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TMI Blog2006 (12) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... xed deposit vide order dated 16-1-2004, passed by this Court. 3. The workers' union filed application bearing C.A. No. 432 of 2004 on or about 6-7-2004, that in view of section 529A of the Companies Act, 1956 (for short "the Act"), the claims of the workers have to be satisfied in full. It may be noticed that prior thereto the Official Liquidator has invited claims from the creditors and workers by publishing the claim notice in the newspapers on 20-3-2004. It was pointed out in the application that the workers have lodged their claims with the Official Liquidator but no action has been taken by the Official Liquidator to settle the claims of the workmen. In reply to such application, the Official Liquidator stated that for the purposes of settlement of such claims, the Official Liquidator has to appoint a chartered accountant for the scrutiny of the claims of the workers as well as the creditors. It was pointed out that quotations from various chartered accountants were called and 13 chartered accountants have given their offers. Keeping in view the said stand of the Official Liquidator, this court passed the following order on 26-8-2004 : "This is an application filed by the wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r opinion, the release of payment of dues to respective cases under this section in annexure C should be made subject to clearance of defects to the satisfaction of your office. The amount of claims calculated together with claim filed by workmen under sections 529A and 530 of the Companies Act, 1956, are given in annexure C under the column 'Net Amount Payable'. We had made the calculations but these are good cases subject to rectification of defects at claimant end and approval by your office." 6. After the said report was filed, the Official Liquidator vide his letter dated 17-5-2005, invited counsel for the workmen for a meeting on 18-5-2005, to settle the claims of workmen. Vide letter dated 18-5-2005, Shri Vivek Bhandari, learned counsel for the workmen, conveyed acceptance to the report of the chartered accountant in respect of claims classified as annexure A. In respect of claims classified as annexures B and C, it was stated that necessary clarification or fresh claim on behalf of the clients shall be submitted to the office of the Official Liquidator and the discrepancies found in their claims would be removed. The said letter reads as under : "This is with reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chartered accountant. The copy of the letter of the workmen representative is enclosed and annexed as annexure A1. The chartered accountant has accordingly scrutinized the books, records of the company (in liqun.) along with the affidavits submitted by the workers and M/s. A.K. Chadda, chartered accountants, has reached to the conclusion vide its report dated 21-4-2005, in which he stated that the total amount of the workmen is considered to the extent of Rs. 8,66,13,241." 8. It may be noticed that 464 workmen includes 395 workmen in annexure-A, 33 workmen in annexure B and 36 in annexure C. 9. On 24-5-2005, another application was filed by the workers union through Shri Vivek Bhandari, advocate, (C.A. No. 417 of 2005) to the effect that the claim of the workmen in annexure A of the report have to be satisfied in full, therefore, the Official Liquidator be directed to make the payment to the workers. 10. This Court on 26-5-2005, decided both the applications, i.e., C.A. No. 416 of 2005 filed on behalf of the Official Liquidator and C.A. No. 417 of 2005 filed by the workmen and permitted the Official Liquidator to pay the dues of the workmen as per the report of the chartered ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 35 lakhs (approximately) is still lying with OBC, Dhuri." 12. Another thing which needs to be noticed is that in terms of rule 167 of the Companies (Court) Rules, 1959 (hereinafter to be referred as 'the Rules'), the Official Liquidator is to file in the court a certificate in Form No. 71 containing the list of creditors whose claims have been admitted wholly, proofs admitted or rejected in part and the proofs wholly rejected. Such certificate was not filed before this court though an averment has been made in paragraph No. 8 of C.A. No. 416 of 2005 filed on 24-5-2005, to the effect that such list of creditors has been displayed on the notice board on 25-5-2005. Paragraph No. 8 of the said application has been reproduced above. 13. It may be clarified that the "workmen" referred to above and hereinafter are the workmen entitled to wages along with secured creditors in terms of section 529A of the Act and falling within the definition of section 2(s) of the Industrial Disputes Act, 1947. The 'employees' referred hereinbefore and after are the employees of the company in liquidation other than the workmen who are entitled to preferential payment along with other creditors in term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rified with the records available with the Official Liquidator as well as the other statutory record. Shri Atul Gandhi, advocate, who is also a chartered accountant is requested to examine the claim of each of the workmen with reference to the records available with the Official Liquidator and other statutory record available and furnish a detailed report. The report should indicate the total number of workmen on the rolls of the company at the time of winding up and the number of the workmen, who have filed claims and the claims admitted/rejected. Shri Gandhi would be at liberty to raise his bill for the services rendered. However, a sum of Rs. 50,000 be paid to Shri Gandhi, on account, forthwith. The parties would be at liberty to file an appropriate application after the report is submitted by Shri Gandhi. C.A. Nos. 723, 800 and 947 of 2005 stand disposed of." 16. In pursuance of the said order, Shri Atul Gandhi, learned Court Commissioner, has submitted his report dated 6-9-2006, which is herein referred to as 'interim report' pointing out that the employees have been classified by the learned chartered accountant in his report dated 22-11-2005, and 8-2-2006, in three categ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... propriate the funds of the company in liquidation with the help and connivance of the beneficiaries of receiving such payment. 