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M/S Sitapur Plywood Man. Co. Ltd. v. Official Liquidator Attached To The Hon' High Court, Alld - COMPANY APPLICATION No. 25 of 2003 [2007] RD-AH 4410 (14 March 2007)


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Court No. 30

Company Application No. 25 of 2003

In the matter of

M/s Sitapur Plywood Manufacturing Company Ltd

          Order on

Civil Misc. Condonation Application No. 19914 of 2007 and Civil Misc. Recalling Application No. 19919 of 2007 filed Plywood Karamchari Sangathan Sitapur

Hon. Sunil Ambwani, J.

This is an application filed by the workmen through Shri Ashok Mehta, Advocate for recalling the order dated 19.7.2006 by which the company was dissolved.  The workmen represented through Plywood Karmchari Sangathan Sitapur have prayed that after recalling the dissolution order the Court may consider for making payment to the workmen under 'Group Gratuity-cum-Life Assurance Scheme' (the Scheme), by the LIC.

The workers have claimed  Rs.3,37,16,765.78.   The application claiming these amounts was dismissed on 02.11.2006 on the ground that the matter has been disposed of and is no longer pending and that any information or report of the Official Liquidator in liquidation proceedings shall be dealt with as chambers' matters.

Each workmen has made claim of his salary from June 2000 to September 2001 (Salary from 1998 to May 2000 is covered by Labour Court's Awards), bonus, retrenchment compensation from Official Liquidator and contribution made to the Scheme from LIC.

The company was dissolved as it had no further asset and as such there is no question of payment of dues to the workmen under Section 529, 529A  and 530 of (The) Companies Act 1956.

So far as payment under the Scheme is concerned, the documents brought on record go to show that a 'Trust' was created under the 'Scheme' on 31.3.1973 with four named persons, who were directors and employees of the company (in liquidation) at the relevant time to act on behalf of the employer. The fund created in the Trust was to be contributed to the Scheme by the company. Under the Scheme, the trust acting on behalf of employer was to make contributions, which were payable (a) on retirement to the extent the amount is payable under the Payment of Gratuity Act 1972 and (b) on death while in service, for which the member's life was assured under the terms of insurance on the date of death and value of assurance under  endowment on the  cessation of employment. Any balance of the value of assurance remaining over after payment of the gratuity as ascertained according to the provisions of Appendix-(1) hereto having regard to the total service completed by the member and the circumstances, in which he ceases to be in the service was to be transferred by the trustees to the 'Surplus Account'. Para 15 of the scheme provided for determining the 'Surrender Value' of pure endowment. The surrender value was to be calculated in accordance with the Rules of Corporation (LIC). One year renewal term assurances were not entitled to any surrender value.

By the order sought to be recalled while dissolving the company, a direction was issued to Official Liquidator to return Rs. 11,93,904/-, the amount paid by LIC to Official Liquidator for being distributed as 'Surrender Value' of the policies closed by LIC to the workmen in accordance with the Scheme.

In terms of para 29 (i) (a) of the Trust Deed, the process came to an end on the dissolution of the company. The Trust was required to  first realise the value of the assets of the fund including the value of the assurances then held by them and the amounts so realised were to be allocated in the manner described below to the members who were in the service of the company on the date of winding up of the fund.

Having settled all the matters with regard to the company (In Liq.), the orders of dissolution were passed on 19.7.2006 with further directions that the amount deposited by LIC under  the Scheme may be paid back to the LIC for disbursement to the workmen.

After dissolution orders have been passed, nothing survives to be considered by the liquidation Court.  In case the workmen have any demand to be made to LIC, the same may be addressed directly to LIC, and for that purpose the Official Liquidator has already paid back the amount in deposit to LIC.  

The contributions to the Scheme came to an end in 1998 on which the payments were closed by the LIC and the company was wound up on 21.1.2000. The Trust as such is no longer in existence. The Official Liquidator was acting  on behalf of the company till the date of dissolution of the company. Now since the company has been dissolved and the amount of the fund has been returned to the LIC, it is for the LIC to make payments to the workmen according to the 'Surrender Value' of the closed polices of each workmen. The Official Liquidator has no further business in the matter. The applicant-workmen may seek their remedies before the  appropriate forum for realisation of the surrender value of the policy from out of Rs. 11,93,904/- and the interest if any, which may have accrued on the deposit.

The delay condonation application and the application for recalling the dissolution order dated 19.7.2006 are rejected.




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