Debasish Ghosal and Others vs Siemens Aktiengasellschaft

Pinaki Chandra Ghose, J.—This application has been filed by the applicant, inter alia, praying for an order to add the applicants as parties in this appeal and further for permanent stay of winding up order passed by the court on January 10, 2007 ( Siemens Aktiengasellschaft Vs. JMD Medicare Ltd.,

The applicants-petitioners are the employees of the appellant company. At present, according to the applicants, there are 55 employees of the appellant company. It is the case of the applicants that the winding up petition was admitted by an order dated July 7, 2005 and the appellant company was granted liberty to pay off the dues of the respondent in 48 equal monthly instalments. From the said order an appeal was filed. The said appeal was dismissed.

None of the present applicants took steps in the matter at that point of time. After the advertisement was published and the matter appeared before the hon''ble company court for hearing, on January 10, 2007, then also, the applicants did not take any step and finally an order was passed on January 10, 2007 by the hon''ble company court directing winding up of the appellant company and the official liquidator was directed to take possession of the assets and properties of the appellant company. The hon''ble company court was pleased to direct that upon payment of Rs. 50,00,000 there will be a stay of the operation of the order so passed by his Lordship.

An appeal was preferred from the said order and the hon''ble appeal court was pleased to direct the company to deposit the said sum of Rs. 50,00,000 and on March 1, 2007, the said sum of Rs. 50 lakhs had been deposited by the company in terms of the order dated January 12, 2007. Thereafter, the hon''ble Division Bench was pleased to direct the company to deposit a further sum of Rs. 50 lakhs. A SLP was filed from the said order before the hon''ble Supreme Court of India which was dismissed as withdrawn. It is to be recorded that the company duly deposited the said sum of Rs. 50 lakhs in terms of the order so passed by the hon''ble Division Bench.

It appears that at this stage, on April 10, 2008, the applicants have filed this application claiming themselves to be the necessary party in the proceeding. No application was filed earlier at any stage.

The learned advocate Mr. Kar appearing in support of this application relied on a decision of National Textile Workers'' Union and Others Vs. P.R. Ramakrishnan and Others, . In the said decision the court was deciding the question that whether the workers of the company had a right to be heard at the time of presentation of a winding up petition. The court held in the said decision : "With a stage anterior to the making of a winding up order" the workers of the company to be heard. The court also held that the minimum requirement of the principle of audi alteram partem which cannot be ignored save on pain of an invalidation of the order of winding up and further held that the right of the workers to appear and be heard in the winding up petition is disputed and there is no specific provision in the Act entitling them to do so and the right to apply for winding up as also to participate in the proceedings in the course of winding up is conferred only on the creditors and the contributories. But it was held that merely because the right to apply for winding up a company is not given to the workers it does not mean that they cannot appear to support or oppose a winding up petition which is properly filed by one or the other persons specified in Section 439. Therefore, the constitutional Bench held as follows (page 203 of 53 Comp Cas):

That has nothing to do with the question whether the company should be wound up or not which is a question in which the workers are vitally concerned and on which they must obviously be heard before any decision is taken by the court.

It was further submitted that the court must give hearing to the workers in the matter before the final order is made. The only question arose at this stage that whether the applicants-petitioners applied before the court for giving a hearing.

Admittedly, the facts remain that the order was passed by the hon''ble company judge admitting winding up petition on July 7, 2005. The appellant company was granted liberty to pay off the dues of the respondent in 48 equal monthly instalments. In the affidavit, filed by the company, the company has admitted that they were facing the financial stringency and further had to take steps to remove the workers from time to time. In fact the company was granted four year''s time to pay off the dues but no step was taken by the company at that point of time. The applicants also never raised their voice when the company admitted in their letter addressed to the petitioning creditor dated December 3, 2001 as follows:

Unfortunate developments pertaining to our group companies during the abeyance of the governmental permissions for bullet payment has further weakened our financial position. As you are aware that presently the Indian economy is in the throes of a severe recession coupled with rampant closure in business houses and mounting economic pressures. Our group companies have been no exception to such depressive pressures and as a result we have been compelled to close down almost all our group companies with the exception of JMD Medicare due to huge losses, colossal overheads and inability to carry on save at a discount. Such has propelled us to voluntarily retire and retrench almost 90 per cent. of our group employees besides cutting down on various fringe benefits to our present staff members.

It would be evident from the said admission, the steps were taken by the company to get rid of 90 per cent. employees of the said group companies and, at that point of time, the workers did not raise their voice nor even at the time when the said order passed by the court on July 7, 2005.

Even at the time when the matter was finally decided by the hon''ble company judge the present applicants never filed an application before the court and prayed for any hearing. It would be further evident from the "annexure" annexed to the petition that even after order passed on July 7, 2005, most of the applicants joined in their service after the date of the said order. None of the employees ever came before this Court or objected to the said order. We further keep it on record that we have specifically asked learned Counsel appearing on behalf of the applicants that whether they can file any scheme so that the amount which is due by the company to the petitioning creditor can be paid off and learned Counsel appearing in support of the applicants could not answer the said question. It has to be noted that dues are more than Rs. 5 crores at this stage.

Therefore, in the facts and circumstances of this case, the decision cited by Mr. Kar cannot help the applicants since the applicants are not in a position even to submit a scheme. After hearing learned Counsel for the applicants, we think that even if we grant leave to the applicants to be added parties in the appeal would not serve the purpose. On the other hand, it will prejudice the petitioning creditor.

Accordingly, in our opinion, no order can be passed on this application since no grounds have been made out by the applicants. Hence, this application is dismissed, however, without any costs.