Telangana High Court
M/S Dewan Bahadur Ramgopal Mills … vs The State Of Telangana on 29 April, 2025
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION No. 33361 OF 2023
O R D E R:
Heard Sri A.K. Jayaprakash Rao, learned counsel
for petitioner and learned Government Pleader for Labour on
behalf of Respondents 1 and 2 and Sri K.V. Satya Ramachandra
Rao, learned counsel on behalf of the 4th respondent.
2. The Writ Petition filed by Petitioner challenging the
proceedings initiated by Respondent No.2 under Section 33-C(1)
of the Industrial Disputes Act, 1947 (for short, ‘the Act’) against
Petitioner and its properties in CRLMP No. 1722 of 2023 on the
file of the Hon’ble XII Additional Chief Metropolitan Magistrate,
City Criminal Courts at Nampally, Hyderabad. These
proceedings were initiated for recovery of a sum of
Rs. 30,38,00,000/- (Rupees thirty crores thirty-eight lakhs only)
which was declared payable to the employees of Petitioner under
a Certificate for Recovery No. B/55/2021 dated 03.01.2023.
This certificate was issued based on an alleged settlement
between various recognized Employees’ Unions and Respondent
No.3. Petitioner contends that these proceedings are illegal,
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arbitrary, and not maintainable against Petitioner, hence, seeks
to quash them.
According to Respondent No.2, Petitioner company,
DBR Mills, located in Tank Bund area of Hyderabad, started its
operations in 1920 and later, faced financial difficulties. It was
declared as Sick Industrial Company under Section 15(1) of the
Sick Industrial Companies Act, 1985. After a series of
litigations, Respondent No.3 entered into a Development
Agreement with Petitioner on 15-03-1999, where Respondent
No.3 allegedly undertook to settle monetary claims of workers of
the mill, as per the terms of the agreement. Furthermore,
Respondent No.2 contends that under two registered documents
executed by Mrs. K.S. Chenai (bearing Document No.1349 of
2009 dated 27-10-2006 and Document No.1350 of 2009 dated
28-10-2006), Respondent No.3 acquired Acs.6.00 guntas of
Petitioner’s land, making it the absolute owner, with full rights
to deal with it. Respondent No.2 also claims that Respondent
No.3, exercising its ownership over the land, entered into a
statutory settlement with the workers of DBR Mills under
Section 12(3) of the Industrial Disputes Act, 1947.
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On 07-03-2017, Respondent No.3 allegedly entered
into a settlement with several trade unions of DBR Mills,
wherein Respondent No.3 agreed to pay Rs. 7,00,000/- each to
434 workers, amounting to Rs.30,38,00,000/- in total. However,
Respondent No.3 allegedly failed to comply with the terms of
this settlement. Following a representation from 142 out of the
434 workers requesting recovery of amounts payable to them
under the settlement, Respondent No.2 issued Certificate for
Recovery of Rs. 30,38,00,000/- against Respondent No.3 and
filed CRLMP against Petitioner (Opposite Party No.1) and
Respondent No.3 (Opposite Party No.2) for recovery of amount
as prescribed under Section 421(1) of the Criminal Procedure
Code. It is important to note that Government of Andhra
Pradesh amended Section 33-C of the Industrial Disputes Act,
empowering the Chief Judicial Magistrate or Chief Metropolitan
Magistrate to recover money owed to workers as the result of a
settlement of an industrial dispute, in the same manner as a
fine imposed by criminal courts. Under Section 421(1) of the
Criminal Procedure Code, procedure for recovering such fine
amounts includes issuance of a warrant for attachment and
sale of any immovable property belonging to the offender.
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Respondent No.2 invoked this section to recover settlement
amount from the properties of Petitioner company, despite
Petitioner being neither a party to settlement nor to proceedings
before Respondent No.2. Petitioner contends that proceedings
initiated against it are illegal because it was not involved in the
settlement between Respondent No.3 and the workers and was
never made a party to the related agreements.
