TaxTMI 
TaxTMI 
2006 (12) TMI 233
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....ued thereon was ordered to be kept in a fixed deposit vide order dated 16-1-2004, passed by this Court. 3. The workers' union filed application bearing C.A. No. 432 of 2004 on or about 6-7-2004, that in view of section 529A of the Companies Act, 1956 (for short "the Act"), the claims of the workers have to be satisfied in full. It may be noticed that prior thereto the Official Liquidator has invited claims from the creditors and workers by publishing the claim notice in the newspapers on 20-3-2004. It was pointed out in the application that the workers have lodged their claims with the Official Liquidator but no action has been taken by the Official Liquidator to settle the claims of the workmen. In reply to such application, the Official Liquidator stated that for the purposes of settlement of such claims, the Official Liquidator has to appoint a chartered accountant for the scrutiny of the claims of the workers as well as the creditors. It was pointed out that quotations from various chartered accountants were called and 13 chartered accountants have given their offers. Keeping in view the said stand of the Official Liquidator, this court passed the following order on 26-8-200....
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....mstances as specified against each case in annexure C. In our opinion, the release of payment of dues to respective cases under this section in annexure C should be made subject to clearance of defects to the satisfaction of your office. The amount of claims calculated together with claim filed by workmen under sections 529A and 530 of the Companies Act, 1956, are given in annexure C under the column 'Net Amount Payable'. We had made the calculations but these are good cases subject to rectification of defects at claimant end and approval by your office." 6. After the said report was filed, the Official Liquidator vide his letter dated 17-5-2005, invited counsel for the workmen for a meeting on 18-5-2005, to settle the claims of workmen. Vide letter dated 18-5-2005, Shri Vivek Bhandari, learned counsel for the workmen, conveyed acceptance to the report of the chartered accountant in respect of claims classified as annexure A. In respect of claims classified as annexures B and C, it was stated that necessary clarification or fresh claim on behalf of the clients shall be submitted to the office of the Official Liquidator and the discrepancies found in their claims would be removed....
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....the settlement done by the Official Liquidator on the basis of report of the chartered accountant. The copy of the letter of the workmen representative is enclosed and annexed as annexure A1. The chartered accountant has accordingly scrutinized the books, records of the company (in liqun.) along with the affidavits submitted by the workers and M/s. A.K. Chadda, chartered accountants, has reached to the conclusion vide its report dated 21-4-2005, in which he stated that the total amount of the workmen is considered to the extent of Rs. 8,66,13,241." 8. It may be noticed that 464 workmen includes 395 workmen in annexure-A, 33 workmen in annexure B and 36 in annexure C. 9. On 24-5-2005, another application was filed by the workers union through Shri Vivek Bhandari, advocate, (C.A. No. 417 of 2005) to the effect that the claim of the workmen in annexure A of the report have to be satisfied in full, therefore, the Official Liquidator be directed to make the payment to the workers. 10. This Court on 26-5-2005, decided both the applications, i.e., C.A. No. 416 of 2005 filed on behalf of the Official Liquidator and C.A. No. 417 of 2005 filed by the workmen and permitted the Offici....
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....n is yet to be paid for want of clarification/compliance on workmen's part and as on date Rs. 35 lakhs (approximately) is still lying with OBC, Dhuri." 12. Another thing which needs to be noticed is that in terms of rule 167 of the Companies (Court) Rules, 1959 (hereinafter to be referred as 'the Rules'), the Official Liquidator is to file in the court a certificate in Form No. 71 containing the list of creditors whose claims have been admitted wholly, proofs admitted or rejected in part and the proofs wholly rejected. Such certificate was not filed before this court though an averment has been made in paragraph No. 8 of C.A. No. 416 of 2005 filed on 24-5-2005, to the effect that such list of creditors has been displayed on the notice board on 25-5-2005. Paragraph No. 8 of the said application has been reproduced above. 13. It may be clarified that the "workmen" referred to above and hereinafter are the workmen entitled to wages along with secured creditors in terms of section 529A of the Act and falling within the definition of section 2(s) of the Industrial Disputes Act, 1947. The 'employees' referred hereinbefore and after are the employees of the company in liquidation ot....
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....d in English newspaper, i.e., "Indian Express", I deem it appropriate to condone delay in filing of the claims of the workmen. However, it is directed that the claim of each of the workmen is required to be verified with the records available with the Official Liquidator as well as the other statutory record. Shri Atul Gandhi, advocate, who is also a chartered accountant is requested to examine the claim of each of the workmen with reference to the records available with the Official Liquidator and other statutory record available and furnish a detailed report. The report should indicate the total number of workmen on the rolls of the company at the time of winding up and the number of the workmen, who have filed claims and the claims admitted/rejected. Shri Gandhi would be at liberty to raise his bill for the services rendered. However, a sum of Rs. 50,000 be paid to Shri Gandhi, on account, forthwith. The parties would be at liberty to file an appropriate application after the report is submitted by Shri Gandhi. C.A. Nos. 723, 800 and 947 of 2005 stand disposed of." 16. In pursuance of the said order, Shri Atul Gandhi, learned Court Commissioner, has submitted his rep....
