STATE OF MADHYA PRADESH Vs. HUKUMCHAND MILLS LTD.

JUDGEMENT

(1.) OLR NO. 33 of 2007 and IA No. 6925 of 2007 along with its reply together with reply to findings of committee's report, dated 31.5.2007 perused.

(2.) THE question that arises for consideration in this OLR and connected application is: whether workers' claim which were adjudicated by official liquidator under the Companies (Court) Rules and further reexamined by the committee appointed by the court should be accepted for giving sanction for making payment to the workers, or not?

(3.) IT is in these proceedings ex -workers of the company had submitted their individual claims through Union under Companies (Court) Rules before the official liquidator. During pendency of their adjudication and keeping in view the objective of Section 529A, ibid., and with a view to give some solace to workers for their sustenance, this court on the reports submitted by official liquidator had passed an order on 13.2.2004 directing release of an ad hoc payment of Rs. 3,000 payable to each worker subject to finalization of their claims at a later date by official liquidator as per rules. It is appropriate to quote in verbatim the order, dated 13.2.2004, passed by this court, infra: 13.2.2004 Report of Official Liquidator bearing OLR No. 31 of 2003, dated 25.9.2003, OLR No. 40 of 2003 dated 4.12.2003 and OLR dated 28.11.2003 perused. 2. In paragraph 7 of the report bearing No. 31 of 2003, dated 25.9.2003, coupled with prayer (ii) and (iii) contained therein and later reiterated in subsequent reports referred supra, it is contended by the official liquidator that keeping in view the provisions of Section 529A(l)(a) of the Companies Act and the fact that several workers of the company (in liquidation) have not been paid their legitimate dues towards their claim (gratuity, closure compensation, arrears of salary, etc.) for last more than a decade making their life miserable this court should accord permission/sanction to official liquidator to distribute/release some payment by way of ad hoc for their sustenance. It is contended that consequent upon the sale of the properties, stock in trade and other movables, the official liquidator is possessed of few crores duly deposited in the bank (company's account). Similar prayer is reiterated by the Union of the ex -workers of the company by making an application to official liquidator as also to this court. 3. It cannot be disputed that legislature has given top priority in liquidation proceedings so far as the dues of workers is concerned. Section 529A of the Companies Act has recognized this right in favour of workers along with secured creditors. It is not in dispute that company is closed for more than a decade and workers have rendered jobless, so far as their earning for livelihood from this company is concerned. Equally not in dispute is that thousand of workers despite their rendering services to the company were not so far paid their legitimate dues such as (i) arrears of salaries, (ii) gratuity, (iii) closure compensation etc. by the company for want of funds. 4. In a situation like the one emerging from the facts on record. In my opinion, the prayer made by official liquidator as also by the union of workers for release of part payment by way of ad hoc against their total claim can not be said to be totally unjustified and/or unreasonable. I, therefore, accept this prayer in part.