Petitioner submits that Respondent No.2 wrongly
presumed the validity of Development Agreement dated
15-03-1999 and the rights of ownership conferred upon
Respondent No.3. It is alleged that Respondent No.2 did not
verify the legality of the documents presented by Respondent
No.3 and failed to seek Petitioner’s response before making such
a presumption. Moreover, Petitioner asserts that the alleged
development agreement was superseded by a Compromise
Petition filed in O.S.No.69 of 2003, which led to a Compromise
Decree in 1999. This decree, however, never attained finality
and was challenged for over 11 years before being dismissed in
2015. An appeal filed by Respondent No.3 was also dismissed
by this Court in 2022, with strong remarks against Respondent
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No.3 for misleading the court. The Supreme Court similarly
rejected Respondent No.3’s Special Leave Petition in 2022,
further negating Respondent No.3’s claim over the land.
Additionally, Respondent No.2 is not competent to
adjudicate on the ownership rights over the land of Petitioner,
and the agreements entered into by Respondent No.3 with
various unions of DBR Mills under Section 12(3) of the
Industrial Disputes Act are also questioned. Petitioner argues
that none of the Unions involved in the alleged settlement had
the authority to represent the workers, as the officially-elected
unions had been representing the workers and staff of DBR
Mills since 1987. Furthermore, Petitioner asserts that no
meeting with the Joint Commissioner of Labour (TCs) was
attended by them and no third party had the authority to
represent DBR Mills. Therefore, the settlement, even if executed,
is not legally-binding on Petitioner.
In a memorandum dated 20-03-2017, Petitioner
raised strong objection to the Joint Commissioner of Labour
(TCs) regarding settlement agreement, clearly stating that DBR
Mills was not a party to the agreement and that any such
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settlement was made by unauthorized third parties. Petitioner
further emphasizes that Respondent No.2 failed to verify the
legitimacy of Respondent No.3’s representation of Petitioner
company before entering into any negotiations or settlements.
As a result, it is argued that Respondent No.2 violated basic
principles of natural justice and it amounts to misuse of
authority.
Respondent No.2 is also criticized for issuing a
verification report dated 25-05-2017, claiming that 434
employees were working at DBR Mills at the time of closure in
May 1991 and awarding Rs. 7,00,000/- per employee, totaling
Rs. 30.38 crores. Despite Petitioner being neither a party to the
agreement nor to the subsequent proceedings, they were
wrongfully named as the first respondent in CRLMP
proceedings. This is seen as an attempt to cover up the illegality
of Respondent No.2’s actions in allowing an unauthorized
settlement between third parties and unions without consulting
or informing Petitioner.
Furthermore, workers from the Union of DBR Mills
Displaced Workers Association filed a petition under Section
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33-C(5) of the Industrial Disputes Act, claiming back wages for
18 years. This Petition was dismissed by this Court on
13.07.2021 and the workers subsequently filed Writ Petition No.
29970 of 2021. Some of the Unions involved in the settlement
filed separate petitions in 2019 claiming payments as agreed by
Respondent No.3, but Petitioner did not sign any settlement
under the Industrial Disputes Act. Petitioner argues that it was
wrongfully included in CRLMP proceedings.
Given these circumstances, Petitioner contends that
CRLMP No. 1722 of 2023 proceedings before the Hon’ble XII
Additional Metropolitan Magistrate at Hyderabad are illegal,
arbitrary, and initiated without following due process of law.
