Sundareswaran v. State of Kerala — 1998 DIGILAW 155 (KER)

Judgment :- P.A. Mohammed, J. The subject matter of this Writ Petition relates to preferential payment of workmens dues in a winding up of a co-operative society. It also pertains to boosting up the value of the assets of the society by the timely intervention of this Court in the present proceeding. The case which is now coming up for decision has a history. something unique. This history has necessarily to be stated for channelizing the reliefs aspired to. 2. The petitioners 1 to 16 were the employees of the Palakkad Wholesale Consumer Co-operative Stores Ltd. (for short 'the Society'). Which started functioning with effect from 19.10.1963. Since it was running on loss the business carried on by it was discontinued. Consequently the second respondent. in exercise of the powers under S.71(1) of the Kerala Co-operative Societies Act (Act 21 of 1969) (for short 'the Act') passed an order of winding up on 5.7.1986 and appointed the Assistant Registrar of Co-operative Societies. Palakkad as part-time liquidator. There were 79 employees on the roll when the winding up order was passed and the services of 47 among them were terminated on 15.8.1985 and the rest on 4.2.1988 without payment of any retrenchment compensation. arrears of salary. gratuity and other benefits. Out of the 47 employees so terminated. 15 have filed applications under the Payment of Gratuity Act. Industrial Disputes Act etc. and obtained awards for payment of compensation. An amount of Rs. 1.10.000/- had been awarded as compensation to ten employees in the year 1987 and the said sum was recovered by revenue recovery proceedings. The remaining employees have filed similar applications for compensation and obtained awards in their favour. The petitioners 1 to 16 were not paid compensation due to them under the awards passed by the authority under the Payment of Wages Act and the Labour Court. Kozhikode in their favour. A sum of Rs. 6.82.000/-was due to petitioners 1 to 16 by way of gratuity and arrears of wages. Exts. P1 and P2 are the copies of the awards passed by the Labour Court. Kozhikode. Even though Exts. P1 and P2 awards were passed respectively on 15.12.1986 and 27.9.1988. no amount was paid to the employees. Therefore,theyfiledWritPetitionbeforethisCourt,O.P.No.7131 of 1989. for a direction to the respondents 2 to 4 therein to pay the arrears of salary and other benefits as per the rates referred to in it. Kozhikode. Even though Exts. P1 and P2 awards were passed respectively on 15.12.1986 and 27.9.1988. no amount was paid to the employees. Therefore,theyfiledWritPetitionbeforethisCourt,O.P.No.7131 of 1989. for a direction to the respondents 2 to 4 therein to pay the arrears of salary and other benefits as per the rates referred to in it. Ultimately that Writ Petition was disposed of by this Court by judgment dated 8.11.1990 directing the second respondent to take a decision as provided in S.73(2)(c) of the Act before disbursing the amount. Ext. P3 is a copy of the judgment in O.P. No. 7131 of 1989. Since no action was taken by the second respondent in view of Ext. P3 judgment. petition C M.P. No. 13219 of 1991. was filed before this Court. In the above C.M.P. an order was passed by this Court on 13.9.1991 directing the second respondent to take a decision on or before 31.12.1991. In compliance with the said direction Ext. P5 order was passed by the third respondent therein. By Ext. P5 the second respondent ordered that under R.73(2)(c) of the Kerala Co-operative Societies Rules. the assets of the society will be discharged as per the priority mentioned therein. The petitioners being aggrieved by the said order in so far as it declines to deal with the claim made by the petitioners. have filed the present Writ Petition. 3. The main prayers contained in the Writ Petition are the following: i) a writ of certiorari or other writ. call for the records leading to Ext. P5 and quash the same as illegal and unsustainable. ii) a writ or direction directing the second respondent to take immediate steps to bring the assets both movable and immovable of the Palghat Wholesale Consumer Cooperative Stores Ltd. for sale after proper and effective advertisement and realise the sale proceeds in order to disburse to the petitioners and other workmen in an equitable and rateable manner within a specified period. 4. When this Writ Petition came up on 22.7.1997. counter-affidavit filed by the third respondent was brought to the notice of this Court. The contention urged in the counter-affidavit is that as per S.73(2)(c) of the Act the liquidator has power to decide the question of priority arising between the claimants. 