{"id":55504,"date":"2008-12-09T00:00:00","date_gmt":"2008-12-08T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/unin-of-india-and-another-vs-additional-district-judge-and-on-9-december-2008"},"modified":"2017-04-23T15:51:21","modified_gmt":"2017-04-23T10:21:21","slug":"unin-of-india-and-another-vs-additional-district-judge-and-on-9-december-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/unin-of-india-and-another-vs-additional-district-judge-and-on-9-december-2008","title":{"rendered":"Unin Of India And Another vs Additional District Judge And … on 9 December, 2008"},"content":{"rendered":"
Punjab-Haryana High Court<\/div>\n
Unin Of India And Another vs Additional District Judge And … on 9 December, 2008<\/div>\n
             C.W.P No.19430 of 2008                        1\n\n\n             In the High Court of Punjab and Haryana, Chandigarh.\n\n\n                                             C.W.P No.19430 of 2008\n\n\n                                             Date of Decision: 09.12.2008\n\n\nUnin of India and another\n\n                                                    ....Petitioners.\n\n               Versus\n\nAdditional District Judge and others\n                                                    ....Respondents.\n\n\nCoram:- Hon'ble Mr.Justice J.S. Khehar\n        Hon'ble Ms. Justice Nirmaljit Kaur\n\n\nPresent: Mr. Arvind Kashyap, Advocate\n         for the petitioners.\n\n                   ...\n<\/pre>\n
J.S. Khehar, J. (Oral).\n<\/p>\n
             In order to substantiate his claim, learned counsel for the<\/p>\n
petitioners, has in the first instance, placed reliance on Section 3 of the Sick<\/p>\n
Textile Undertakings (Nationalisation) Act, 1974 (hereinafter referred to as<\/p>\n
the Sick Textile Act). On the basis of Section 3 of the aforesaid Act, it is<\/p>\n
the contention of the learned counsel for the petitioners, that with effect<\/p>\n
from the appointed date, every sick textile undertaking shall be deemed to<\/p>\n
have been vested absolutely in the Central government. In so far as, the<\/p>\n
present controversy is concerned, it is acknowledged by the learned counsel<\/p>\n
for the petitioners, that the date of vesting of the industry, under reference,<\/p>\n
in the Central government, is 31.10.1972.\n<\/p>\n
             Despite the vesting of the industry, under reference, in the
\n             C.W.P No.19430 of 2008                      2<\/span><\/p>\n
Central government under the mandate of Section 3 of the Sick Textile Act<\/p>\n
on 31.10.1972, its actual takeover came about on 6.4.1976. The issue in the<\/p>\n
present controversy is in respect of the income derived by the sick industry,<\/p>\n
under reference, during the period between 31.10.1972 and 6.4.1976. The<\/p>\n
petitioner i.e. the Central government seeks the exclusive right to the<\/p>\n
aforesaid income under Section 10 of the Sick Textile Act. Section 10 of<\/p>\n
the Sick Textile Act is being extracted hereunder: —<\/p>\n
            “10. Accounts to be rendered by the owners of sick textile<\/p>\n
            undertakings: — (1) , Where in pursuance of any decree, order<\/p>\n
            or an injunction of a Court or otherwise, the central government<\/p>\n
            or the custodian was prevented from taking over the<\/p>\n
            management of any sick textile undertaking, the owners of such<\/p>\n
            sick textile undertaking shall,<\/p>\n<\/blockquote>\n
            (a) in the case of an undertaking into management of which was<\/p>\n
            subsequently taken over by the central government at any time<\/p>\n
            before the date on which the Ordinance was promulgated<\/p>\n
            within sixty days from such date; or<\/p>\n<\/blockquote>\n
            (b) in the case of any other sick textile undertaking, the<\/p>\n
            management of which could not be taken over by the central<\/p>\n
            government before the date on which the ordinance was<\/p>\n
            promulgated, within sixty days from such date.<\/p>\n
            render accounts in relation to the period commencing on the<\/p>\n
            date of the notified order under the Industries (Development<\/p>\n
            and Regulation) Act , 1951, or as the case may be, on the date<\/p>\n
            of commencement of the sick textile undertaking (Taking Over<\/p>\n
            of Management) Act, 1972, and ending on the date on which
\n             C.W.P No.19430 of 2008                       3<\/span><\/p>\n
            the management of the sick textile undertakings was taken over<\/p>\n
            by the Central Government or the Custodian, as the case may<\/p>\n
            be, with regard to the–\n<\/p><\/blockquote>\n
            (i) assets, and stores of the sick textile undertaking acquired or<\/p>\n
            sold during the set period;\n<\/p><\/blockquote>\n
            (ii) textile sold or despatched during the second period; and<\/p>\n<\/blockquote>\n
            (iii) income derived by the owner from the sick textile<\/p>\n
            undertaking during the said period.\n<\/p><\/blockquote>\n
            (2) If on examination of the accounts referred to in sub-section<\/p>\n
            (1), any income is found to have been derived by the owner<\/p>\n
            from the sick textile undertaking during the period referred to<\/p>\n
            in that sub-section, such income shall be recoverable by the<\/p>\n
            Central government from the amount payable under Section 8<\/p>\n
            to the owner of such sick textile undertaking and the debt due<\/p>\n
            to the Central government on this account shall rank as an<\/p>\n
            unsecured debt.”\n<\/p><\/blockquote>\n
Having perused Section 10 of the Sick Textile Act, we are satisfied that the<\/p>\n
same pertains only to the rendering of accounts by the owners of the sick<\/p>\n
textile undertakings, and the acknowledgement that the income of the Sick<\/p>\n
Textile Undertaking from the date when it was declared sick (in the present<\/p>\n
case 31.10.1972) till the date of its actual takeover (in the present case<\/p>\n