3. In the counter filed by the 2nd respondent, it is
stated, M/s DBR Mills Limited entered into a Development
Agreement dated 15-03-1999 in favour of M/s Ashish
Developers and Builders (P) Limited, which is now known as
Kshitij Infraventures Pvt. Ltd. (formerly Maheshwari
Megaventures Ltd.). Under the terms of the Development
Agreement, it was agreed that either the management of
M/s DBR Mills Limited or the developer, before undertaking any
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development activities on the property in question, must resolve
the claims of the workers. However, if the developer is to settle
the claims of the workers, this responsibility lies with the
developer and must be settled in the account of M/s DBR Mills
Limited. Clause (6) of the Agreement dated 15-03-1999 between
Respondents 1 and 2 outlines this arrangement. Furthermore,
Respondent No. 3, in accordance with the Development
Agreement, informed the Commissioner of Labour about their
undertaking to settle the workers’ claims, subject to mutually-
agreed terms and conditions. This action, taken in the interest
of the workers, was in line with the prolonged litigation and
difficulties faced by the workers. Thus, Petitioner cannot deny
its joint and several liabilities and responsibilities in light of the
actions taken by Respondent No. 3. This Respondent submits
that the landed property bearing Survey Nos. 157/1 to 3, 158/1
& 2, 159/1 and 28, 160/1 to 28, and 161/3 to 7, covering an
area of Acs.34 situated in Elchiguda, Bakaram Village was
allocated to Mrs. Khorshed Shapoor Chenai pursuant to the
compromise decree dated 20-10-1967 in the family partition
suit O.S. No. 38 of 1967 before the learned Chief Judge, City
Civil Court, Hyderabad. Prior to the family partition decree, the
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ancestors of Mrs. K.S. Shenoy had leased an extent of Acs.26.00
of land, part of the aforementioned survey numbers to M/s DBR
Mills Limited under a lease deed dated 17th Aban 1328 Fasli
(equivalent to 1918 A.D.). In 1994, M/s DBR Mills stopped
paying rent to Mrs. K.S. Chenai, claiming ownership of the
property under the Inams Abolition Act. This led to Mrs. Chenai
filing a civil suit for eviction and damages against M/s DBR
Mills (O.S. No. 1201/1995). During the pendency of the suit,
Mrs. Chenai entered into an agreement of sale dated
03-12-1998 with M/s Ashish Developers and Builders Pvt. Ltd.
(subsequently merged with M/s Maheshwari Megaventures Ltd.
as per the orders of this Court dated 22-03-2005 in C.P. Nos.
201, 202, and 203 of 2004). After the various litigations
concerning the mill land were resolved, culminating in the
dismissal of SLP Nos. 13630-13633/05 and SLP 19446/05
before the Hon’ble Supreme Court, Mrs. K.S. Chenai executed
two registered documents in favour of M/s Maheshwari
Megaventures Ltd. (now M/s Kshitij Infraventures Ltd.)
conveying an area of Acs.6.00 of land, registered under
documents No. 1349/2009 dated 27-10-2006 and No.
1350/2009 dated 28-10-2006. These documents were registered
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by the authorities as per the order of this Court in Writ Petition
No. 25181 of 2005 dated 01-02-2007 and in Contempt Case No.
829/2009 dated 08-04-2009. As a result of the Supreme Court’s
final judgment, M/s Maheshwari Megaventures Ltd. (currently
known as Kshitij Infraventures Pvt. Ltd.) has full ownership and
possession of the 6-acre land and is free to deal with it as it sees
fit.
It is stated, though Petitioner is not a party to the
certificate for recovery amount nor to the statutory agreement,
the employees involved were employed by M/s DBR Mills
Limited and the employee-employer relationship exists until the
full and final settlement of the workers’ claims. Respondent No.
3, who entered into a development agreement with M/s Ashish
Developers & Builders (P) Ltd. and later with M/s Maheshwari
Megaventures Ltd. (now Kshitij Infraventures Pvt. Ltd.), is
bound to the settlement. One of the clauses of the Development
Agreement grants M/s Ashish Developers and Builders the
liberty to enter into any statutory agreements necessary for the
smooth functioning and completion of the project. The
Petitioner, after completion of the project, is expected to receive
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more than 49% share in the project, along with other amenities.
According to Section 421(1) of the Criminal Procedure Code,
which prescribes the procedure for the recovery of fines imposed
by criminal courts, the Court may issue a warrant for levy of
amount through attachment and sale of any immovable
property belonging to the offender. As the project is a joint
venture under a development agreement, all parties to the
property must agree to the extent of the share of the offending
party (i.e. Respondent No. 3). Thus, Petitioner is a necessary
party in the petition filed before the Criminal Court.
