2004 (3) TMI 414 - HC - Companies Law

Appeals Dismissed for Lack of Maintainability under Companies (Court) Rules

The court dismissed the appeals, ruling that they were not maintainable under Rule 164 of the Companies (Court) Rules, 1959, by SFC and Canara Bank. The ... Debts and claims against company Issues Involved:1. Maintainability of the claim petition by the President of M/s. Mopeds India Staff and Workers Union.2. Coverage of claims under sections 529 and 529A of the Companies Act, 1956.3. Determination of claims falling outside sections 529 and 529A of the Companies Act, 1956.4. Entitlement of workmen for closure compensation under section 25FFF of the Industrial Disputes Act.5. Cut-off date for deciding the closure of the company.6. Exclusion of persons from the definition of workmen under section 2(s) of the Industrial Disputes Act.7. Gainful employment of workmen during the claim period.8. Entitlement of workmen to interest and its rate and date.9. Representation of the Official Liquidator before the DRT to protect the interests of secured creditors and workmen.Detailed Analysis:1. Maintainability of the claim petition by the President of M/s. Mopeds India Staff and Workers Union:The court addressed whether the claim petition filed by the President of the M/s. Mopeds India Staff and Workers Union is maintainable on behalf of its members. The Official Liquidator had framed issues to determine the legitimacy of the union's representation and the validity of their claims.2. Coverage of claims under sections 529 and 529A of the Companies Act, 1956:The court examined whether the claims made by the workmen fell under sections 529 and 529A, which grant workers the status of secured creditors. The Official Liquidator admitted the workmen's claim as a secured debt to an extent of Rs. 1,41,19,125, ranking pari passu with other secured creditors, and assessed bonus amounts as unsecured debt.3. Determination of claims falling outside sections 529 and 529A of the Companies Act, 1956:The court considered whether any part of the amount claimed by the workmen fell outside the scope of sections 529 and 529A. The objections raised by SFC and Canara Bank included contentions that certain claims, such as wages during the strike period, were not permissible.4. Entitlement of workmen for closure compensation under section 25FFF of the Industrial Disputes Act:The court deliberated on whether the workmen were entitled to closure compensation at 15 days' salary for every completed year of service or only for 3 months as per section 25FFF of the Industrial Disputes Act. The Official Liquidator had considered various heads of claims, including closure compensation, gratuity, and notice pay.5. Cut-off date for deciding the closure of the company:The court needed to establish a cut-off date to decide the closure of the company. The Official Liquidator had taken into account the date of the winding-up order and the subsequent actions, including the appointment of the provisional liquidator and the transfer of assets.6. Exclusion of persons from the definition of workmen under section 2(s) of the Industrial Disputes Act:The court examined whether any individuals should be excluded from the definition of workmen as per section 2(s) of the Industrial Disputes Act. The objections included claims that names of deceased workers or those who had left the company were included in the list.7. Gainful employment of workmen during the claim period:The court considered whether the workmen were gainfully employed during the period of their claim, which would affect their entitlement to wages and other dues. The Official Liquidator had to investigate these claims and determine their validity.8. Entitlement of workmen to interest and its rate and date:The court evaluated whether the workmen were entitled to interest on their dues, and if so, at what rate and from which date. The Official Liquidator had granted interest at 4% per annum from the date of the appointment of the Official Liquidator.9. Representation of the Official Liquidator before the DRT to protect the interests of secured creditors and workmen:The court discussed whether the Official Liquidator should represent the interests of secured creditors and the claims of the workmen before the Debt Recovery Tribunal (DRT). The Official Liquidator had to balance the interests of all parties involved, including secured and unsecured creditors.Conclusion:The court dismissed the appeals, holding that the appeals under Rule 164 of the Companies (Court) Rules, 1959, were not maintainable at the instance of SFC and Canara Bank. The court emphasized that only creditors whose claims were directly rejected or accepted by the Official Liquidator could appeal under Rule 164. The court also clarified that rival creditors could only intervene in such appeals with the court's leave. Consequently, the court did not adjudicate the other issues raised in the appeals.