SHREE MADHAV MILLS LTD Vs. Y V CHAVAN

JUDGEMENT

(1.) THIS Summons is an appeal against the decision of the (Official) Liquidator of Shri Madhav Mills Ltd. , dated 19-8-1963, whereby the Liquidator dismissed large parts of claims made by several ex-employees of the company. The ex-employees had claimed retrenchment compensation on he footing that the provisions in Section 25fff of the Industrial Disputes Act, 1947, were applicable to the facts of their case. The relevant facts are as follows; The company carried on business of textile mills, Gill and Co. Private Ltd. applied to this Court for a winding up order against the company. Their case was that they had sold and delivered to the company 174 bales and another lot of 74 bales of cotton in September 1958. In respect of the balance of the price due, the company had handed over to the sellers a cheque for Rs. 32,414. 45 np. but the same was dishonoured by non-payment. In spite of repeated reminders and Attorneys' correspondence, the company failed to pay the sellers the above amount of Rs. 32,414. 45np. Various particulars were mentioned in the petition to show that the company was in huge financial difficulties and unable to pay its debts. By the Order dated 5-8-1959 the company was ordered to be wound up.

(2.) PRIOR to the above order for winding up by a notice dated February 25, 1959, Haridas Mundhra, the Chairman of the Board of Directors of the Company, notified all the employees of the company that the company had "been incurring heavy losses over a period of about three years Owing to the sustained losses and financial difficulties, the Management is unable to continue to run the Mills. further, owing to the winding up proceedings launched in the Bombay High Court by the Elgin Mills Ltd. , kanpur, it has become impossible for the Management to make any effort whatsoever of keeping the Mills running". (The reference to the Elgin Mills Ltd. , ought to have been to Gill and Co-Private Ltd ).

(3.) ALL the employees were notified that the mill "will not be working on and from 26th February 1959 and the employees concerned will be treated as laid off. They are further informed that the Management waive the condition that they have to report at the starting time of their respective shifts as required under the provisions of the Industrial Disputes Act. The workers need not call at the Mills until further notice"