1999 (8) TMI 733 - HC - Companies Law

Summary

Issues Involved:
1. Winding up of Ravindra Pharmaceutical (P.) Ltd.
2. Application by the official liquidator under Companies (Court) Rules, 1959, and Companies Act, 1956.
3. Pari passu charge of workmen's dues.
4. Applicability of State Financial Corporations Act, 1951 vs. Companies Act, 1956.
5. Interpretation of non-obstante clauses in conflicting statutes.

Detailed Analysis:

1. Winding up of Ravindra Pharmaceutical (P.) Ltd.:
The Haryana Financial Corporation (the corporation) filed a petition for winding up Ravindra Pharmaceutical (P.) Ltd., which was ordered on February 4, 1994. Subsequently, the court directed the sale of the company's properties, and a detailed report was to be submitted regarding the sale. The sale was confirmed on January 13, 1995.

2. Application by the official liquidator:
The official liquidator filed an application under rule 9 read with rules 147 and 148 of the Companies (Court) Rules, 1959, and sections 529 and 529A of the Companies Act, 1956. The application was based on the claims forwarded by the Commissioner for Workmen's Compensation related to seven deceased workmen and two injured. The liquidator contended that the workmen's dues should be treated pari passu with the secured creditors' claims as per section 529A of the Companies Act, 1956.

3. Pari passu charge of workmen's dues:
The corporation argued that it is governed by the State Financial Corporations Act, 1951, which grants it special privileges in enforcing claims against borrowers. It contended that sections 529 and 529A of the Companies Act, 1956, do not apply to it. However, the liquidator asserted that the workmen's dues should rank pari passu with the secured creditors' dues under section 529A of the Companies Act, 1956.

4. Applicability of State Financial Corporations Act, 1951 vs. Companies Act, 1956:
The corporation claimed that as a special enactment, the State Financial Corporations Act, 1951, should prevail over the Companies Act, 1956. However, the court noted that section 529A of the Companies Act, introduced in 1985, contains a non-obstante clause giving priority to workmen's dues. The court emphasized that the intention of the legislature was to protect workmen's dues, and thus, section 529A should take precedence over the State Financial Corporations Act, 1951.

5. Interpretation of non-obstante clauses in conflicting statutes:
The court referred to various precedents, including the Supreme Court's decision in Maharashtra Tubes Ltd. v. State Industrial and Investment Corporation of Maharashtra Ltd., which held that when two special statutes contain non-obstante clauses, the later statute prevails. The court concluded that section 529A of the Companies Act, being a later enactment, should override the provisions of the State Financial Corporations Act, 1951.

Conclusion:
The court allowed the official liquidator's petition, holding that the respondent-Corporation could not appropriate the sale proceeds solely for its claim. The dues of the workmen were to rank pari passu with the corporation's dues under clause (c) of the proviso to sub-section (1) of section 529 of the Companies Act, 1956. The corporation was directed to pay the amount claimed by the official liquidator to meet the costs of advertisement and ensure the workmen's dues were prioritized as per the statutory provisions.