1966 Supreme(Guj) 112
Gujarat High Court
Judgename :P.N.BHAGWATI
J.SARABHAI and COMPANY - Appellant
Versus
NEW SWADESHI MILLS OF AHMEDABAD LIMITED - Respondent
COMPANY APPLICATION 24 of 1964
Decided On : 09/26/1966
Headnote:
Summons – Master and Servant relationship –This Summons has been taken out by the applicants for a direction that the respondent Company should pay to the applicants a sum of Rs. 39 619 ps. sanctioned by this Court by an order – Clause 6 of Scheme requires the respondent to pay to the employees of the Bharathand Textile Manufacturing Company Limited arrears of wages and the claim of the applicants is that they were employees of the Bharathkand Textile Manufacturing Company Limited and they are therefore entitled to recover from the respondent the sum of Rs. 39 619 ps. for work done during the said period – Held, Court is therefore of the view that the legal relationship between the Company and the applicants under the agreement was not that of master and servant and the applicants were not employees of the Company within the meaning of clause 6 of the Scheme – The claim made by the applicants in the Summons must therefore be rejected –The Summons therefore fails and is dismissed with costs – Summons Dismissed
( 1 ) THIS Summons has been taken out by the applicants for a direction that the respondent Company should pay to the applicants a sum of Rs. 39 619 ps. under Clause 6 of the Scheme of Arrangement or Compromise sanctioned by this Court by an order dated 6th December 1962. Clause 6 of the Scheme requires the respondent to pay to the employees (including workmen clerks technicians officers watch and ward staff) of the Bharathand Textile Manufacturing Company Limited arrears of wages and the claim of the applicants is that they were employees of the Bharathkand Textile Manufacturing Company Limited for the period 21st January 1961 to 31st March 1962 and they are therefore entitled to recover from the respondent the sum of Rs. 39 619 ps. representing the arrears of wages due to them from the Bharatkhand Textile Manufacturing Company Limited (hereinafter referred to as the Company) for work done during the said period. The applicants are a partnership firm and they were appointed as Dalals by the Company for sale of cloth manufactured by the Company throughout the whole of India on the terms and conditions recorded in an agreement dated 10th April 1961. Pursuant to their employment as Dalals under the said agreement the applicants acted as Dalals for sale of cloth manufactured by the Company from 21st January 1961 upto 31st March 1962 and after giving credit to the Company for various payments made to the applicants from time to time a sum of Rs. 66 33 ps. became due and payable by the Company to the applicants as on 31st March 1962. The applicants were therefore unsecured creditors of the Company in the sum of Rs. 66 33 ps. at the date when the Scheme was put forward for the sanction of the Court. Clause 6 of the Scheme made provision for payment of arrears of wages unpaid bonus wages in lieu of leave and gratuity to the employees of the Company and so far as unsecured creditors of the Company other than its employees were concerned Clauses 7 7 and 7b of the Scheme provided that the unsecured creditors should lodge their claims before the Official Liquidator of this Court on or before 20th November 1963 and such claims should be verified by Messrs. C. C. Chokshi and Company Auditors and in case any unsecured creditors disputed the verification the claim should be taken to the learned Judge taking Company matters and his decision would be final and the unsecured creditors should be entitled to receive payment of 40 per cent of the verified claims from the respondent. A machinery was devised by Clauses 7 7 and 7b of the Scheme for making payment of 40 per cent of the verified claims and it was provided that the amount representing 40 per cent of the verified claim should be paid by the purchaser to Shri C. C. Gandhi and Shri M. M. Thakore learned advocates appearing on behalf of some of the creditors and they should distribute the said amount amongst the unsecured creditors according to 40 per cent of the verified claims. The scheme also provided that unsecured creditors whose claims were admitted in the books of the Company and shown in the statements annexed to the affidavit filed by Shri Ravindra Gunvantlal in Court on 3 December 1963 should also be entitled to receive 40 per cent of their admitted claims from out of the amount to be handed over by the respondent to Shri C. C. Gandhi and Shri M. M. Thakore. The claim of the applicants for Rs. 66 33 ps. was admitted in the books of the Company and was shown in the statements annexed to the affidavit of Shri Ravindra Gunvantlal dated 3rd December 1963 and a sum of Rs. 26 413 ps. representing 40 per cent of the said claim was therefore paid by Shri C. C. Gandhi and Shri M. M. Thakore to the applicants. The applicants thereupon took out the present Summons claiming to recover the balance of Rs 39 619 ps. from the respondent on the ground that they were employees of the Company and the amount due to them from the Company represented arrears of wages within the meanin