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TMI Blog1986 (7) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... nal liquidator was not opposed by learned counsel for the respondent. The provisional liquidator submitted his report dated May 8, 1986, whereby he submitted that he had taken charge of the respondent company. By the said report, the provisional liquidator has pointed out that the fixed assets of the company including land, building, plant and machinery have been either mortgaged/hypothecated to the Industrial Development Bank of India, Bombay, and M.P. Financial Corporation, Indore; that the company's entire movable assets have been hypothecated/charged to the State Bank of India, Ratlam, by way of first charge, and the said bank had its second charge over the fixed assets of the company. Further, according to the provisional liquidator, the State Bank of India has financed the respondent company and a sum of Rs. 792 lakhs approximately was outstanding at the date of appointment of the provisional liquidator. He has further submitted that the liability of the Industrial Development Bank of India and the M.P. Financial Corporation is to the tune of Rs. 200 lakhs, the contingent liability payable to M. P. Electricity Board is around Rs. 125 lakhs and thus there is a total liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1986 under section 446 of the Companies Act with a prayer that the proceedings pending before the Tahsildar, Ratlam, for recovery be stayed. Counsel for the respondent company also submitted hi9 objections dated May 25, 1986, to the report submitted by the provisional liquidator dated May 8, 1986. It is in these circumstances, that the President, Mill Mazdoor Sangh, Ratlam, has filed I.A. No. 2032 of 1986 under section 530(1)(b) of the Companies Act, 1956, with a prayer that the Tahsildar who, on the basis of the decree passed by the Labour Commissioner, has attached the goods belonging to the company, may be permitted to sell the same and the workers be paid their wages out of the sale proceeds so realised. This application is opposed on behalf of the State Bank of India mainly on the ground that as no winding-up order has yet been passed by this court and that, admittedly, all the movable goods are hypothecated or pledged with the State Bank of India, the Tahsildar cannot be permitted to sell the attached goods even though they may have been attached prior to the appointment of the provisional liquidator. Learned counsel for the provisional liquidator has supported the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egate of the following sums due from the company to its workmen, namely: ( i )all wages or salary including wages payable for time or piece-work and salary earned wholly or in part by way of commission of any workman, in respect of services rendered to the company and any compensation payable to any workman under any of the provisions of the Industrial Disputes Act, 1947 (14 of 1947); ( ii )all accrued holiday remuneration becoming payable to any workman, or in the case of his death to any other person in his right, on the termination of his employment before, or by the effect of, the winding-up order or resolution ; ( iii )unless the company is being wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company, or unless the company has, at the commencement of the winding up, under such a contract with insurers as is mentioned in section 14 of the Workmen's Compensation Act, 1923 (8 of 1923), rights capable of being transferred to and vested in the workman, all amounts due in respect of any compensation or liability for compensation under the said Act in respect of the death or disablement of any workman of the company ; ( iv )all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( ii )after clause ( b ), the following clause shall be inserted, namely: '( bb ) the expression "employee" does not include a workman ; and '." Relying on the amended provision, learned counsel for the President, Mill Mazdoor Sangh, submitted that, admittedly, a large and substantial amount by way of wages is due to the labourers in respect of which a decree has already been passed. He also submitted that even though the secured creditor like the State Bank of India is outside the purview of the Companies Act, still, as a result of the amendment, the workers of the respondent-mill have got priority in respect of their wages which they are entitled to realise in proportion. He, therefore, submitted that in case the bank has any grievance against the decree passed, it has to approach the Tahsildar for submitting its objections before him regarding the attached goods. He further submitted that, in such a situation, the attached goods should be permitted to be auctioned by the Tahsildar. As against this, learned counsel for the State Bank of India, relying on the decisions in M. K, Ranganathan v. Govt. of Madras [1955] 25 Comp. Cas. 344 (SC), Bank of Bihar v. State of B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng-up petition whether to support or to oppose it so long as no winding-up order is made by the court. The workers have a locus standi to appear and be heard in the winding-up petition both before the winding-up petition is admitted and an order for advertisement is made as also after the admission and advertisement of the winding-up petition until an order is made for winding-up the company. If a winding-up order is made and the workers are aggrieved by it, they would also be entitled to prefer an appeal and contend in the appeal that no winding-up order should have been made by the company judge. But when a winding-up order is made and it has become final, the workers ordinarily would not have any right to participate in any proceeding in the course of winding up the company though there may be rare cases where, in a proceeding in the course of winding up, the interest of the workers may be involved and in such a case it may be possible to contend that the workers must be heard before an order is made by the court. Even when an application for appointment of a provisional liquidator is made by the petitioner in a winding-up petition, the workers would have a right to be heard if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anies Act seeking leave and it also is not in dispute that a winding-up order has not yet been passed. However, having regard to the peculiar facts and circumstances of the case, coupled with the fact that in order to save further deterioration of the attached goods, which are lying open in the mill premises exposed to rains, this case comes under special and exceptional circumstances. It is not yet known what is the exact amount which the State Bank of India has to recover from the respondent company. However, no harm is likely to be caused even to the bank in case the Tahsildar, Ratlam is allowed to sell the goods which he has already attached, as learned counsel for the State Bank of India also submitted that in the present situation at the mill premises, even the bank officials are not allowed to enter therein by the workers. The application, therefore, succeeds partly. The Tahsildar, Ratlam, is permitted to sell the attached goods in the presence of the provisional liquidator by public auction and the sale proceeds so realised shall be kept by the Tahsildar, Ratlam, with the provisional liquidator, who shall keep the same in deposit in his name in a nationalised bank until f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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