1985 (8) TMI 315 - HC - Companies Law

Summary

Issues Involved:
1. Liability of the Cement Controller of India to pay balance wages.
2. Role and responsibilities of the provisional liquidator.
3. Applicability of the Dalmia Dadri Cement Limited (Acquisition and Transfer of Undertakings) Act, 1981.
4. Rights of workmen to claim arrears of wages.
5. Jurisdiction of the Commissioner of Payments.

Issue-wise Detailed Analysis:

1. Liability of the Cement Controller of India to pay balance wages:
The primary issue was whether the Cement Controller of India (the appellant) was liable to pay the balance wages to the workmen-respondents for the period from May 16, 1980, to June 22, 1981. The learned single judge had directed the appellant to make this payment. However, the appellant contended that it came to the court as a creditor under sections 433(e), 434, and 439 of the Companies Act, 1956, and advanced Rs. 9 lakhs to meet preliminary expenses for winding up the company, which was to be repaid out of the company's assets in priority to other debts under rule 292 of the Companies (Court) Rules, 1959. The court found it unjust to burden the appellant with the payment of wages, as the appellant was not responsible for the employment of the workmen-respondents during the relevant period.

2. Role and responsibilities of the provisional liquidator:
The provisional liquidator was appointed to take charge of the plant and machinery of the company and retained 95 workmen for maintenance and guarding purposes. The provisional liquidator initially paid 50% of the wages to these workmen from the Rs. 9 lakhs advanced by the appellant. The provisional liquidator exhausted these funds and sought additional sums for winding-up expenses. The court noted that the provisional liquidator's role was to manage the company's assets during the winding-up process, and the funds provided by the appellant were meant for preliminary expenses, not for covering all operational costs, including full wages.

3. Applicability of the Dalmia Dadri Cement Limited (Acquisition and Transfer of Undertakings) Act, 1981:
The Act came into force on June 23, 1981, transferring the undertakings of the company to the Central Government and subsequently to the Cement Corporation. Section 12(3) of the Act stated that arrears of wages could be claimed against the company but not against the Central Government or the Corporation. The court highlighted that the workmen's claims for wages were to be satisfied by the Commissioner of Payments as per sections 14 and 18 of the Act, which prioritized wages and salaries as the first liability to be discharged.

4. Rights of workmen to claim arrears of wages:
The workmen-respondents claimed that they were entitled to the balance 50% of their wages for the period they worked under the provisional liquidator. They initially moved an application before the learned single judge, who directed the appellant to pay the balance wages. However, the court found that the workmen's claims should be directed towards the company and satisfied by the Commissioner of Payments, as per the provisions of the Act. The court emphasized that the workmen had already preferred their claims before the Commissioner of Payments and should seek redress through that channel.

5. Jurisdiction of the Commissioner of Payments:
The Commissioner of Payments was appointed to disburse amounts payable to the company and satisfy claims against it, including wages, as per sections 14 and 18 of the Act. The court directed that the claims for the balance wages, which had been withdrawn by the workmen-respondents after the single judge's order, should be revived and satisfied by the Commissioner of Payments from the Rs. 7 lakhs kept intact as per the interim order dated May 7, 1985.

Conclusion:
The court set aside the order dated January 18, 1985, of the learned single judge, directing the workmen-respondents to refund the balance wages to the appellant within three months. If they failed to do so, the Corporation was to recover the amount from their wages in reasonable installments and pay it to the appellant. The claims for the balance wages were to be revived and satisfied by the Commissioner of Payments in accordance with the law. There was no order as to costs.