Liquidation proceedings cannot the legality of factory closure; workmen must prove employment and dues with satisfactory evidence.
A liquidation forum cannot decide the legality of a factory's alleged closure, because that industrial dispute must be raised before the Industrial Court or Labour Court. In liquidation proceedings, workmen seeking wages or other dues must independently prove employment as on the liquidation commencement date and substantiate the claimed dues with satisfactory evidence under the liquidation regulations. Here, limited material such as identity cards and old pay slips was found insufficient, and no satisfactory proof established either continued employment or the quantum of dues. The rejection of the claims was therefore affirmed, and the challenge to the closure was left outside the liquidation process.
Issues: Whether the liquidation authority could entertain a challenge to the alleged illegal closure of the factory and whether the workmen's claims were rightly rejected for want of satisfactory proof of employment and dues.
Analysis: The claim of entitlement to wages depended on the assertion that the factory closure was invalid for want of permission under Section 25-O(6) of the Industrial Disputes Act, 1947. The dispute regarding legality of closure was held to be one that ought to be raised before the Industrial Court or Labour Court, not in liquidation proceedings. In the liquidation process, the claimants were required to substantiate their dues under Regulation 19(3) of the IBBI (Liquidation Process) Regulations, 2016, but only limited material such as identity cards and old pay slips was produced. There was no satisfactory material to show that the workmen were in employment on the liquidation commencement date or that the claimed dues were established.
Conclusion: The challenge to the closure could not be adjudicated in the liquidation proceedings, and the rejection of the workmen's claims for insufficient proof was fully upheld.
Final Conclusion: The appeal failed, and the order rejecting the claim application and the workmen's claims stood affirmed.
Ratio Decidendi: A liquidation forum cannot adjudicate a substantive industrial dispute on the legality of a factory's closure, and workmen's claims must be proved by satisfactory evidence of employment and dues in accordance with the liquidation regulations.
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