9911796707
TMI Blog2005 (3) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... ere engaged and appointed by M/s. Associate Cement Company Limited and they were working with the said Company for many years. The respondent Company was run and managed by ACC Company Limited and was a profit-making unit. However, the said ACC Company decided to sell the said unit to the respondent by an agreement dated 5-3-1988, along with all the liabilities of about 11,102 workers at the relevant time. After purchasing the unit of M/s. Sevalia Cement Works, the respondent Company was not running the unit and the factory was totally closed from May 1989 and there was no production from that date. The respondent Company has sold away the assets of the Company and the regular wages of the workers were not paid. More than Rs. 10 crores were due and payable by the respondent Company to its workers towards the wages, allowances etc. The respondent Company has made payment to its other Creditors without paying wages to its workers and employees and as per the Provisions of sections 529A and 530 of the Companies Act, 1956, the dues of the workers are having priority over the dues of other Creditors of the Company. The petitioner has, therefore, filed the present petition for recovery o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... five representatives of the Union and three representatives of the respondent Company. The amount of the sale proceeds was to be deposited in this Court and all the workmen would be paid their dues as per the amount drawn in Annexure to the settlement. The respondent Company has also agreed to pay the Provident Fund Contribution up to the cut off date i.e., 31-1-1997 before the authorities to enable the employees to get their P.F. and pension benefits under the Scheme. The respondent Company has also agreed that all the workmen would continue to occupy their respective Quarters till the entire amount was paid to the concerned employees. The respondent Company has also agreed that the Company continue to supply all the necessary amenities i.e., light, water, etc., till the entire dues were paid up to the concerned employees. 4. Based on the aforesaid settlement, this Court has passed an order on 16-12-1997 in Company Petition Nos. 40 to 44, 54 to 70, 76 to 92, 102 to 137, 158 to 213 and 263 to 271 of 1997. The consent terms were placed on record in Company Petition No. 40 of 1997. In view of the said consent terms, the interim relief granted earlier by this Court in terms of para 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sit the amount as per the Schedule fixed, it would be liable to pay interest at the rate of 8 per cent per annum on such belated payment. It was also stated in the said agreement that once the workmen received the payment as per the settlement, they would not have any dispute or objection against other assets of the respondent Company. Along with this agreement, an undertaking was also given by Shri Mayur Amin, the Director of the respondent Company wherein it is stated that under the settlement, on 22-4-1998, the Management, the Workmen and M/s. Punit Corporation entered into a Sale Agreement and thereby parties agreed to dispose of movable and immovable assets of the Company and agreed to purchase the said assets under the Sale Agreement dated 22-4-1998. It was further undertaken that he would comply with each and every terms and conditions of the Sale Agreement dated 22-4-1998 as entered into between M/s. Punit Corporation, Manor Investment Com- pany Private Limited and the Sale Committee. It was further undertaken by him that he would pay all the legal dues of the workmen as per the Agreement entered into on 22-4-1998. 8. Based on the aforesaid Sale Agreement, this Court has p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intending purchasers or by M/s. Punit Corporation or by the Company. All other petitions were disposed of in view of the consent terms and the present petition was kept pending till the entire dispute was over. 11. This Court has disposed of several applications and also heard all other remaining applications. However, this petition being the main petition, unless and until it is finally heard and disposed of, all matters could not come to an end finally. 12. It is in the above background of the matter, the present petition is taken up for final hearing. 13. Heard Mr. G.M. Das and K.M. Paul, learned advocates appearing for the petitioner and other Workers and Mr. G.M. Joshi, learned advocate appearing for the respondent Company. Mr. Joshi has put forward a proposal on behalf of the respondent Company by affidavit of Mr. Darpan M. Amin, Director of Manor Investment Company Limited dated 2-2-2005. It is stated in the said affidavit that the present proceedings seeking winding up of the Company at the instance of the Workmen are not maintainable. Subject to this preliminary objection, it is further stated that only with a view to finding overall solution to the issue between the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of the Company be disposed off under the supervision of this Court. 16. Mr. G.M. Das, learned advocate appearing for other Workers has submitted that the preliminary objection raised by the respondent Company against the maintainability of the petition has no substance at all. The petition filed by the Workmen is maintainable and for this purpose, he has relied on the decision of the Hon'ble Supreme Court in the case of National Textile Workers' Union v. P.R. Ramakrishnan [1983] 1 SCC 228 wherein the Hon'ble Supreme Court has held that the Workers are entitled to appear at the hearing of the winding up petition whether to support or to oppose it so long as no winding up order is made by the Court. The workers have a locus to appear and be heard in the winding up petition both before the winding up petition is admitted and an order for advertisement is made as also after the admission and advertisement of the winding up petition until an order is made for winding up the Company. If the winding up order is made and the workers are aggrieved by it, they would also be entitled to prefer an appeal and to contend in the appeal that no winding up order should have been made by the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after making part payment as per the said agreement and also after filing an undertaking before this Court to be abide by the consent terms, it is not open for the respondent Company now to challenge the maintainability of the present petition before this Court. He has, therefore, submitted that the preliminary objection raised by the respondent Company is nothing but an abuse of process of law and such objection cannot be entertained by this Court. 