2019 (9) TMI 751 - HC - Companies Law

Company under Liquidation process - Withdrawal of amount for making payment to employees - HELD THAT - Submission made on behalf of the office is to act on precedent of several orders earlier passed coupled with good feeling for approaching festive season. Purely by reason of several orders having been passed earlier, this application is disposed of in terms directed by last order dated 31st August, 2018, in respect of the prayers allowed thereby. Application disposed off.

Summary

Issues:
1. Consideration of ex-gratia payment to company paid staff completing one year of service.
2. Consideration of payment to company paid casual sweepers on the occasion of Durga Puja Festival.
3. Compliance with previous orders regarding the creation of the "Official Liquidator's Establishment Charges Account."

Analysis:
1. The company application sought the High Court's consideration to pay ex-gratia to company paid staff who completed a full year of service as of August 2019. The prayer included payment of half a month's Basic Pay plus an additional amount, subject to a maximum limit, from the Official Liquidator's Establishment Charges Account. The Court noted that previous orders allowed for such payments on the occasion of Durga Puja festival. The application was disposed of in accordance with the directions of the last order dated August 31, 2018, regarding similar prayers.

2. Another prayer in the application was for the consideration of payment to company paid casual sweepers from the Official Liquidator's Establishment Charges Account on the occasion of Durga Puja Festival 2019. The Court acknowledged the representation of the company paid staff and the past practice of granting such payments during the festive season. The decision was made based on the precedent of previous orders and the goodwill gesture towards the approaching festive season. The application was disposed of accordingly.

3. The application also referenced a previous order dated April 5, 1991, which granted leave to the Official Liquidator to create a separate fund known as the "Official Liquidator's Establishment Charges Account" for various payments, including staff salaries. The order allowed for the withdrawal of a specific amount from the Profit and Loss Account I to be deposited into the said account. Additionally, it permitted the segregation of a portion of interest income to be deposited into the fund. The Court considered the compliance with this order and subsequent applications for extra expenses for employee payments during the festive season. The decision was made in line with the directions of the previous orders and the trust placed in the Official Liquidator's office based on past actions.

In conclusion, the High Court of Calcutta disposed of the company application by the Official Liquidator, addressing the requests for ex-gratia payments to company paid staff, payment to casual sweepers, and compliance with previous orders regarding the creation and utilization of the "Official Liquidator's Establishment Charges Account." The decision was based on the precedent of past orders and the goodwill associated with the festive season.