4. When this Writ Petition came up on 22.7.1997. counter-affidavit filed by the third respondent was brought to the notice of this Court. The contention urged in the counter-affidavit is that as per S.73(2)(c) of the Act the liquidator has power to decide the question of priority arising between the claimants. It is further contended that the Industrial Disputes Act is not at all relevant in the process of winding up of a cooperative society registered under the Act and Rules. From Ext. P5 it was evident that the value of the assets of the society was determined at Rs. 8.83.823.70. The value of the land, buildings and machinery was seen fixed at Rs. 1.13.078.11. The assets of the society were taken over by the third respondent on 11.11.1987 and the assets of the society including the car. lorry. building and machinery were in the custody of the third respondent from that date. Counsel for the petitioners at that time pointed out that the land. building and machinery were under attachment ordered by the Labour Court in realisation of the dues payable to the employees as per the award passed in their favour. At this juncture. Government Pleader submitted before this Court that the attachment made was lifted by the Labour Court in 1994. On behalf of the petitioners. counsel then submitted that the land involved in the case is having an extent of 70 cents in Palakkad town and the value of the property at present could be estimated at Rs. 2 lakhs per cent. In other words. The estimated total value of the property would come to Rs. 1.40.00.000/-. It is also pointed out by the counsel for the petitioners that the car. lorry and other machinery have not properly been maintained and damage has been caused to the building and machineries. He further added that these assets of the society are being subjected to decay and damage. This Court cannot turn a blind eye to the realities borne out from passing of the order winding up on 5.7.1986. Near about twelve years have now elapsed, nothing having been done tangibly and thus allowing the assets, movable and immovables to cause themselves to decay and deterioration. In this despicable situation if the Court intervenes and takes measures to prevent further loss and decay in public interest, it cannot be characterised as unwarranted judicial activism. Near about twelve years have now elapsed, nothing having been done tangibly and thus allowing the assets, movable and immovables to cause themselves to decay and deterioration. In this despicable situation if the Court intervenes and takes measures to prevent further loss and decay in public interest, it cannot be characterised as unwarranted judicial activism. In this premise this court by order dated 22.7.1997 observed that the assets of the society shall not be allowed to be wasted or dealt with hereafter in a manner as done before. Accordingly. a direction was given to the second respondent to file a detailed report about the present position of the assets of the society within a period of two weeks. Accordingly a punter-affidavit has been filed by the Additional Registrar of Co-operative Societies (Audit). Kerala. Thiruvananthapuram. 5. The said counter-affidavit reveals that the attachment of Labour Court on the landed building and lorries and car was lifted on 7.4.1994 on condition that the sale proceeds should be deposited in a nationalised bank. The Liquidator approached the Labour Court on 7.4.1997 seeking permission for sale of the immovable property in public auction. The permission was also sought by the Liquidator from the Registrar of Co-operative Societies through the Joint Registrar for sale of immovable property in public auction. Permission was not granted by the Labour Court and therefore. this Court directed the respondent that proceedings for sale shall be taken only after obtaining permission from this Court. From the counter affidavit filed by the second respondent it was further revealed that an amount of Rs. 74.416.24 had been deposited with the Bank. In view of the circumstances available in this case. this Court came to the conclusion that some interim relief has to be granted to the petitioners 1 to 16 who were parties to Exts. P1 and P2 awards. Accordingly this court directed respondents 1 to 3 to withdraw a sum of Rs. 50.000/- from the Bank and the same shall be paid towards Exts. P1 and P2 awards at Rs. 25.000/-each. Ultimately this Court directed the Registrar to submit a valuation report within a period of one month from the date of the order. 6. In compliance with the above direction. the second respondent filed a statement on 8.9.1997 showing the Government dues and other liabilities. According to S.73(2) of the Act and R.61(2) of the Kerala Co-operative Societies Rules. 25.000/-each. Ultimately this Court directed the Registrar to submit a valuation report within a period of one month from the date of the order. 