TaxTMI 
TaxTMI 
1991 (1) TMI 365
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....it. The first respondent has textile undertakings in Bombay and Jaipur. The management of the Bombay undertaking was taken over in 1983 By the National Textile Corporation under the provisions of the Textile Undertakings (Taking Over of Management) Act, 1983. The Jaipur unit was closed on August 2, 1985. On December 18, 1986, the appellants who are a nationalised bank filed this suit against the first respondents, their directors and the National Textile Corporation to recover the sum of (approximately) Rs. 14.76 crores which had been advanced by the appellants to the first respondent on the security of the mortgage of immoveable property and the hypothecation of plant and machinery. On February 14, 1987, the appellants took out a not....
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....e affidavit in support of the chamber summons that it was, on behalf of these workmen, entitled to make a claim against the first respondents for full wages from August, 1985, under the provisions of the Industrial Disputes Act in the sum of approximately Rs. 2,94,00,000 and also a claim for notice pay, compensation and gratuity in the sum of approximately Rs. 1,00,00,000. The workmen were very keen to restart the undertaking and had approached the appropriate authorities of the State and Central Governments in that behalf. An exhaustive viability study had been made by the Ahmedabad Textile Industry Research Association which had concluded that the Jaipur unit was technically viable. The workmen were confident that a viable scheme would be....
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....rdinary course. The sixth, respondent had, therefore, a direct interest in the subject matter of the suit, limited though it was to the sale of the mortgaged and hypothecated property, and it was, therefore, a necessary party to the suit. We shall consider the relevant judgments. We think it necessary to go first to the basics. We asked Mr. Shah, who appeared on behalf of the sixth respondent, as to whether the sixth respondent could help in answering the issues in the suit; he, fairly and quite rightly, stated that it could not. He also rightly stated that the sixth respondent could not prevent a decree from being passed in favour of the appellants. His submission, however, was that since all the assets of the first respondent were secu....
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....claim that it is a necessary party to the suit. It is not even a proper party thereto. In this behalf, we may refer to the judgment of the Supreme Court in Udit Naraih Singh v. Board of Revenue, AIR 1963 SC 786. The Supreme Court said that a necessary party was one without whom no order could be made effective and a proper party was one in whose absence an effective order could be made but whose presence was necessary for a complete and final decision on the question involved in the proceeding. The sixth respondent does not satisfy either requirement. On principle, therefore, the sixth respondent is neither a necessary nor a proper party to the suit. The Supreme Court was considering a winding up proceeding in Workmen of Rohtas Industrie....
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....a precedent. Whether the company's assets are sufficient to meet all the liabilities is a matter which is yet to be seen and this court really intended to say that there were other assets against which the financial institutions could pitch their claims". In our view, therefore, neither of these orders can be availed of by the sixth respondent. In National Textile Workers' Union v. P. R. Ramakrishnan, [1983] 53 Comp Cas 184 (SC); AIR 1983 SC 75, trade unions had made a claim to be made parties to a winding up petition but, at the hearing before the Supreme Court, "it was conceded on behalf of these two unions that they were not pressing their applications for being added as parties and they were claiming only the right to appear and be h....