19. 33 employees, whose names appear in the list annexure B, lodged their claims in Form No. 67 regarding the proof of debt of workmen even prior to the advertisement inserted by the Official Liquidator inviting the claims from the workmen. The claims lodged are almost in identical words. Since all the affidavits and proofs of debt are identical, for the facility of reference, an extract of documents produced by Shri Shiv Kailash Saini and attached as annexure A3 in reply submitted through Shri Vivek Bhandari, advocate, read as under : "FORM NO. 67 COMPANY PETITION NO. 8214 OF 1997 OF OSWAL AGRO FURANE LTD. PROOF OF DEBT OF WORKMAN I, Shiv Kailash Saini, son of Ram Saroop, resident of Ambala city, Haryana, an asstt. of Oswal Agro Furane Ltd., village Basaur, tehsil Dhuri, district Sangroor, solemnly affirm and say : That the above named company was on the 29th day of April, 2001 and still is justly and truly below indebted to me as per descriptions appear in the schedule below in sums set against my name in the column 12 of such schedule for wages, acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f List B of the report prepared by you. 3. That my name has been erroneously written in the report as Shiv Kailash Saini whereas my name is Shiv Kailash, and may be noted as such. 4. That my claim as adjudicated may kindly be released without further delay. Dhuri (Sd.) Deponent Dated : Verification Verified that the facts stated in paragraph 1 to paragraph 4 above are true and correct to my knowledge. No part of it is false and nothing has been concealed therefrom. Dhuri (Sd.) Deponent Dated : Affidavit of Sh. Shiv Kailash Saini dated 29-8-2005 "Affidavit of Sh. Shiv Kailash Saini, s/o Ram Saroop, resident of House No. 5377/3, Punjabi Mohalla, Ambala Cantt., Distt. Ambala. I, the above named deponent solemnly affirm and depose as under : 1. That I am a worker in the Oswal Agro Furane Ltd. (under liquidation) and was working in the factory at the time of closure of the factory. That when the factory was running my duty to procure and maintain the record of the purchase of spares, stationery and repair equipment and technical machinery, as such I am entitled to my claim under section 529A of the Companies Act, 1956. This was directly related with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pee) To Shiv Kailash Saini, s/o Ram Sarup r/o . . . . . Through Vivek Bhandari, Advocate, H. No. 1239, Sector 8C, Chandigarh. Take notice that a first dividend of 100 paise in the rupee has been declared. The amount payable to you is Rs. 3,58,733 and the same will be payable at my office on the .... day of .... 2005 and on the subsequent working days up to the .... day of.... 2005 between the hours of.... Upon applying for payment this notice you must be produced entire with any bills of exchange, promissory notes or any other negotiable securities held by you. If you desire the dividend to be paid to some other person, you may sign and lodge with the Official Liquidator an authority in the prescribed form (Form No. 139). If you do not attend personally, you must fill up and sign the enclosed forms of receipt and authority. Dated this . . . day of . . . . 2005. *Insert here 'first' or 'second' or 'final' as the case may be. Note: 1. The receipt and authority should, in the case of a firm's name and in the case of a limited company, by an officer of the company so described. 2. If you do not claim the dividend, declared and payable as above, within six months after the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssible under section 529A of the Act. In spite of pointed reference to learned counsel representing the Official Liquidator and the Official Liquidator present in the Court, no such order was produced and it was stated that the relevant files are with the Central Bureau of Investigation. On 1-12-2006, learned standing counsel for the Central Bureau of Investigation was requested to produce the record for the perusal of the Court. Even the record produced does not contain any order but the noting shows that a cheque for Rs. 10,80,14,047 was approved for payment on 17-6-2005. 26. In the reply filed on behalf of 30 workmen through Shri Vivek Bhandari to the show-cause notice issued, again there is no reference to any order passed by the Official Liquidator on or after 18-5-2005, till 23-5-2005, in respect of their assertion that their claims are admissible under section 529A of the Act as proposed by them in the communication dated 18-5-2005, in respect of the employees classified as annexures "B" and "C". It was stated that the work performed by these persons clearly fall within the definition of "workmen" as defined in section 2(s) of the Industrial Disputes Act, 1947, and they hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verbatim same with some changes regarding the nature of work as those filed through Shri Vivek Bhandari, Advocate. 