A short but important question that arises in this matter is, up to which date the dues of workmen are to be calculated when a Company is wound up. Whether the Companies Act, 1956 provides the date of passing the order of winding up as the only contingency or whether the Act provides any other event prior to the date of order of winding up.

2. This Company application is taken out by workmen of M/s Swadeshi Mills Co. Ltd. These workmen are five out of the 735 workmen who were employed in the Mill. They had filed proof of debt before the Official Liquidator. They inter alia claimed that they should be paid up to the date of the order of winding up. The Official Liquidator has paid them till the date of the appointment of Provisional Liquidator, taking that as the relevant date. Since this view taken by the Official Liquidator affects large number of workmen of the Mill under liquidation, and that the issue raises question of law of general importance, the learned counsel for the parties have advanced arguments at great length and have submitted written submissions. Their assistance is appreciated.

3. M/s Swadeshi Mills Co. Ltd. was one of the leading Mills in Mumbai. The Company, when it was in operation, had approximately 2970 employees. The Company had substantial immovable assets. The main asset being 48 acre land at Sion Chunabhatti in Mumbai. In the year 1997, one M/s Rally Brothers & Convey filed Company Petition No.1068 of 1997 for winding up of the Swadeshi Mills Co. Ltd. The Company made a reference to the Board of Industrial and Financial Reconstruction (BIFR). On 24 April 1998, the BIFR declared the Company as a sick undertaking, under the provisions of Sick Industrial Companies (Special Provisions) Act. The BIFR on 5 February 2001, recorded a prima facie opinion that the Company was not likely to make it's net worth match its cumulative losses within a reasonable time and that the Company was not likely to be viable. The BIFR recommended that it was just and equitable and in public interest to wind up the Company. Rashtriya Mill Mazdoor Sangh (RMMS) being the workers Union filed an appeal before the Appellate Authority of Industrial and Financial Reconstruction (AAIFR) challenging the order of BIFR. The Appeal was dismissed by the AAIFR. Upon the recommendation, Company petition was registered as BIFR Case No. 15/1998 and it was admitted by this Court on 13 February 2002. On that day, the Company Petition filed by M/s Rally Brothers & Convey was also admitted. On the same day i.e. 13 February 2002 the Official Liquidator was appointed as a Provisional Liquidator.

4. Prior to the order dated 13 February 2002, the Government of Maharashtra, by its communication dated 20 September 2001, had constituted a High Power Committee for the payment of workmen and other dues of the Company. The High Power Committee consisted of the Chief Secretary (Labour), Deputy Secretary (Labour), Representative of the Company and workers Union.

5. The Company thereafter filed a Company Application and prayed that the High Power Committee appointed by the government of Maharashtra be authorized to sell the assets of the Company and deposit sale proceeds in this Court. It was also prayed that directions be issued to call a meeting of the creditors and workers of the Company to formulate a scheme for distribution of the amount recovered after sale of the assets. The application was disposed of by order dated 21 June 2002, empowering the High Power Committee to dispose of assets and realize the proceeds, except the assets which were subject matter of an Appeal pending before the Appeal Bench. The High Power Committee was directed to dispose of the assets and deposit the sale proceeds with the Official Liquidator. In July 2002, the Official Liquidator took possession of the assets of Company. The High Power Committee, thereafter proceeded to dispose of the plant and machinery of the Company, which were sold to one M/s Bhavana Enterpri