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Jharkhand High Court · body

2016 DIGILAW 544 (JHR)

BIFR v. UMI Special Steel Limited

2016-04-01

APARESH KUMAR SINGH

body2016
ORDER : I.A. Nos. 3376 of 2012 & 654 of 2016 1. There are 68 persons in the first Interlocutory Application, who claim to be the workmen of the Company under liquidation and seek to be included in the list of workmen on the date of winding of the Company for receiving their wages and other claims arising out of sale proceeds of the Company under liquidation. 2. In the second Interlocutory Application there are 12 persons, who also make a similar claim. It is not out of place to observe here that the Company went into liquidation on 5.8.2003 after the proceeding before BIFR for its revival failed. The statement of affairs of the Company were submitted in terms of Section 454 by the Directors of the Company containing the list of workmen on the rolls of Company at the time of liquidation on 21.10.2003. 368 workmen were shown to be borne on the rolls of the Company as per statement of affairs submitted, out of which, 236 are pursuing their claims. This Court in discharge of powers under the Companies Act, considered the statement of affairs and after giving sufficient notice even by paper publication for any other persons/creditors to raise their claims for realization of debts from the Company under liquidation, passed an order on 26th April, 2007 directing the official liquidator to pay 50% of the wages to those 236 workmen out of sale proceeds of the Company. In that sense, after due exercise and proper notice to all concerned, the list of 236 workmen were taken to be final for the purpose of payment of their dues out of sale proceeds of the assets of the Company. These applicants in their interlocutory application have tried to show that they were also on the rolls of the Company and were left out in the statement of affairs submitted by the Board of Directors which should not be a ground to suffer them from the legitimate dues to which they are entitled from the sale proceeds of the assets of the Company. These persons through supplementary affidavit have enclosed certain I.D. Cards and certain statements showing receipt of wages for particular years. The I.D. Cards do not contain any date and the statement of payment enclosed to their I.A. shows certain wages paid either in the years 1997, 1998 or 1992 etc. These persons through supplementary affidavit have enclosed certain I.D. Cards and certain statements showing receipt of wages for particular years. The I.D. Cards do not contain any date and the statement of payment enclosed to their I.A. shows certain wages paid either in the years 1997, 1998 or 1992 etc. It is beyond doubt that the applicants in the first interlocutory application have come after a delay of 2027 days after the list of workmen was finalized and this Court directed for payment of 50% wages out of sale proceeds of the Company to those 236 workmen. 3. The workmen in the second Interlocutory Application have come before this Court even after further delay i.e. total 3144 days. All these workmen have sought to explain the delay on the ground of being out of Ranchi at their different places of work or at their native places and their ignorance about any notice issued through paper publication pursuant to the orders of the Court. 4. Learned counsel for the applicants has placed reliance on the provisions of Sections 454, 455 and 538 of Companies Act as also Rule 177 of the Company Rule, 1959 in order to submit that the statement of affairs submitted by the Directors should be a document reflecting the true state of affairs of the Company and if they fail to disclose the correct facts on the date of winding of the Company, they would be liable for being prosecuted also. It is also submitted that there is no question of delay involved in making a claim before the Company Court by any such workmen during the liquidation proceeding. Therefore, addition of these workmen in the list of workmen could not be to prejudice of the remaining workmen as each one of them would get their respective share out of sale proceeds of the Company. 5. Therefore, addition of these workmen in the list of workmen could not be to prejudice of the remaining workmen as each one of them would get their respective share out of sale proceeds of the Company. 5. This prayer of the applicants have been opposed by the official liquidator and the counsel appearing for 236 workmen primarily on the grounds (a) that there are no documents on record in the first place to support their contention that they were on the rolls of the Company on the date of its winding up (b) that there is an inordinate delay of 2273 and 3144 days in moving those applications after the list of workmen was finalized after due paper publication and taking objection, (c) thirdly, similar such applications have been rejected by this Court earlier in respect of 144 workmen vide orders dated 14th August, 2015 as also 30th October, 2015 after referring to the same provisions of the Companies Act and the Rules. 