6. In compliance with the above direction. the second respondent filed a statement on 8.9.1997 showing the Government dues and other liabilities. According to S.73(2) of the Act and R.61(2) of the Kerala Co-operative Societies Rules. the Liquidator has declared the priority of the liabilities to be paid. The statement would reveal that the said amount would come to Rs. 67.32.063.55. As per Ext. R2 the total value of the three come to Rs. 41.500/- and as per Ext. R3 the value of the land would not exceed Rs. 50.000/- per cent. As per Ext. R4 valuation certificate the buildings are valued for an amount of Rs. 14.11.021/-. The total market value as per Exts. R2 to R4 would come to Rs. 49.52.721/-. In view of the statement contained in Ext. R3 the value of the land would not exceed Rs. 50.000/- per cent. This Court therefore decided to order sale of the land in public auction. In that juncture the counsel for the petitioners submitted that if proper publicity is given for the proposed auction sale of these properties. there is very chance of getting more than an amount of Rs. 11/2 crores. In the aforesaid circumstances this Court finally ordered to sell the properties in public auction after giving wide and sufficient publicity in that behalf. Therefore. the District Collector. Palakkad was directed to control and supervise on behalf of the State of Kerala the auction sale of the properties aforementioned. This Court as per order dated 11.9.1997 further directed to obtain instructions for the District Collector for working out sale proceeding as and when necessary. 7. Subsequently by statement dated 13.10.1997 it was informed to this Court that the auction notice for the sale of the land and building was finalised as per Ext. R2 and the auction was fixed to 17.11.1997. This Court was further informed that wide publicity had been given to the proposed public auction. Subsequently as per report dated 18.11.1997 the second respondent reported to this Court that three tenders were received and the tender rs have participated in the auction and deposited the earnest money deposit of Rs. 2 lakhs. Among the bidders. the Managing Director. Kerala State Co-operative Consumer Federation Ltd.. Ernakulam has offered Rs. 50 lakhs. Subsequently as per report dated 18.11.1997 the second respondent reported to this Court that three tenders were received and the tender rs have participated in the auction and deposited the earnest money deposit of Rs. 2 lakhs. Among the bidders. the Managing Director. Kerala State Co-operative Consumer Federation Ltd.. Ernakulam has offered Rs. 50 lakhs. Since the amount offered by the bidders is found to be below the amount expected the Liquidator has decided to adjourn the sale to 15.12.1997. In order to give wide publicity this Court by order dated 14.10.1997 directed respondents 1 and 2 to publish fresh auction notice in one issue of Indian Express. Coimbatore Edition. After completing all the formalities auction was again conducted on 13.1.1998. A statement has been filed by the Assistant Registrar on 14.1.1998 disclosing that the Managing Director of Kerala State Co-operative Consumer Federation Ltd. has this time offered a sum of Rs. 51.00.000/-. By the said statement the third respondent requested this Court to give sanction to confirm the sale in favour of the Consumer Federation. After hearing both sides this court by order dated 20.1.1998 gave sanction to confirm the sale for an amount of Rs. 51.00.000/-offered by the Managing Director of Kerala State Co-operative Consumer Federation Ltd. So. the sale was thus confirmed in favour of K.S.C.C.F. 8. Subsequently. third respondent filed a statement on 20.2.1998 informing this Court that the entire amount of Rs. 51.00.000/- has been deposited by the Managing Director of the Kerala State Co-operative Consumer Federation Ltd. in the account of the third respondent. 9. Third respondent however filed a statement on 5.1.1998 requesting to exempt the respondents 2 and 3 from payment of tax arrears of Rs. 1.00.000/- in respect of the vehicles owned by the society. The above amount was due in respect of the vehicles KLP 2544. KLP 2939 and KLP 3223. As per the orders passed by this Court the three vehicles were also to be auctioned. However. it is said that in view of the huge tax arrears the sale of these vehicles did not take place. Therefore. the third respondent submitted before this Court that unless this tax arrears are cleared it is difficult to get customers to take these vehicles on auction. In the aforesaid background third respondent prayed to this Court for an order of exemption from payment of tax referred to above. Therefore. the third respondent submitted before this Court that unless this tax arrears are cleared it is difficult to get customers to take these vehicles on auction. In the aforesaid background third respondent prayed to this Court for an order of exemption from payment of tax referred to above. This Court cannot allow this prayer because the question of exemption from payment of tax in respect of these vehicles has to be decided by the Government. In the statement itself the liquidator has pointed out that he has filed an application before the R. T. O., Palakkad praying for exemption from payment of arrears of taxes in respect of the above vehicles. The Government Pleader in this context submitted that the said application for exemption received by the R.T.O.. Palakkad has