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Gujarat High Court · body

2015 DIGILAW 264 (GUJ)

N. RAJENDRA RAJU v. NEESA VENTURE HOLDING LTD.

2015-03-09

N.V.ANJARIA

body2015
Judgment 1. Whether an employee or workman can claim entitlement to file a petition for winding-up of employer-company and whether he could be said to be a creditor for his salary dues so as to maintain such petition under Sections 433 and 434 of the Companies Act, 1956, is the preliminary question raised in the present petition. 2. Before proceeding to consider the issue, stating in brief the factual controversy could not be out of place. 2.1 The petitioner was appointed as a Group Chief Executive Officer under the respondent company-Neesa Venture Holdings Limited. It was the case of the petitioner that by a letter of appointment dated 27th August, 2011, he came to be appointed as Group Chief Executive Officer E-8 in view of his specialization and experience in the field works. According to the petitioner, the group companies including the respondent company were reeling under bad financial state of affairs, therefore, the respondent company was seeking a financial restructuring and rescheduling of debt. It was stated that under the appointment terms, the consolidated salary payable to the petitioner was Rs.6,59,996/-. The said component in the salary was fixed as minimum and additional perks including performance linkage incentive of Rs.26 Lakhs was to be paid in installments. The petitioner was entitled for bonus upto 10% of the salary. The appointment conditions further provided that initial period of six months would be probation period and the same may be extended further at the discretion of the management. It was provided that on satisfactory completion of probation, the appointee would be confirmed in writing and in absence of such confirmation, the probation would continue. 2.2 It is the further case of the petitioner that he gave his resignation on 10th November, 2011 in terms of contract; the resignation was to take effect from 10th December, 2011 on completion of notice period. The petitioner was relieved from service with effect from 10th December, 2011. It is the case that though repeatedly requested, the respondent company failed to release the dues including the salary payable from 01st October, 2011 to the petitioner. 2.3 According to the petitioner, the salary not paid was a debt due to him from the respondent company and for failure and neglect to discharge the said debt, the company was liable to be wound up as it was apparent that it had lost its financial substratum. 2.3 According to the petitioner, the salary not paid was a debt due to him from the respondent company and for failure and neglect to discharge the said debt, the company was liable to be wound up as it was apparent that it had lost its financial substratum. On 07th April, 2012, the petitioner issued notice to the respondent company, calling upon the company to pay the dues of salary, etc. Thereafter, the petitioner issued statutory notice dated 16th May, 2012 under Sections 433 and 434 of the Companies Act, 1956. The respondent company gave reply dated 04th June, 2012. 2.4 The company filed its affidavit-in-reply and disputed the claim of the petitioner. It was stated that the salary of the petitioner could not be released in view of the fact that the petitioner tendered resignation on 10-11-2011 and moved to his place at Pune on the same day without even getting approval. The respondent even gave an option to the petitioner to accommodate him to work from Pune and look after the business development part of NEESA group of companies and set up a strong sales and marketing department in Pune. However, the petitioner didn't do anything for setting a sales and marketing department in Pune and such a conduct on the part of the petitioner was in violation of the terms of appointment letter. It was stated that due to lack of skills and negligence on the part of the petitioner the respondent company has suffered a loss, which was and is also required to be set-off against any amount due. It was stated that as per the letter of appointment dated 27th August 2011 and more particularly as per clause 7 of the same, the petitioner was obliged to give 30 days' notice in writing in case of his resignation or payment in lieu of notice period. It was stated that in view of the specific provision in the said contract one month's salary of the petitioner was liable to be deducted from the dues payable to the petitioner. It was further submitted that the respondent company was in the process of calculating the total amount of loss suffered by the respondent company due to negligence on the part of the petitioner which was and is liable to be deducted from any amount due to the petitioner. It was further submitted that the respondent company was in the process of calculating the total amount of loss suffered by the respondent company due to negligence on the part of the petitioner which was and is liable to be deducted from any amount due to the petitioner. It was further stated that the respondent company has also decided to file a suit for damages suffered by it for recovery of damages. 