2009 (3) TMI 567 - HC - Companies Law

Winding up - grievance of the appellant is that though other similarly situated workers of the company-in-liquidation have been paid their salaries, the appellant has not been paid his salary for the very same period and has only received a sum of ₹ 50,000 - Held that - The case of the appellant cannot, therefore be equated with a debtor after winding up. His claim for salary is based on the illegal termination of his services, which order was set aside, meaning thereby, that status quo ante, qua the services of the appellant was restored regarding the service conditions of the appellant. As such, the appellant is entitled to his salary up to 31-10-1994, at par with other similarly situated workers, at the relevant point of time. For the aforesaid reasons, the appeal is partly allowed. The Official Liquidator is directed to pay a sum of ₹ 2,24,092 as full and final payment of arrears of salary up to 31-10-1994, as given to other similarly situated workmen, within a period of four (4) weeks from today. The appeal is accordingly disposed of. The appellant is entitled to costs quantified at ₹ 500 (rupees five hundred only) which shall be paid by the Official Liquidator.

Summary

Issues:
Claim for unpaid salary by appellant from a company in liquidation.

Analysis:
The appellant filed an appeal against the order of the company judge regarding unpaid salary. The appellant claimed that despite other workers being paid, he had not received his salary for the same period. The appellant joined the company in 1955 and his services were terminated in 1990. The termination was challenged, set aside, and the appellant claimed salary for the period from June 1990 to March 1991. The company went into liquidation in 1994. The appellant claimed Rs. 2,24,092 for the period from July 1990 to October 1994, reducing his initial claim. The Official Liquidator contested the claim, citing the priority of payments under the Companies Act. Other respondents argued that the appellant's claim was not maintainable and should be governed by the Companies Act. Judgments were cited to support the respondents' arguments.

The court considered the appellant's case in detail. It noted that the appellant's services were terminated before the company's winding up, and the termination was set aside before the closure. The appellant's computation petitions for salary claims were allowed by the labour court. The court emphasized that the appellant's claim for salary was for the period before winding up and stood on a different footing. The termination of the appellant's services was deemed illegal and set aside, indicating that he should have been reinstated. The court found that the appellant was entitled to his salary up to October 1994, similar to other workers. The court ruled that the Companies Act provisions were not applicable in this case, as the appellant's claim was based on the illegal termination of his services, which was rectified by the competent forum.

In the judgment, the court partly allowed the appeal, directing the Official Liquidator to pay Rs. 2,24,092 as arrears of salary to the appellant within four weeks. The appellant was also awarded costs of Rs. 500 to be paid by the Official Liquidator. The court concluded that the appellant was entitled to his salary up to October 1994, aligning his treatment with other workers in similar circumstances at the relevant time.