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Gujarat High Court · body

2007 DIGILAW 707 (GUJ)

O. L. OF KANKARIA CHEMICALS LTD v. BANK OF BARODA

2007-10-25

JAYANT PATEL

body2007
( 1 ) THE present OLR is for taking on record the revised verification report submitted by the Chartered Accountant vide letter dated 24. 4. 2007 and to permit the OL to pay the left out 28 workers in proportion to the other workers, who are already paid the amount and the OL has also prayed for the direction to settle the bills of the Chartered Accountant. ( 2 ) HEARD Mr. Yadav, learned Counsel for the OL, Mr. Mehta, learned Counsel for one of the secured creditors and Mr. Dave, learned Counsel for the workers union. ( 3 ) IT has been submitted on behalf of the OL that based on the report of the Chartered Accountant for revised verification and for the payment of 28 workers, who were left out, the present report has been submitted for appropriate directions. ( 4 ) HOWEVER, Mr. Dave, learned Counsel for the workers Union strenuously contended that the report of the Chartered Accountant may not be accepted by this Court and in furtherance to his submission, he contended that there were so many workers, whose employment is not accepted by the Chartered Accountant only because there was no proof for satisfying the employment as per Chartered Accountant. He submitted that the details of such workers are given on page 63 and 64 and, therefore, the report of the Chartered Accountant is defective and may not be accepted by this Court. ( 5 ) MR. DAVE also submitted that in the report of the Chartered Accountant he has excluded 30% wages for the period during which the factory of the Company remained closed from 1987 to 1992 and he submitted that there was settlement between the workers Union and the employer i. e. the Company that during the period of closure after restarting of the factory, 30% wages were to be paid. He also admitted that the company had restarted from 1992 and continued up to 1996-97, but during that period no wages were paid, nor any dispute is on record to show that there was any direction by any competent authority to make payment of such wages, but he submitted that as the amount of 30% wages during the period from 1987 to 1992 is not found admissible by the Chartered Accountant, Court may not accept the report or may alternatively direct the Chartered Accountant to verify the aspect after taking such amount as admissible in the workers dues. ( 6 ) CONCERNING to the first objection for non-acceptance of the status as the employees of the company in liquidation by the Chartered Accountant in his report, it deserves to be recorded that when the company is ordered to be wound up and the claim is to be considered for admissibility of the workers dues, the OL or the CA, as the case may be, shall be justified in relying upon the record of the company in liquidation or any other material before any Government or statutory authority concerning to the company in liquidation. If the Chartered Accountant in his report has proceeded on the basis of the record available of the company, including the verification thereof in the office of the Provident Fund Authority and has excluded such workers being employees of the company in liquidation, since no record is available of the company or with any Government authority, such approach on the part of the CA at the stage of verification cannot be discarded. In the proceedings of the winding up, the Court would not undertake the exercise of examination and cross examination of the witnesses, more particularly in the matter of accepting the status of the persons concerned as of employees or otherwise. In such circumstances, if the OL or the CA, who was assigned with the work to ascertain the status of the persons, has excluded them as employees of the company in liquidation, then such workers, if desirous, may adopt such course or would resort to appropriate proceedings for declaration of the status or other consequential reliefs as may be available under the Labour Legislation. Until such declaration is made by competent forum, it may not be possible for this Court to conclude on the aspect of status of other workmen as the employees of the company in liquidation, nor can the report be said as defective in absence of any order of the competent authority. Therefore, such objection as sought to be canvassed on behalf of the Union by Mr. Dave is not accepted, but with the further observations that if the persons, who are claiming status as employees of the company in liquidation are desirous to get appropriate declaration and consequential reliefs, they may resort to appropriate remedy, as may be permissible in law. It is hardly required to be stated that in the event if such remedy is resorted to, the rights and contentions of such persons as well as the OL in the appropriate proceedings shall remain open. ( 7 ) THE second aspect canvassed on behalf of the Union for claiming wages of 30%, even if examined, it appears that as per the workers Union, the factory remained closed from 1987-92 and it was restarted in the year 1992 and continued up to 1996-97. The agreement, which is pressed in service, shows the obligation of the management to pay the wages after restarting of the factory and that too, within 15 days from restarting of the manufacturing activity. So right, even if considered as accepted can be said as accrued, of so-called 30% wages for the period from 1986 to 1992, during that period of 15 days from the restarting of the factory. However, neither such rights were pressed in service at the relevant point of time, nor any material is produced on record for the workers Union or the workers, as the case may be, for raising any dispute before the appropriate authority or that there is any direction by any authority to pay the wages. Such situation continued for about four years and after the closure of the manufacturing activity in the year 1996-97 and thereafter winding up proceedings, the dispute is sought to be raised. Therefore, considering the facts and circumstances, it appears that now workers cannot be allowed to contend that as the wages were not paid during the period from 1986 to 1992, the same should be considered for workers dues on the date of winding up. Therefore, considering the facts and circumstances, it appears that now workers cannot be allowed to contend that as the wages were not paid during the period from 1986 to 1992, the same should be considered for workers dues on the date of winding up. In absence of any order of the competent authority for such purpose if the Chartered Accountant has excluded the claim, the same cannot be said as defective and the report deserves to be accepted by rejecting the objections as sought to be canvassed on behalf of the workers Union. ( 8 ) THEREFORE, the report of the Chartered Accountant, subject to the aforesaid observations and directions, submitted vide letter dated 24. 4. 2007 is taken on record and is accepted for the present. Since the report of Chartered Accountant is accepted, OL shall come out with appropriate report for final disbursement based on the fund available within two months from the date of receipt of the order. Prayer 7 (A) shall stand covered accordingly. ( 9 ) THERE is no dispute raised for the payment to 28 workers and even the Union has also supported the same. Hence, the OL shall be at liberty to make payment to left out 28 workers in proportion to the other workers, who are paid vide order dated 22. 9. 2006 passed by this Court in Company Application No. 62 of 2005. OL to make payment within two weeks from the date of receipt of the order of this Court. Hence, ordered accordingly. Prayer 7 (B) shall stand covered accordingly. ( 10 ) IT appears from the record that the bill of the Chartered Accountant is not only on higher side, but no details are submitted about the time consumed and the expenses incurred for such purpose. Therefore, the OL will have to consider the practice being followed for examination of the workers claim and the bills approved in respect of other companies by this Court. Therefore, after getting necessary details from the Chartered Accountant and after putting other details concerning to the admissibility of the amount as found proper by this Court in similar cases, OL may come out with appropriate report for settlement of the bill of the Chartered Accountant. Hence, Prayer 7 (C) shall stand covered accordingly. No further orders are required. Hence, OLR is disposed of accordingly.