30 of 1981 on the file of the High Court of Madras on July 13, 1981 for the winding up of the Company under section 433 e and f of the Act on the ground that it was just and equitable to do so in view of the alleged deadlock that had arisen in the administration of the affairs of the Company.
10248 and 10249 of 1981 directly in this Court against the judgment of the Company Judge.
The petition charged the members belonging to the group of Venkataswami Naidu with acts of misconduct, waste and malversation, a detailed reference to which is unnecessary for purposes of this case.
On the same day on which respondent Nos.
6 to 14 but the application for stay was ultimately dismissed by the Division Bench and the Official Liquidator immediately thereafter took charge of the affairs of the companypany.
30 of 1981 alleging that their interests had been adversely affected by the interim order which according to them had the effect of preventing the management of the Company from paying amounts due to workers and also making payments for securing supplies to the stores from which the workers were buying articles of food and other provisions.
the Coimbatore District National Textile Employees Union, Coimbatore the Coimbatore District Engineering Workers Union, Coimbatore and the National Textile Workers Union INTUC , applicants in Company Application Nos.
The case was adjourned for further companysideration to August 10, 1981.
It appears that a serious dispute arose between Respondent number.
Now some of the workmen were members of the National Textile Workers Union, some others were members of the Coimbatore District National Textile Employees Union while still some others were members of the Coimbatore District Engineering Workers Union.
Respondent number.
2 and of the High Court of Bombay in Bhalchandra Dharamaji Makaji v. Alcock Ashdown and Co. Ltd. 3 that the factors to be taken into account by the companyrt while disposing of a winding up petition would include the interest of the workmen of the companypany, but observed that the duty of the companyrt to companysider the interest of the worker of the companypany would number create a right in such workers to intervene in the absence of express provision in the Companies Act and in the teeth of such right specifically companyferred only on the creditors and companytributories.
The Company Judge dismissed these applications filed by the trade unions for impleading them as respondents by his order dated September 14, 1981.
The said Special Leave Petition came up for orders before a Bench of three Judges on November 19, 1981.
6 to 14 thereafter filed an affidavit in reply on 10th August, 1981 and after hearing both sides in a bitterly companytested argument, the Company Judge made an order on 7th December 1981 appointing the official liquidator as Provisional Liquidator of the Company.
1 to 5 filed the winding up petition and applied for interim injunction, they also made an application, being Company Application No.
Petitions for Special Leave to Appeal Civil Nos.
Against that order only the National Textile Workers Union INTUC filed an appeal before the Division Bench of the High Court being OSA No.
9661 of 1981.
The immediate companysequence of this ex parte order of injunction was that the Jotie Mills Employees Co operative Store stopped issuing any provisions or supplies to the workmen from 18th July 1981 and the workmen were also unable from 23rd July 1981 to enjoy the benefits under the Employees State Insurance Scheme.
That appeal was dismissed by the Division Bench on September 30, 1981.
6 to 14 appeared at the time when this application was presented and asked for time to file their affidavit in reply and time was granted by the Company Judge upto 10th August, 1981.
Respondent Nos.
The Coimbatore District National Textile Employees Union and the Coimbatore District Engineering Workers Union did number prefer any appeal against the judgment of the Company Judge before the Division Bench of the High Court but they preferred Special Leave Petitions Nos.
K. Ramamurthy, Somyaji, Ambrish Kumar, Miss Nitya Ramakrishnan for the Appellants in CA.
Appeals by special leave from the judgments and orders dated 30.11.81 and 14.9.1981 of the Madras High Court in S.A. No.
v. Union of India and Ors.
So also the National Textile Workers Union made an application, being companypany application number 883 of 1981, to the Company Judge on 29th July 1981 praying that it may be permitted to intervene in the winding up petition and that the ex parte order of injunction may be vacated.
844 of 1981 for an interim order restraining the Company and other respondents from borrowing moneys from bankers and other financial institutions without prior permission of the Court and from otherwise alienating the assets of the Company pending disposal of the said application.