2.5 From the above facts, it is clear that winding-up petition filed by the present petitioner was based on his dues of salary. He contended that since the amount of salary was payable and unpaid, it was a debt and because of non-payment thereof by the company, he prayed for winding-up of respondent under Sections 433 and 434 of the Companies Act. 3. At the same time, a preliminary contention was raised by the company in its affidavit-in-reply about the maintainability of the winding-up petition by the petitioner contending that the petitioner being an employee of the company, did not fall within the purview of the class of creditors entitled to present winding-up petition. Therefore in course of hearing, learned advocate for the respondent, at the outset raised the said preliminary ground. 3.1 Since the aforesaid preliminary point surfaced as moot question, both the learned advocates made their submissions on the issue, in extenso. 4. Learned advocate for the respondent Mr.Ravish Bhatt raising preliminary point submitted that as the petitioner is employee and claims his dues of salary and other service dues, he is not entitled to file a winding-up petition for his said dues. It was submitted that the dues of the nature claimed by the petitioner cannot be said to be falling within the purview of term “debt” under Section 433(e) of the Companies Act, and that the petitioner is not a “creditor” so as to maintain the petition under Section 433 and 434 of the Act. It was submitted that only those class of persons enumerated in Section 439 of the Act can file a petition seeking winding-up of company. 4.1 Learned advocate for the applicant Mr.Dhaval Vyas, seeking to repel the preliminary contention, submitted that even an employee is a creditor in respect of his salary dues, therefore he is entitled to maintain a winding-up petition. 4.1 Learned advocate for the applicant Mr.Dhaval Vyas, seeking to repel the preliminary contention, submitted that even an employee is a creditor in respect of his salary dues, therefore he is entitled to maintain a winding-up petition. In support, he relied on decision of the Supreme Court in National Textiles Workers Union vs. P.R. Ramkrishna [ AIR 1983 SC 75 ]. According to him, paragraph 3 in the said judgment contains submissions whereas the ratio is available from paragraph 7 of the judgment. In the next, he relied on decision rendered on 31st March, 2011 by this Company Court in Khimjibhai Sanabhai Parmar vs. Sevalia Cement Works (Unit of Manor Investment Private Limited) being Company Petition No. 40 of 1997 and allied matters, by submitting that the said company petitions for winding-up were filed by the workmen whose wages as well as other service dues were unpaid and that this Court had entertained them. Learned advocate submitted that the said decision was taken in O.J. Appeal No. 17 of 2005. The Letters Patent Bench remanded the case, but did not held that the winding-up petition was not maintainable, rather treated the petitions maintainable. Learned advocate for the petitioner relied on observations in paragraph 14 of judgment dated 10th February, 2011 of the Division Bench in Khimjibhai Sanabhai Parmar (supra). 4.2 Learned advocate for the petitioner relied on decision of the Supreme Court in Bank of India Vs O.P. Swarnakar [ 2003(2) SCC 721 ] to submit that the workmen can claim status of creditors from contract of employment. Learned advocate further relied on observation in paragraph 6 in the decision of the Supreme Court State of Bihar Vs Abdul Majid [ AIR 1954 SC 245 ]. Learned advocate next relied on another decision in The State of Madhya Pradesh Vs G.C. Mandawar [ AIR 1954 SC 493 ] and upon referring to paragraph 6 thereof, it was harped that the unpaid salary is a debt due which is attachable under the provisions of the Code of Civil Procedure, 1908. Learned advocate for the petitioner thereafter relied on decision of Delhi High Court in Argha Sen vs. Interra Information Technologies (India) (P.) Ltd. being CP Nos. 244 and 245 of 2004 decided on 12th September, 2005. Learned advocate for the petitioner thereafter relied on decision of Delhi High Court in Argha Sen vs. Interra Information Technologies (India) (P.) Ltd. being CP Nos. 244 and 245 of 2004 decided on 12th September, 2005. By referring to paragraph 16 thereof, it was submitted that non payment of salary would give a right to an employee to bring an action against the employer, as right to seek payment of salary from a private employer in an actionable claim. The Delhi High Court took view that what was recoverable by the petitioner from the respondent company was “debt”; and the employees whose debts were not paid, shall have to be treated as “creditor”. Another decision of Bombay High Court in Smt.Carlota Farnandese Vs Naik and others being First Appeal No.11 of 1997 decided on 23rd March, 2004 [III (2004) BC 269] was pressed into service, in particular paragraph 15, wherein the Court considered the the term “creditor”. 4.3 Learned advocate for the petitioner also relied on a decision of Andhra High Court in B.S. Demogray vs. Vif Airways Ltd. [1998 94 Comp Cases 291 AP], which quoted from the Supreme Court’s decision in Keshoram Industries and Cotton Mills Ltd. vs. CWT, explained the concept of debt. Yet another decision of Karnataka High Court in Iron Ore Co. Ltd. vs. Kooky Roadways P. Ltd. [(1990) 69 Comp Cases 178 (Karnataka) was relied on which took view that unpaid salary of an employee is liable to be recovered from the employer is a “debt” because the employer is obliged to pay to the employee for the services rendered by it. Decision of Allahabad High Court in Naresh Chandra Sharma vs. Avadh Rubber Ltd. [(2009) 93 SCL 134] was also pressed into service. 