9911796707
TMI Blog2001 (8) TMI 1305X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Rs. 4,58,47,593.74 comprising of wages for December 1999, 30 days gratuity, 30 days compensation, leave wages, wages and dearness allowance. 2. The respondent-company has filed affidavit in reply of its Managing Director disputing the whole claim and contentions of the Union. It has contended that the activities of the company were stopped in or about April 1994 and that the company was closed. It has challenged the claim of the Union for wages till December, 1999 as the employees had not done any work and that they were gainfully employed else where. It has also questioned legality of the other items and their factual correctness. It has mainly contented that the employees and the Union have alternative remedies under various labour laws, i.e., the Industrial Disputes Act, 1947, the Payment of Gratuity Act, 1971 etc. and that the Union has already filed one complaint of unfair labour practice under the provisions of the M.R.T.U. and P.U.L.P. Act, 1971 on behalf of some of the employees and the same is pending for final disposal before the Industrial Court, Maharashtra, at Mumbai. The company has further pointed out that out of total 145 employees 30 had sought voluntary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined and computed in accordance with law by the appropriate forum specifically created for such purpose. According to the learned Counsel there are major miscalculations in the chart of the claims prepared by the Union and that the company Court cannot undertake. Such onerous exercise to compute the correct legal dues of the concerned employees. He has further pointed out that the company has already challenged the decisions of the BIFR/AIFR recommending winding up of the company under article 226 of the Constitution of India and is awaiting the hearing of its writ petition before this Court. Shri Kapadia further submits that it has paid and satisfied all its creditors and by November, 2001 the Bank debt to the tune of Rs. 1 crore 40 lakhs would be paid. He has also pointed out that no creditor has filed a winding up petition. According to him it is not that the company is unable to pay its debt. He reiterates that his clients have already deposited the admitted dues of the VRS employees and the company was further ready and willing to pay to the remaining 56 employees on par with the 19 VRS employees. Shri Kapadia has relied on the judgment of the Supreme Court on the poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kers from the right to present a winding up petition it does not follow as a necessary consequence that the workers have no right to appear and be heard in a winding up petition filed by one or more of the persons specified in section 439. It may be that the workers have no right to present a winding up petition against the company, but if a winding up petition is properly filed by any of the persons entitled to do so under section 439, they may still be entitled to appear and be heard in support or opposition to the winding up petition. That would depend upon whether their interest is likely to be affected by any order which may be made on the winding up petition. The next section relied upon by respondent Nos. 6 to 9 was section 440 which says that where a company is being wound up voluntarily or subject to the supervision of the Court, a petition for its winding up by Court may be presented by any person authorized to do so under section 439 or the Official Liquidator, but the Court shall not make a winding up order unless it is satisfied that the voluntary winding up or winding up subject to the supervision of the Court cannot be continued with due regard to the interests of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , but if an order for winding up is made, their services would, except in cases where the business of the company is continued, stand terminated by reason of sub-section (3) of section 445 which provides that a winding up order shall be deemed to be notice of discharge to the officers and employees of the company, except when the business of the company is continued . Ordinarily when a winding up order is made, the business of the company would cease to continue and even if the Liquidator is authorized to carry on the business, such continuance would be only for the beneficial winding up of the company and the logical and inevitable end would be the ultimate discontinuance of the business. The making of a winding up order on a petition for winding up would therefore almost certainly have an adverse consequence on the workers inasmuch as the continuance of their service would be seriously jeopardised and their right to work and earn their livelihood would be disastrously imperilled. Now it is an elementary principle of law, well settled as a result of several decisions of this Court and particularly the decisions in State of Orissa v. Dr. Bina Pani [1967] 2 SCR 625 AIR 1967 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is properly filed by one or the other persons specified in section 439. There would, in fact, be no point in conferring the right to apply for winding up of a company on the workers since they cannot have any interest in demolishing the enterprise which is the source of their livelihood and particularly when the only effect of the winding up order would be to render them unemployed and to bring about winding up of the company for the benefit of the creditors and the contributories. So also the circumstance that the right to be consulted or to make applications in the course of the winding up of a company is conferred only on the creditors and the contributories does not in any way militate against the right of the workers to appear and be heard in the winding up petition because once the winding up order is made the assets of the company have to be realised, the creditors have to be paid and if there is any surplus it has to be distributed among the contributories and therefore at that stage it only the creditors and the contributories who have an interest and that is why in the course of the winding up it is the creditors and the contributories who have been given a voice. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Central and the State Legislatures for recovery of their dues. There are 4 main enactments arming the Unions and the employees to recover their dues from their employers, viz. the Industrial Disputes Act, 1947 the Payment of Wages Act, 1936, the Payment of Gratuity Act, 1971 and the State Acts viz. the Bombay Industrial Relations Act, 1946 and the M.R.T.U. P.U.L.P. Act, 1971. There are other special enactments which are self contained codes providing for remedies for recovery of dues, such as ESI Act, 1950, E.P.F. Act, 1952, Workmen s Compensation Act, 1926. These enactments have created special machinery to deal with the disputes and the claims of the employees as expeditiously as possible free from the unnecessary and avoidable procedural shackles of the civil litigation. In the presence of expeditious and special remedy it would be absolutely unreasonable to allow a Union and/or unpaid employees to abuse the process of the Companies Act. 9. The petitioner union has, indeed, abused the process of the Companies Act by filing the present petition for winding up of the company. The union has already resorted to such remedy under the M.R.T.U. and P.U.L.P. Act, 1971. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that it is just and equitable that the company should be wound up the court may refuse to make an order of winding up if it is of opinion that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy. Again under sections 397 and 398 of the Act there are preventive provisions in the Act as a safeguard against oppression in management. These provisions also indicate that relief under Section 433( f ) based on the just and equitable clause is in the nature of a last resort when other remedies are not efficacious enough to protect the general interests of the company." (p. 575) And further the Supreme Court in the case of Pradeshiya Industrial Investment Corpn. of U.P. v. North India Petrochemicals Ltd. [1994] 3 SCC 348 has held as under : "It is beyond dispute that the machinery for winding up will be allowed to be utilised merely as a means for realising its debts due from a Company. In Amalgamated Commercial Traders (P.) Ltd. v. A.C.K. Krishnaswami [1965] 35 Comp. Cas. 456 (SC) this Court quoted with approval the following passage from Buckley on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition is presented on the ground that it is just and equitable that the company should be wound up, the Court may refuse to make an order of winding up, if it is of opinion that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy." 12. Malice, ulterior motives, trade union rivalry and unscrupulous trade union leaders getting set up by the rivals in the trade and industry cannot be ruled out in the present days when the tribe of honest dedicated trade union leaders is getting vanished. By construing section 439 neither the trade unions nor the employees, even if unpaid, can be added as a class of creditors to exercise the right to file petition for winding up a company. It would prove to be an additional weapon in the hands of unscrupulous to terrorise the employers who refuse to yield to any unreasonable, unjust and illegal demands by them. These provisions even for genuine creditors are called as vehicle of oppression to pressurise the debtor-companies. No trade union leader can be allowed to sit on the steering wheel of this vehicle of oppression by stretchin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
