the assets so transferred on the properties covered in Exts.P2 and P3 also.

7. So even if there is a valid transfer of property in favour of the second respondent by the first respondent – employer, such transfer can only be subject to the first charge created by the judgment of the third respondent viz. Ext.P1 in favour of the petitioner and the second respondent has title, interest and ownership over such property only subject to the liability to the petitioner to the extent the third respondent has awarded compensation in favour of the petitioner. On that sole ground itself, the petitioner is legally entitled to proceed against the properties so transferred by the employer and now in the hands of the second respondent and respondents 1 and 2 have no legal right to prevent or oppose the petitioner in proceeding against the property for realisation of the compensation awarded as per Ext.P1.

8. Then the next question to be considered is whether Ext.P5 would in any way disentitle the petitioner in proceedings against the properties covered in Ext. P2 and P3 for realisation of the amount covered in Ext.P1 judgment. The suit itself is one filed by the 2nd respondent against the State and the revenue officials for a permanent injunction. As can be seen from Ext.P5 the 2nd respondent, who was the plaintiff in the suit, had suppressed the fact of passing of Ext.P1 judgment by the third respondent in the suit. What has been stated by the 2nd respondent in the suit is that the husband of the second respondent plaintiff has incurred some liability and for that, recovery steps are being taken including attachment and sale of immovable, in the building in A and B schedule properties. Admittedly, in the suit, the person liable to pay the amount under the Act viz. the 1st respondent, is not made a party. The petitioner also was not impleaded as a defendant in the suit, even though he is deeply interested in the properties involved in Exts.P2 and P3. As can be seen from Ext.P5, the defendants in the suit did not even contest the matter properly. They have not produced any evidence in the case. They have also not examined any witness. As a matter of fact, the defendants were not even present during the trial of the case. Practically, Ext.P5 is an ex parte judgment without considering Section I9(2) of the Act as well as Section 14A of the Act. The learned Munsiff did not consider the statutory charge created on the property under the said section. The Munsiff also did not consider the extent of the right and interest of the plaintiff in the properties. Admittedly, the petitioner is not a party in the suit. On that ground itself, the said judgment and decree cannot have any binding of at all on him.

9. It is true that he has filed an application for impleadment in the suit as an additional defendant. But that opposed by respondents 1 and 2 and the same was dismissed as per Ext.P4 dated July 7, 1994. Thereafter, ther is absolutely no legal or moral justification for respondents 1 and 2 to contend that the decree pursuant to Ext.P5 judgment is binding on the petitioner. The said decree cannot have any legal impact on persons who are not parties to the suit. Obviously, the properties were transferred by the employer to defeat the interest of the workman-petitioner, who had sustained a very serious employment injury. Such a transfer itself is, therefore, liable to serious attack on the ground of collusion and fraud. The attempt on the part of the 2nd respondent in filing such a suit is only to defeat the interest of the creditors, including the petitioner herein, in whose favour there is an award by the third respondent. It is suppressing these facts the plaintiff in the suit the second respondent fifed the suit and obtained a practically exparte decree against the State. Such a conduct of respondents 1 and 2 cannot be countenanced by any court of law. None of the legal questions based on Section 14A read with Section 19(2) of the Act was considered by the learned Munsiff in the suit. The counsel appearing on behalf of the petitioner has submitted that the learned Munsiff is having no jurisdiction or authority to entertain such a suit and pass Ext.P5 judgment in the light of the statutory injunction under Section 19(2) of the Act. Section 19 of the Act is extracted below:

“Reference to Commissioners – (1) If any question arises in any proceedings under this Act as to the liability of any person to pay compensation (including any question as to whether a person injured is or is not a workman) or as to the amount or duration of compensation (including any questions as to the nature or extent of disablement) the question shall, in default of agreement, be settled by a Commissioner.

(2) No Civil Court shall have jurisdiction to settle, decide or deal with any question which is by or under this Act required to be settled, decided or dealt with by a Commissioner or to enforce any liability incurred under this Act”