It is also stated that these issues can be raised
before the Criminal Court with all material facts and evidence.
In fact, Petitioner is liable to clear full and final settlement for
the workers. Respondent No. 3 has come forward to implement
this settlement on behalf of Petitioner. Settlement under Section
12(3) of the Act, Condition 11, which was reproduced as
Paragraph (m) of this Affidavit, clearly states that the workers
have undertaken to file necessary affidavits in Writ Appeal No.
391 of 2008, Writ Petition No. 10801 of 2005 and Writ Petition
No. 11349 of 2014, which are pending before this Court.
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It is stated, Petitioner is evading the settlement of
statutory dues to the employees. Despite the Labour
Department and Respondent No. 3 coming forward to settle the
dues, Petitioner failed to cooperate. Furthermore, under the
BIFR rehabilitation scheme, Petitioner is obligated to settle both
the statutory dues and the creditors’ dues, including those of
the workers, which remains an ongoing obligation. As such,
Petitioner may agitate this issue before the Criminal Court with
all available material documents to facilitate their release in the
case.
4. Respondent No. 4 in the counter-affidavit states
that management of petitioner company was taken over in 1985
by S. Krishnam Raju, who serves as the Chairman and
Managing Director (CMD). It was soon discovered that petitioner
company’s mills were under the purview of the Board for
Industrial and Financial Reconstruction (BIFR). It is clarified
that petitioner company has not been closed and for all legal
purposes, it continues to operate. This Respondent further
affirms that the employees of petitioner company are members
of the 4th Respondent Association. The petitioner company, a
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textile mill established in 1920, had flourished in the mid-1980s
with a workforce of about 5000 employees working in three
shifts. However, the company began to experience a downfall
due to various reasons shortly thereafter. This Respondent
provides information regarding a Development Agreement
executed by M/s DBR Mills Ltd. in favour of M/s Ashish
Developers and Builders Pvt. Ltd. (now known as Kshitij
Infraventures Pvt. Ltd.) on 15.03.1999. The agreement
stipulates that both the management of DBR Mills and the
developer are responsible for settling workers’ claims before
proceeding with the development activities on the subject
property. Should the developer settle these claims, it would do
so on behalf of DBR Mills Ltd., as per Clause (6) of the
Development Agreement. Therefore, Respondent argues that the
petitioner cannot deny its joint and several liabilities in the
settlement under Section 12(3) of the Industrial Disputes Act,
1947.
It is stated, the landed property, bearing Survey
Numbers 157/1 to 3, 158/1 & 2, 159/1 and 28, 160/1 to 28,
and 161/3 to 7, measuring a total area of 34 acres, is located at
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Elchiguda, Bakaram Village which was allotted to M/s
Khorshed Shapoor Chenai through a compromise deed dated
20.10.1967, following a family partition suit O.S. No. 38 of 1967
in the City Civil Court, Hyderabad. Prior to the partition decree,
the ancestors of Smt. K. S. Chenai had leased Acs.26.00 of this
land to M/s DBR Mills Ltd under a lease deed dated 17th Aban
1328 FASLI (corresponding to the year 1918 AD). In 1994, DBR
Mills ceased making rent payments to Mrs. K.S. Chenai,
claiming ownership of the land under the Inams Abolition Act,
leading to the filing of a civil suit for eviction (O.S. No.
1201/1995). In the course of the litigation, Mrs. Chenai entered
into an agreement to sell the property to M/s. Ashish
Developers and Builders Pvt. Ltd., which later merged with M/s.
Maheshwari Megaventures Ltd (now Kshitij Infraventures Pvt.
Ltd.).