been forwarded to the Government for appropriate orders. In the aforesaid background the only direction required is to direct the Government to consider the claim of respondents 2 and 3 for exemption from payment of arrears of vehicle tax in respect of the above three vehicles. The Government Pleader further submitted that these vehicles were garaged immediately after the assets were taken over by the liquidator and those vehicles were not put in use during the period in relation to which exemption has been claimed. I therefore. direct the Government to consider the claim of exemption in view of the aforesaid background and pass orders expeditiously so that the sale of these vehicles can also be completed by the liquidator before he takes up the question of distribution of assets among the claimants. 10. The. next question to be decided in this case is whether the Writ Petitioners 1 to 16 are entitled to get priority in payment of earned wages accrued to them by reason of Exts. P1 and P2 awards. Ext. P1 is the award passed by the authority under the Payment of Wages Act on a petition under S.15(2) of the said Act. The Labour Court declared that the petitioners 1 to 16 were entitled to get salary from 1.6.1984 to 30.6.1986 as well as the bonus for the years 1984-1985 and 1985-1986. Accordingly. a sum of Rs. 4.17.330/-was ordered to be disbursed to the petitioners as arrears. As per Ext. P2 award passed by the Labour Court on 27.9.1988 the respondents are directed to pay the total sum of Rs. 4.41.169/-. Accordingly. a sum of Rs. 4.17.330/-was ordered to be disbursed to the petitioners as arrears. As per Ext. P2 award passed by the Labour Court on 27.9.1988 the respondents are directed to pay the total sum of Rs. 4.41.169/-. S.71 of the Act deals with winding up of Co-operative Societies. S.72 authorities appointment of a liquidator by the Registrar for the purpose of winding up. S.73 deals with powers of the liquidator. Relevant portion of S.73 is extracted hereunder: 73. Powers of liquidator :(1) Subject to any rules made in this behalf. the whole of the sets of the society in respect of which an order of winding up has been made shall vest in the liquidator appointed under S.72 from the date on which the order takes effect and the liquidator shall have power to realise such assets by sale or otherwise. (2) The liquidator shall also have power. subject to the control of the Registrar:- (a) to institute and defend suits and other legal proceedings on behalf of the society by the name of his office; (b) to determine from time to time the contribution (including debts due) to be made or remaining to be made by the members or past members or by estates or nominees. heirs or legal representatives of deceased members or by any officers or former officers. to the assets of the society. (c) to investigate all claims against the society and subject to the provisions of this Act. to decide questions of priority arising between claimants. (d) xxx xxx xxx xxx (e) xxx xxx xxx xxx (f) xxx xxx xxx xxx (g) xxx xxx xxx xxx No doubt. this Court by Ext. P3 judgment directed the second respondent -Registrar of Co-operative Societies. Trivandrum to decide the claims. This Court observed that the power under S.73(2) includes the power to investigate all claims against the society and to decide the question of priority between the claimants. In view of the above direction the claims of the petitioners will have to be decided by the Registrar of Co-operative Societies. Trivandrum. S.73(2)(c) of the Act contains two parts; one is to investigate all claims against the society and the other is to decide the question of priority arising between the claimants subject to the provisions of the Act. That means. claims of the petitioners will have to be decided independently. Trivandrum. S.73(2)(c) of the Act contains two parts; one is to investigate all claims against the society and the other is to decide the question of priority arising between the claimants subject to the provisions of the Act. That means. claims of the petitioners will have to be decided independently. That is what the first part of clause (c) authorises. Second part authorises decision on the question of priority if there a contest by the different claimants. When there is a dispute between the different claimants the second part authorises to decide the question of priority arising between the claimants. Therefore. these two parts of clause (c) cannot be inter linked while considering the claims by the liquidator under S.72(2) of the Act. Those claims should be investigated independently. What is before this Court is the claims of the petitioners against the society. As against the claim of the petitioners there is no rival claims on the basis of priority. Of course in the counter affidavit filed on behalf of the respondents it was pointed out that priority shall be given to the liquidation charge. audit fee. government loan. government share and other liabilities. The claim of the workmen has not been specified as one of the items of in the priority list. When the priority list does not evince anything about the dues of the workmen. the claim of the petitioners as per Exts. P1 and P2 awards is an independent claim which will have to be decided under main part of clause (c) of sub-s.