State Bank of India vs Titaghur Jute Factory PLC

Ajoy Nath Ray, J.—This is an application on behalf of eleven out of 12 unions of workers of Titaghur directed towards the stay of a notice published in the Statesman of January 10, 1993, which was inserted by Joint Receivers pursuant to an order towards the sale of company property.

The owner of the property is the first Defendant in the suit.

The suit is one by the State Bank of India which had allegedly lent and advanced moneys on security.

It is clear law, in my opinion, that in a suit by a creditor against a debtor, the workers of the debtor or the unions of such workers are not necessary parties. If the contrary view is to be held, then it would require a pronouncement of law which would be at variance with the entire body of the established commercial law now prevalent in India, I would not like to be the first person to make such breaches in the well-knit fabric of the laws of our country.

The question of participation of workers in the matter of passing of a discretionary order for winding up of a company, however, is quite another question, and the same is authoritatively settled by a 3: 2 decision of a Five Judge Bench of the Supreme Court of India in the case of National Textile Workers'' Union and Others Vs. P.R. Ramakrishnan and Others, . If, however, on the basis of the said authority every creditor were to consider the possibility of fighting battle with every labourer of every debtor, then nobody would have funds to lend to anybody else. For in that case, there would be no knowing as to how the lent money would end up, whether by way of recovery, or for the purpose of saving the fate of the debtor''s labourers, with whom the creditor never had any intention to create any legal relationship.

On the point of absence of locus standi alone therefore this application is summarily rejected with costs assessed at 200 G. Ms.

All parties concerned to act on a signed copy of the minutes of this dictated order on the usual undertaking.