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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.C. DHARMADHIKARI, B.P. COLABAWALLA, JJ.
Mr Sanjay Sadanand Varrier - Petitioner
Vs.
M/s Power Horse India Pvt. Ltd. - Respondent
Company Petition No. 263 of 2015
Decided On : 22-03-2017
In the case of Khandelwal Tube Mill Kamgar Sangh, Kanhan v. Government of Maharashtra and others, 2006 (1) CLR 51. This decision was rendered in Writ Petition No. 2243 of 2005 decided on 11th August, 2005. On a perusal of this decision, it is clear that a workman or an individual employee, being a creditor within the meaning of the relevant statutory provisions of the Companies Act, can institute or file a petition for winding up of a Company. Order dated 22nd February, 2017, recorded that the only issue that would survive for Court`s consideration was whether a Trade Union can file a petition so as to espouse the cause of a workman or workmen who are members of such a Trade Union. Whether the Trade Unions Act, 1926 would be the governing law in so far as this aspect is concerned, or whether the applicable provisions in so far as the State enactments carving out a category of unions namely, representative/ recognised unions alone could maintain such a petition was also needed to be considered. The above being the only surviving issue, the parties have addressed Court on the same.
Companies Act, 1956 - Section 439-Trade Unions Act, 1926, Section 15-Winding up of Company.-Petition for winding up of company filed by Trade Union is maintainable.
The Trade Union, for and on behalf of the its members can certainly prefer a winding up petition as contemplated under Section 439 of the Companies Act. This is for the simple reason that if the workmen have not been paid their wages and/or salary by the Company, they would certainly be a creditor or creditors as contemplated under Section 439(1)(b) of the Companies Act, 1956. Section 15 clearly mandates that the Trade Union can take up this cause for an on behalf of its members. Hence, after complying with the provisions of Section 434 of the Companies Act, 1956 the Trade Union would certainly be competent to present a winding up petition. This does not mean that in every instance when a Trade Union or a workman files a winding up petition, the Company is ipso facto to be wound up. Whether or not there is any merit in the claim made by the workman and/or employee depends on the circumstances in each case.
B.P. Colabawalla, J.
1. This matter has been placed before us by the Hon'ble Chief Justice in view of the order passed by the learned Single Judge on 24th January, 2017. The issue referred to us for our consideration is:-
“(i) Whether an employee can maintain a Petition for winding up of a Company under section 439 r/w sections 433(e) and 434(1)(a) of the Companies Act, 1956 as a creditor based on the claim of the recovery of his unpaid salary and wages?”
2. The reason why this matter was referred to a Larger Bench was because the learned Single Judge in this matter was not in agreement with a view taken by another learned Single Judge in the case of Mumbai Labour Union vs. M/s Indo French Time Industries Ltd., 2002 (2) Mah.L.J. 405.
3. Before we proceed further, it would be apposite to set out a few facts. By this Company Petition filed under section 439 of the Companies Act, 1956, the Petitioner seeks winding up of the Respondent Company on the ground that it is unable to pay its debts. The Petitioner was an employee of the Respondent Company and was initially appointed as the Regional Sales Manager and thereafter as the Manager, Key-Accounts and Trade Marketing, with effect from 1st October, 2007. It is the Petitioner's case that since October 2009 till he resigned in March 2012, his entire salary was outstanding. It is in this light that the Petitioner issued a statutory notice under section 434 of the Companies Act, 1956 dated 21st February, 2014 calling upon the Respondent Company to pay his dues, failing which winding up proceedings would be initiated. Since no payment came forth, the Petitioner approached this Court claiming that the Company is indebted to him in the sum of Rs.39,51,558/- and filed the present Company Petition.
4. This Company Petition for winding up of the Respondent Company was resisted by it on several grounds. One of the contentions raised by the Respondent Company was that the Petitioner is not a creditor of the Respondent Company. It was the contention of the Respondent that the Petitioner being an employee of the Respondent, cannot maintain the Company Petition under section 439 of the Companies Act, 1956 as he was not a creditor of the Respondent Company. In support of this proposition, the Respondent relied upon a decision of the learned Single Judge of this Court in the case of Mumbai Labour Union, 2002 (2) Mah.L.J. 405. In this decision, the learned Single Judge, placing reliance on the decision of the Supreme Court in the case of National Textile Workers' Union and others vs. P.R. Ramkrishnan and others, (1983) 1 SCC 228 : AIR 1983 SC 75 came to the conclusion that the workers had no right to prefer a Petition of winding up of the Company. If that was so, the learned Single Judge held that a Trade Union also could not present such a Petition claiming to represent the class of unpaid employees as creditors of the Company.
5. On the other hand, the Petitioner relied upon the judgment of the Full Bench of the Madhya Pradesh High Court in the case of Jonathan Allen vs. Zoom Developers Pvt. Ltd., 2015 (192) Company Cases 501 (MP) Placing reliance on this decision, the Petitioner submitted that even if an employee has no locus to file a Company Petition in respect of his unpaid wages, salary and emoluments, he was entitled to file a Company Petition as a creditor of the Company. He therefore contended that the Madhya Pradesh High Court has rightly distinguished the judgment of this Court in the case of Mumbai Labour Union (Supra). The Petitioner also placed reliance on a judgment of the Delhi High Court in the case of Argha Sen v/s Interra Information Technologies (India) (P) Ltd., (2007) 75 SCL 150 (Delhi) which also considered the Bombay High Court's decision in Mumbai Labour Union (Supra) and thereafter distinguished it.
6. After considering all these decisions, the learned Single Judge hearing this Company Petition was unable to agree with the view taken by this Court in Mumbai Labour Unio
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