2005 (3) TMI 478 - HC - Companies Law

Issues Involved:
1. Petition for winding up of the respondent company under sections 433(e) and 434 of the Companies Act, 1956.
2. Non-payment of wages to workers.
3. Consent terms and settlement between the workers and the respondent company.
4. Sale of company assets to pay workers' dues.
5. Maintainability of the winding-up petition by workers.
6. Proposal by the respondent company to pay remaining dues.
7. Interest on delayed payments to workers.

Issue-wise Detailed Analysis:

1. Petition for Winding Up:
The petitioner filed a petition under sections 433(e) and 434 of the Companies Act, 1956, seeking the winding up of the respondent company due to its inability to pay debts, specifically wages to its workers.

2. Non-payment of Wages:
The petitioner and other workers were not paid regular wages despite several demands, notices, and court directions. The respondent company, after purchasing the unit from ACC Company Limited, ceased production and closed the factory, leading to the accumulation of unpaid wages amounting to over Rs. 10 crores.

3. Consent Terms and Settlement:
Interim relief was granted by the court, restraining the respondent company from disposing of its assets. Consent terms were agreed upon on 26-10-1997, wherein the respondent company agreed to pay legal dues, including wages and allowances, to the workers by disposing of its assets. The settlement was to cover dues up to 31-1-1997 and included a detailed payment plan.

4. Sale of Company Assets:
The respondent company entered into a tri-partite agreement with M/s. Punit Corporation and a Sale Committee to sell the company's assets to pay the workers. The agreement stipulated that M/s. Punit Corporation would deposit Rs. 6.61 crores in court, but only Rs. 3.25 crores was deposited, leading to disputes and contempt proceedings.

5. Maintainability of the Winding-up Petition by Workers:
The respondent company challenged the maintainability of the petition, arguing that workers are not entitled to file a winding-up petition under section 439 of the Companies Act, 1956. The court acknowledged that while workers have the right to be heard in a winding-up petition, they do not have the right to file such a petition.

6. Proposal by the Respondent Company:
The respondent company proposed to pay the remaining dues of Rs. 3.26 crores to the workers within 21 days, subject to the court's direction. This proposal was made to demonstrate the company's ability to discharge its liabilities and avoid winding up.

7. Interest on Delayed Payments:
The workers demanded interest on the delayed payments. However, the court did not award interest, considering the peculiar circumstances and the fact that the workers continued to occupy company quarters despite their employment ending earlier.

Judgment and Directions:
- The court dismissed the winding-up petition on the ground of non-maintainability but directed the respondent company to deposit Rs. 3.36 crores within 21 days.
- Workers were directed to vacate company quarters upon receiving their dues.
- The stay on the sale of company assets was vacated upon deposit of the amount.
- The court emphasized cooperation between the company management and workers for smooth implementation of the order.
- The claims of all petitioning workers against the company were deemed discharged upon payment.

Conclusion:
The court resolved the dispute by directing the respondent company to pay the remaining dues to the workers, thereby avoiding the winding-up of the company and ensuring that the workers received their rightful dues.

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