Further, after finalization of litigation surrounding
the mill land, including dismissal of SLP Nos. 13630, 13633/05,
and SLP 19446/05, Mrs. K.S. Chenai executed two registered
documents in favor of M/s. Maheshwari Megaventures Ltd,
conveying 6 acres of land, as per documents 1349/2009 (dated
15
27.10.2006) and 1350/2009 (dated 28.10.2006). These
documents were registered in accordance with the orders of the
Hon’ble High Court of Andhra Pradesh in W.P. No. 25181 of
2005 (dated 01.02.2007) and the directions in Contempt Case
(CC) No. 829/2009 (dated 08.04.2009). As per the final
settlement of this dispute, M/s. Maheshwari Megaventures Ltd
(now Kshitij Infraventures Pvt. Ltd.) holds absolute ownership
and possession of the said 6 acres of land and is free to deal
with the property. It is asserted that although petitioner is not
a direct party to the certificate for the recovery of amounts nor a
party to the statutory settlement agreement, the workers
involved are employees of the petitioner company. The
employer-employee relationship remains intact until full and
final settlement of the workers’ dues. Respondent No. 3 had
come forward to facilitate settlement of workers’ dues on behalf
of petitioner company under a development agreement between
M/s Ashish Developers and Builders Pvt. Ltd., later merged into
M/s. Maheshwari Megaventures Ltd (now Kshitij Infraventures
Pvt. Ltd.). One clause of the agreement permits the developer to
enter into statutory agreements for the smooth functioning and
completion of the project. Upon completion, petitioner company
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is entitled to receive more than 40% of the share in the project
along with other benefits. This Respondent highlights that
Section 421(1) of the Criminal Procedure Code, dealing with
recovery of fines, allows the court to issue a warrant to levy
amounts via the attachment and sale of immovable property
owned by the offender. Therefore, as petitioner holds a share in
the project, it must be made a party in any proceedings before
the criminal court related to this matter. It is reiterated that
petitioner is obligated to clear workers’ dues. However,
Respondent No. 3 has come forward to handle the
implementation of the settlement on behalf of the petitioner
company. This Respondent asserts that settlement under
Section 12(3) of the Industrial Disputes Act, 1947, clearly
stipulates that the workers have agreed to file necessary
affidavits, including W.A. No. 391/2008, W.P. No. 10801/2005,
and W.P. No. 11349/2014, all pending before this Hon’ble
Court.
It is argued that petitioner is avoiding the
settlement with the workers despite the fact that both the
second and third Respondents have come forward to settle the
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statutory dues. The Respondent points out that prior to this
settlement, B. Sayanarayana, the President of the 4th
Respondent, and 216 workers had filed a case under the
Payment of Wages Act before the relevant authority, which
allowed the claim of 69 workers. Aggrieved by the decision, the
petitioner filed CMA No. 64 of 2017 before the Chief Judge, City
Civil Court, Hyderabad. During the proceedings, the petitioner
presented a memo and a copy of the 12(3) agreement and
communication between the Labour Commissioner and Kshitij
Infraventures Pvt. Ltd., indicating that the 4th Respondent and
the workers had entered into a Memorandum of Settlement
under Section 12(3) of the Industrial Disputes Act on
07.03.2017. According to the settlement, the workers agreed to
receive Rs. 7,00,000 each as full and final settlement. The
petitioner acknowledged this in cross-examination in M.P. No. 1
of 2013 before the Additional Labour Court-cum-Industrial
Tribunal, where it was also admitted that the petitioner had not
challenged the agreement entered into by the third Respondent
with the workers in any court of law. Furthermore, the
petitioner admitted the existence of a development agreement
between the petitioner and the third Respondent.
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5. Petitioner filed reply to counter of the 4th
respondent stating that Respondent No.4 is not recognized as a
union of petitioner company. It was formed in 2009, long after
the closure of the factory in 1991. All employees are already
represented by other recognized unions in various forums such
as the BIFR, courts, and other judicial forums. Petitioner
company was taken over by the present management in 1985-
86 at the direction of the State Government to revive the
company, which was considered sick at that time. It was later
registered under SICA as BIFR Case No.109/1987. The
company’s operations were suspended in May 1991 following an
illegal disconnection of power by APSEB in violation of
Government G.O.Ms.No.498 dated 21.11.1985. The legality of
the closure of the mill is currently subjudice.