6. I have considered the submission of the parties on the aforesaid applications and perused the relevant records relating to them. In this connection, the position of law as has also been referred to in the earlier orders dated 14th August, 2015 as also 30th October, 2015 is to the effect that applications of the nature made by present applicants after huge delay in the matter of prosecuting their claims before this Court can only be considered if there are sufficient explanation to condone the delay under the inherent powers of the Court. It is also duty of the Company Court to look into the merits of the matter, if the question of delay is sufficiently explained by the applicant. Company Court is required to look into the merits of the matter whether the contention of the applicants that they were borne on the rolls of the Company, is substantiated by adequate materials on record to dislodge the statement of affairs submitted by the Directors of the Company at the time of winding of the Company. 7. Upon due consideration of all the relevant materials on record, this Court is of the considered view that there is no sufficient explanation or good cause on the part of the applicants for the gross delay in raising their claims before this Court in the matter after 2273 and 3144 days. 7. Upon due consideration of all the relevant materials on record, this Court is of the considered view that there is no sufficient explanation or good cause on the part of the applicants for the gross delay in raising their claims before this Court in the matter after 2273 and 3144 days. Apart from that, there are no cogent materials to dislodge the statement of affairs submitted by the Directors of the Company at the time of liquidation to show that these applicants were on the rolls of the Company and were illegally or deliberately left out of the statement of affairs. Such application cannot be allowed at this stage when the matter have progressed to a considerable extent after the list was finalized in 2007. Therefore, prayer made in both the Interlocutory Applications are refused. Both I.A Nos. 3376 of 2012 & 654 of 2016 are accordingly, dismissed. I.A. No. 1271 of 2016 8. Counsel for Central Excise Department has pressed this I.A for condonation of delay in filing the claim/proof of debt before the Official Liquidator in respect of OIO No. 18/MP/Commr./07 dated 19th March, 2007 issued upon notice Company which has also been adjudicated. The official liquidator has by his communication dated 12th October, 2011, also communicated the Assistant Commissioner, Central Excise and Service Tax, Ranchi that the said claim has been allowed at a sum of Rs. 21,93,314/- only as preferential claim. 9. Counsel for the applicant by referring to the order dated 4th January, 2007 in the instant company petition, submitted that other 12 claims arising out of OIO already adjudicated at that point of time, have been entertained by this Court after condoning the minor delay vide order dated 4th January, 2007. Therefore, the present I.A has been preferred for condonation of delay in the aforesaid circumstances in respect of OIO No. 18/MP/Commr./07 dated 19th March, 2007. 10. Learned Official Liquidator does not object to the prayer for condonation of delay in the circumstances explained by the applicant neither are any of the parties against it. 11. Therefore, having considered the reasons stated in the instant interlocutory application and the submissions of the parties the prayer for condonation of delay is allowed. Accordingly, the aforesaid I.A. No. 1271 of 2016 stands disposed of. I.A. No. 1272 of 2016 12. 11. Therefore, having considered the reasons stated in the instant interlocutory application and the submissions of the parties the prayer for condonation of delay is allowed. Accordingly, the aforesaid I.A. No. 1271 of 2016 stands disposed of. I.A. No. 1272 of 2016 12. The instant interlocutory application has been filed by the same applicant-Department of Central Excise and Service Tax, Ranchi through its Commissioner and seeks consideration of the claim in respect of 12 OIO which were already filed in the year 2006 and in respect of which the minor delay in filing of such claim was condoned by the order dated 4th January, 2007 by this Court passed in the instant petition. 13. Counsel for the official liquidator submits that the said claim would be examined and decision would be taken in that regard and brought to the notice of the Court. 14. In that view of the matter, the prayer made in the instant I.A. is also allowed. Official liquidator to examine the aforesaid claims and report to the Court. 15. Counsel for the parties have brought to the notice of the Court that the claims of the applicant-Central Excise and Service Tax Department would be governed as per the provisions of Section 530 of the Companies Act and would rank next to the claim of the workmen and secured creditor as provided under Section 529A of the Act. 16. Accordingly, the aforesaid I.A. No. 1272 of 2016 stands disposed of. Company Petition No. 02 of 2002 17. As prayed for on behalf of learned counsel for the parties, let the case appear on 29th April, 2016 for consideration on I.A. No. 3369 of 2012. 18. Let a copy of this order be handed over to Official Liquidator. I.A. disposed of.