29. In the reply filed on behalf of learned chartered accountant, it has been pointed out that there was considerable divergence in the interpretation of section 2(s) of the Industrial Disputes Act, 1947, and that the Official Liquidator was approached with this difficulty. After discussion, it was decided by way of abundant precaution to classify the workers and the staff on the basis of designation alone and any person who was described in the record of the company as supervisor, officer, manager and senior accounts officer should be categorized separately and claims of such claimants should be classified as payable under section 530 of the Act. The chartered accountant was supplied with a copy of similar report in Punjab Anand Battery, company in liquidation, and was asked to follow the report as a precedent prevailing in the office of the Official Liquidator. It is pointed out that the Official Liquidator was fully aware regarding the legal consequences of classification of workers into annexures A, B and C. A meeting was held on 16-8-2005, wherein the Official Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the court along with the certificate and such list of creditors could not be varied except under the orders of the Court in terms of rule 168 of the Rules. For the facility of reference, rules 163, 167 and 168 of the Rules are reproduced hereunder : "163. Acceptance or rejection of proof to be communicated.-After such investigation as he may think necessary, the liquidator shall in writing admit or reject the proof in whole or in part. Every decision of the liquidator accepting or rejecting a proof, either wholly or in part, shall be communicated to the creditor concerned by post under certificate of posting where the proof is admitted and by registered post with acknowledgement due where the proof is rejected wholly or in part provided that it shall not be necessary to give notice of the admission of a claim to a creditor who has appeared before the liquidator and the acceptance of whose claim has been communicated to him or his agent in writing at the time of acceptance. Where the liquidator rejects a proof, wholly or in part, he shall state the grounds of the rejection to the creditor in Form No. 69. Notice of admission of proof shall be in Form No. 70. 167. Proof and list o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he workmen in annexure C amounts to Rs. 45,10,368.19 and employees in annexure C amounts to Rs. 68,09,386.32, total amounting to Rs. 10,94,25,421.06. As against the said amount in respect of 464 workmen as per report of the chartered accountant, Shri Ashish Vajpayee has sought approval of this Court for payment of Rs. 8,66,13,241 in respect of such 464 employees of the company in liquidation. Actually 575 workmen have been paid after transferring a sum of Rs. 10,80,14,047. It is, thus, apparent that the learned Official Liquidator has not only misled this Court in respect to existence of claims of 33 employees and 36 employees/workmen falling within annexures B and C of the report of the chartered accountant but also disbursed more than two crores over and above the amount communicated to this Court in the miscellaneous application. The Official Liquidator also paid 575 employees though approval was sought in respect of 464 employees. 32. There is no order of acceptance or rejection of proof contemplated under rule 163 of the Rules but still payment has been made to 33 employees and 36 employees/workmen on the basis of affidavits taken on the date of issuance of dividend notices a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f signatures, photographs and other data available with the bank by the bank officials. In case of discrepancy, the bank has refused to identify the workman and certain payments were withheld. In fact, the Commissioner of Court vide communication dated 3-10-2005, addressed to the Official Liquidator has suggested that the matter be brought to the notice of this Court for appropriate clarification, direction but to such direction or clarification was sought by the learned Official Liquidator. 35. Another factor which requires to be noticed is that the Official Liquidator has sought reports from the learned chartered accountant without permission or direction of this Court in respect of which learned chartered accountant has given supplementary reports on 22-11-2005, and 8-2-2006. The action to seek further reports from the learned chartered accountant without the intervention of this Court is highly improper if not illegal. 36. Shri Vivek Bhandari, Advocate, who has put in appearance on behalf of the workers and the employees, has asserted that the classification made by the chartered accountant by way of annexures A, B and C was never accepted by the employees. The employees are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h report is not acceptable, therefore, the disbursement made to 33 employees in annexure B is wholly unjustified, illegal and without jurisdiction. 37. In view of the above, I deem it appropriate to issue the following directions : (i)That the Official Liquidator shall consider and pass appropriate order adjudicating the claims of the employees classified under section 530 of the Act in terms of the report of the chartered accountant dated 21-4-2005, 22-11-2005, and 8-2-2006. (ii)That the employees falling in annexure B of the report of the chartered accountant dated 21-4-2005, shall refund the amount to the Official Liquidator within one month pending adjudication of their claims so as to restore the position as it existed prior to disbursement of the amount. (iii)That the Central Bureau of Investigation to investigate the entire gamut of payment of dividend from the stage of invitation of claims, settlement and payment to find out any misappropriation of funds of the company in liquidation by the Official Liquidator, employees or workmen or any other person who has connived or colluded with the officials. The Central Bureau of Investigation shall furnish the report, preferabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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