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....made over and above the approvals sought from this court. Still further, whether the action of the Official Liquidator in making such payment was with the intention to cause loss to the company in liquidation and to misappropriate the funds of the company in liquidation with the help and connivance of the beneficiaries of receiving such payment. 19. 33 employees, whose names appear in the list annexure B, lodged their claims in Form No. 67 regarding the proof of debt of workmen even prior to the advertisement inserted by the Official Liquidator inviting the claims from the workmen. The claims lodged are almost in identical words. Since all the affidavits and proofs of debt are identical, for the facility of reference, an extract of documents produced by Shri Shiv Kailash Saini and attached as annexure A3 in reply submitted through Shri Vivek Bhandari, advocate, read as under : "FORM NO. 67 COMPANY PETITION NO. 8214 OF 1997 OF OSWAL AGRO FURANE LTD. PROOF OF DEBT OF WORKMAN I, Shiv Kailash Saini, son of Ram Saroop, resident of Ambala city, Haryana, an asstt. of Oswal Agro Furane Ltd., village Basaur, tehsil Dhuri, district Sangroor, solemnly affirm and say : That the ....
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....der : "Affidavit of Sh. Shiv Kailash dated 22-8-2005 Affidavit of Sh. Shiv Kailash, s/o Ram Sarup, aged 43 years, about, r/o 5377/3 Punjabi Mohalla, Ambala Cantt. Distt., Ambala. I, the above named deponent solemnly affirm and depose as under : 1. That I am a worker of Oswal Agro Furane Ltd. [in liquidation]. 2. That I have already filed my claim in Form No. 67 which has been duly adjudicated at serial No. 20 of List B of the report prepared by you. 3. That my name has been erroneously written in the report as Shiv Kailash Saini whereas my name is Shiv Kailash, and may be noted as such. 4. That my claim as adjudicated may kindly be released without further delay. Dhuri (Sd.) Deponent Dated : Verification Verified that the facts stated in paragraph 1 to paragraph 4 above are true and correct to my knowledge. No part of it is false and nothing has been concealed therefrom. Dhuri (Sd.) Deponent Dated : Affidavit of Sh. Shiv Kailash Saini dated 29-8-2005 "Affidavit of Sh. Shiv Kailash Saini, s/o Ram Saroop, resident of House No. 5377/3, Punjabi Mohalla, Ambala Cantt., Distt. Ambala. I, the above named d....
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....tary, Chandigarh, and signatures have been attested by the manager of Oriental Bank of Commerce, Dhuri. The dividend notice, authority of delivery and receipt are reproduced hereunder for ready reference : "FORM NO. 138 In the High Court of Punjab and Haryana at Chd. In the Companies Act, 1956 And In the matter of Oswal Agro Furane Ltd. (in liquidation) Company Petition No. 173 of 2000 Notice of dividend (Please bring this dividend notice with you) (Dividend of 100 paise in the rupee) To Shiv Kailash Saini, s/o Ram Sarup r/o . . . . . Through Vivek Bhandari, Advocate, H. No. 1239, Sector 8C, Chandigarh. Take notice that a first dividend of 100 paise in the rupee has been declared. The amount payable to you is Rs. 3,58,733 and the same will be payable at my office on the .... day of .... 2005 and on the subsequent working days up to the .... day of.... 2005 between the hours of.... Upon applying for payment this notice you must be produced entire with any bills of exchange, promissory notes or any other negotiable securities held by you. If you desire the dividend to be paid to some other person, you may sign and lodge with the Official Liquidator an....
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....he learned chartered accountant on the basis of fresh affidavits filed therein. 24. Out of such 66 employees, it appears that two employees were out of list annexure B, whereas remaining employees were out of list annexure A. 25. A perusal of the reply shows that there is no averment regarding the passing of any order by the Official Liquidator on or after 18-5-2005, till the application was filed before this Court on 23-5-2005, wherein it was averred by the Official Liquidator that claim of 464 workmen had been found by the learned chartered accountant as admissible under section 529A of the Act. In spite of pointed reference to learned counsel representing the Official Liquidator and the Official Liquidator present in the Court, no such order was produced and it was stated that the relevant files are with the Central Bureau of Investigation. On 1-12-2006, learned standing counsel for the Central Bureau of Investigation was requested to produce the record for the perusal of the Court. Even the record produced does not contain any order but the noting shows that a cheque for Rs. 10,80,14,047 was approved for payment on 17-6-2005. 26. In the reply filed on behalf of 30 work....
