D. RAJU Vs. ALLWYN WATCHES LTD.

JUDGEMENT

(1.) The applicants are erstwhile workmen of the company in liquidation-M/s Allwyn Watches Limited. The company was wound up by the orders of this Court dtd. 11/12/2006, and the company went into liquidation. The major assets of the company were sold in public auction and amounts were realized. Thereafter, the Official Liquidator has invited claims from both secured and unsecured creditors, and adjudicated the claims. Likewise, claims from workmen were also invited and they were also adjudicated by the Official Liquidator in accordance with the Company Court Rules. In view of Sec. 529(A), workmens dues have preferential treatment in the order of preference. The Official Liquidator, on adjudication of various claims, after ascertainment of workmen who are entitled to be paid the dues, had determined that, in all, 116 workmen are eligible to receive the amounts in terms of Sec. 529 and 529(A) of the Companies Act. After adjudication of the claims, as against the claim amount of Rs.12,89,18,803.68, the Official Liquidator had determined on adjudication and submitted that the workmen are entitled to be paid a total consolidated sum of Rs.6,24,56,469.18 and in terms of Annexure-A to Form-69 filed under Rule 163 of the Company Court Rules. The details of individual entitlements are set out in Annexure-A filed by the Official Liquidator in Form 69 dtd. 20/4/2018. A perusal of Annexure-A discloses that for the purpose of determining the amounts payable to each individual workman, in the individual computation, the components of Wages, Dearness Allowance, Gratuity, Compensation, One month Pay, Bonus at 8.33% were taken. The applicants/workmen filed the present applications seeking disbursal of the amounts as computed in Annexure-A to Form 69.

(2.) As per the affidavit dtd. 11/7/2019, as against the total claim of Rs.12,89,18,803.00, a total sum of Rs.6,24,56,469.18 was payable which included secured payment to the extent of Rs.4,76,24,157.00; Rs.1,48,12,312.18 as unsecured debt and preferential basis Rs.20,000.00; in all 116 individuals, including one staff member. The detailed components which went into adjudication of the total admitted amounts payable, a question arose whether Bonus would form part ofWages; and whether same is payable in terms of Sec. 529 and 529(A) of the Companies Act, 1956, particularly while computing workmens dues as defined under Sec. 529(3)(B)(1); and in particular, the scope and width of the term wages.

(3.) Though in the report filed before this Court the Official Liquidator had submitted that the workmen will be entitled for the entire admitted amount in accordance with the provisions of Payment of Wages Act, however, a doubt was raised by this Court as to whether, in respect of cases of adjudication of claims under Companies Act, 1956, the wider connotation of the term wages as provided under the Payment of Wages Act, which includes the component of Bonus?, would apply for determining the amounts payable to workmen under priority as envisaged under Sec. 529 and 529A of the Companies Act. Sri M. Anil Kumar, learned counsel appearing for the Official Liquidator had placed reliance on the judgment of the Gujarat High Court reported in Textile Labour Association v. Official Liquidator of Jubilee Mills Ltd, 2000 (99) CompCas 189 , that Bonus would not form part of the Wages in terms of Industrial Disputes Act, and as Sec. 529(3)(B) requires Wages to be computed in accordance with the Industrial Disputes Act, there is no scope to import into the term ?Wages?, the definition contained in Payment of Wages Act; and thus, the element of Bonus which was erroneously included in computation of amount payable to the Workmen by the Official Liquidator requires to be deducted.