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TMI Blog2024 (5) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... become secured creditors by operation of law to the extent of the workmen's dues provided there exists secured creditor by contract. If there is no secured creditor then the workmen of the company become unsecured preferential creditors under Section 529-A to the extent of the workmen's dues - The purpose of Section 529-A is to ensure that the workmen should not be deprived of their legitimate claims in the event of the liquidation of the company and the assets of the company would remain charged for the payment of the workers' dues and such charge will be pari passu with the charge of the secured creditors. Further, there is no other statutory provision overriding the claim of the secured creditors except Section 529-A. This section overrides preferential claims under Section 530 also. Under Section 529-A, the dues of the workers and debts due to the secured creditors are to be treated pari passu and have to be treated as prior to all other dues - it appears that the arrears of amount have been paid in favour of the workmen. But, the amount has been paid in favour of the workmen only with respect to the arrears of salary. After the subsequent time having been elapsed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yan Roy , Advocate ( In Company Appeal No. 2 / 2019 ) For the Respondents : Mr. Himanshu Kr. Mehta , Advocate Mrs. Manjushri Patra , Advocate ( In both the cases ) ORDER Per Sujit Narayan Prasad , J. 1. Both the appeals since arise out of common order dated 01.11.2018 passed in I.A. No.7469 of 2016 filed in Company Petition No.2/2002. Accordingly, both the appeals have been heard together and are being disposed of by this common order. Prayer 2. The instant appeals have been filed under Section 483 of the Companies Act, 1956 against the order dated 01.11.2018 passed in I.A. No.7469 of 2016 arising out of Company Petition No.2/2002, whereby and whereunder, the prayer made in the interlocutory application being I.A. No.7469 of 2016 for grant of statutory interest in accordance with Rule 156 of the Companies (Court) Rules, 1959 in favour of the workmen, has been rejected. Facts 3. The brief facts of the case, as per the pleading made in the memo of appeal, require to be enumerated, as hereunder:- 4. It is the case of the appellants that the workmen filed an application before the learned Labour Court, Hazaribag in M.J Case No. 7/2001, 18/2003, 3/2004 and PG Case No. 3/2003 to 241/2003 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kmen for payment of their proved balance debt on priority basis from the sale proceeds of the unsecured assets, was allowed in terms of order dated 12/08/2016 passed in I.A No. 3369/2012, wherein, it has been held that since the secured creditors were participating in the liquidation proceedings and thus, they are not entitled to claim that their unrealized dues in terms of distribution of secured assets under clause-c of the proviso to Section 529(1) shall be pari passu with that of the workmen in the matter of apportionment of debt in terms of Section 529A of the Companies Act, 1956. 11. In pursuant to the order dated 12/08/2016 passed in I.A No.3369/2012, the workmen got their remaining proved balanced debts. The workmen, after receiving their proved debts, had filed an interlocutory application being I.A. No. 7469/2016 on 09/11/2016 for grant of statutory interest accrued from the sale proceeds of the unsecured assets of the Company in liquidation as the same was ordered to be kept in fixed deposit account in a Nationalized Bank since the year 2008. 12. The workmen pleaded that the amount of Rs. 8,51,01,000/- which is the sale proceed arising from unsecured assets, was kept in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ong with the interest, while no such interest is being granted in favour of the workmen, even though, in view of the provision of Section 529 of the Companies Act, both the secured creditor and workmen are to be treated as pari passu. Therefore, the argument has been advanced that when the secured creditor has been paid amount along with the interest, then why not such interest is to be paid to the workmen, even though, the workmen have been paid their arrears of salary after lapse of eight years. (iii) It is submitted that the claim of the workmen is supported by the provisions of Rule 156 of the Companies (Court) Rules, 1959, and in spite of that the interest component on the proved debt, has not been given to the workmen. (iv) Relying upon the judgment of the Apex Court rendered in Vijay Industries Vs. NATL Technologies Ltd. reported in (2009) 3 SCC 527, it is further submitted that debt also includes statutory interest but Workmen have not received any interest on their debts. 