2000 (9) TMI 1087 - HC - Companies Law

Summary

Issues: Ad hoc arrangements for payment of workers' dues pending final decision, dispute between workers and secured creditors, directions for payment distribution, appointment of Chartered Accountant for ratio calculation.

The judgment involves a company application filed by the Textile Labour Association (TLA) seeking direction for the Official Liquidator (OL) to pay workers' dues. The State Bank of India, a secured creditor, objected to the workers' claim. The court, without deciding the merits, passed an order for ad hoc arrangements to pay workers with the consent of the secured creditor. The order emphasized that it does not adjudicate the rights of the parties and is only temporary pending a final decision.

The ad hoc arrangements were made to ensure workers are paid without prejudice to the contentions under the Companies Act. The workers were directed to submit their claims based on a previous judgment, subject to pending appeals. The OL, holding a sum of Rs. 1.38 Crores, was instructed to retain a portion and distribute Rs. 55 Lacs to workers and Rs. 60 Lacs to the State Bank of India. The OL was directed to issue cheques to workers based on genuine claims submitted by TLA, absolving OL of responsibility for any incorrect payments. A new Dividend Account was permitted, and payment was to be made within eight weeks.

Additionally, a Chartered Accountant was appointed to calculate the ratio of distribution between workers and secured creditors within three months. The CA's report was to be shared with the parties, allowing them to challenge the ratio. The OL was authorized to encash FDRs for payment. The next hearing was adjourned to December 4, 2000 for further proceedings.