Disposed

Kamani Employees'Union v. the Official Liquidator (and the Liquidator of Kma Ltd. Andors.

Bombay HC30 Aug 2012APP/529/2012

Case brief

AI extract

What is this about?

An appeal against an order where the Company Judge allowed applications filed by dissenting workmen. The High Court held that the consent terms are binding subject to disputes between the union and dissenters. The applications were restored for re-decision after hearing both sides, particularly regarding the appellant union's objections.

What did the court decide?

Company Application Nos.593 and 620 of 2011 restored for decision after hearing the appellant union and secured creditors.

Kamani Employees'Union Vs the Official Liquidator (and… — Company and Corporate | Bombay HC (2012)

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app-601-12

IN THE HIGH COURT OF JUDICATURE AT BOMBAY.

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ORDINARY ORIGINAL CIVIL JURISDICTION

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APPEAL LODGING NO.601 OF 2012 IN COMPANY APPLICATION NO.620 OF 2011 IN COMPANY APPLICATION NO.593 OF 2011 IN COMPANY PETITION NO.778 OF 2005

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Kamani Employees' Union ...Appellant

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Versus

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The Official Liquidator and the Liquidator of KMA Ltd. (In Liquidation) & Ors.

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...Respondents.

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Ms. Meena H. Doshi for the appellant. Mr. J.P. Sen for Official Liquidator respondent No.1. Mr. N.M. Ganguli, for respondent No.3. Mr. Shailesh C. Naidu i/b. Ms. Gauri S. Rao for respondent No.2. Mr. S.K. Chari i/b. M.V. Kini & Co., for respondent No.4.

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CORAM: MOHIT S. SHAH, C.J. & N.M. JAMDAR, J. DATE : 30 August 2012.

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P.C.

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This appeal is directed against the order dated 2 February 2012 of the learned Company Judge disposing of Company Application Nos.593 and 620 of 2011. These two Company Applications were filed by the dissenting workmen, numbering about 71, who contend that they are not bound by the consent terms dated 8 July 2008 which were placed before the Division Bench of this Court on 8 July 2008 in Writ Petition No.195 of 2006 and connected Writ Petitions, in which the judgment and order dated 2 July 2005

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of the Industrial Court, Mumbai in Complaint (ULP) No.144 of 2005 was challenged.

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In the impugned order dated 2 February 29012, the learned Company Judge has not given any particular finding in favour of the dissenting workmen, but Ms.Meena Doshi, learned counsel for the appellant-Kamani Employees Union, claiming to be representing the sole Union of the workers of Kamani Metal & Alloys Limited, (KMA Ltd.) (a claim which is disputed) submitted that the learned Company Judge has allowed the Company Application No.620 of 2011 in terms of prayers (a) to (c), which read as under:-

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“(a) That this Hon'ble Court be pleased to direct the Official Liquidator to adjudicate the claim of the applicants as per the provisions of Section 529A of the Companies Act on the basis of the documents submitted by the Applicant workmen after verifying their claims as per Company Court Rules, with or without the help of an approved cost accountant/chartered accountant within a reasonable time.

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(b) That the adjudication made by the Official Liquidator in respect of 11 workers and set out in resubmitted report No.158 of 2010 (dated 26-10-2010) be quashed and set aside.

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(c ) That the Official Liquidator be directed to readjudicate the claim on the basis of the Order and Judgment passed by the Hon'ble Industrial Court Bombay in Complaint (ULP) No.144 of 2005 dated 2^nd July 2005 and at Exhibit L to the Affidavit and also in accordance with the provisions of Section 529 (a) of the Companies Act 1956.”

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It is submitted that when in the Writ Petitions challenging the judgment and order dated 2 July 2005 of the Industrial Court the parties had arrived at the consent terms and the Division Bench of this Court had disposed of the Writ Petitions in terms of the consent terms, which were to substitute the decision of the Industrial Court, the learned Company Judge could not have granted the prayer clause (c). It is also submitted that the clarification to the effect that the Official Liquidator shall adjudicate the claim on the basis of the records referred to in the judgment and order dated 2 July 2005 does not wipe out the direction contained in prayer clause (c) which is granted.

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It is submitted by Ms. Doshi that the consent terms having been arrived at between the secured creditors and the appellant union, claiming to be representing all the workers in the Company under liquidation, the same are binding on all the workers including the applicants in Company Application Nos.593 and 620 of 2011. It is submitted that the appellant union has filed affidavits in the above applications objecting to the claim of the applicants, but disposal of those applications would handicap the appellant union at the hearing of the Official Liquidator's report dated 19 June 2012.

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On the other hand, learned counsel for the applicants in the above two company applications have opposed the appeal and submitted that the learned Company Judge has not decided any issue. Relying on the order dated 13 March 2009 of the Company Court (Coram: S.J. Vazifdar, J.), it is submitted that the question whether the consent terms are binding on the dissenting employees was specifically kept open and, therefore, the applicants are entitled to agitate the said issue before the learned Company Judge.

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Having heard the learned counsel for the parties, we do find some substance in the submission made by the learned counsel for the appellant union that since the consent terms dated 8 July 2008 were placed on record of the Writ Petitions challenging the judgment and order dated 2 July 2005 of the Industrial Court and the Division Bench accepted the consent terms subject to the concurrence of the Company Court and the Company Court had granted concurrence to the said consent terms, though it will be open to the applicants to agitate the dispute between the appellant union and the dissenting employees, it cannot be said that the judgment and order of the Industrial Court dated 2 July 2005 holds the field. Subject to the dispute between the appellant union and the dissenting employees (applicants in Company Application Nos.593 and 620 of 2011), the Company Court had granted concurrence to the consent terms, which were in substitution of the judgment and order dated 2 July 2005 of the Industrial Court.

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Apart from the abvoe, it is not possible to read the impugned order dated 2 February 2012 of the learned Company Judge as having decided any issue between the appellant union and the dissenting employees. In fact the dispute between the appellant union and the dissenting employees is not a dispute simplicitor between the appellant Union and the dissenting employees. The consent terms were arrived at between the secured creditors and the appellant union claiming to be representing the workers of the company under liquidation. Clause 13(a) of the consent terms indicates the sharing ratio agreed in principle by the appellant union, the Banks and the Financial Institutions. Clause 13(b) of the consent terms refers to the ratio of distribution of the funds as agreed between the parties to the Writ Petitions. Clause 15 of the consent terms also states that the distribution amongst the

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workers/employees shall be as per the annexure to the affidavit being filed by the Officer of Kamani employees' Union along with the consent terms.

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In view of the above, Company Application Nos.593 and 620 of 2011 are restored and the learned Company Judge will decide the Company Application Nos.593 and 620 of 2011 after taking into consideration the objections raised by the appellant union and also after giving an opportunity of hearing to the appellant union as well as to the secured creditors.

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The appeal accordingly stands disposed of with the above directions.

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CHIEF JUSTICE

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(N.M. JAMDAR, J.)

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Kamani Employees'Union v. the Official Liquidator (and the Liquidator of Kma Ltd. Andors.

Case brief

What is this about?

What did the court decide?

Kamani Employees'Union v. the Official Liquidator (and the Liquidator of Kma Ltd. Andors.

Case brief

What is this about?

What did the court decide?

What the court decided

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