The employees of Petitioner have been represented
by their respective unions since 1987 in BIFR, AAIFR, and in
various court proceedings. In a related case ie. Writ Petition No.
11173 of 2007, this Court ordered Petitioner to deposit Rs. 50
lakhs towards the dues of workmen as decided by BIFR. This
amount was deposited with IFCI (OA of BIFR) in 2008 and it
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remains with IFCI available to be claimed by the workmen. The
company is not liable to pay any additional amount beyond
what has already been agreed upon by BIFR and ordered by this
Court. This sum has been lying with IFCI for over 16 years and
none of the employees or the unions have challenged the
decisions of BIFR or the High Court nor have they filed claims
for additional dues before BIFR, IFCI, or NCLT.
Petitioner denies the claims made by the
Association that its members are employees of the company.
Petitioner challenges the authenticity and validity of the
membership claims of the Association and insists that they be
held strictly accountable to provide evidence for their
membership and any claims made on behalf of the company.
Regarding the Agreement between petitioner and
Respondent No.3, dated 15.03.1999, it is stated that this
agreement was never acted upon. Moreover, it was overridden
by the compromise in OS.No.69 of 2003 between the same
parties. Even if the agreement dated 15.03.1999 were valid, it
did not authorize the 2nd party developer (Respondent No.3) to
negotiate or settle dues of the banks or employees of petitioner
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company. The right to negotiate these dues was solely the
prerogative of petitioner company. Therefore, the claims made
by Respondent No.3 in the alleged memorandum of settlement
under Section 12(3) of the Industrial Disputes Act, asserting
their rights to negotiate and settle the dues of petitioner
company, are completely false, baseless, and not binding on the
petitioner.
Petitioner refers to a compromise dated 08.03.1999,
where they agreed to allocate Acs.6.00 of land to the 2nd
plaintiff in the eviction suit O.S.No.1201 of 1995 (new OS No.69
of 2003). This compromise was ordered by the court on
03.04.2003, but later remanded by this Court in CCCA No. 329
of 2003 on 12.04.2004 for payment of court fees by Respondent
No.3. The compromise was finally rejected on 28.04.2015 for
non-payment of court fees. In a later judgment, this Court in
CCCA No. 66 of 2020 filed by Respondent No.3 concluded that
compromise was never valid and no rights were conferred upon
Respondent No.3 concerning Acs. 6.00 of land. The orders of the
Hon’ble Supreme Court dated 18.04.2022 upheld the decision,
and the alleged documents executed by Mrs. K.S. Chenai in
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2009 (documents 1349/2009 and 1350/2009) claiming rights
over the land are invalid and have no legal standing.
Petitioner emphasizes that the claims made by
Respondent Nos. 3 and 4 regarding the validity of the
compromise and the 3rd respondent’s ownership and
possession rights over Acs. 6.00 of land are misleading and
amounts to contempt of court. These claims violate the court’s
orders and the parties involved are liable for criminal action due
to misrepresentation and making false statements on oath. It is
argued that memorandum of settlement under Section 12(3)
signed between Respondent No.4 and petitioner Association
(which is an unrecognized union) along with five other old
unions, was executed without the knowledge of petitioner
company. This settlement was made with malicious intent of
signing unions to extract money from Respondent No.4 and
facilitate his attempts to unlawfully seize the property of
Petitioner. Upon discovering the settlement, Petitioner
addressed a letter to the Joint Commissioner of Labour (TCS),
stating that none of the parties involved had the authority to
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make any promises or meddle with the assets or liabilities of the
company.
