This company petition sought recovery of dues including leave encashment and gratuity. The court held that the genuine dispute regarding expense approvals and service rendered precluded summary adjudication under the Companies Act, 1956.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
19. CP199-12.DOC
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMPANY PETITION NO.199 OF 2012
Ratan Singh Rana…Petitioner
Versus
Oilco Services (India) Limited…Respondents
Mrs. Mohana Nairi/by M/s. JMB Partners, for the Petitioner.
Mr. A. Daverwith Mr. Sunil K. i/by DSK Legal, for the Respondents.
CORAM : G.S. Patel, J. Thursday, 13th February 2014.
P.C. :
1.The petitioner was employed with Oilco Services (India)
Limited (“the Company”) since June 2000. His present claim
against the Company is for an amount of Rs. 14,94,631/-. This
includes an amount of Rs.1,62,000/- as interest. He claims that the
Company owes him Rs.8,45,781/- towards leave encashment, salary
for July 2010 and other investments; and Rs.4,86,000/- by way of
gratuity dues.
2.Although the claim is relatively small, it has been resisted
with a surprising degree of vehemence. Mrs. Nair, learned advocate
for the petitioner says that the claim is on the basis of the services
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rendered by the petitioner to the Company. It seems that in 2010
there were disputes between two groups then in management of the
Company. An agreement of settlement was signed between those
groups on 12th July 2010. The agreement provided that a portion of
the Company's business would be taken over by one of the parties to
the settlement, one Mr. Arup Chatterjee, or his nominee. For a
period of 12 months after the signing of that agreement, these
businesses would be carried out by the Company. The petitioner
and another employee one Mr. Sunil Kumar Bose, would manage
these affairs in that transitional period. The petitioner was not
himself a party to that settlement agreement.
3.The petitioner’s claim is based on the services he says he
rendered during this period. He claims that his designation was
indicated incorrectly in some salary slips or documents; there were
mistakes in leave encashment calculation; and similar issues. There
is also the matter of the petitioner’s approval of several expense
vouchers. There is no doubt that the petitioner did, in fact, approve
many such expense vouchers. The Company has contested these,
and has, even before the petition was filed, contested his own claims
for reimbursement and payment.
4.The petitioner resigned with effect from 7th July 2011. His
resignation was accepted. On 27th July 2011, the petitioner e-mailed
one Mana Chatterjee (one of the parties to the settlement
agreement) saying that there were issues related to his engagement
with the Company that were still inconclusive. It is not insignificant
that this e-mail was also copied to one Sunil Kumar Bose; for Bose is
the other person to have filed a similar winding up petition against
the Company. In this e-mail, the petitioner raised issues regarding
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the expense statements of Mr. Bose, the petitioner, and other
claims. These including bills of parties who were said to have
rendered services on behalf of the Company. He also disputed the
Company’s computation and pointed to certain discrepancies in his
salary slip, designation, leave encashment, etc. A subsequent e-mail
on 28th November 2011 from the petitioner to Mana Chatterjee, not
only reiterates some of the previously raised, but also indicates that
there were serious disagreements about the claims made by the
petitioner.
5.On 10th December 2011, the petitioner through his advocates
issued a statutory notice to the Company. The Company received
this notice. It replied by its advocates’ letter dated 6th January 2012.
This reply is significant because it is in this reply to the statutory
notice that the Company not only deals with and denies the
petitioners’ claim, but also sets up an affirmative case. In paragraph
3, the Company claims that the petitioner had filed claims for
services done for the business of Tatsuno India Private Limited
(TIPL), despite the fact that TIPL and the Company were two
distinct entities. The Company alleged that the petitioner had not
handed over statutory records of contracts; it disputed the
petitioners’ claim regarding his designation; it challenged the
validity of his claim for travel expenses reimbursement; and finally
denied that the petitioner had rendered any service after 7th July
2011.
6.In paragraph 9 of that letter, the Company provided a detailed
break down of the amount that, according to the Company, would be
the maximum payable to the petitioner. This was under various
heads. It totals to an amount of Rs.8,00,260/-. The Company does
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not dispute that, but for what follows in paragraphs 11 and 12, this
amount would be payable to the petitioner. Paragraphs 11 and 12 of
that letter are the ones in which the Company takes a stand that the
petitioner had wrongfully approved travel vouchers of persons who
had ceased to be in the employment of the Company. The Company
claims it has been put to a loss exceeding Rs.1.5 crores. The
Company, therefore, made a demand for restitution in that letter.
7.The petitioner’s advocate responded on 29th March 2012. In
paragraph 10 of the reply, the petitioner contested the issue of the
business done by him. He claimed that he has always done the
business on behalf of the Company and not on behalf of TIPL.
However, in the same response, the petitioner also contested the
computations made by the Company in paragraph 9 of its reply to
the statutory notice.
8.Ex-facie, these are not matters that can be examined in a
summary jurisdiction under Sections 433 and 434 of the Companies
Act, 1956. I have heard Mrs. Nair for the petitioner and Mr. Daver
for the respondents at some length. I do not believe it is possible to
accept Mr. Nair’s submission that the case placed by the Company
as a defence is entirely illusory, not bona fide and without substance.
In the affidavit in reply, as Mr. Daver points out, there is material to
show that the petitioner has approved expense vouchers in
December 2010, February 2011 and April 2011 of several employees
who resigned from the Company in October 2010. There is also
material to show that the petitioner approved expenses vouchers of
as many as ten persons who were not on the Company’s rolls at all.
From the reply, it seems that as many as 52 employees of the
Company resigned in October 2010 and joined TIPL. Despite this,
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their expenses were apparently approved by the petitioner for
reimbursement by the Company even after their resignations. The
Company has also disputed the petitioner’s own travel expenses to
Bangalore for meeting with a Shell India Markets Private Limited,
although some contracts of Shell India have been transferred to
TIPL and, therefore, the entirety of the petitioner’s travel expenses
could not have been debited to the Company alone.
9.It is difficult, on these facts, to accept the submission that
there is no defence to the petition; or that the only defense is
illusory, without substance and not bona fide. These are clearly
matters that require adjudication, and the taking of evidence. This is
not possible in the summary jurisdiction under Sections 433 and 434
of the Companies Act, 1956. I cannot accept the submission that the
Company has, without just cause, neglected to pay a demand made
by the petitioner.
10.The company petition is dismissed. There will be no order as
to costs.
(G.S. Patel, J.)
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1 issue framed by the court
Whether matters requiring adjudication and taking of evidence can be examined in summary jurisdiction under Sections 433 and 434 of the Companies Act, 1956.
1 provisions across 1 enactments
Ratan Singh Rana
Oilco Services (India) Limited
G.S. Patel
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court