TaxTMI 
TaxTMI 
2011 (10) TMI 511
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....ated 20.12.1993. 3. On the other hand, the unit of respondent No.1(for short 'the Company') was taken up by the Haryana Financial Corporation in exercise of the powers conferred under Section 29 of the State Financial Corporation Act, 1951, on account of defaults committed by it in not discharging its liability. The respondent-Company was also ordered to be wound up on 4.2.1994 and the Official Liquidator attached to this Court, had taken over the assets of the Company. 4. In the process of settling the claim of secured creditors, the claim of the workmen was ordered to be satisfied on pari passu basis by the learned company Judge in his order dated 10.8.1999. The Corporation deposited the payment of said compensation on pari passu basis. The appellants filed an appeal against the said order passed by the learned Company Judge for the reason that the appellants have not been heard before passing such order. Such appeal was decided on 3.10.2000, when the following order was passed:- "Learned counsel appearing on behalf of the applicant-appellants prays for permission to withdraw the appeal and the application for condonation of delay in filing the appeal, with liberty to mo....
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....ration have to be paid in priority, notwithstanding any other law in force, which includes the provisions in the Act i.e. Section 14-A. It is contended that keeping in view the constitutional scheme, if two Central Statutes have been given overriding effect, it is the latter statute, which prevails, as the legislature, while enacting such latter statute is deemed to have legislated the same, considering the earlier law. 8. Before, we discuss the respective arguments of the learned counsel for the parties, certain statutory provisions are required to be reproduced:- "Section 46B of the State Financial Corporation Act, 1951 (w.e.f. 1.10.1956 vide Act No. 56 of 1956) Effect of Act on other laws.-The provision of this Act and of any rule or orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in the memorandum or articles of association of an industrial concern or in any other instrument having effect by virtue of any law other than this Act, but save as aforesaid, the provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being applicable....
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....les in winding up of insolvent Companies (1) ** ** ** (3) For the purposes of this section, section 529A and section 530,- (iii) unless the company is being wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company, or unless the company has, at the commencement of the winding up, under such a contract with insurers as is mentioned in section 14 of the Workmen's Compensation Act, 1923 (8 of 1923) rights capable of being transferred to and vested in the workman, all amounts due in respect of any compensation or liability for compensation under the said Act in respect of the death or disablement of any workman of the company; (c) "workmen's portion", in relation to the security of any secured creditor of a company, means the amount which bears to the value of the security the same proportion as the amount of the workmen's dues bears to the aggregate of- (i) the amount of workmen's dues; and (ii) the amounts of the debts due to the secured creditors. 9. We have heard learned counsel for the parties at some length and find that there is no dispute with the argument raised that in case of two Central Statutes coveri....
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....as under:- "To sum up, the personality of the whole statute, be it remembered, has a welfare basis, it being a beneficial legislation which protects labour, promotes their contentment and regulates situations of crisis and tension where production may be imperilled by untenable strikes and blackmail lock-outs. The mechanism of the Act is geared to conferment of regulated benefits to workmen and resolution, according to a sympathetic rule of law, of the conflicts, actual or potential, between managements and workmen. Its goal is amelioration of the conditions of workers, tempered by a practical sense of peaceful coexistence, to the benefit of both-not a neutral position but restraints on laissez faire and concern for the welfare of the weaker lot. Empathy with the statute is necessary to understand not merely its spirit, but also its sense." 13. The Hon'ble Supreme Court in R.S. Raghunath v. State of Karnataka [1992] 1 SCC 335, has held that General Law does not abrogate an earlier Special Law by mere implication. Reference was made to the latin maxim "Generalia specialibus non derogant", i.e. where there are general words in a latter Act, capable of reasonable and sensible ap....
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....ssets of the Sugar Mills pledged by the borrower in favour of the appellant-Bank could be attached and sold for realization of the provident fund dues payable by the employer under the EPF Act. The Court was considering Section 11(2) of the EPF Act inserted vide Act No. 40 of 1973 with a non-obstante clause. The Court referred to earlier judgment in Organo Chemical Industries v. Union of India [1979] 4 SCC 573, and held to the following effect:- "31. We shall now consider the question whether the provision contained in Section 11(2) of the Act operates against other debts like mortgage, pledge, etc. Answer to this question is clearly discernible from the plain language of Section 11. The priority given to the dues of provident fund, etc. in Section 11 is not hedged with any limitation or condition. Rather a bare reading of the section makes it clear that the amount due is required to be paid in priority to all other debts. Any doubt on the width and scope of Section 11 qua other debts is removed by the use of expression "all other debts" in both the sub-sections. This would mean that the priority clause enshrined in Section 11 will operate against statutory as well as non statut....
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....stitutions Act, 1993 (for short the 'DRT Act') and Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the 'Securitization Act'), came up for consideration. The Court found that neither the DRT Act nor the Securitization Act can be invoked for declaring that the first charge is created in favour of Banks, Financial Institutions and other secured creditors for recovery of their dues or enforcement of security, as the case may be as such provision is not in tune with Section 14-A of the Act. It was held that such Acts do not create first charge in favour of the Bank, financial institutions or other secured creditors and the provisions contained in Section 35A of the Bombay Act are not in consistent with the provisions of DRT Act or Securitization Act, so as to attract a non-obstante clause contained therein. 17. Recently in Offshore Holdings (P.) Ltd. v. Bangalore Development Authority [2011] 3 SCC 139, the Constitution Bench of the Supreme Court, while considering the conflict between the Bombay Development Act and the Land Acquisition Act, observed as under:- "64. It is an established principle of law that an Act sho....
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....ven after sale of assets of the Company but the preference is to the Award before the sale of assets of the Company. Such special provisions will prevail over the general provisions of the Companies Act. The expression employer in Section 14A shall include its transferees' such as State Financial Corporation, therefore, in terms of such provisions, the liability accrued prior to transfer of asset has to be met from the asset alone. 20. The Companies Act, 1956 was amended in the year 1985 vide Central Act No. 35 of 1985 whereby Section 529-A and sub section (3) was inserted in Section 529. Such provisions were inserted to protect the rights of the workmen to claim their dues from the assets of the industrial concern having charge in favour of a secured creditor(s). The wages or the salary payable to the workmen in the absence of the provisions of Section 529A would not get preferential payment in the event of sale of the assets secured by the secured creditors. But in respect of the dues of the workmen on account of loss of life during the course of employment, Section 14A protected the rights of workmen. The provisions of Section 529A if strictly applied acts to the detriment of....