BANK OF INDIA Vs. BINOD STEEL LTD

JUDGEMENT

(1.) THE petitioner, the Bank of India, seeks in this petition under Articles 226 and 227 of the Constitution of India to quash the order of the Sub-Divisional officer, Indore dated 28-1-1976 confirming the order of the Additional tahsildar, Indore, dated 26-11-1975 rejecting its application not to attach the machinery of the M/s. Binod Steel Ltd. Company and directing the recovery of a sum of Rupees 25,765. 78 P. due and payable by the Company to the workers towards their wages for the month of March 1975 by attachment and sale of the machinery.

(2.) THE first respondent M/s. Binod Steel Ltd. Company had borrowed on mortgage of its machinery, a sum of Rs. 33 lacs on various debts from the petitioner Bank. The Company had closed its business on April 11, 1975. The payment of Wages Inspector has raised a demand of Rs. 25,765. 78 P. against m/s. Binod Steel Limited Company towards the amount of wages due and payable by the Company to the workers for the month of March 1975. The amount also includes some compensation payable by the Company. The payment of Wages Inspector moved the Additional Tahsildar, Indore for recovery of Rs. 25,765. 78 P. from M/s. Binod Steel Ltd. Co. having recourse to the provisions of the Land Revenue Code. The Additional Tahsildar took steps to attach the machinery and other moveables belonging to the Company and bring the same for public auction. At that stage the petitioner Bank objected to the recovery proceedings initiated by the Additional Tahsildar under the Land revenue Code. The ground on which the petitioner Bank objected to the recovery proceedings is that it is a secured creditor having obtained a pledge or mortgage of all the moveables belonging to the Company and the revenue authorities or any other creditor has no right to proceed against the machinery and other moveables of the Company without satisfying the claim and debt of the Bank. The Additional Tahsildar dismissed the objection raised by the petitioner and proceeded to attach the moveables and bring the same for sale. Aggrieved by the decision of the Additional Tahsildar, the petitioner appealed to the Sub-Divisional Officer, Indore, who held that the Additional Tahsildar was competent to attach and auction the moveable property of M/s, Binod Steel limited Company and the petitioner Bank is competent to receive any balance amount of the sale proceeds after satisfying the debt of the workers. Hence this writ petition.

(3.) THE sum and substance of the contention of Shri K. A. Chitale, learned counsel for the petitioner is that the petitioner is the pledgee or mortgagee of the machinery and other movables of the Company and the possession of such moveables after the pledge or mortgage is for or on behalf of the Bank and, therefore, no proceedings by any creditor against the Company can be made in respect of the pledge of the machinery under other modes and consequently the orders of the Additional Tahsildar and that of the Sub-Divisional Officer are without jurisdiction and void and, therefore, liable to be quashed. This claim of the petitioner is resisted by the learned Deputy Government Advocate contending inter alia that the revenue authorities are empowered to have resort to the provisions of the Land Revenue Code in respect of the amount of Rupees 25,765. 78 P. due to the workers from the Company and the petitioner-Bank is not entitled or justified to raise any objection and it is entitled only to the excess and surplus sale proceeds after satisfying the debt due to the workers.