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TMI Blog2008 (9) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... lary is debt or not and on default of payment of arrears, the company is liable to be wound up or not, the relevant provisions of the Act are to be considered, which are quoted hereinunder :- "Section 433. Circumstances in which company may be wound up by Tribunal.-A company may be wound up by the Tribunal,- (a )to (d)****** (e )if the company is unable to pay its debts; Section 439. Provision as to applications for winding up.-(1) An application to the [Tribunal] for the winding up of a company shall be by petition presented, subject to the provisions of this section,- (a )by the company; or (b )by any creditor or creditors, including any contingent or prospective creditor or creditors; or (c )by any contributory or contributories; or (d )by all or any of the parties specified in clauses ( a), (b) and (c), whether together or separately; or (e )by the Registrar; or (f )in a case falling under section 243, by any person authorised by the Central Government in that behalf; (g )in a case falling under clause (h) of section 433, by the Central Government or a State Government. [529A. Overriding preferential payments.-Notwithstanding anything contained in any other provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge held that workmen had no right either to get impleaded in the winding up petition or even to intervene in the winding up petition. It was observed that the duty of the court to consider the interest of the workers of the company would not create a right in such workers to intervene in the absence of express provision in the Companies Act and in the teeth of such right specifically conferred only on the creditors and contributories. The Union preferred an appeal before the Division Bench of the High Court but the Division Bench also took the same view and held that though it was undoubtedly true that while disposing of a winding up petition preferred on the ground that it is just and equitable to wind up the Company, the court must consider the interest of the workmen, it does not mean "that everybody who is remotely interested in the Company can file an application to implead himself as a party in the petition for winding up" and "merely because in considering the question whether to wind up or not the court has also to take the larger point of public interest including that of the workers into consideration, it will not clothe the Unions with any locus standi to file applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, 1956 and since no such right is conferred on the workmen by any provision of the Companies Act, 1956, the workmen are not entitled to intervene in the winding up petition, even though the making of a winding up order may result in termination of their services. The workmen, according to respondents 1 to 5, could appear at the hearing of the winding up petition and make their submissions only in their capacity as creditors if any part of their wages remained unpaid by the Company but they had no locus to appear in their capacity as workers. The respondents further submitted that section 439 confers the right to present a winding up petition only on certain specifically enumerated persons and the workers are not included in that enumeration and therefore obviously, the workers have no right to prefer a petition for winding up of a company. The right to apply for winding up of a company being a creature of statute, none other, than those, on whom the right to present a winding up petition is conferred by the statute can make an application for winding up a company and no such right having been conferred on the workers, they cannot prefer a winding up petition against a company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Co-operative Transport Society Ltd. v. Financial Commissioner & Secretary to Government of Haryana [2002] 6 SCC 269 in which it has been held that it is trite to say that the intention of the Legislature must be found by reading the statute as a whole. The court must ascertain the intention of the Legislature by directing its attention not merely to the clauses to be construed but to the entire statute; it must compare the clause with the other parts of the law, and the setting in which the clause to be interpreted occurs. The expres-sion used in a statute should ordinarily be understood in a sense in which they best harmonize with the object of the statute, and which effectuate the object of the Legislature. He also relied upon a decision of the Hon'ble Supreme Court in the case of CIT v. N.C. Budharaja & Co. [1993] 204 ITR 4121 in which it has been held that a statute cannot always be construed with the dictionary in one hand and the statute in the other. Regard must also be had to the scheme, context and to the legislative history of the provision. 11. In reply to the objections of the opposite parties on the maintainability of the present company petition, learned counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . VIF Airways Ltd. [1998] 94 Comp. Cas. 2911; the judgment of the Hon'ble Supreme Court given in the case of Kesoram Industries & Cotton Mills Ltd. (supra) and expressed its full agreement with the view taken by the Andhra Pradesh High Court. The Hon'ble Judge has also taken care of the decision of the Hon'ble Supreme Court in the case of P.R. Ramakrishnan (supra) and distinguishing the facts of both the cases observed as under :- "While making the observation that the workers may not have right to file winding up petition under section 433 of the Act, the Supreme Court treated them as workers alone and it was held that section 439 does not mention the category of the workers. It may be mentioned that section 439 stipulates various categories of persons who are competent to file a petition for winding up. The persons specified are company itself, creditor, contributory, the Registrar and in some cases Central or State Governments. In this context the Supreme Court stated that workers are not included in section 439. However, the position of workers was creditor as neither in issue nor dealt with by the Supreme Court. A worker per se may not have right to file the winding up petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluded in the term "debt" for the purpose of filing petition for winding up on the eventuality of non-payment of debt by the Company. After going through the decision discussed hereinabove, I am of the view that the employee of the company can file the company petition for winding up of the company on its failure to pay the salary to the employees but passing the order for winding up of the company depends upon the satisfaction of the Company Judge that there is no other mode to claim the dues and salary and further without winding up of the company, the same cannot be paid. Therefore, I hereby entertain the present company petition subject to determination that the petitioner was employee of the opposite party and without the order of winding up of the company, the payment of dues against the salary is not payable. 15. Now, the relevant facts of the case are to be dealt with to determine the question as to whether at the behest of the employees as creditors, the present company can be wound up or not. The petitioner is a shareholder of the company amongst the first subscribers of shares of the company having 100 equity shares. He was working in the predecessor company known as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been followed and the Registrar of Companies was also not intimated. It has further been submitted by him that there was unwarranted pressure upon the petitioner to sign blank cheque books and to hand over the same to the Managing Director of Company. Since he refused to do the same, alternative authorised signatory was introduced. The petitioner has also levelled allegations that the tax authorities were deceived and the tax authorities took some action against opposite party No. 1 in 1998-99. 17. Learned counsel for the petitioner submitted that vide notice dated 16-5-2003 the petitioner demanded his salary from February, 2003 to April, 2003 along with other allowances as well as increments from 1995 to April, 2003 at the rate 15 per cent per annum but the same was not responded. Under the circumstances, he filed the present company petition. This fact has been denied by the opposite party No. 4 that since the petitioner ceased to be on rolls of company after 31-1-2003 there is no question of payment of any salary from February to April, 2003 and thereafter. So far as the payment of increments is concerned, it has been submitted by the opposite parties that no director of c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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