Liquidation claims of dissenting workmen limited to statutory dues; wage, bonus and interest claims restricted, gratuity remains payable.

Dissenting workmen not bound by union-backed consent terms may still have their dues determined under the Companies Act liquidation scheme, and their claims are confined to what Sections 529 and 529A permit. Wages after closure were recoverable only by workmen who joined the workers' cooperative and actually continued working until the winding-up order; others could not claim wages from the earlier closure date. Notice pay, general leave encashment, bonus and interest were not allowable as preferential claims, while gratuity remained payable according to law and the liquidation priorities.

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Issues: (i) Whether the dissenting workmen were bound by the consent terms or were entitled to have their dues determined under the Companies Act, 1956; (ii) upto what date wages were payable for the purpose of workmen's dues in liquidation; (iii) whether notice pay, leave wages, bonus, gratuity and interest thereon were payable as preferential claims.

Issue (i): Whether the dissenting workmen were bound by the consent terms or were entitled to have their dues determined under the Companies Act, 1956

Analysis: The workmen who had not assented to the consent terms and had not authorised the registered union to settle on their behalf could not be treated as bound by those terms. The earlier Industrial Court adjudication ceased to govern once the consent terms were accepted in the writ proceedings and received the Company Court's concurrence, but the dissenting workmen still retained an independent right to have their dues worked out under the statutory scheme governing liquidation.

Conclusion: The dissenting workmen were not bound by the consent terms, but their dues had to be determined in accordance with Sections 529 and 529A of the Companies Act, 1956.

Issue (ii): Upto what date wages were payable for the purpose of workmen's dues in liquidation

Analysis: Under Section 445(3) of the Companies Act, 1956, the winding-up order operates as a notice of discharge only for workmen who continue in employment on that date. Where the company had already ceased to run and the sanctioned rehabilitation scheme under SICA altered the employment relationship, only those workmen who became members of the workers' cooperative and actually continued working were entitled to wages up to the winding-up order. Others, having not joined the cooperative and not worked, could not claim wages beyond the date when the factory closed and the scheme ceased to sustain the employment relationship.

Conclusion: Only the dissenting workmen who became members of the workers' cooperative and actually worked till 31 December 1998 were entitled to wages upto the winding-up order; the others were not entitled to wages from 20 September 1991 onwards.

Issue (iii): Whether notice pay, leave wages, bonus, gratuity and interest thereon were payable as preferential claims

Analysis: The State amendment relied upon for notice pay was repugnant to the later central law and could not prevail. Leave encashment was confined to the statutory situations contemplated by the Factories Act and was not available as a general claim. Bonus was not a preferential wage component in liquidation. Gratuity was payable, but interest on such gratuity, and on other analogous claims, could not be treated as a preferential payment under the liquidation scheme; post-winding-up interest depended upon surplus after admitted claims were satisfied.

Conclusion: Notice pay, general leave encashment, bonus and interest thereon were not allowed as preferential claims, while gratuity was payable in accordance with law.

Final Conclusion: The dissenting workmen were granted only such reliefs as were supportable under the liquidation provisions and the winding-up order, with their individual claims to be re-adjudicated by the Official Liquidator on the basis of the present ruling and with an option to accept the consent-term package.

Ratio Decidendi: In liquidation, dissenting workmen not bound by union-backed consent terms may still claim only those dues that survive under the statutory scheme, and wages or ancillary benefits are recoverable only to the extent permitted by the governing liquidation, labour, and special rehabilitation statutes.

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