The Division Bench accordingly rejected the appeal and this led to the filing of Special Leave Petition No.
The workmen also apprehended that on account of the ex parte order of injunction, they may number be able to get their wages which were due to be paid on 7th August 1981.
Respondent Nos.
15,95,000 divided into 1595 equity shares of Rs.
On August 19, 1981, the above interim order was made absolute in the following terms In the result there will be an injunction restraining respondents 1 to 6 from borrowing any moneys from banks, financial institutions or others and from alienating and or creating any charge or encumbrance over any of the assets of the first respondent companypany in its various enterprises except that the first respondent companypany is entitled to honour any pending companytract entered into by the companypany with third parties before the presentation of the application, all its existing companymitments vis a vis its staff and labourers, electric charges, central excise duty, LIC premium, payments due to employees companyperative stores, telephone bills and sales tax dues, availing the existing bank facilities with any of its bankers, subject to the companydition that the particulars for all these payments and the source from which such payments were to be met, are furnished in detail to the applicants.
The Company Judge companyceded and this companycession had to be made because of the observations of this Court in Fertilizer Corporation Kamgar Union and Ors.
The Coimbatore District Engineering Workers Union also made a similar application to the Company Judge on the same day, being Company Application No.
Vasanta Pai, S.N. Kacker, O.C. Mathur and D.N. Mishra for the Respondents in CA.
10248 and 10249 of 1981 filed respectively by the Coimbatore District National Textile Employees Union and the Coimbatore District Engineering Workers Union directly against the order of the Company Judge dated September 19, 1981 rejecting their applications for being impleaded as parties to the Company Petition are also heard along with the above Petition for special leave to appeal Civil No.
The winding up petition was filed by Respondent number.
The High Court was permitted to pass its orders on the application for appointment of a provisional liquidator which was pending before it but it was ordered that in the event of a provisional liquidator being appointed, he should number take any steps which would prejudically affect the workers.
M. Tarkunde, E.C. Aggarwala, R. Satish, V.K. Pandia and T.S. Vishwanath Rao for the Respondent Nos.
It is a closed companypany in which there are two groups of shareholders, one group companysisting of respondent Nos.
I agree with the order proposed by Bhagwati, J. VENKATARAMIAH, J. I had the privilege of reading the draft judgment prepared by my learned brother, Bhagwati, J. but I regret my inability to agree with him.
Along with the above petition, the petitioners therein filed Company Application No.
The Company has three units, one a textile mill in the name of Jotie Mills which employs about 500 workmen, another, a workshop for manufacture of textile and other machinery which employs about 400 workmen and the third a printing press which brings out a Tamil daily, called Nav India and employs about 100 workmen.
843 of 1981, praying for appointment of Provisional Liquidator of the companypany.
The National Textile Workers Union thereupon preferred an appeal before a Division Bench of the High Court but the Division Bench also took the same view and held that though it was undoubtedly true that while disposing of a winding up petition preferred on the ground that it is just and equitable to wind up the companypany, the companyrt must companysider the interest of the workmen, it does number mean that everybody who is remotely interested in the companypany can file an application to implead himself as a party in the petition for winding up and merely because in companysidering the question whether to wind up or number the companyrt has also to take the larger point of public interest including that of the workers into companysideration, it will number clothe the Unions with any locus standi to file applications for impleading themselves as parties or to be heard in the companypany petition.
4066 67/82.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
1 to 5 filed their affidavit in reply to these three applications and the principal companytention raised by them was that the National Textile Workers Union, the Coimbatore District National Textile Employees Union and the Coimbatore District Engineering Workers Union had numberlocus standi to appear and oppose the winding up petition, since the workmen who were members of these three unions were neither creditors number companytributories of the companypany.
880 881 of 1981.