It is stated, the Recovery Petition filed by
Respondent No.3 is not maintainable because Petitioner was not
a party to Memorandum of Settlement or the recovery order
passed by the 2nd respondent. Furthermore, the claims for dues
by employees/unions have already been addressed by BIFR,
and as per the orders of this Court in Writ Petition No. 11173 of
2007, petitioner deposited Rs. 50 lakhs in 2008, which is still
held by IFCI (OA of BIFR) for the last 16 years. None of the
unions or employees have challenged the BIFR or this Court’s
orders or made any claims for additional amounts before BIFR,
IFCI or NCLT.
6. The core issue in this case is whether Petitioner can
be held liable for the sum declared payable to the employees
under the settlement entered into by Respondent No. 3.
Petitioner denies any responsibility for the settlement, arguing
that it was not a party to the agreement nor to the proceedings
leading to issuance of Certificate for Recovery. The primary
issue in this Writ Petition is whether the proceedings initiated
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by Respondent No. 2 under Section 33-C(1) of the Industrial
Disputes Act for the recovery of workers’ dues are legally valid.
7. It is evident from the pleadings of Respondents 2
and 3 that development agreement between DBR Mills and M/s
Ashish Developers & Builders Pvt. Ltd. (now Kshitij
Infraventures Pvt. Ltd.) explicitly outlines the responsibility for
settling workers’ claims. The agreement stipulates that the
developer, Respondent No. 3, undertook to settle workers’
claims on behalf of DBR Mills. Clause (6) of the development
agreement specifically provides that management of DBR Mills
or the developer must resolve the claims of workers before
undertaking any development activities. Therefore, Respondent
No. 3’s role in settling workers’ claims cannot be disregarded.
Moreover, the legal framework under Section 33-C(1) empowers
the Chief Judicial Magistrate or Chief Metropolitan Magistrate to
recover sums payable to workers under a settlement in the
same manner as a fine imposed by a criminal court. Section
421(1) of the Criminal Procedure Code further supports the
recovery mechanism. The settlement reached between
Respondent No. 3 and workers, under Section 12(3) of the Act
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was a statutory settlement and workers’ dues were clearly
identified in the settlement. While Petitioner was not a direct
party to this settlement, the relationship between workers and
Petitioner remained intact and the obligations arising from the
employment contract could not be avoided by Petitioner,
especially given the terms of the development agreement. The
settlement under Section 12(3 was made in good faith to resolve
long-pending workers’ claims and Petitioner cannot evade its
responsibility by relying on technicalities related to the
agreement.
8. The issuance of Certificate for Recovery of
Rs. 30,38,00,000/- under Section 33-C(1) is a procedural
mechanism available for recovery of dues owed to workers
under a statutory settlement. Section 33-C(1) authorizes the
authority to issue a certificate for recovery in the same manner
as a decree of the Court. Petitioner’s argument that it is not a
party to the settlement and therefore, cannot be subject to
recovery proceedings is unsubstantiated. The workers are
entitled to the dues owed to them and issuance of recovery
25
certificate was a necessary step in ensuring that they receive
their rightful compensation.
9. In the light of these provisions, this Court finds that
proceedings before Respondent No. 2 are not illegal per se. The
fact that Petitioner was not a direct party to settlement does not
preclude the possibility of its involvement in the recovery
process, especially considering that workers involved were
employed by Petitioner and settlement pertains to claims arising
from their employment. It is also relevant that Petitioner and
Respondent No. 3 had a joint responsibility under development
agreement for resolving workers’ claims, which implies that
Petitioner cannot evade liability for settlement.
10. Furthermore, while Petitioner raises concerns
regarding the legality of land transactions and the authority of
unions involved in the settlement, these issues are peripheral to
the central matter of workers’ claims and recovery proceedings.
The ownership dispute over the land as well as Petitioner’s
involvement in the agreements, is a separate legal issue that
does not negate Petitioner’s obligation to settle workers’ claims.
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11. For the reasons outlined above, this Court finds no
merit in Petitioner’s claims. The Writ Petition is therefore,
dismissed. No costs.
12. Consequently, Miscellaneous Applications, if any
shall stand closed.
——– —————————–
NAGESH BHEEMAPAKA, J
29th April 2025
ksld