10. The next question to be considered is whether the suit filed by the 2nd respondent as plaintiff against the State and revenue officials is barred under Section 19(2). It is the case of the petitioner that the civil Court has no jurisdiction to entertain such a suit or to pass any judgment and decree under Section 19(2) of the Act, no civil Court has jurisdiction to decide or deal with any question which by or under the Act required to be enforced any liability incurred under the Act. Obviously, the attempt of the 2nd respondent in filing the suit is to avoid the determination or enforcement of the liability incurred under the Act by the 1st respondent, who is the transferor of the property in favour of the 2nd respondent. The suit itself is filed against the enforcement of the liability incurred under the Act, even though it is styled as a suit for permanent injunction restraining the defendants from proceeding against the movable and immovable properties of the 2nd respondent. Under such circumstance, in the light of the statutory injunction provided under Section 19(2) of the Act. I am inclined to accept the contention raised by the counsel for the petitioner that such a suit itself is not maintainable, and the decree passed in the suit is invalid and the same is a nullity. At any rate, the said judgment and decree cannot have any binding force on the petitioner. On the basis of such a decree, the right of the workman under the Act over the property cannot be jeopardised. In that view of the matter, it has to be declared that the learned Munsiff is incompetent to entertain such a suit in the light of the statutory injunction provided under Section 19(2) of the Act. The application submitted by the petitioner for impleadment was opposed by the 2nd respondent and, therefore, the said application was dismissed. But now respondents 1 and 2 contend that the judgment and decree passed in the suit are binding on the petitioner. I find absolutely no legal or factual basis to accept the said contention raised by counsel for respondents 1 and 2. Such a contention is thoroughly devoid of merits. After raising such an objection before the learned Munsiff on an application submitted by the petitioner for impleadment in the suit as a defendant, respondents 1 and 2 are estopped from raising a contention that the decree passed in the said suit is binding on the petitioner who was not allowed to be impleaded or contested as a defendant in the suit. The contention made by counsel for respondents 1 and 2 that since the petitioner has filed an impleading petition to get himself impleaded as an additional defendant in the suit, he shall be bound by the decree is absolutely illegal and perverse. There is no legal basis to raise such an untenable contention before any court of law. Such a contention if frivolous and has therefore only to be rejected. In spite of Ext.P5 judgment, the right of the petitioner to proceed against the properties covered in Exts.P2 and P3 is protected under Section 14A of the Act.

11. It is contended by counsel for respondents 1 and 2 that this Court will not be justified in interfering with the decree passed by a competent civil court in proceedings under Article 226 of the Constitution. In support of such a contention, counsel placed reliance on the decision of this Court reported in St.Mary’s Society v. Alphonse Alexander and Ors. (1995 (2) K.L.J. 63) wherein this court held that a writ of certiorari cannot be issued to a civil Court. The judgment or order of a civil Court cannot be interfered with or quashed under Article226 of the Constitution. Even if the decision of the civil court is wrong, a party cannot approach the High Court on the ground that it has supervisory jurisdiction over civil courts and this Court has ample powers to interfere with the order of the civil Court. The said decision has no application to the facts and circumstance of this case.

12. Normally, this Court will not be justified in interfering with the decree passed by a competent civil court in exercise of the extra ordinary jurisdiction of this Court under Article 226 of the Constitution. But such judgment and decree shall be passed by a competent civil court having jurisdiction to try the case. But, in this case, it cannot be held that the Munsiff has jurisdiction to entertain and try the above case in the light of the statutory injunction contained in Section 19(2) of the Act. Therefore, it must be held that such a judgment and decree can be interfered with by this Court in the extraordinary jurisdiction of this Court under Article 226 of the Constitution.

13. As stated earlier, the 1st respondent has transferred his, interest and ownership over the property in favour of his wife 2nd respondent after the judgment of the third respondent. Such a transfer was made for the purpose of defeating the interest of the workman concerned, in whose favour there is a judgment passed by a competent statutory authority viz., the third respondent. Therefore, the decision relied on by counsel for respondents 1 and 2 has no application on the facts and circumstances of this case.

14. Counsel also placed reliance on the decision of the Orissa High Court reported in Abdul Rashid Khan v. Sk. Rahimtulla and Ors. AIR i 979 Orissa 175 in support of the contention that Ext.P5 is binding on the petitioner in spite of the fact that the application for impleadment was rejected. I see no justification to place any reliance on the said decision. The facts in that case would amply prove that the decision has no application on the facts pleaded and proved in this case. A suit was filed against six defendants before the Munsiff Court. The 6th defendant is the benamidar for the petitioner in that case. The petitioner filed an impleading petition in the said suit. But it was dismissed. The matter was taken up by him before the High Court in revision. The same was not successful. Subsequently, the petitioner filed another suit O.S .96/73 for a declaration that he is the real owner of the property and the 6th defendant is only a benamidar and he is not bound by the decision in the earlier suit. That suit was decreed. Subsequently O.S.No. 48/71 also decreed. The plaintiff had taken up the execution of that decree. The petitioner then filed a petition under Section 151 CPC claiming that he is the real owner of the property. That petition was dismissed after finding that the petitioner has no locus standi. On a revision before the High Court, the High Court found that the petitioner cannot invoke the inherent jurisdiction of the Court under Section151 CPC in execution proceedings. The High Court also found that it is well settled that a benamidar is bound by decision against the real owner. The High Court further found that a benamidar can represent the real owner. In that view, it has to be held that the court passed the decree the petitioner in the party array, represented by his benamidar and the subsequent decree passed against the benamidar is also binding on the petitioner. Legally speaking, there is a decree with the petitioner also in the party array, he being represented by his benamidar in the suit. Such a decree is binding on the petitioner therein also, and the execution of such a decree cannot be prevented by filing a petition under Section151 C.P.C. Therefore, the said decision is not helpful to sustain the case of respondents 1 and 2 in this case.