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....90 in Oriental Bank of Commerce on 26-10-2005, as per procedure settled by the Court Commissioner Mr. Atul Gandhi and the Official Liquidator. 6. That my claim has been correctly disbursed under section 529A of the Companies Act, 1956, as I am a workman as defined in section 2(s) of the Industrial Disputes Act, 1947. 7. That I am ready and willing to face my inquiry or investigation with regard to the nature of my duties as stated in the affidavit before the Official Liquidator or with regard to the disbursal of the claim to me." 28. Reply on behalf of other three employees is verbatim same with some changes regarding the nature of work as those filed through Shri Vivek Bhandari, Advocate. 29. In the reply filed on behalf of learned chartered accountant, it has been pointed out that there was considerable divergence in the interpretation of section 2(s) of the Industrial Disputes Act, 1947, and that the Official Liquidator was approached with this difficulty. After discussion, it was decided by way of abundant precaution to classify the workers and the staff on the basis of designation alone and any person who was described in the record of the company as supervisor, of....
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....e 167 of the Rules contemplates that the Official Liquidator was to file in the Court a certificate in Form No. 71 containing a list of creditors who submitted to him proofs of their claims in pursuance of the advertisement and the notices referred to in rule 148, the amounts of debts for which they claimed to be creditors, distinguishing in such list the proofs admitted wholly, the proofs admitted or rejected in part, and the proofs wholly rejected. The proofs along with the memorandum of admission or rejection of the same in whole or in part, as the case may be, was required to be filed in the court along with the certificate and such list of creditors could not be varied except under the orders of the Court in terms of rule 168 of the Rules. For the facility of reference, rules 163, 167 and 168 of the Rules are reproduced hereunder : "163. Acceptance or rejection of proof to be communicated.-After such investigation as he may think necessary, the liquidator shall in writing admit or reject the proof in whole or in part. Every decision of the liquidator accepting or rejecting a proof, either wholly or in part, shall be communicated to the creditor concerned by post under certi....
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....lication, it was conveyed as if the claims of 464 workmen have been accepted under section 529A of the Act. Such representation is factually incorrect and was made to mislead this Court. Still further, learned chartered accountant in his report dated 21-4-2005, has given names of 395 workmen in annexure A, 33 employees in annexure B and 36 employees and workmen in annexure C but during the course of hearing Shri Chadda, chartered accountant, has pointed out that the total wages of workmen in annexures A and B amounts to Rs. 8,72,55,256.68 and Rs. 1,08,50,409.87 respectively and the total wages of the workmen in annexure C amounts to Rs. 45,10,368.19 and employees in annexure C amounts to Rs. 68,09,386.32, total amounting to Rs. 10,94,25,421.06. As against the said amount in respect of 464 workmen as per report of the chartered accountant, Shri Ashish Vajpayee has sought approval of this Court for payment of Rs. 8,66,13,241 in respect of such 464 employees of the company in liquidation. Actually 575 workmen have been paid after transferring a sum of Rs. 10,80,14,047. It is, thus, apparent that the learned Official Liquidator has not only misled this Court in respect to existence of ....
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....ing the one of Smt. Krishna Devi, w/o Late Shri S.R. Verma, falling within the list of annexure B of the report of the chartered accountant. It is also explained that since all the workmen and employees of the company in liquidation have opened their bank accounts with Oriental Bank of Commerce, Dhuri, and such bank accounts were opened after obtaining the photographs and introduction, the process of identification of the workmen would be carried out by the officials of the bank. It was pointed out during the course of hearing that the identification process of the workmen was carried out by comparison of signatures, photographs and other data available with the bank by the bank officials. In case of discrepancy, the bank has refused to identify the workman and certain payments were withheld. In fact, the Commissioner of Court vide communication dated 3-10-2005, addressed to the Official Liquidator has suggested that the matter be brought to the notice of this Court for appropriate clarification, direction but to such direction or clarification was sought by the learned Official Liquidator. 35. Another factor which requires to be noticed is that the Official Liquidator has sough....
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.... any acceptance of claims by the Official Liquidator and on the basis of misrepresentation by the Official Liquidator to this Court. Though Shri Vivek Bhandari, Advocate, has communicated to the Official Liquidator on 18-5-2005, to file additional documents to admit the claims of the employees in annexure B treating them under section 529A of the Act but no such documents were filed before the applications were filed before this Court to seek approval of the payment. The Official Liquidator has accepted the report of the chartered accountant in its entirety as there is no averment in the application that such report is not acceptable, therefore, the disbursement made to 33 employees in annexure B is wholly unjustified, illegal and without jurisdiction. 37. In view of the above, I deem it appropriate to issue the following directions : (i)That the Official Liquidator shall consider and pass appropriate order adjudicating the claims of the employees classified under section 530 of the Act in terms of the report of the chartered accountant dated 21-4-2005, 22-11-2005, and 8-2-2006. (ii)That the employees falling in annexure B of the report of the chartered accountant dated 21....