MANISNH L BHAKTA Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) THE petitioners in Writ Petition Nos. 19 of 1985, 20 of 1985, 21 of 1985, 22 of 1985 and 228 of 1985 have filed these writ petitions against the impugned notices dated 28th November, 1984 issued by respondents Nos. 1 to 3 on the instructions of and at the behest of respondent No. 4. In the said notices, the petitioners were called upon to pay an aggregate sum of Rs. 9,48,805. 50 ps. as a due payable by a Company The Elphinstone Spinning and Weaving Mills Co. Limited" as employers contribution to the Employees State Insurance Fund, being the Directors of the said Company at the relevant time. By the said notices, the petitioners were also threatened that failure on the part of the petitioners to pay the aforesaid amount mentioned in the said notices, the said amount shall be recovered from the petitioners personal assets as arrears of land revenue. Since all these demands are common demands and made against the present petitioners being the Directors of the Company, all these matters heard together and are being disposed of by the common judgment. The few facts which are material from the point of view of deciding these writ petitions are as under.

(2.) THE petitioners were the Directors of the Elphinstone Spinning and Weaving Mills Co. . Ltd. , registered under the Companies Act of 1956. It appears that prior to 1981, The said company was in financial difficulties due to the position in the Textiles Industry for various reasons such as recession in the market, increase in prices of raw materials and the said position further deteriorated because of the strike which commenced from 18th January, 1982 and is not called off even today. Thereafter the management of the said Textile Mill run by the Company was taken over by the National Textile Corporation (South Maharashtra) Limited, the respondent No. 5 herein in this petition by the Textile Undertaking (Taking Over of Management) Act, 1983. Incidently, I may mention that the Ordinance and the said Act was challenged in the Writ Petition No. 2401 of 1983 by the Elphinstone Spinning and Weaving Mills Co. Ltd. , before the High Court of Bombay and the High Court by its decision dated 13th June, 1984 struck down the said Ordinance and the Act. Against the said decision, special leave petition was filed by the Union of India and the respondent No. 5 before the Supreme Court and the same is still pending. On 28th November, 1984, the petitioners received notices from Tahsildar, respondent No. 3 demanding amount of Rs. 9,48,805. 50 ps. as Employers Contribution to the Employees State Insurance fund. It was also stated in the said Notices that the failure on the part of the petitioners, to pay the said amount within 20 days the said amount was to be recovered from the petitioners personal assets as arrears towards land revenue. All the petitioners filed the present writ petitions against the said orders of recovery, which are at Ex. B to F, before this High Court. After the receipt of the aforesaid notices, the petitioner in Writ Petition No. 19 replied the same on 18th December, 1984, the petitioner in Writ Petition No. 20 of 1985, Writ Petition No. 21 of 1985 and Writ Petition No. 22 of 1985 replied on 27th December, 1984 while the petitioner in Writ Petition No. 228 of 1985 replied on 7th January, 1985. Though the said reply was given on the various dates, the stand taken by the petitioners more or less was that in view of the decision in (Suresh Tulsidas v. Collector of Bombay and others) reported in 1984 Mh. L. J. 117, the respondents are not entitled to recover the said amount from the petitioners personally as the Directors of the company. The petitioners therefore, requested the respondent No. 4 to withdraw or cancel the aforesaid recovery notices. I may further point out that in para 7 of the said reply, the petitioner in Writ Petition No. 19 of 1985 had also sought personal hearing in the matter. Since there was no response from the respondent No. 4 to the aforesaid reply given by the petitioners, the petitioners have filed the present writ petitions.

(3.) ACCORDING to the petitioners, the arrears of the Employees State Insurance Fund dues, if any cannot be recovered from the Directors of the Company personally, Similarly, the arrears of the Employers Contribution to the Employees State Insurance Fund are required to be deposited under the said Act due from the Public Limited Company which owns and runs the factory cannot be recovered from the personal properties of the Directors of the Company. To support their aforesaid contentions, the petitioners have relied upon the Division Bench judgment of the High Court of Bombay in Suresh Tulsidas v. Collector of Bombay, reported in 1984 Mh. L. J. 117. The petitioners have further contended that in spite of pointed reference to the decision given by the Bombay High Court, the respondents have not taken any cognizance by replying their letters and therefore, the petitioners had no other alternative but to file the present writ petitions. On the other hand, it was strenuously contended on behalf of the respondent No. 4 that the petitioners can ventilate their grievance before the machinery provided under the E. S. I. Act, 1948, instead of filing the present writ petitions. It was further contended on behalf of the respondents that the respondent No. 4 wants to know as to who was the principal employer or the occupier of the said Company at the relevant time. According to the respondent No. 4 all these matters can be decided by the machinery provided under the E. S. I. Act, 1948, if the matter is remanded back to proper forum.