TaxTMI 
TaxTMI 
2001 (3) TMI 927
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....e, on 17-3-1988 Company petition No. 43 of 1988 was filed by a creditor of the company for winding up. This court by order dated 27-10-1988, ordered winding up of the company. However, that order was reviewed and this court by a subsequent order dated 31-7-1991, held that the order of winding up dated 27-10-1988, passed without taking note of the inquiry proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985, pending before the Board for Industrial and Financial Reconstruction, was void. This Court, however, after the proceedings before the Board for Industrial and Financial Reconstruction and appellate authority for Industrial and Financial Reconstruction had ended, reconsidered the matter and passed an order on 31-7-1991, ordering winding up the company. 3. The applicants herein filed Application No. 11 of 1991, before the Labour Court, Mysore, under section 33C(2) of the ID Act, to determine the amount due to them in pursuance of the award dated 12-10-1989 made in Reference No. 132 of 1981 and a direction to pay the amount so determined. When the company was ordered to be wound up on 31-7-1991, leave of the company court was not taken to continue the pro....
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....ed or if pending on the date of winding up order, shall be proceeded with, against the company, except by leave of the company court. Sub-section (2) of section 446 provides that notwithstanding anything contained in any other law for the time being in force, the company court shall have jurisdiction to entertain or dispose of any suit or proceeding by or against the company, or any claim made by or against the company. Sub-sections (3) and (4) of section 446 provide that such suit or proceedings (other than those pending in appeal before the Supreme Court or a High Court) may be transferred to and disposed of by the company court. Any 'other legal proceeding' referred to in sub-section (1) of section 446 can be defined as any proceeding in a court of Tribunal, regulated by law, but of a nature which can conveniently and appropriately be dealt with and decided by the winding up court if transferred to it, in which a judicial decision is given after enquiry. Governor General-in-Council v. Shiromani Sugar Mills Ltd. [1946] 16 Comp. Cas. 71 ; as explained by the Supreme Court in S.V. Kondaskar, Official Liquidator & Liquidator of the Colaba Land & Mills Co. Ltd. v. V.M. Deshpande, ITO....
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....b)The Labour Court had already made an award on 12-10-1989 in favour of the applicants in a reference under section 10(1)(c). (Reference No. 132 of 1981) passed prior to the date of winding up order. The proceedings under section 33C(2) are meant only to quantify the benefits under the said award. Therefore, the proceedings are of the nature of an execution proceedings and do not require the leave of the company court under section 446. 12. The first ground is based on the decision of the Patna High Court in S. K.G. Sugar Ltd. v. Ali Hassan [1957] 27 Comp. Cas. 168 (Pat.), and the decision of the Kerala High Court in B.V. John's case (supra). Both the decisions relied on by the applicants considered the question as to whether a reference under section 10(l)(c) attracted section 446(1). 13. In S.K.G. Sugar Ltd's case (supra), the Patna High Court held that section 10(1)(c) imposes a statutory duty on the Government to refer disputes for adjudication for the sake of public interest and for preservation of industrial peace and therefore there is no need for the Government to seek leave of the company court under section 171 of the Companies Act, 1913, (corresponding to section 446 o....
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....t proceedings under section 33C(2) are in the nature of execution proceedings and therefore do not require leave of the company court under section 446(1), proceeds on a misconception that execution proceedings are not legal proceedings and that leave of the company court under section 446(1) is not required for initiating or continuing execution proceedings. 18. The nature of the power exercised by the Labour Court has been explained by the Supreme Court in several decisions. A proceeding under section 33C(2) is a proceeding generally in the nature of execution proceedings and the jurisdiction of the Labour Court is in the nature of an executing court. The calculation or computation follows upon an existing right to the money or benefit in view of a previous adjudication, or otherwise duly provided for - Central Inland Water Transport Corpn. Ltd. v. Workmen AIR 1974 SC 1604. But the power under section 33C(2) can be exercised by the Labour Court not only in cases where an award is made in proceedings under section 10(1)(c) but even in other cases. The Labour Court has jurisdiction under section 33C(2) to determine whether the workman has a right to receive the benefit when such r....
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....r proceeded with after a winding up order is made, without leave of the company court. We have already held that the proceeding under section 33(2) is a legal proceeding, for purposes of section 446. Even if the said proceeding had been initiated prior to the order of winding up, as the order of winding up was passed during the pendency of such proceeding, it was mandatory for the applicants to have obtained leave of the company court. A statutory mandate cannot be avoided on the ground of ignorance or hardship. It should also be noticed that the order was obtained ex parte without impleading the Official Liquidator who represented the company in liquidation. The Official Liquidator has refused to accept the order of the Labour Court. It is therefore not valid and enforceable. The fact that in some other matters, the relevant contentions were not urged or that the Official Liquidator did not challenge the validity cannot be a ground for ignoring the requirements of section 446(1). Consequently, these applications are liable to be rejected. 22. The learned counsel for the applicants submitted that to avoid further delay leave may be granted under section 446(1) to enable the quanti....