Winding up by court treats closure as unavoidable, limits compensation under the Industrial Disputes Act proviso and operates as notice of discharge.

Court-ordered winding-up constitutes closure by unavoidable circumstances, bringing the Industrial Disputes Act proviso limiting compensation into effect and accordingly the compensation cap was applied and upheld. Implementation of the trial judge's awards for allowances and increments was not reopened on appeal and no appellate relief was granted on that point. A winding-up order operates as notice of discharge under the Companies Act where there is no evidence of a fresh contract with the liquidator, so no additional notice-pay is due. The appeal fails and the lower judgment is confirmed.

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Issues: (i) Whether the appellant's claims for implementation of allowances and increments ordered by the trial judge warranted interference on appeal; (ii) Whether compensation for termination was rightly confined to the maximum of average pay for three months under the proviso to sub-section (1) of section 25FFF of the Industrial Disputes Act; (iii) Whether employees were entitled to one month's notice-pay under section 25F(a) of the Industrial Disputes Act in view of section 445(3) of the Companies Act and the conduct of the liquidator.

Issue (i): Whether the appellant could obtain appellate relief for non-implementation of allowances and increments awarded by the learned judge.

Analysis: The Court observed that implementation of the trial judge's award is not a matter for this appeal and accepted the respondent's assurance that the order would be implemented or corrected if incomplete.

Conclusion: The Court did not grant relief to the appellant on implementation; the conclusion is in favour of the respondent.

Issue (ii): Whether the proviso to sub-section (1) of section 25FFF of the Industrial Disputes Act was correctly applied to limit compensation to average pay for three months where the bank was wound up by court order.

Analysis: The Court held that closure imposed by a winding-up order of the court constitutes unavoidable circumstances beyond the control of the directors; mismanagement or misconduct causing winding-up is irrelevant to that question unless the order was procured by collusion or fraud. Therefore closures following adjudication in insolvency or compulsory winding-up fall within the proviso to section 25FFF(1).

Conclusion: The limitation of compensation under the proviso to section 25FFF(1) was correctly applied; the conclusion is in favour of the respondent.

Issue (iii): Whether employees were entitled to one month's notice-pay under section 25F(a) because the business was or was not continued after the winding-up order, and whether subsequent employment under the liquidator amounted to fresh employment.

Analysis: The Court accepted that carrying on business by a liquidator for the beneficial winding-up is not a continuation of the company's business for purposes of section 445(3). There was no evidence of any new contract between the liquidator and employees; accordingly the winding-up order operated as notice of discharge under section 445(3). Where employees continued to receive salary beyond the notice period or had extended notice, further notice-pay was not due.

Conclusion: The employees were not entitled to additional notice-pay; the conclusion is in favour of the respondent.

Final Conclusion: The grounds of appeal fail on the merits and the judgment of the learned judge is confirmed; no relief is granted to the appellant.

Ratio Decidendi: A court-ordered winding-up constitutes closure by unavoidable circumstances bringing the proviso to section 25FFF(1) into play, and a winding-up order operates as notice of discharge under section 445(3) of the Companies Act absent evidence of a fresh contract of employment with the liquidator.

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