6.4.1974) shall be treated as an unsecured debt due to the Central<\/p>\n
government. We are also satisfied, that Section 10 of the Sick Textile Act<\/p>\n
does not envisage the recovery of the aforesaid income. As noticed<\/p>\n
hereinabove, the aforesaid income is merely defined as an unsecured debt<\/p>\n
due to the Central government.\n<\/p>\n
              C.W.P No.19430 of 2008                      4<\/span><\/p>\n
             In view of our conclusions hereinabove, no recovery can be<\/p>\n
claimed by the Central government i.e. the petitioner before this Court in the<\/p>\n
present writ petition under Section 10 of the Sick Textile Act. We required<\/p>\n
the learned counsel for the petitioners to invite our attention to the<\/p>\n
provisions under which recovery could be made, as was envisaged under the<\/p>\n
provisions of the Sick Textile Act. In furtherance thereof, and on perusal of<\/p>\n
the said Act, we are satisfied that Sections 20 and 21 of the Sick Textile<\/p>\n
Act, are the only provisions whereunder a claim can be made in respect of<\/p>\n
the income or assets of the sick textile undertaking. Under Section 20 of the<\/p>\n
Sick Textile Act, claims can be made at the hands of the creditors. The<\/p>\n
priority in which the aforesaid claims have to be disbursed is, however,<\/p>\n
determined under Section 21 of the Sick Textile Act. Section 21 of the Sick<\/p>\n
Textile Act refers to the Second Schedule for the determination of the<\/p>\n
priorities, and also, mandates the manner in which the aforestated priorities<\/p>\n
are to be given effect to.\n<\/p>\n
             Having collectively perused Sections 20, 21 and the Second<\/p>\n
Schedule of the Sick Textile Act, we are of the view that the claim of<\/p>\n
income derived by the sick textile undertaking, in the present case, during<\/p>\n
the period from 31.10.1972 to 6.4.1976 has to be determined in terms of the<\/p>\n
mandate of Sections 20 and 21 read with the Second Schedule of the Sick<\/p>\n
Textile Act. This is exactly what has been sought to be done in the<\/p>\n
impugned orders dated 26.3.2008 (Annexures P-6 and P-7). Sections 20<\/p>\n
and 21 of the Sick Textile Act are being extracted hereunder:-<\/p>\n
             “20. Claim to be made to the Commissioner: — Every person<\/p>\n
             having a claim against the owner of a sick textile undertaking<\/p>\n
             shall prefer such claim before the Commissioner within 30 days
\n             C.W.P No.19430 of 2008                        5<\/span><\/p>\n
            from the specified date.\n<\/p><\/blockquote>\n
                   Provided that if the Commissioner is satisfied that the<\/p>\n
            claimant was prevented by sufficient cause from preferring the<\/p>\n
            claim within the said period of 30 days he may entertain the<\/p>\n
            claim within a further period of thirty days, but not thereafter.<\/p>\n<\/blockquote>\n
            21. Priority of Claims: — The claims arising out of the matters<\/p>\n
            specified in the Second Schedule shall have priorities. In<\/p>\n
            accordance with the following principles, namely: —<\/p>\n<\/blockquote>\n
            (a) Category I will have precedence over all other categories,<\/p>\n
            and Category II will have precedence over Category III and so<\/p>\n
            on,<\/p>\n<\/blockquote>\n
            (b) The claims specified in each of the categories except<\/p>\n
            Category IV shall rank equally and he paid in full, but if the<\/p>\n
            amount is insufficient to meet such claims in full, they shall<\/p>\n
            abate in equal proportions, and be paid accordingly,<\/p>\n<\/blockquote>\n
            (c) The liabilities specified in Category IV shall be discharged,<\/p>\n
            subject to the priorities specified in this section, in accordance<\/p>\n
            with the terms of the secured loans and the priority inter se of<\/p>\n
            such loans, and<\/p>\n<\/blockquote>\n
            (d) The question of payment of a liability with regard to a<\/p>\n
            matter specified in a lower category shall arise only if a surplus<\/p>\n
            is left after meeting all the liabilities specified in the immediate<\/p>\n
            higher category.”<\/p><\/blockquote>\n
       It is inconceivable to envisage the disbursement of claim but for the<\/p>\n
procedure laid down in Sections 20 and 21 of the Sick Textile Act.
\n               C.W.P No.19430 of 2008                         6<\/span><\/p>\n
              In view of the conclusions drawn hereinabove, we are satisfied<\/p>\n
that no interference is called for in the impugned orders.<\/p>\n
              Dismissed.\n<\/p>\n
                                                   ( J.S. Khehar )
\n                                                          Judge<\/p>\n
                                                   ( Nirmaljit Kaur )
\n                                                              Judge.\n<\/p>\n
09.12.2008
\n        sk.<\/p>\n","protected":false},"excerpt":{"rendered":"
Punjab-Haryana High Court Unin Of India And Another vs Additional District Judge And … on 9 December, 2008 C.W.P No.19430 of 2008 1 In the High Court of Punjab and Haryana, Chandigarh. C.W.P No.19430 of 2008 Date of Decision: 09.12.2008 Unin of India and another ….Petitioners. Versus Additional District Judge and others ….Respondents. Coram:- Hon’ble […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,28],"tags":[],"class_list":["post-55504","post","type-post","status-publish","format-standard","hentry","category-high-court","category-punjab-haryana-high-court"],"yoast_head":"\nUnin Of India And Another vs Additional District Judge And ... on 9 December, 2008 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/unin-of-india-and-another-vs-additional-district-judge-and-on-9-december-2008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Unin Of India And Another vs Additional District Judge And ... on 9 December, 2008 - 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