4.4 Learned advocate for the petitioner thereafter, without prejudice to the aforesaid submissions, attempted to distinguish between the claim of an existing employee and claim of an ex-employee for their salary dues. It was submitted that even if it is to be accepted for the sake of argument without admitting, that the existing employee would not be a creditor for the purpose of Section 433(e) of the Act, the ex-employee would stand on a different footing and his claim towards salary and other benefits would be a “debt” and he would be a creditor entitled to file winding-up petition. In support of this contention, learned advocate placed reliance on decision of this Court in Pravinchandra Natvarlal Jani and Anr. vs. Omex Investors Limited and Anr. [(2011) 162 CompCas 544(Guj.); on another decision of Andhra Pradesh High Court in M. Suryanarayana and ors. vs. Stiles India Ltd. and ors. [ 2002(2) ALD 185 ]; as also on decision of the Calcutta High Court in B.E. pumps Pvt. Ltd. vs. Debatosh Thakur being CP No. 387 of 2007 decided on 16th December, 2008. 4.5 In the rejoinder submissions, learned advocate Mr. Ravish Bhatt for the respondent argued that concept of “debt” under Section 433 cannot include salary dues and that the arrears of salary is not a “debt”, nor the employee or ex-employee could be categorized or viewed as “creditor”, for the purpose of invoking winding-up jurisdiction. It was submitted that decision in National Textiles Workers Union (supra), on the contrary supported the proposition other way. It was submitted further that the orders passed in Khimjibhai Sanabhai Parmar (supra) in Company Petition No. 40 of 1997 had an altogether different context on facts, where the dues of the employees admitted by the employer. 5. Having noted the preliminary controversy as above and the contentions canvassed by both the sides on the issue, proceeding first to consider the decision and the ratio of National Textiles Workers Union (supra) relied on by learned advocate for the petitioner. In the said decision, the Supreme Court dealt with the question about right of workmen employed in a company to appear and oppose the petition of a winding-up of the company. The winding-up petition was filed by the respondents who were the contributories and also the creditors of the company. Learned Company Judge had passed an ex-parte order restraining the company from borrowing any money from any bank, financial institution and from alienating, creating charge over any of the properties of the company and its various enterprises. Against the said ex-parte order, National Textiles Workers Union as well as other Unions filed applications seeking to implead themselves as respondents on the ground of protecting interest of the workers. Their applications were contested on the ground that they had no locus-standi to appear and oppose the winding-up petition. Against the said ex-parte order, National Textiles Workers Union as well as other Unions filed applications seeking to implead themselves as respondents on the ground of protecting interest of the workers. Their applications were contested on the ground that they had no locus-standi to appear and oppose the winding-up petition. 5.1 It was in the context of said facts and the controversy, the Supreme Court proceeded to state, “We may now proceed to consider the question that arises for determination before us. The question, briefly stated, is : when a petition for winding up a company is filed in court, are the workmen of the company entitled to ask the court to implead them as parties in the winding up petition or to allow them to appear and contest the winding up petition or they have no locus stand at all so far as winding up petition is concerned and they must helplessly watch the proceedings as outsiders though the result of the winding up petition may be to bring about termination of their services and thus affect them vitally by depriving them of their means of livelihood ? It is a well established principle of administrative law that no order entailing adverse civil consequences can be made by the State or a public authority unless the person affected is afforded an opportunity to show cause against the making of such order by controverting the allegations made against him and presenting his own positive case, but in case of a winding up petition, it was contended that on behalf of respondent Nos.2 to 5, that though the result of successful termination of a winding up petition may, and in most cases, would be to put an end to the services of the workmen and throw them on the streets, they are not entitled to an opportunity to be heard against the making of the winding up order, because under the Companies Act, 1956, it is only the creditors and contributories and in certain specified contingencies, the Registrar and the Central Government who can present a petition for winding up a company and the workmen have no locus at all in a winding up petition except where their dues have remained unpaid in which case they would be entitled to be heard in a winding up petition, but that would be in their capacity as creditors and not as workmen.” (Para 3) 5.1.1 The Constitutional Bench in National Textile Workers Union (supra) discussed the whole raison d'etre for allowing entitlement to the workers to be heard in a winding-up petition filed by any of the persons entitled to file the same. “The principal argument urged against the right of the workers to be heard in the winding up petition was that under the scheme of the Companies Act, 1956, it is only the creditors and contributories who are entitled to appear and be heard in a winding up petition. The Companies Act, 1956 is a