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2004 (3) TMI 414

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..... ion) was incorporated under the Companies Act, 1956 on 30-5-1962 as an automobile industry for manufacture of two-wheelers. The company has 300 workmen under its control. On 29-9-1987, the company made a reference under section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), Board for Industrial and Financial Reconstruction (BIFR) registered the same as Case No. 239 of 1987. By an order dated 17-7-1989, BIFR recommended for winding up of the company. Aggrieved by the same, M/s. Mopeds India Ltd. Staff Workers Union preferred an appeal being Appeal No. 25 of 1989 before the Appellate Authority for Industrial and Financial Reconstruction (AIFR), New Delhi. The appeal of workers union was dismissed on 22-5-1990. 3. In pursuance of the order of BIFR, as confirmed by AIFR, Company Petition No. 48 of 1989 was taken cognizance by this Court. By an order dated 15-9-1989 (while appeal of workers union was pending before AIFR), Official Liquidator of this Court was appointed as provisional liquidator, by reason of which all the assets stood vested in the company court in the charge of Official Liquidator. Be that as it is, ultimately, by an order dated 17-10-1 .....

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..... dated 17-7-1998 in C.A. No. 426 of 1997, O.S.A. Nos. 3 and 4 of 1998 and Company Appeal Nos. 1 and 2 of 1997. The Official Liquidator was directed to reconsider the matter upon affording opportunity to all the parties including employees. Thereafter, the Official Liquidator issued notice to SFC, Canara Bank, ex-management, ex-Secretary of the company and workers union represented by Secretary. The workers union submitted a claim for an amount of Rs. 4,33,71,314 representing arrears from July 1996 to 15-9-1989, closure compensation, gratuity, notice pay of one month and interest at 18 per cent per annum from October 1990 to December 1996. The workers union also produced material before Official Liquidator to show that it is a registered union regularly submitting annual returns in Form E as per Regulations to the competent authority consisting 307 members. The workers also filed a claim petition in Form No. 67 under Rule 152 of Companies Rules. 6. SFC, Canara Bank and ex-Secretary of company raised objections to the claim of the workers union contending that claim is not proper, that workers union is not a registered union, that claim for wages from July 1986 to October 1990 can .....

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..... icial Liquidator assessed bonus amount of Rs. 15,29,148 as an unsecured debt. 8. Learned Standing Counsel for SFC, Sri Y.N. Lohitha, and the learned Standing Counsel for Canara Bank, Sri Deepak Bhattacharjee made lengthy submissions covering wide range of points in relation to sections 528, 529, 529A and 530 of the Companies Act. Learned counsel also attacked the impugned notice of admission of workers debt (hereinafter called the impugned order ) on various grounds. A summary of these submissions in brief is as follows. 9. The Official Liquidator while taking action in accordance with Rules 147 to 279 of the Companies Rules is not competent to adjudicate the claims of secured/unsecured creditors as well as workmen. He cannot accept or reject a claim of proof of debt. Alternatively, by reason of clause ( a ) of proviso to sub-section (1) of section 529, the Liquidator represents the workmen and, therefore, he cannot be an authority to determine the workmen s dues as it would result in real bias. By reason of the provisions of Recovery of Debts due to Banks and Financial Institutions Act, 1993 (RDB Act) and by reason of section 29 of SFC Act read with section 529(1) of the .....

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..... alculating workmen dues the Official Liquidator has taken into consideration the number of workers or their legal heirs on the rolls as on the date of winding up order excluding the dead-persons which is permissible under law as per the rules made in accordance with section 643, especially Rules 148, 149, 158, 159 and 163 of the Rules and it is competent for the Official Liquidator to accept or reject the proof of debt of the workmen and Official Liquidator does not incur any disqualification by reason of the power conferred to representing the workmen in the winding up of the company. Without prejudice to this submission, the learned counsel for the Official Liquidator placed reliance on the judgment of the Supreme Court in Allahabad Bank v. Canara Bank AIR 2000 SC 1535, International Coach Builders Ltd. v. Karnataka State Financial Corpn. AIR 2003 SC 2012. The learned counsel has taken me through the entire material on record to contend that the findings recorded by the Official Liquidator on all the nine issues are sustainable and do not warrant any interference by this Court. 12. After giving anxious consideration, this Court is of the considered opinion that these .....

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..... determining the claims of creditors submitted either in Form No. 65 or 66 pursuant to notice issued under Rule 148 of the Rules. 16. Fifthly, the SFC as well as Canara Bank have invoked Rule 164 of the Rules in their respective applications to make different grievance against admission of proof of debt in Form No. 70 issued by the Official Liquidator. Rule 164 of the Rules read as under: "164. Appeal by creditor. If a creditor is dissatisfied with the decision of the liquidator in respect of his proof, the creditor may, not later than 21 days from the date of service of the notice upon him of the decision of the Liquidator, appeal to the Court against the decision. The appeal shall be made by a Judge s summons, supported by an affidavit which shall set out the grounds of such appeal, and notice of the appeal shall be given to the liquidator. On such appeal, the Court shall have all the powers of an appellate Court under the Code. The Rule provides that if a creditor is dissatisfied with the decision of the liquidator in respect of his proof, the creditor may not later than twenty one days from the date of service of notice upon him of the decision of the liquidator appeal .....

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..... the case on hand Canara Bank or SFC are themselves creditors and therefore they cannot file appeal against the decision of the liquidator in Form No. 70 accepting the claim of the workmen for their dues. In the event of workmen filing appeal against determination of their dues by the liquidator, as per Rule 165(2) the appellants herein can intervene in the matter with the leave of the Court. Reading provisions of Rules 148 to 165 together it is not possible to accept the submission of the learned counsel for the appellants that appeal would lie. 17. The right of appeal to a designated Court or a Forum must be specifically provided by the Statute. In the absence of authority of law there is no inherent right to file appeal. This is a settled principle of law. If any authority is required, a reference may be made to the decision of the Supreme Court in Smt. Ganga Bai v. Vijay Kumar AIR 1974 SC 1126 wherein it was held: "15. . . .The main controversy before us centres round the question whether that appeal was maintainable. On this question the position seems to us well-established. There is a basic distinction between the right of suit and the right of appeal. There is an i .....

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