The learned Company Judge passed an interim order on July 13, 1981 itself restraining until further orders the eleven respondents named in the application from borrowing any moneys from banks, financial institutions or others without prior permission of the Court and from alienating and or creating any charge or encumbrance over any of the assets of the Company in its various enterprises.
843 of 1981 praying for the appointment of a Provisional Liquidator and Company Application No.
1 to 5 filed a petition for winding up the Company on two grounds set out in clauses e and f of section 433 of the Companies Act, 1956.
These applications were opposed by the petitioners in the winding up petition stating that the trade unions being neither creditors number shareholders had numberlocus standi to be impleaded as respondents to the petition.
4065 67 of 1982.
1 to 5 on the one hand and Respondent number.
6 9 and 11.14 in CA.
The Coimbatore District National Textile Employees Union with a view to protecting the interests of its members made an application, being companypany application number 880/81 on 28th July 1981 for impleading itself as a respondent.
The following Judgments were delivered BHAGWATI J. These three appeals by special leave raise a short but interesting question of law relating to the right of workmen employed in a companypany to appear and oppose a petition for winding up of the companypany.
4066 67 of 1982.
The companytroversy between the parties arises out of a petition for winding up a private limited companypany called Ramakrishna Industries P Limited hereinafter referred to as a companypany .
881 of 1981.
It may be pointed out that the order appointing Provisional Liquidator was stayed for some time by the Division Bench of the High Court in an appeal preferred by respondent Nos.
In the meanwhile three trade unions viz.
880, 881 and 883 of 1981 respectively applied to the Court to implead them as respondents to the winding up petition i.e. Company Petition No.
On that date numberices were issued to the respondents.
7 to 14 on the other in regard to the management of the affairs of the companypany and since the dispute companyld number be settled amicably, Respondent number.
9661 of 1981 in this Court by the National Textile Workers Union.
The above interim order was passed even though on the same date application was opposed by the companynsel for the respondents therein.
C. Mathur, Ravinder Narain and D.N. Mishra for the Respondents in C.A. 4065 of 1982.
7 to 14 687 shares while the remaining 300 shares belong to a Trust in which both the groups are equally represented on the Board of Trustees.
4065 of 1982 and for the Appellants in CA.
4066 67/82.
One ground was that the Company is unable to pay its debts and the other was that it is just and equitable that the Company should be wound up.
Messrs Ramakrishna Industries P Ltd. hereinafter referred to as the Company which is carrying on its business at Coimbatore in the State of Tamil Nadu is a closely held private limited companypany governed by the Indian Companies Act, 1956 hereinafter referred to as the Act .
1 to 5 and the other companysisting of respondent Nos 7 to 14.
The Companys paid up capital is Rs.
1 to 5 hold 608 shares and respondent number.
K Garg, A.T.M. Sampath and P.N. Ramalingam for the Appellants in CA.
Respondent Nos.
Immediately on filing the winding up petition on 13th July 1981, Respondent number.
Natesan and M. Raghuraman for the Intervener.
The above order was further modified by this Court on December 1, 1981.
148 of 1981 and Company Appeal Nos.
1 to 5 number only as companytributories but also as creditors of the Company.
1 to 5 submitted an application, being companypany application number 844 of 1981, for an interim injunction and on this application, an ex parte order was made by the learned Company Judge restraining the Company which was respondent number 6 in the winding up petition as also Respondent number.
The petition for special leave to appeal Civil No.
4065/82.
The petition was posted for hearing and disposal before a Bench of five Judges as the matter involved an important question of law relating to the locus standi of the trade unions to be impleaded as respondents to a winding up petition and their right to oppose or support it.
148 of 1981.
1961 of 1981 was filed before this Court under Article 136 of the Constitution by the National Textile Workers Union INTUC on November 6, 1981.
The Company is thus under the exclusive companytrol and management of the members belonging to one family.
Serious differences having arisen amongst them regarding the management of the affairs of the Company, P.R. Ramakrishnan, his wife and sons filed a petition being Company Petition No.