self-contained code exhaustive in regard to all matters relating to companies and since there is no provision in that Act conferring on the workers a right to intervene in a winding up petition, no such right can be spelt out in their favour outside the provisions of that Act. Respondents Nos.6 to 9 relied upon various provisions of the Companies Act, 1956 in support of their contention that the workers have no locus in a winding up petition but we do not think these provisions lend any support of that contention. Respondents Nos.6 to 9 relied upon various provisions of the Companies Act, 1956 in support of their contention that the workers have no locus in a winding up petition but we do not think these provisions lend any support of that contention. The first provision relied upon by respondents Nos.6 to 9 was Section 439 which inter alia provides as to who shall be entitled to make an application for winding up of a company. It is no doubt true that this section confers the right to present a winding up petition only on certain specifically enumerated persons and the workers are not included in that enumeration and therefore obviously, the workers have no right to prefer a petition for winding up of a company. The right to apply for winding up of a company being a creature of statute, none other than those on whom the right to present a winding up petition is conferred by the statute can make an application for winding up a company and no such right having been conferred on the workers, they cannot prefer a winding up petition against a company. But from this exclusion of the workers from the right to present a winding up a petition, it does not follow as a necessary consequence that the workers have no, right to appear and be heard in a winding up petition filed by one or more of the persons specified in Section 439. It may be that the workers have no right to present a winding up petition against the company, but if a winding up petition is properly filed by any of the persons entitled to do so under Section 439, they may still be entitled to appear and be beard in support or opposition to the winding up petition. That would depend upon whether their interest is likely to be affected by any order which may be made on the winding up petition. That would depend upon whether their interest is likely to be affected by any order which may be made on the winding up petition. The next section relied upon by respondents Nos.6 to 9 was Section 440 which says that where a company is being wound up voluntarily or subject to the supervision of the Court, a petition for its winding up by Court may be presented by any person authorised to do so under Section 439 or the Official Liquidator, but the Court shall not make a winding up order unless it is satisfied that the voluntary widing up or winding up subject to the supervision of the Court cannot be continued with due regard to the interest of the creditors or contributories or both. (Para 7)(emphasis supplied) 5.1.2 The Court then proceeded to elaborate, “There can be little doubt that the object of winding up being to realise the assets of the company, pay the preferential claims and expenses of liquidation and then discharge the debts of the creditors in full or pari passu and if after paying to the creditors, there is any surplus, distribute the same among the shareholders by way of dividend and ultimately dissolve the company, it is only the creditors and the contributories who would be affected by any action taken in the course of winding up of the company and that is why we find several provisions in the Companies Act, 1956 which speak of winding up being carried on with due regard to the interest of the creditors and the contributories or after consultation with them or confer rights on the creditors and the contributories to make applications for diverse purposes with a view to effective winding up of the company. Such provisions are for instance to be found in Sections 464, 466, 478, 517, 542, 543, 549, 556, 557 and 560. These provisions apply at a stage after a winding up order is made by the Court or the voluntary winding up has communicated or an order is made for continuance of winding up subject to the supervision of the Court, when winding up having been ordered or resolved, what remains to be done is only to wind up the company, pay the creditors and if there is any surplus, distribute the same among the shareholders. These provisions do not deal with a situation prior to the making of the winding up order when the question is whether the company should be ordered to be wound up or not.” (Para 7) 5.1.3 It was explained that workers' have the right to be heard as part of natural justice. “Ordinarily when a winding up order is made, the business of the company would cease to continue and even if the Liquidator is authorised to carry on the business, such continuance would be only for the beneficial winding up of the company and the logical and inevitable end would be the ultimate discontinuance of the business. The making of a winding up order on a petition for winding up therefore almost certainly have an adverse consequence on the workers inasmuch as the continuance of their service would be seriously jeopardised and their right to work and earn their livelihood would be disastrously imperilled. Now it is an elementary principle of law, well-settled as a result of several decisions of this Court..... that no order involving adverse civil consequences can be passed against any person without giving him an opportunity