(2) of S.73. 11. Apart from what is contained in paragraph 5 of the counter affidavit. no claims were there before the liquidator at the time of passing Ext. P5. Probably such claims may arise after the realisation of the value of the entire assets by the liquidator. Therefore. the claim of the petitioners for 'wages' quantified under the Payment of Wages Act by the Labour Court will have to be decided before adjudicating the claims that may be filed later. 12. Sub-r.(2) of R.61 deals with the method as to how the reserve fund shall be disbursed on winding up of a society. Sub-r.(2) provides that on the winding up of a society. the reserve fund together with other funds constituted by the society. in accordance with its bye-laws shall be applied by the liquidator to discharge such liabilities of the society. Sub-r.(2) provides that on the winding up of a society. the reserve fund together with other funds constituted by the society. in accordance with its bye-laws shall be applied by the liquidator to discharge such liabilities of the society. as may remain undischarged out of the assets of the society on the following order; namely: i) the debts due to the Government ii) other debts of the society iii) the paid up share capital; and iv) the dividend upon such share capital at a rate not exceeding 10% per annum for any period for which no dividend has been paid. Sub-r.(2) will apply only in the case of reserve funds together with other funds constituted by the society. Treating the value realised by selling the assets of the society as part of other funds. the liabilities undischarged can be discharged out of the assets so available. There also. quantified wages payable to the workmen is not included in the list of priori ties. What is contained in sub-r.(2)is only debts and paid up share capital. dividend etc. Therefore. the claim of the petitioners in this case for realisation of the quantified wages will have to be independently considered notwithstanding the provisions contained in sub-r.(2) of R.61. 13. In this context. let us now examine the provisions contained in the Companies Act. 1956 regarding the preferential payments in the winding up of a company. S.529-A dealing with overriding preferential payments was introduced by the Companies (Amendment) Act. 1985 with effect from 24.5.1985. The said provisions is as follows: 529-A Overriding preferential i payments - (1) Notwithstanding any tiling contained in any other provision of this Act or any other law for the time being in force. in the winding up of a company (a) workmen's dues; and (b) debts due to secured creditors to the extent such debts rank under clause (c) of the proviso to sub-s.(1) of S.529 pari passu with such dues shall be paid in priority to all other debts. (2) The debts payable under clause (a) and clause (b) of sub-s.(1) shall be paid in full. unless the assets are insufficient to meet them. in which case they shall abate in equal proportion. (2) The debts payable under clause (a) and clause (b) of sub-s.(1) shall be paid in full. unless the assets are insufficient to meet them. in which case they shall abate in equal proportion. The above provision was incorporated in the Companies Act so that legitimate dues of the workers are pari passu with secured creditors and above even the dues to the Government in the event of winding up of the company. It was felt that since the resources of the companies constitute a major segment of the material resources of the community. the common good demands that the ownership and control of the resources of every company be so distributed in the unfortunate event of its liquidation that workers whose labour and effort constitute an indivisible but easily perceivable part of the activities of the company are not deprived of their legitimate right to participate in the product of their labour and effort. With this object in mind Ss.529 and 530 were amended. The effect of the proviso to S.529(1) and 529a both of which were inserted by the above Amendment Act. 1985 is that the secured creditors who can realise his security by remaining outside the winding up will now have to act in association with the official liquidator who will represent the workmen. The 'workmen's portion' as defined in the amended S.529 will be deducted from what realised and applied rate ably for the discharge of 'workmen's dues'. That part of the secured debt which cannot be realised because it has been appropriated towards 'workmen's dues' is under this section to be treated as payable in preference to all other debts. Thus unless the property by which the debt is secured realises an amount equal at least to the total of the secured debt and the workmen's portion. secured creditors