15. His true that even a non-party can file an appeal under Order 41, Rule 1, CPC with leave of the court, Admittedly, in this case, no such appeal is filed by the petitioner against Ext.P5. He has also not filed any revision against the order dismissing his application for impleading himself as a defendant in the suit. But the question then to be decided is whether non-filing of such an appeal against the decree passed in the suit with leave of the court would in any way save the property owned by the first respondent which was admittedly transferred to the name of the 2nd respondent after Ext.P.1. Admittedly, the third respondent had passed Ext.P1 on December 31, 1990 and Exts. P2 and P3 were executed on April 19, 1991 and April 26, 1991. Such a transfer is hit by Section 14A of the Act.

16. Counsel for the petitioner placed reliance on the decision of this Court reported in Sainalabdeen v. District Collector (1994-I-LLJ-529) wherein this Court had considered the scope of Section 18(3)(C) of the Industrial Disputes Act and found that an order passed under Section 33C(2) of the Industrial Dispute Act is enforceable against the purchaser who is the successor in interest of the original owner Section 18(3) (c) of the Industrial Disputes Act reads as follows:

“18(3) A settlement arrived at in the course

“18(3) A settlement arrived at in the course of conciliation proceedings under this Act (or an arbitration award in a case where a notification has been issued under Sub-section (3-A) of (10-A) or (an award or a Labour Court, Tribunal or National Tribunal), which has become enforceable, shall be binding on-

(c) Where a party referred to in Clause (a) or Clause (b) is an employer, his heirs successors or assigns in respect of the establishment to which the disputes relate”.

It is contended by counsel for the petitioner that provisions similar to Section 18(3)(c) is incorporated under Section 14A of the Act and, therefore, the decision is squarely applicable on the facts of the case under Section 18(3)(c)of the I.D. Act an award passed by the Labour Court is binding on an employer, his heirs successors, or assigns in respect of the establishment to which the dispute relates. In the same manner, under Section 14A of the Act, where an employer transfers his assets, before any amount due in respect of any compensation under the Act had been paid, such amount shall be notwithstanding anything contained in any other law for the time being in force be a first charge on that part of the assets so transferred. I am therefore, inclined to accept the contention by counsel for the petitioner that in the light of the principles enunciated in Sainalabdeen Musaliar’s case(supra), the property subsequently transferred in favour of the 2nd respondent as per Exts. P2 and 3 is liable to be proceeded against by the petitioner and respondents 3 to 6 are legally entitled to proceed against those properties under Section 31 of the Act by invoking the provisions under the Revenue Recovery Act in spite of the fact that the learned Munsiff has passed Ext. P5 against the State and the revenue officials. Such a decree has to be declared as invalid and inoperative as far as the recovery of the amount due from the first respondent Ext. P1. Subject to the satisfaction of the judgment (Ext.Pl) and the right of the respondent to realise that amount from the properties covered in Exts. P2 and P3, Ext P5 can be enforced against respondents 4 to 6 for realisation of any other amount other than the amount covered by Ext.P1.

17. In the result, it is declared that the petitioner is entitled to recover the amount granted as per Ext. P1 together with interest and penalty from the 1st Respondent and the properties covered in Exts. P2 and P3. It is also declared that respondents 3 to 6 are entitled to proceed against the property covered in Exts. P2 and P3 for realisation of the amount covered by Ext.P1 inspite of Ext.P5 judgment in O.S.No. 1033/91 under Section 14A of the Act. There will be a further direction to respondents 3 to 6 to recover the amount covered by Ext.P1 by resorting to the provisions under the Kerala Revenue Recovery Act as contemplated under Section 31 of the Act.

18. The petitioner has sustained a very serious employment injury while working in the saw mill owned by the husband of the second respondent. His right palm was cut off and hanged. He was treated in the hospital for days together. As a result of the said accident, the petitioner was disabled and all his five fingers of his right hand became useless even though the palm was stitched and kept in the original position by surgery. Now more than 8 years have elapsed after sustaining the injury. The petitioner had been driven from piller to post by the employer and members of his family, including his wife the 2nd respondent, after transferring the properties only to defeat the interest of the workman viz., the petitioner herein. He had suffered irreparable injury, hardship and pain, for which he was awarded only a meagre amount of Rs. 24,460/-by the third respondent. Respondents 1 and 2 did not pay any amount to the petitioner. They have adopted dubious methods to bypass the orders of the 3rd respondent. Untenable and cantankerous contentions were raised by respondents 1 and 2 before this Court also. Under such circumstances, counsel for the petitioner is perfectly justified in praying for his cost in this proceeding. I, therefore, allow the original petition with costs. Advocate fee is fixed as Rs. 2,000/-, payable by respondents 1 and 2.