to be heard against the passing of such order and this rule applies irrespective whether the proceeding in which it is passed is a quasi-judicial or an administrative proceeding. The audi alteram partem rule which mandates that no one shall be condemned unheard is one of the basis principles of natural justice and if this rule has been held to be applicable in a quasi-judicial or even in an administrative proceeding involving adverse civil consequences it would a fortiori apply in a judicial proceeding such as a petition for winding up of a company. It is difficult to imagine how any system of law which is designed to promote justice through fair play in action can permit the Court to make a winding up order which has the effect of bringing about termination of the services of the workers without giving them an opportunity of being heard against the making of such order. (para 7)(emphasis supplied) 5.1.4 The Supreme Court observed to state that right to winding-up rests with creditors and contributories only, eventhough the workers may be entitled to be heard in such winding-up petition. “…. (para 7)(emphasis supplied) 5.1.4 The Supreme Court observed to state that right to winding-up rests with creditors and contributories only, eventhough the workers may be entitled to be heard in such winding-up petition. “…. we have pointed out above that merely because the right to apply for winding up a company is not given to the workers it does not mean that they cannot appear to support or oppose a winding up petition which is properly filed by one or the other persons specified in Section 439. There would, in fact, be no point in conferring the right to apply for winding up of a company on the workers since they cannot have any interest in demolishing the enterprise which is the source of their livelihood and particularly when the only effect of the winding up order would be to render them unemployed and to bring about winding up of the company for the benefit of the creditors and the contributories. So also the circumstance that the right to be consulted or to make applications in the course of the winding up of a company is conferred only on the creditors and the contributories does not in any way militate against the right of the workers to appear and be heard in the winding up petition because once the winding up order is made, the assets of the company have to be realised, the creditors have to be paid and if there is any surplus it has to be distributed among the contributories and therefore at that stage it is only the creditors and contributories who have an interest and that is why the course of the widing up it is creditors and the contributories who have been given a voice.” (Para 7) (emphasis supplied) 5.1.5 The Supreme Court held, “11. We are therefore of the view that the workers are entitled to appear at the hearing of the winding up petition whether to support or to oppose it so long as no winding up order is made by the court. The workers have a locus to appear and be heard in the winding up petition both before the winding up petition is admitted and an order for advertisement is made as also after the admission and advertisement of the winding up petition until an order is made for winding up the company. The workers have a locus to appear and be heard in the winding up petition both before the winding up petition is admitted and an order for advertisement is made as also after the admission and advertisement of the winding up petition until an order is made for winding up the company. If a winding up order is made and the workers are aggrieved by it, they would also be entitled to prefer an appeal and contend in appeal that no winding up order should have been made by the Company Judge. But when a winding up order is made and it has become final, the workers ordinarily would not have any right to participate in any proceedings in the course of winding up the company though there may be rare cases where in a proceedings in the course of winding up, the interest of the workers may be involved and in such a case it may be possible to contend that the workers must be heard before an order is made by the court. We think that even when an application for appointment of a provisional liquidator is made by the petitioner in a winding up petition, the workers would have right to be heard if they so wish because the appointment of a provisional liquidator may adversely affect the interest of the workers. But when we make it clear that neither the petitioner nor the court would be under any obligation to give notice of such application to the workers. It would be for the workers to apply for being heard and if they do so, they would be entitled to appear and be heard on the application for appointment of provisional liquidator. But when we make it clear that neither the petitioner nor the court would be under any obligation to give notice of such application to the workers. It would be for the workers to apply for being heard and if they do so, they would be entitled to appear and be heard on the application for appointment of provisional liquidator. The workers therefore in the present case had a right to be heard before the provisional liquidator was appointed by the Company Judge but the circumstance that the workers were not so heard would not have the effect of vitiating the order appointing provisional liquidator, because on the view taken by us, it would be open to the workers to apply to the court for vacating that order and it would be for the court after considering