Workmen cannot claim statutory interest under Rule 156 after final settlement from unsecured assets

The Jharkhand HC dismissed appeals challenging denial of statutory interest under Rule 156 of Companies (Court) Rules, 1959. The court held that Section 483 of Companies Act, 1956 grants wide appellate powers to ensure complete justice. Under Section 529-A, workmen's claims rank pari passu with secured creditors' charges. However, workmen never claimed interest during proceedings and payments were made from unsecured assets per court order dated 12th August 2016, which attained finality. The court found no error in the Single Judge's refusal to grant statutory interest to workmen post-settlement.

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Issues Involved:
1. Entitlement of workmen to statutory interest under Rule 156 of the Companies (Court) Rules, 1959.
2. Applicability of pari passu principle for interest payment between secured creditors and workmen.
3. Scope of appellate jurisdiction u/s 483 of the Companies Act, 1956.

Summary:

Entitlement of workmen to statutory interest under Rule 156 of the Companies (Court) Rules, 1959:
The workmen filed I.A. No. 7469/2016 seeking statutory interest on the amount of Rs. 8,51,01,000/- from the sale proceeds of unsecured assets of the company in liquidation, which was kept in a fixed deposit account since 2008. The Company Court rejected this prayer, and the workmen appealed. The court analyzed Rule 156, which allows creditors to prove for interest not exceeding four percent per annum on debts overdue at the date of the winding-up order. However, the court noted that the workmen did not claim interest when the debt was adjudicated by the Official Liquidator. Therefore, Rule 156 was deemed inapplicable.

Applicability of pari passu principle for interest payment between secured creditors and workmen:
The appellants argued that both secured creditors and workmen should be treated pari passu u/s 529 of the Companies Act, 1956, and thus, workmen should receive interest on their debts if secured creditors did. The court acknowledged that while workmen and secured creditors are pari passu concerning the principal amount, this does not extend to interest payments. The interest for secured creditors is part of the loan contract, whereas the workmen's arrears of salary do not inherently include interest unless explicitly claimed and adjudicated.

Scope of appellate jurisdiction u/s 483 of the Companies Act, 1956:
The court examined the scope of appellate jurisdiction u/s 483, which allows appeals from any order made in the winding-up of a company. The court emphasized that the appellate jurisdiction should correct any erroneous consideration of factual aspects by the lower court. However, in this case, since the claim for interest was not raised or adjudicated at the initial stage, and the order dated 12th August 2016 had attained finality without being challenged, the appellate court found no error in the Single Judge's decision to reject the workmen's claim for statutory interest.

Conclusion:
The appeals were dismissed, and the court upheld the decision that workmen are not entitled to statutory interest under Rule 156 of the Companies (Court) Rules, 1959, as the claim was not raised initially and the principle of pari passu does not apply to interest payments in this context.

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