* IN THE HIGH COURT OF DELHI AT NEW DELHI
% CO.APP. NO. 227/2011 IN CO.PET. 66/2003
+ Date of Decision: 15th July, 2011
# SOCIETE GENERAL .....Petitioner
! Through: None.
Versus
$ DAEWOO MOTORS INDIA LTD. ....Respondent
Through: Mr. Arjun Kathpalia, Mr. Rajnish Sinha
& Mr. Harshit Aggarwal, Advocates for
respondent.
Mr. Pinaki Mishra, Sr. Advocate with
Mr.Dhruv Dewan, Advocate for ARCIL.
Mr. Kanwal Chaudhary, Advocate for
OL.
Mr. Sanjiv Kakra & Mr. Irfan Ahmed,
Advocates for State Bank of Patiala in
COA No. 482/2010.
CORAM:
* HON'BLE MR. JUSTICE P.K.BHASIN
1. Whether Reporters of local papers may be allowed
to see the judgment?(No)
2. To be referred to the Reporter or not?(No)
3. Whether the judgment should be reported in the digest?(No)
ORDER
P.K BHASIN,J:
This application filed on behalf of the employees of the Company
-in-liquidation for ad hoc payment of their wages as an interim relief
pending consideration of various issues involved in the main matter.
CO. A. 227/2011 in CO. PET. 66/2003 Page 1 of 5
2. The relevant facts appearing from the record and the submissions
made during the course of hearing are that in some proceedings initiated
by ICICI Bank before the DRT – III, Mumbai being (O.A. No. 162/2002)
in the year 2002 for recovery of its money from the Company in
liquidation its claim was decreed on 31-08-2004 and in execution
proceedings by the Recovery Officer some property of the Company in
liquidation was sold through private sale. As per the present applicant,
the property was sold in the year 2007for a sum of Rs. 765/- crores and
out of that amount a sum of Rs.50 crores was earmarked by the Recovery
Officer towards workers’ claim. These facts are not in dispute.
3. The prayer made by the workers of the Company in liquidation for
disbursement of the amount of ` 50 crores earmarked for them out of the
sale consideration received from the sale of the property of the Company
in liquidation has been opposed on behalf of M/s. Asset Reconstruction
Company (INDIA) Ltd.(‘ARCIL’ for short), which Company claims to
have been assigned the rights of the creditors of the Company in
liquidation including the ICICI Bank and consequently it also claims to
have become entitled to receive the sale proceeds of the assets of the
Company in liquidation. It has opposed this application of the workers,
inter-alia, on the grounds that this Court has no jurisdiction whatsoever to
entertain this kind of prayer of the workers in view of the decision of the
CO. A. 227/2011 in CO. PET. 66/2003 Page 2 of 5
Hon’ble Supreme Court in the case of Allahabad Bank vs. Canara Bank
(2004) 4 SCC 406 according to which judgment it would be only the
Debt Recovery Tribunal, Mumbai which can order any kind of release of
money to workers and that too after the Official Liquidator attached to
this Court has authoritatively and finally accepted the claim of the
workers. Another ground raised by ARCIL in opposition to this
application is that the sale of the property of the Company in liquidation
itself has been challenged by the workers themselves and that challenge
is pending consideration before the Debt Recovery Tribunal and,
therefore, they cannot ask for disbursement of any money out of the sale
proceeds. The application has also been opposed on the ground that so
far the Official Liquidator or the Committee appointed by this Court for
settling the claims of the workers have not been able to give any final
report and whatever report has already been submitted has been seriously
challenged by the workers.
4. Regarding the point taken by ARCIL that the workers themselves
have challenged the validity of the sale the response of the workers was
that all that they have challenged before the Debt Recovery Tribunal is
that the purchaser of the sale property has paid only a sum of ` 267.50/-
crores out of the total sale consideration of ` 765/- crores and has also not
complied with some other terms of sale.
CO. A. 227/2011 in CO. PET. 66/2003 Page 3 of 5
5. During the course of hearing it was contended on behalf of the
workers that this Court can pass an order for ad hoc payment of the
workers’ dues from the amount of ` 50 crores also lying earmarked for
payment of their dues while it was seriously contended on behalf of
ARCIL that this Court has no jurisdiction to entertain this request of the
workers. In support of their respective submissions, learned counsel
from both the sides had cited many judicial pronouncements of the
Hon’ble Supreme Court as well as of different High Courts.
6. After having given my consideration to the rival submissions, I am
of the view that as far as the prayer made by the workers for making ad
hoc payments to them is concerned, the same cannot be considered at this
stage since admittedly the very sale of the property is under challenge at
the instance of the workers. In case that sale itself is set aside by the Debt
Recovery Tribunal there would be no money available for being
disbursed to the workers. Learned counsel for the workers had submitted
that there are many buyers ready to purchase the property in question for
a consideration of over ` 900/- crores and even if the sale in favour of the
existing purchaser is set aside the new willing purchaser would refund the
money to the purchaser out of the sale consideration. However, on this
ground also the workers cannot be paid any money only in the hope that
CO. A. 227/2011 in CO. PET. 66/2003 Page 4 of 5
some party would be coming forward to offer some price more than what
the existing purchaser had offered.
7. This prayer of the workers is, therefore, declined for the time
being. However, it is clarified that if the challenge of the workers to the
sale of the property in question is not accepted or they give up their
challenge to the sale, they would be at liberty to approach this Court once
again for the same relief and at that stage it would be considered in
accordance with law and at that stage even the objections raised by
ARCIL that this Court has no jurisdiction to order release of any money
to the workers even if the existing sale is confirmed shall also be
considered and no view is being expressed at present.
P.K. BHASIN,J
July 15, 2011
sh
CO. A. 227/2011 in CO. PET. 66/2003 Page 5 of 5