the material produced before it and hearing the parties to decide whether that order should be vacated or not.” 5.1.6 Thus the controversy before the Apex Court in the National Textile Workers Union(supra) had the different dimension and the context. The question considered was whether the workmen had right to appear in the winding-up petition filed by the creditors. The submission of the union was about right of hearing only in the winding-up petition which was pressed for the workmen on the basis of Rule 34 of the Companies (Court) Rules, 1959. The Court never held, nor even suggested implicitly that the workmen were entitled to invoke the winding-up jurisdiction and file a winding-up petition for themselves. As is clear from above, what was recognized was therefore, right to appear and to oppose or to support the winding-up petition which creditor may file. The Supreme Court rather viewed, as could be clearly culled out from the above quoted observations, that a winding-up petition can be validly instituted by those class of persons as provided in Section 439 of the Companies Act. The contention that National Textile (supra) recognised right of the workmen to file winding-up petition is entirely misconceived and based on misinterpretation of the said judgment and its ratio. The important purport of the Apex Court decision in National Textile (supra) was correctly discussed by the Bombay High Court in its decision in Vishwanath Namdeo Patil Vs The Official Liquidator of M/s.Swadeshi Mills Forbes & Company Limited and Grand View Estate Private Limited [(2013) 181 CompCas 133 (Bom)]. The important purport of the Apex Court decision in National Textile (supra) was correctly discussed by the Bombay High Court in its decision in Vishwanath Namdeo Patil Vs The Official Liquidator of M/s.Swadeshi Mills Forbes & Company Limited and Grand View Estate Private Limited [(2013) 181 CompCas 133 (Bom)]. 5.2 Khimjibhai Sanabhai (supra) was next relied on. The facts therein were entirely different. The petitioner and other workmen were engaged by M/s. Associate Cement Company limited and had been working with the said company for many years; the said company decided to sell its unit-M/s. Sevalia Cement Works-along with the liabilities of the workers-11,103 in numbers-at the relevant time, to the respondent by agreement dated 05th March, 1988. Later, the respondent company stopped running and production was discontinued; the respondent company had sold away the assets and the regular wages of the workers were not paid; more than Rs.10.00 crores were due and payable to the workers towards their wages and allowances. The respondent company disregarding the claim of the workmen, made payment to its creditors. The petitioner-workmen therefore filed the Company Petition No.40 of 1997 and others for recovering their dues. Under the provisions of Section 529-A and 530 of the Companies Act, 1956 the dues of the workers are required to be paid in priority over the dues of the other creditors. A formula was evolved and a Consent Terms was arrived at between the petitioner-workmen and the management under which a cut-off date of 31st January, 1997 was agreed upon for the purpose of paying wages and other service dues and allowances of the workmen. In the context specifically of the Consent Terms whereunder the employer had agreed to pay amount, this Court passed order dated 31st March, 2005 issuing certain directions including requiring the company to deposit Rs.03.36 crores. 5.2.1 The aforesaid order dated 31st March, 2005 was subsequently recalled on 11th May, 2005 for the reason that as per the directions issued in the order, the respondent company failed to deposit the amount. The matter was carried in O.J. Appeal No.31 of 2011. While disposing of the O.J. Appeal the Division Bench observed the context in which the Appeal was filed, namely non-deposit of the amount. The matter was carried in O.J. Appeal No.31 of 2011. While disposing of the O.J. Appeal the Division Bench observed the context in which the Appeal was filed, namely non-deposit of the amount. Having noted the peculiar aspect of the case that where the workers’ dues were admitted by the respondent company in the Consent Terms arrived at between the parties and the company had agreed to pay the amount, relegated the matter to the learned Company Judge requiring him to dealt with various aspects of the matter. 5.2.2 The learned Company Judge thereupon passed order dated 30th March, 2011 and after considering the National Textile (supra) in its true perspective, stated and held, leaving the question no longer res integra, that “Therefore and ultimately, the Supreme Court noticed that at the most, the workers have a right of hearing/audience and nothing beyond that.” After referring to paragraph 11 in the judgment of the Supreme Court, this Court stated, “To the above decision and law laid down by the Apex Court, Mr. Paul learned Advocate for the petitioner workman is unable to point out any decision contrary to this. At the same time, against the order dated 11.05.2005, passed by the learned Company Judge in Company Petition No.40/1997 and subsequent order dated 31.05.2005 passed in the same proceedings in O.J. Appeal No.17/2005 preferred by the appellant, the Division Bench in Paragraph 13, 14 and 15 held as under:- “13. We find that we need not examine the said aspect at this stage because such is not the subject matter of the present OJ Appeal nor can it be concluded unless and until the question is decided on the aspect of winding up of the Company or otherwise by the Ld. Company Judge. 