Company appeals dismissed as workmen cannot claim statutory interest on salary arrears under Rule 156 without prior adjudication

HC dismissed company appeals regarding workmen's claim for statutory interest under Rule 156 of Companies (Court) Rules, 1959. Court held that under Section 529-A of Companies Act 1956, workmen become secured creditors pari passu with secured creditors for dues, but only for salary arrears already adjudicated. Since workmen never initially claimed interest and no such claim was adjudicated upon, they cannot subsequently claim interest on arrears. The court found workmen had no vested right to interest as this was never established by competent authority order.

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Issues Involved:
1. Whether the workmen can claim parity with respect to the payment of interest on the basis of the principle of pari passu.
2. Whether the prayer of the workmen for grant of statutory interest in accordance with Rule 156 of the Companies (Court) Rules, 1959 is tenable in law and facts.

Summary of Judgment:

Issue 1: Parity in Payment of Interest Based on Pari Passu Principle:

The appellants argued that the Company Court failed to appreciate their claim for interest, despite the provision of Section 529 of the Companies Act, 1956, which treats secured creditors and workmen as pari passu. They contended that since secured creditors received interest, workmen should also be entitled to interest on their delayed payments. However, the Court noted that the principle of pari passu applies to the distribution of assets but does not extend to the payment of interest. The Court highlighted that the interest paid to secured creditors is part of the loan contract, whereas the workmen's claim for interest is not based on any contractual obligation.

Issue 2: Grant of Statutory Interest Under Rule 156 of the Companies (Court) Rules, 1959:

The appellants claimed statutory interest under Rule 156, which allows creditors to claim interest on overdue debts. The Court examined the context of Rule 156 within the chapter "Debts and Claims against Company" and concluded that this rule does not provide for interest claims at this stage for workmen. The Court emphasized that the workmen's claims were adjudicated without any claim for interest, and the order dated 12th August 2016, which settled their claims, was not challenged and thus attained finality. Therefore, the subsequent claim for interest was not tenable.

Analysis and Conclusion:

The Court reiterated that the workmen and secured creditors are treated as pari passu for the distribution of assets but not for the payment of interest. The Court further explained that the interest claimed by secured creditors is part of the loan contract, whereas the workmen's claim for interest lacks such contractual basis. The Court also clarified that Rule 156 does not support the workmen's claim for interest at this stage. The judgment of the Hon'ble Supreme Court in Vijay Industries was distinguished as it involved a specific contractual clause for interest, which was not present in the workmen's case. The appeals were dismissed, and the Court upheld the order rejecting the workmen's claim for statutory interest.

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