19. Mr. G.M. Joshi, learned advocate appearing for the respondent Company has submitted that the present petition is not maintainable and the petitioner has no locus to file this petition against the respondent Company. Section 439 of the Companies Act, 1956 is very clear and the petitioner does not fall in any of the categories which are enumerated in section 439 of the Act. The petitioner is neither Creditor nor Contributory nor Company nor Registrar nor any person authorised by the Central Government. In this connection, Mr. Joshi has relied on the decision of the Hon'ble Supreme Court in the case of National Textile Workers' Union (supra) wherein it is observed that it is no doubt true that section 439 confers the right to present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be able to file a winding up petition under section 439 of the Act. If an unpaid employee is considered to be a Creditor in the provisions of the Companies Act, 1956, one employee is enough to bring about disaster in the industrial sphere if he is allowed to maintain a winding up petition as a Creditor. There is another stronger reason for not treating a Union and unpaid workmen/employees as Creditors of a Company to enable them to maintain a winding up petition and that is the efficacious and legitimate remedy provided by the Central and the State Legislatures for recovery of their dues. These enactments have created special machinery to deal with the disputes and the claims of the employees as expeditiously as possible free from the unnecessary and avoidable procedural shackles of the civil litigation. In the proceedings of expeditious and special remedy, it would be absolutely unreasonable to allow a Union and/or unpaid employees to abuse the process of the Companies Act. 22. Relying on the aforesaid judgments, Mr. Joshi has strongly submitted that the present winding up petition is not maintainable. Simply because consent terms were filed earlier, the respondent Company's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal. By entering into several disputes, the petitioner and other workers have not received their amount for number of years and even by inviting the winding up order, the workers are not going to get their due amount. Mr. Joshi has further submitted that there is neither any Secured Creditor nor any Statutory Creditor. The P.F. dues are also taken care of in the present arrangement. Considering all these aspects of the matter, he has strongly urged that either the petition deserves to be dismissed on the ground of non-maintainability or in the alternative the offer made by the respondent Company to the petitioner and to other workers be accepted and the respondent Company be permitted to deposit the amount of Rs. 3.36 crores before this Court within 21 days from the date of the order. 25. After having heard the learned Advocates appearing for the respective parties and after having considered their rival contentions including the preliminary issue raised by the respondent Company against the maintainability of the winding up petition and after having gone through all the earlier proceedings in this matter as well as all other connected matters relating to the Company and the wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sation Act, 1926. All these enactments have created special machinery to deal with the disputes and the claims of the employees as expeditiously as possible and the winding up petition can never be thought of by any prudent workman, unless such petition is a sponsored petition or there is malicious intention behind it. 26. This Court is also in agreement with the second reason given by the Bombay High Court in the said judgment that even one employee is enough to bring about the disaster in the industrial sphere if he is allowed to maintain a winding up petition as a Creditor. There is no dispute about the fact that section 529A confers preferential rights on the workmen and it says that notwithstanding anything contained in any other provisions of this Act or any other law for the time being in force, in the winding up of a Company - (a) workmen's dues and (b) debts due to Secured Creditors to the extent such debts ranked under clause (c) of the Proviso to sub-section (1) of section 529 pari passu with such dues, shall be paid in priority to all other debts. Thus, within the meaning of this section, workmen's dues are also considered to be the debts due to them by the Company and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold to a particular buyer. The Court is, therefore, of the view that the offer made by the Company at this stage to deposit the amount of Rs. 3.36 crores before this Court within 21 days from the date of order is quite just and appropriate and the same has to be accepted rather than accepting the plea of the petitioner to first wind up the Company and thereafter to put the assets on sale by auction. It is common experience by every one that there is no possibility of fetching higher price while putting the assets for sale, after winding up of the Company. 28. The only issue which remains for consideration is that of the interest. As per the agreement, undertaking and the consent terms, the entire amount was to be deposited in 1998 itself. More than seven years have gone and the workmen were deprived of their dues. Though there is much substance in this contention, looking to the peculiar facts of this case, the Court is not inclined to accept the interest claim of the workmen and to direct the respondent Company to pay the interest on the remaining dues of the workers. There was no intentional delay in making the payments to the workers nor there was any wilful default or intent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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