14. In view of the aforesaid, the impugned order passed by the Ld. Company Judge in Company Petition No. 40/1997 dated 11/5/2005 is modified to the extent that as now the amount of more than Rs.3.36 crore is already deposited, the Company Petition No. 40/1997 may stand revived to the file of the Ld. Company Judge afresh and the Ld. Company Judge will decide the aspect of admission of the petition or for dismissal of the petition and at that stage, it would be open to the Ld. Company Judge afresh and the Ld. Company Judge will decide the aspect of admission of the petition or for dismissal of the petition and at that stage, it would be open to the Ld. Company Judge to consider the view taken vide order dated 31/3/2005 and also the subsequent development of the matter and in accordance with law. 15. So far as the Company Petition No.116/2005 is concerned, as the order of the Ld. Company Judge for issuance of advertisement has not been implemented on account of the compliance of the condition by the Company to deposit the amount, the order of issuance of advertisement shall now not be required to be implemented, but the Ld. Company Judge shall decide the aspect as to whether in view of the amount already deposited, which has been claimed by the petitioner, save and except the additional liability of interest, if otherwise is to be attracted, the Company should be ordered to be wound up or not. At that stage, the Ld. Company Judge may also decide as to whether issuance of advertisement would now be required or not.” 6. Considering the overall aspects coupled with the law laid down by the Apex Court which covers the subject matter of this petition, no other contention is to be gone into as held by the Hon'ble Apex Court National Textile Workers Union V. P.R. Ramakrishnan (supra). The workmen have no right to file winding up petition, but only right to an audience.”(emphasis supplied) 6. The contention of learned advocate for the petitioner that the Division Bench in its order dated 16th January, 2013 in O.J. Appeal No.31 of 2011 has held that the workers are entitled to file winding-up petition is not correct. No such ratio or statement of law emanate from the judgment of the Division Bench. As already seen, even as the factual context in Sanabhai (supra) was altogether different, but in any view, merely because the Court entertained a winding-up petition and passed directions, it did not constitute its ratio. In Kanhiya Lal Omar Vs R.K. Trivedi and others [ (1985) 4 SCC 628 ] the Supreme Court stated that a direction may mean an order issued to a particular individual or a precept which many may have to follow and such order may be specific or general. However such directions remain confined to the facts of that case. In Kanhiya Lal Omar Vs R.K. Trivedi and others [ (1985) 4 SCC 628 ] the Supreme Court stated that a direction may mean an order issued to a particular individual or a precept which many may have to follow and such order may be specific or general. However such directions remain confined to the facts of that case. Again in the jurisprudence of law of precedent, even if an observation or statement in a judgment as the effect of dictum, such dictum does not necessary become ratio decidendi. In Giani Devender Sinh Vs Union of India [ (1995) 1 SCC 391 ], the Supreme Court discussing the effect of dictum observed that there is a distinction between holding and a dictum. The expressions in a judgment could be again classifiable as dicta or obiter dicta. “Dicta” are the opinion of a Judge and the “obiter dicta” refers to remarks made by or opinion expressed by a Judge. The “dicta” may have force as precedent. Still it may not be liable to be treated as ratio decidendi in itself. A decision, it is well-settled, as is observed in State of Haryana Vs Ranbir [ (2006) 5 SCC 167 ], is an authority for what it decides and not what can be logically deduced therefrom. It was stated that the statements which are not part of the ratio decidendi are not authoritative. 6.1 By picking up a sentence from the judgment at random, it cannot be projected that the same constitutes ratio decidendi. No sentence in the decision or a judgment of a Court can be treated as statement of law, diverged and divorced from the factual context in which it is stated. 7.The Bombay High Court in Mumbai Labour Union Vs Indo French Time Industries Limited [1991 FLR 1194] held that the workers have no right to file a winding-up petition and a Trade Union cannot be called to be a creditor so as to maintain a winding- up petition under Section 439 of the Act. It held that even unpaid employees considered to be a creditor in the provisions of the Companies Act, one employee can bring about a disaster in the industrial sphere by seeking a winding-up order of the company. A respectful agreement is expressed by this Court to the aforesaid proposition of law by the Bombay High Court. It held that even unpaid employees considered to be a creditor in the provisions of the Companies Act, one employee can bring about a disaster in the industrial sphere by seeking a winding-up order of the company. A respectful agreement is expressed by this Court to the aforesaid proposition of law by the Bombay High Court. 