Horizon Sugar Mills Vs. Ariyur Sugar Mills Staff Welfare & Ors.  INSC
1514 (31 August 2009)
APPELLATE JURISDICTION CIVIL APPEAL NO. 6381 OF 2009 (arising out of SLP [C]
No.8387 of 2007) M/S. NEW HORIZON SUGAR MILLS LTD., ARIYUR ... APPELLANT ARIYUR
SUGAR MILLS STAFF WELFARE UNION & ORS. ... RESPODNENTS WITH CIVIL APPEAL
NO. 6382 OF 2009 (arising out of SLP [C] No. 13569 of 2007) EID PARRY INDIA
LTD. ...APPELLANT VS. PUDUVAI PRADESA SARKARAI AALI THOZHILALAR SANGAM &
ORS. ... RESPODNENTS
O R D E R
Leave granted. Heard the learned counsel
The assets of New Horizon Sugar Mills (for short, `New Horizon')
were seized and sold by auction under the provisions of SARFAESI Act, 2002 by
Indian Bank, a secured creditor. EID Parry India Ltd. (for short `EID Parry')
was the auction purchaser.
While dismissing a batch of writ petitions arising
from/challenging the proceedings initiated by Indian Bank under SARFAESI Act, a
learned single Judge of the Madras High Court, by order dated 12.7.2005
directed that the workmen of New Horizon will be entitled to the benefits under
Section 25FF of the Industrial Disputes Act, 1947 as against the employer - New
Horizon and EID Parry. Aggrieved by the said order, EID Parry filed W.A. No. 1788/2005.
By interim order dated 7.12.2005 passed in writ petitions filed by
the two employees unions of New Horizon, another learned single Judge appointed
a retired Judge of the High Court as the Special Authority to compute the
claims of the workmen (instead of Commissioner of Labour, Pudhucherry) and
submit a report to the Court. He also directed the Indian Bank which had the
sale proceeds in respect of sale of the assets of New Horizon to deposit
initially a sum of Rs. 6,00,00,000/- (Rupees six corers) for being disbursed to
the workmen. The said amount was ordered to be placed in a no-lien account in
the Pondicherry main branch of the said Bank. Feeling aggrieved by the said
order New Horizon filed W.A. No. 1209/2006.
The said two writ appeals along with other writ petitions and writ
appeals were disposed of by a Division Bench of the Madras High Court by the
impugned judgment dated 27.3.2007. The said judgment deals with several
aspects. We are concerned in this appeal, with only one aspect of the said
judgment, that is, the workers' dues. By the said judgment, W.A. No. 1788/2005
filed by EID Parry and W.A. No. 1209/2006 filed by New Horizon were dismissed.
The order of the learned single Judge dated 7.12.2005 directing quantification
of the amount due to the employees and further direction for earmarking Rs. six
crores for meeting the employees dues was upheld. The Division Bench, however,
directed that the quantification should be done by Commissioner of Labour,
Puducherry (instead of by the retired Judge appointed by the learned Single
Feeling aggrieved by the dismissal of W.A. No.1209/2006, and W.A.
No. 1788/2005, New Horizon and EID Parry have filed these appeals by special
leave. The common issue involved in these two appeals is who should be made
liable to pay the compensation under Section 25FF of the Industrial Disputes Act,
1947, to the employees of New Horizon whose services
were deem3dto have been terminated.
After the matter was argued for some time, Mr. S. Ganesh, learned
senior counsel appearing for New Horizon fairly conceded that having regard to
the wording of Section 25FF of the said Act and the settled legal position
under several decisions of this Court starting from Anakapalla Co-operative
Agricultural and Industrial Society v. Its Workmen [1962 (2) LLJ. 629], the
liability to pay its workmen would be on New Horizon. Therefore, it follows
that the amount due to the workers will have to be paid from out of the sale
proceeds which are lying with the Indian Bank.
purchaser - EID Parry, who has already paid the sale price, will have no
However, having regard to the fact that the quantification of the
workmen's dues would involve verification of records/claims, it will be
convenient and appropriate, if the management of New Horizon is associated with
the process of verification, quantification and payment to its workmen.
Therefore, the Commissioner of Labour will hear New Horizon in regard to each
claim before passing appropriate orders in favour of workmen.
The Indian Bank will now transfer the sum of Rs. six crores as
directed by the High Court, from the sale proceeds, without prejudice to its
contentions to a no-lien account in its Pondicherry Main Branch which shall be
operated by the Commissioner, who shall endeavour to complete the exercise of
verification, quantification and payment of the employees' dues within three
months. The balance, if any, remaining in the no-lien account after such
settlement of workers' dues, shall be paid to the New Horizon without prejudice
to the contentions of the Bank.
amount of Rs. 6 crores is found to be insufficient by the Commissioner, the
Commissioner may apply to Madras High Court for release of further funds from
the amount in deposit with it.
The sum of Rs. 2 crores (or such other sum) that was deposited by
the EID Parry with the Commissioner of Labour, Pondicherry in pursuance of our
interim order dated 19.3.2009 shall be refunded to EID Parry.
With the above directions, the appeal of New Horizon is dismissed
and the appeal of EID Parry is allowed. The intervention applications of some
workmen are dismissed as not calling for any orders.
As a consequence, the interim direction dated 19.3.2009 directing
EID Parry not to prevent the workmen from attending to their duties in the
factory premises is vacated, without prejudice to the rights of the workers in
accordance with law.
....................J. (R. V. Raveendran)
....................J. (B. Sudershan Reddy)
August 31, 2009.