18. Learned counsel appearing for the appellants on these grounds, have assailed the impugned order. Argument advanced on behalf of the Respondents 19. Per contra, Mr. Himanshu Kumar Mehta, learned counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve heard the learned counsel for the parties and gone across the finding recorded by the learned Company Court in the impugned order. 22. This Court, before proceeding to examine the factual aspect, needs to refer herein the very scope of the Section 483 of the Companies Act, 1956, under which both of the instant appeals have been preferred. 23. Section 483 of the Companies Act provides that appeals from any order made, or decision given, in the matter of the winding up of a company by the court shall lie to the same court to which, in the same manner in which, and subject to the same conditions under which, appeals lie from any order or decision of the court in cases within its ordinary jurisdiction. Section 483 is placed in Chapter II of Part VII. 24. Therefore, at the first blush, it would appear that Section 483 provides for appeals from any order made, or decision given, in the matter of winding up of the company by the court. Section 483 indicates that the appeal would lie in the same manner to the same court and naturally and logically, an appeal from the decision of the Single Judge would lie to the Division Bench. 25. Thus, it is evident that the Section 483 confers the ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Companies Act, 1956. 32. It is evident that in pursuant to the order dated 12/08/2016 passed in I.A No.3369/2012, the workmen got their remaining balanced debts. The workmen, after receiving their proved debts, had filed an interlocutory application being I.A. No. 7469/2016 on 09/11/2016 for grant of statutory interest accrued from the sale proceeds of the unsecured assets of the Company in liquidation as the same was ordered to be kept in fixed deposit account in a Nationalized Bank since the year 2008. 33. The Official Liquidator pleaded that the workmen are entitled for payment of interest under Rule 179 of the Companies Act, 1959 at the rate of 2 percent on the total dividend paid to the workmen. 34. The Secured creditors had also submitted their reply submitting that workmen are not entitled for grant of any statutory interest under section 179 of the Companies (Court) Rules, 1959 because secured creditors have not received their debt fully during the liquidation proceedings. 35. Further, it is evident that the learned Single Judge of this Court, vide order dated 01/11/2018 passed in I.A. No.7469/2016 arising out of Company Petition No.02/2002, has rejected the prayer made o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the workmen should not be deprived of their legitimate claims in the event of the liquidation of the company and the assets of the company would remain charged for the payment of the workers' dues and such charge will be pari passu with the charge of the secured creditors. There is no other statutory provision overriding the claim of the secured creditors except Section 529-A. This section overrides preferential claims under Section 530 also. Under Section 529-A the dues of the workers and debts due to the secured creditors are to be treated pari passu and have to be treated as prior to all other dues. 40. It is manifestly apparent from the record that the appellants have made claim at the time of disbursement of the amount which has elaborately been dealt with by the Company Court in the order dated 12th August, 2016 and at that time, no claim was made so far as the payment of interest is concerned. It is the admitted fact that the order dated 12th August, 2016 has not been assailed before the Higher Forum and hence, the same has attained its finality. 41. Further, it appears that the arrears of amount have been paid in favour of the workmen. But, the amount has been paid in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est will also be said to be part of the principal amount which has been sanctioned in favour of the concerned unit. 48. But the amount of interest which is being claimed by the workmen, cannot be said to be exclusive part of the salary and in that view of the matter, the workmen cannot be allowed to raise the claim by way of an accrued right for payment of the same. 49. Here, it would be relevant to deal with the vested/accrued right. Rights are vested when right to enjoyment, present or prospective, has become property of some particular person or persons as present interest mere expectancy of future benefits, or contingent interest in property founded on anticipated continuance of existing laws, does not constitute vested rights. 