7.1 The difference between the “debt” and “salary” has conceptual distinction and is one of essence. The difference was succinctly stated by Madhya Pradesh High Court in Pawan Kumar Khullar vs. Kaushal Leather Board Limited [ AIR 1996 MP 85 ] that “the salary is the remuneration paid to a person in lieu of services rendered by him/her whereas debt is not remuneration. The debt is something which is borrowed by a person on settled terms and conditions and settled rate of interest and can be resettled between the parties.” This is subtle but substantial distinction. The above difference necessarily brings out that the workman or employee is not a creditor for his salary dues. The claim of salary for the employee and the obligation to pay salary and service dues of the employer arises because of jural relation of master of servant or the employer or employee. The relationship of an employee and an employer or that of a master and servant is not that of debtor and creditor, and cannot be perceived to be so. The lis for claiming dues as creditor arise differently. The creation of this relationship has different conception in terms of facts and has different connotation in eye of law. Section 433(e) speaks of debt, which debt is debt due from a “debtor” to a creditor. The employer is not a debtor. The employee or worker is not recognized as “creditor” under the Section. 8. The distinction sought to be made out by learned advocate for the applicant with regard to existing employees and the former employees not in service is only artificial, and for the purpose of issue involved, it is inconsequential. For considering the question of right to file winding-up petition and whether such right flows for the employees under the provisions of the Companies Act, the differentiation between and classification of existing employee or worker or former employee or ex-worker, cannot be made. The nature of salary dues remains the same. For considering the question of right to file winding-up petition and whether such right flows for the employees under the provisions of the Companies Act, the differentiation between and classification of existing employee or worker or former employee or ex-worker, cannot be made. The nature of salary dues remains the same. It is not a “debt”, nor the employee or ex-employee or in the category of creditor or class persons under Section 439 of the Companies Act which enlists the categories of persons who can present an application for winding-up of a company. 9. Section 439 of the Companies Act confers right to present a winding-up petition on certain specifically enumerated class of persons. The sub-section (1) inter alia provides that an application for winding-up of a company may be presented (a) by the company; or (b) by any creditor or creditors, including any contingent or prospective creditor or creditors; or (c) by any contributory or contributories; or (d) by all or any of the parties specified in clauses (a), (b) and (c), whether together or separately; or (e) by the Registrar; or (f) in a case falling under section 243, by any person authorised by the Central Government in that behalf; or (g) In a case falling under clause (h) of section 433, by the Central Government or a State Government. Sub-section (2) say that a secured creditor, the holder of any debentures, including debenture stock, whether or not any trustee or trustees have been appointed in respect of such and other like debentures, and the trustee for the holders of debentures, shall be deemed to be creditors within the meaning of clause (b) of sub-section (1). as per sub-section (3), a contributory is entitled to present a petition for winding up a company. 9.1 The employees or workmen are not included in the class of persons entitled to maintain winding-up petition. To hold that the workmen can file petition for winding- up in respect of their claim for wages or that the employees are entitled to file the petition for winding-up for their salary dues or service benefits against the employer by invoking Section 433 and 434 of the Companies Act, would amount not only to travelling four corners of legislative description under Section 439, and would mean adding a category of persons therein, otherwise not included. It would amount to re-writing the provision. It would amount to re-writing the provision. In other words, the right to apply for winding-up of a company is a creature of statute and unless specifically conferred by the statute, the same cannot be claimed by any party on the ground that it has certain unpaid claims against the company. Every claim as already noted, is not a debt and every party who claims an amount from the company is not by itself becomes creditor to be entitled to maintain a winding-up petition under Sections 433 and 434 of the Act. Right to seek winding-up order or remedy for winding-up is available within the criteria and parameters statutorily provided. The provisions of Sections 433 and 434 of the Companies Act are the statutory zone within which such right falls. 10. For the foregoing discussion and reasons, answering the preliminary issue, it has to be held that an employee, whether ex-employee or existing employee, is not a creditor within the meaning and for the purposes of Sections 433 and 434 of the Companies Act, 1956, so as to entitled to maintain a winding-up petition against the company. A petition for winding-up of a company invoking Sections 433 and 434 of the Companies Act, at the instance of the employee or the workman of the company, is not competent and cannot be entertained. 11. Having held on the preliminary point as above, it is not necessary to dwell into any other aspect of the matter and accordingly, the same is not gone into. The present petition by the petitioner-employee is accordingly dismissed.