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2004 DIGILAW 566 (KAR)

ASHOK MAHAJAN v. KAINDI INDIA PVT. LTD.

2004-09-24

D.V.SHYLENDRA KUMAR

body2004
D. V. SHYLENDRA KUMAR, J. ( 1 ) THIS petition is presented under Section 433 (e) of the Companies Act, 1956 (for short, the act), praying for passing a winding up order in respect of the respondent company on the premise that the company is unable to pay its admitted debts, which, according to the petitioner, includes arrears of salary to the tune of Rs. 85,613/- a sum of Rs. 75,000/- payable in lieu of three months notice period, and interest on those amounts. ( 2 ) NOTICE was issued to the respondent company. Respondent company has entered appearance through Counsel and objections have also been filed. Petition is sought to be contested on the premise that the petitioner was not even an employee in terms of any appointment order issued by the respondent company etc. ( 3 ) IT is not necessary for this Court to examine this dispute, as the materials placed before the court by the petitioner prima facie indicate that the petitioner had been rendering services to the respondent company; that the petitioner was being remunerated at the rate of Rs. 25,000/- per month for such services; that the petitioner had not been paid this full amount for several months; and that his services had not been availed by the respondent company on and after 15. 4. 2002. ( 4 ) THOUGH several other disputes are sought to be raised on behalf of the respondent company, it cannot be said that the disputes are really such bona fide serious dispute that renders the petition liable for dismissal. One main contention urged by the learned Counsel for the respondent company is that the petition itself is not maintainable, as the arrears of salary payable to the employee does not amount to a 'debt' within the meaning of this expression under Section 433 and 434 of the Act. ( 5 ) LEARNED Counsel for the respondent has placed reliance of the reported decision of the madhya Pradesh High Court in the case of PAWAN KUMAR KHULLAR V. KAUSHAL leather BOARD LIMITED, 1996 (87) Comps cases 130. A learned Single Judge of the madhya Pradesh High Court had occasion to take the view that there is a distinction between the word 'salary' and the word 'debt', and a petition filed for winding up of a company by an employee for nonpayment of salary is not maintainable. A learned Single Judge of the madhya Pradesh High Court had occasion to take the view that there is a distinction between the word 'salary' and the word 'debt', and a petition filed for winding up of a company by an employee for nonpayment of salary is not maintainable. With respect, I am unable to agree with the view taken by the learned Judge of Madhya Pradesh High Court. ( 6 ) WHILE there is definitely a distinction and difference between the two words 'salary' and 'debt', salary if due becomes debt when it is not paid. In this regard, Sri Nagananda, learned Senior counsel appearing for the petitioner, has drawn the attention of this Court to the provisions of section 529a of the Act, wherein it is categorically indicated that dues to the workman like wages and salary etc. , which are not settled becomes debt due to the workman by the company and in fact such amounts are treated on par with other debts due to the secured creditors. In the light of such provision, it cannot be accepted that the amount not paid by way of salary which was due to the employee cannot become a debt for the purpose of Section 433 (e) and 434 of the act. ( 7 ) IT is no doubt true it is in the sound discretion of the Court to pass or not to pass an order for winding up the affairs of the company for mere non-payment of salary of an employee, but that does not mean that the company petition itself is not maintainable under Section 433 (e) of the act. ( 8 ) IN the present case, statutory notices had been issued, which have not been replied by the respondent. As such, the deeming provision under Section 434 of the Act comes into play. It is inevitable to admit this company petition, Petition is accordingly admitted. However, further proceedings are stalled for two weeks, so that if the respondent company can settle the claim of the petitioner in an amicable manner, it may be so resolved, rather than proceeding with this company petition before this Court. It is open to the respondent company to report to this Court payment of, if not entire amount, at least the arrears of salary amounting to Rs. 75,000/- within next two weeks. Call after two weeks.