50. The word vested is normally used where an immediate fixed right in present or future enjoyment in respect of a property is created. With the long usage the said word vest has also acquired a meaning as an absolute or indefeasible right . It has a legitimate or settled expectation to obtain right to enjoy the property etc. Such settled expectation can be rendered impossible of fulfilment due to change in law by the legislature. Besides this, such a se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein the Rule 156 of Rules, 1959 which is being quoted as under :- R. 156. Interest. On any debt or certain sum payable at a certain time or otherwise, whereon interest is not reserved or agreed for, and which is overdue at the date of the winding-up order, or the resolution as the case may be, the creditor may prove for interest as a rate not exceeding four percent per annum up to that date from the time when the debt or sum was payable, if the debt or sum is payable by virtue of a written instrument at a certain time, and if payable otherwise, then from the time when a demand in writing has been made, giving notice that interest will be claimed from the date of demand until the time of payment. 55. This aforesaid rule is incorporated under the Chapter Debts and Claims against Company and starts from Rule 147 which stipulates for fixing a date for proving debts. The liquidator is required to give notice under Rule 148 of not less than 14 days fixed by the advertisement to be published in daily newspapers, to prove their debts required under R. 149. The proof is to be submitted on affidavit verifying the debts giving statement of account showing particulars of the debts and the vou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of statutory interest, the learned counsel for the petitioner/appellant has put his reliance on the judgment rendered by the Hon ble Apex Court in the case of Vijay Industries (supra). 62. In the aforesaid context, it is bounden duty of this Court to go through the aforesaid judgment in order to reach out the conclusion that whether the claim of the interest amount by the workmen has some legal sanction or not. 63. In the case of Vijay Industries (supra), appellant was a small-scale industry which supplied castor oil to the respondent valued at Rs.89,13,589/- out of which Rs.49,99,000/- was paid. Invoices of the credit bill attached with each of the supply contained a clause relating to payment of interest @ 2% per month. At the foot of each credited bill the officer of the respondent company has put a signature as a token of acceptance. 64. On failure of payment of the outstanding dues, a winding up petition was filed by the appellant before the Company Court. The learned court admitted the company petition and held that prima-facie case was made out. On being aggrieved, the respondent preferred an appeal which was allowed by the learned Division Bench. When the matter was tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tio of any decision must be understood in the background of the facts of that case and the case is only an authority for what it actually decides, and not what logically follows from it. The court should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. 67. It is evident that in the instant case, the workmen never raised the claim of interest and no such claim of interest was ever adjudicated upon. The payments have been made to the workmen in priority against sale proceeds of unsecured assets of the company in compliance of the order dated 12th August 2016. It has been accepted by the parties and has attained finality. 68. Moreover, at the time of making claim before the Company Court for arrear of the salary, there was no claim for making payment of the interest upon the said arrear which also suggests that the workmen are well aware with the fact that they are not entitled for the interest, otherwise, the issue of interest would have been raised at the very inception by raising the said issue in the interlocutory application which has been filed for arrears of the salary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a non-deserving appeal, not a fit one to go for final hearing, is not taken away. 70. Further, it is evident that the section 483 of the Act 1956, confers power of the widest amplitude on the appellate court so as to do complete justice between the parties and such power is unfettered by consideration of facts like who has filed the appeal and whether the appeal is being dismissed, allowed or disposed of by modifying the judgment appealed against. The object sought to be achieved by conferment of such power on the appellate court is to avoid inconsistency, inequity, inequality in reliefs granted to the parties concern. 71. This Court, after having discussed the aforesaid issue and taking in to consideration the above discussed settled proposition of law and coming back to the impugned order passed by the learned Single Judge, is of the view that if the learned Single Judge has declined to interfere with the prayer made in the interlocutory application being I.A. No.7469 of 2016 for grant of statutory interest, the same cannot be said to suffer from an error. 72. Accordingly, the instant Company appeals are hereby dismissed. 73. Pending interlocutory application(s), if any, also s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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