Raman Kumar Suri v. Assistant Collector and Ors

1. Thepresent writpetition hasbeen preferred by the petitioner to assail;

(i) the order dated 30.03.2013-which is the notice issued by the office of S.D.M. (CivilLines) to the petitionerrequiring the petitioner to deposit an amount ofRs.5,92,665/-;

(ii) the recovery certificate dated 08.12.2012 issued by the Joint

Labour Commissioner (District West) for the amount of Rs.5,92,665/towards the awardedamountpayable to five workmen, and; 2013:DHC:7653

(iii) the order dated 27.11.2012 issued by the Assistant Labour

Commissioner (West) under Section 33-C(l) of the Industrial Disputes Act, 1947 computing the amounts due to the five workmen as follows: "7. Shri Santosh Kumar Mishra Rs. 1,18,531/-

2. Shri Imran Rs. 118,531/-

5. Shri Ram Prakash Rs. 1,18,531/-

4. Shri Sarovar Jha Rs. 1,18,531A

5. Shri Amrit Singh Rs. 1,18,531/- Total Rs. 5,92,655A

2. The case of the petitioner is that the petitioner is an ex-Director of M/s Kalon Engineering Pvt. Ltd. The petitioner submits that the factory of the said company was closed due to financial problems. The submission of the petitioner is that the petitioner is not personally liable for the amounts owed by the said company to the respondent workmen. It is claimed that the petitioner was not personally made party before the Labour Court, wherein the liability ofthe company was determined.

3. The petitioner disclosed in the writ petition (in ground 'T') that the asset of the company had been sold to settle the dues of the secured creditors, namely the State Bank of India. By order dated 01.05,2013, this Court required the petitioner to file an affidavit explaining as to how the funds received by the petitioner on account of sale of the property of the company had been dealt with. The petitioner has filed the affidavit in pursuance of the said direction.

4. In the said affidavit, the petitioner claims that the said company had obtained a loan from State Bank of India for Rs.80 Lakhs by mortgage of property bearing Shed No.14, SFS, DSIDC Industrial Complex, Rohtak Road, Delhi -110041. State Bank of India initiated recovery proceedings under Section 19 of the Recovery of Debts Due to Banks & Financial Institutions Act, 1993 before the Debts Recovery Tribunal for Rs.1,01,73,094/- against the said company. The State Bank of India sought to liquidate mortgaged property by invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The same was challenged by the company by filing W. P. (C) Nos. 9158-59/2006. These writ petitions were disposed of by the Court on 25.05.2006. A copy of the order has been produced on record.

5. From the said order, it appears that the petitioner and the company stated that they would pay an amount of Rs.97,40,456.90/- on or before 30.06.2006, which was the one-time settlement amount. The petitioner states that he did not have the requisite funds and borrowed monies from his brother and other relatives. The petitioner deposited an amount of Rs.50 Lakhs in cash towards the loan account of the company with State Bank of India, and a further sum of Rs.22,40,456/- was deposited by cheque issued by the brother of the petitioner. The further claim of the petitioner is that after the property had been released from mortgage by the State Banlc of India, the same was sold for Rs.37,50,000/- to M/s Bimal Polymers Private Limited. The said payment had been received by cheque. The manner of utilisation of the amount of Rs.36,99,550/- has been sought to be explained by the petitioner in Annexure A-5. A perusal of the same shows that the lions share in the said amount, i.e., Rs.32,48,500/- has been utilised for repaying the loan amount taken from Mr. Ajay Suri, the brother of the petitioner. Some amount has also been deposited in the Provident Fund account of the company. The said company also paid some amount for settlement ofthe electricity dues and the property tax dues.

6. The aforesaid disclosure made by the petitioner clearly disclosed that the petitioner has, in fact, siphoned off the asset of the said company. It is shocking to note that the petitioner paid to the State Bank of India a sum of Rs.97,40,456.90/- so as to save its aforesaid property from being sold in auction which, according to the petitioner, was only worth Rs.37.[5] Lakhs. One has to be absolutely naive to accept that the said property was sold by the petitioner for only Rs.37.[5] Lakhs after defraying an amount of Rs.97,40.456.90 to get the properties released from mortgage. It is obvious that the property in question was worth much more than Rs. 97,40,456.90 as, otherwise, the petitioner - while acting for and on behalf of the company, would not have agreed to shell out the said amount to get the property released from mortgage. The conduct of the petitioner amounts to a fraud on the said company and its workmen and other creditors. It appears that the said steps were taken by the petitioner primarily to evade the liability owed to the respondent workman under the award and to other creditors of the company. The petitioner becomes personally liable in these circumstances, as the petitioner has himself claimed to have acted for purpose of sale of the asset of the company after remitting mortgage of payment of Rs.97,40,456.90/- to State Bank of India. This is a fit case of Ufting of corporate veil. I am, therefore, not inclined to interfere in the present writ petition and dismiss the same.