Case Note & Summary
The matter concerns a company application filed by five workmen of M/s Swadeshi Mills Co. Ltd., which was wound up. The company had approximately 2970 employees and substantial assets, including 48 acres of land. It was declared a sick undertaking by BIFR on 24 April 1998, and BIFR recommended winding up on 5 February 2001. The company petition was admitted on 13 February 2002, and the Official Liquidator was appointed as Provisional Liquidator on the same day. A High Power Committee constituted by the State Government disposed of plant and machinery, and the Official Liquidator took possession in July 2002. The company was ordered to be wound up on 5 September 2005. Workmen submitted claims; the Official Liquidator adjudicated some claims using the date of appointment of Provisional Liquidator as the cut-off date. The applicants contend that the correct date should be the date of the winding up order, invoking section 445(3) of the Companies Act, 1956. They sought reasons for partial rejection of their claims. The issue before the court is the appropriate date for calculating workmen dues upon winding up. The judgment was reserved on 17 July 2013 and pronounced on 28 October 2013. The text provided does not include the final decision.
Headnote
A) Company Law - Winding Up - Workmen Dues - Cut-off Date - Companies Act, 1956, Sections 445(3), 456, 457, 529, 529A - The Official Liquidator calculated workmen dues only up to the date of appointment of Provisional Liquidator (13 February 2002), while the workmen contended that dues are payable up to the date of the winding up order (5 September 2005), raising the question of interpretation of the relevant provisions. (Paras 1-2)
Issue of Consideration
Up to which date the dues of workmen are to be calculated when a Company is wound up; whether the date of passing the order of winding up is the only contingency or any other event prior to that date.
Law Points
- Determination of cut-off date for workmen dues in winding up
- interpretation of Sections 445(3)
- 456
- 457
- 529
- 529A Companies Act 1956
- priority of workmen dues under Section 529A
- role of provisional liquidator
- commencement of winding up