will also come into the winding up for the unsatisfied portion of their claims. The practical result of this provision is likely to be that in future lenders will increase the margin maintained on secured debts. The purpose of this provision is to ensure that the workmen should not be deprived of their legitimate claims in the event of liquidation of the company. The practical result of this provision is likely to be that in future lenders will increase the margin maintained on secured debts. The purpose of this provision is to ensure that the workmen should not be deprived of their legitimate claims in the event of liquidation of the company. By this section the workmen of the company in liquidation have been made secured creditor in respect of their claims against the company and the assets of the company would remain charged for the payment of the workers' dues and such charges will be pari passu with the charge of the secured creditors. No doubt this provision overrides the preferential claims under S.530. The Supreme Court in Workmen of Rohtas Industries Ltd. v. Rohtas Industries Ltd. (1987) 62 Comp. Cases 872) observed that the subsistence and living of the workers is of paramount importance and has to rank with highest priority. Their wages and emoluments upto the date of closure of the company will rank in priority over the secured creditors. 14. From the above observation it is crystalline that the Supreme Court treated the issue as a human problem involving subsistence and living of workmen. Therefore. the interpretation of the provisions contained in the Kerala Co-operative Societies Act and Rules with regard to the winding up and adjudication of the claims of the workmen will have to be made within the above perception. When the necessity was felt by the Central Government to safeguard the interest of the workers in a winding up proceeding, S.529-A of the Companies Act was incorporated as discussed herein before. 15. Chapter X of the Act deals with winding up and dissolution of the co-operative societies and for the purpose of winding up the Registrar has been empowered to appoint the liquidator under S.72. The liquidator has been conferred with the power to investigate all claims against the society and to adjudicate the question of priority arising between the claimants. While deciding the priority as contemplated in Clause (c) of sub-s.(2) of S.73. provision similar to S.529-A contained in the Companies Act is obviously absent. This appears to be a lacuna in the Act. How ever it has to be recalled that S.529-A was incorporated in the Companies Act only with effect from 24.5.1985. No similar amendment has been made in the Co-operative Societies Act. 1969. It is therefore. provision similar to S.529-A contained in the Companies Act is obviously absent. This appears to be a lacuna in the Act. How ever it has to be recalled that S.529-A was incorporated in the Companies Act only with effect from 24.5.1985. No similar amendment has been made in the Co-operative Societies Act. 1969. It is therefore. essential that a provision similar to S.529-A of the Companies Act shall be incorporated in Chapter X of the Act dealing with winding up and dissolution of the cooperative societies. As pointed out above. S.529-A was introduced when the general concern was expressed by the Supreme Court to safeguard the interest of the workmen who were employed in a company prior to its winding up. Exactly a similar situation arises in the facts of the present case. The paramount interest of the workmen has to be safeguarded by introducing the appropriate amendment, Therefore, in public interest I suggest that the Government of Kerala shall take steps to introduce appropriate amendments to the Kerala Co-operative Societies Act by incorporating a provision similar to S.529-A of the Companies Act, in Chapter X of the Act. R.61 of the Kerala Co-operative Societies Rules also requires amendment. No priority has been given to the dues of the workmen in sub-r.(2) of the R.61 which deals with discharge and liabilities of the society. 16. Learned counsel for the petitioners brought to my notice the decision of a Division Bench of this Court in State of Kerala v. Official Liquidator (ILR (1979) 1 Kerala 7). That was a case which arose under S.230 of the Indian Companies Act. 1913. While interpreting the above provisions corresponding to S.530 of the present Act. the Division Bench observed: "There is. however. some force in the contention raised by the learned Advocate General on the second aspect. viz.. as to the right of the workmen to priority of payment in respect of the various amounts covered by the claims which were admitted to proof by the order of the District Court dated 11th August. 1962. Priority is claimed by the workmen onIyunderS.230ofthemdian Companies Act. 1913. Admittedly it is only clauses (b). (c) and (e) of sub-s.(1) of the said section which are attracted in the instant case. Under clause (b) and (c) priority can be allowed only in respect of wages or salaries of clerks. or servants. 