2016 (12) TMI 184 - HC - Indian Laws

Payment of dues of the Company under liquidation - preference to receive the dues - Held that - The applicant can be paid his dues only on the basis of pari passu, i.e., amount which is paid to all similarly situated workers/employees of the Company under liquidation and no priority can be given to the applicant under the provisions of the Companies Act. Considering the various reports which are filed by the Official Liquidator in the proceedings as well as in OLR No.16/15 by making payment of ₹ 53,266/-, the applicant is brought at par with the other regular workers/employees of the Company under liquidation. Under the provisions of the Act, the applicant for whatever reason, cannot be given priority over any other similarly situated workers/employees of the Company and his claim even if verified, can be satisfied only to the extent at par with the other workers and employees. Only because the applicant has approached this Court time and again would not entitle him to get any priority dehors the provisions of section 529A. The Official Liquidator has declared before this Court that claim of the applicant shall be considered as and when disbursement is done. It is a matter of fact that the Company in which the applicant was working has been wound up by an order of this Court and still the winding up proceedings are pending and the disposal of the properties of the Company in liquidation is still to take place. In light of such facts, this Court has passed the order dated 08.06.2016 as per the provisions of the Act. The applicant would be entitled to any further amount of his claim as and when some amount is available for disbursement at the hands of the Official Liquidator and the case of the applicant shall be considered for disbursement of any further amount at par with the other similarly situated workers/employees.

Summary

Issues Involved:
1. Immediate Payment of Claim Amount
2. Compensation on Humanitarian Grounds
3. Action for Undue Delay
4. Litigation Costs and Incidental Expenses
5. Priority Handling of the Case

Detailed Analysis:

1. Immediate Payment of Claim Amount:
The applicant requested an immediate payment of ?10,82,292/-, inclusive of interest up to 31/03/2015. The Court reviewed the applicant's employment history with Maharana Mills Ltd., which is under liquidation. The applicant had previously filed multiple applications seeking relief, which were addressed in various orders. The Official Liquidator (OL) had verified the claim and calculated the amount to be ?1,00,550/- initially, later reverified to ?2,02,687/-. The applicant was paid ?53,266/- (26.28% of the reverified claim) to bring him at par with other workers. The Court emphasized that the applicant's claim could only be satisfied pari passu with other workers under Section 529A and 530 of the Companies Act, not on a priority basis.

2. Compensation on Humanitarian Grounds:
The applicant sought compensation on humanitarian grounds due to alleged torture and social stigma. The Court found no legal basis for granting such compensation under the Companies Act. The claim was considered and processed according to the standard procedures applicable to all workers of the company in liquidation.

3. Action for Undue Delay:
The applicant requested action against concerned persons for undue delay. The Court noted that the delays were examined and justified in previous orders. The OL had processed the claim as per the Court's directions, and any delay was due to procedural requirements and the need for verification by Chartered Accountants.

4. Litigation Costs and Incidental Expenses:
The applicant sought litigation costs and incidental expenses over 40 years. The Court did not find any provision under the Companies Act to award such costs. The focus remained on ensuring that the applicant's claim was processed fairly and in line with other workers' claims.

5. Priority Handling of the Case:
The applicant requested priority handling of his case due to his old age and illness. The Court acknowledged the applicant's repeated requests but reiterated that under the Companies Act, claims must be processed pari passu with other workers. The Court found no grounds to grant priority handling outside the established legal framework.

Conclusion:
The Court concluded that the applicant's claims had been addressed in accordance with the law, ensuring parity with other workers. The application for review or recall of the order dated 08.06.2016 was dismissed as misconceived. The Court emphasized that any further disbursement to the applicant would be considered along with other workers as and when funds became available.