ORDER :- This petition was filed under S. 216 (2) of the since repealed Indian Companies Act, 1913 (corresponding to S. 518 (2) of the Companies Act, 1956) by the Liquidator of the Vijaya Card Board Company for an order setting aside the attachment made by the Collector of Hyderabad against the building bearing No. 1-9-1 in Azamabad belonging to the Company.

2. The 1st respondent in the petition is the Collector of Hyderabad; the 2nd respondent is the Labour Commissioner; and the 3rd respondent is the President of the Vijay Card-Board Companys Workers Union.

3. The material facts giving rise to this petition may be stated : The Vijay Card-Board Company (hereinafter referred to as the Company) was incorporated under the Hyderabad Companies Act. By an order dated the 28th of June, 1952, the Government of Hyderabad referred to the Industrial Tribunal a dispute between the workmen and the Company. The issue referred to the Tribunal for decision was whether the contemplated lock out of the Company with effect from 1-7-1952 was justifiable and if so to what relief would the workmen be entitled.

By its award dated the 16th of August 1952, the Industrial Tribunal held that in the event of the Company closing down its factory at any time within one year from the date when the award became enforceable, it should pay to each workman half months wage for every completed year of service as compensation. This award was published in the Hyderabad Gazette on the 29th of August 1952. At a meeting of the directors of the company held on 23rd of August 1953, a resolution for voluntary winding up of the company was passed and a Liquidator was appointed for winding up its affairs. The Liquidator so appointed having resigned, at a meeting of the creditors of the Company held on 30-10-1954, the present petitioner was appointed Liquidator.

4. Now, the compensation payable to the workmen by the Company as per the award of the Industrial Tribunal abovementioned, amounted to Rs. 4,709-11-8. The Collector of Hyderabad, by an order dated the 31st of October 1955, directed the attachment of the building bearing No. 1-9-1 in Azamabad belonging to the Company and further ordered that if the amount of compensation was not paid on or before the 7th of November, 1955, the said property should be sold for realisation of the amount.

5. In this petition, it is submitted by the Liquidator that it is only wages of workmen in respect of services rendered to the Company within the two months next before the date of the commencement of the winding up, that have a priority over other debts due by the Company; that the sum claimed by the 2nd respondent on behalf of the workmen is not for services rendered by the workmen but is a sum awarded by the Industrial Tribunal as compensation for closing down the factory calculated at half months wage for every completed year of service and such a debt has no priority under S. 230 (1) (c) of the Companies Act, 1913 (corresponding to S. 530 (1) (b) of the Companies Act, 1956.

The Liquidator, therefore, sought the following reliefs : (a) that the attachment made by the Collector be set aside; (b) that the Collector be directed to stay the sale by auction of the building bearing No. 1-9-1 situated at Industrial Area, Azamabad, belonging to the Company; and (c) for directing the workmen of the Company represented by the 3rd respondent to prove the sums due to them as any other ordinary creditor and to accept rateably with the other creditors of the Company.

6. It is submitted by the respondents that the amount of compensation awarded by the Industrial Tribunal to the workmen is entitled to preferential payment under S. 230 (1) (a) of the Companies Act, 1913.

7. On the above contentions the question that falls for determination is whether the compensation awarded by the Industrial Tribunal, Hyderabad, to the workmen for the period when the factory was closed, calculated at a half months wage for every completed year of service, should be paid

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