1962. Priority is claimed by the workmen onIyunderS.230ofthemdian Companies Act. 1913. Admittedly it is only clauses (b). (c) and (e) of sub-s.(1) of the said section which are attracted in the instant case. Under clause (b) and (c) priority can be allowed only in respect of wages or salaries of clerks. or servants. labourers and workmen that have accrued due in respect of service rendered by them to the company within the two months next before the date of winding up order. We hold that leave allowances and notice pay will come within the scope of expression "wages" used in clauses (b) and (c) of sub-s.(1) of S.230. But. the right of priority in respect of such amounts will. as already indicated. have to be limited to the period mentioned in those clauses viz. the period of two months next before the date of winding up of the company." This decision is cited by the counsel only to show the wide scope given to the expression 'wages' used in different clauses. It has to be observe that the workmen to priority of payments in respect of workmen's dues has been recognized in the above decision. 17. In view of the discussion herein before. the claims put forth by the petitioners for the amount awarded under Exts. P1 and P2 shall be treated to be a preferential claim and be satisfied before taking up the settlement of the dues between the rival claimants in the winding up proceeding. The preferential claim pleaded by the petitioners 1 to 16 shall not be denied for the reason that a provision in Chapter X of the Co-operative Societies Act similar to the one contained in S.529-A of the Companies Act is absent. However. final decision in this regard will have to be taken by respondents 1 and 2. State of Kerala and the Registrar of Co-operative Societies. Trivandrum. 18. In this context. it has to be observed that out of the amount claimed under Exts. P1 and P2 a sum of Rs. 50.000/- had been paid to them as per the interim order issued by this Court. I further direct respondents 1 and 2 to pay a further sum of Rs. 2.50.000/-to the petitioners 1 to 16 out of the balance amount payable to them. This amount of Rs. 2.50.000/- shall be paid to the workmen within a period of four months. 50.000/- had been paid to them as per the interim order issued by this Court. I further direct respondents 1 and 2 to pay a further sum of Rs. 2.50.000/-to the petitioners 1 to 16 out of the balance amount payable to them. This amount of Rs. 2.50.000/- shall be paid to the workmen within a period of four months. The payment of the balance amount after deducting Rs. 3.00.000/- as aforesaid shall be paid to the petitioners subject to the final decision by respondents 1 and 2 as directed above. 19. While considering the claim of the petitioners it must also be borne in mind that the amount claimed is an amount legally due to them as quantified under Exts. P1 and P2 awards. The right to receive quantified wages cannot be denied. Itis an enforceable right being a means of Livelihood which is guaranteed under Art 21 of the Constitution. There is an added reason in this case that it was due to the persistent effort made by the writ petitioners 1 to 16 coupled with the cooperation extended by the State this Court was able to sell the immovable properties of the defunct society in public auction fetching the value of Rs. 51 lakhs. 20. As far as the movable items of properties. this Court has already ordered that those items were to be sold in public auction. But the movable items namely. the three vehicles. could not be sold since huge arrears of tax is to be paid in respect of those vehicles. The claim of exemption made by the respondents shall be dealt with by the Government expeditiously. at any rate within a period of one month from the date of receipt of a copy of this judgment. After getting the order in this behalf from the Government. respondents 2 and 3 shall take immediate steps to sell those items in public auction as ordered above and such auction shall also be conducted under the supervision and control of the District Collector. Palaxxad as directed earlier. The amount to be realised in auction by sale of the movable items shall be added to the total amount realised as value of the immovable assets of the society. Such amount available after deducting the amount disbursed to the petitioners as directed above. Palaxxad as directed earlier. The amount to be realised in auction by sale of the movable items shall be added to the total amount realised as value of the immovable assets of the society. Such amount available after deducting the amount disbursed to the petitioners as directed above. shall be kept in the Bank and further steps for completion of the winding up of the society shall be made by respondents 1 and 2. This Writ Petition is disposed of with the directions and observations given above. No order as to costs. A copy of this judgment shall be forwarded to the Chief Secretary to Government. Government of Kerala.