THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN COMPANY APPEAL NO.15 OF 2010 IN R.C. NO.3 OF 1998 ORDER: This appeal, filed under Rule 164 of the Company Court Rules, 1959, is against the order of the Official Liquidator dated 28.10.2009 rejecting the appellant’s claim to be a workmen, and his preferential debt for Rs.3,45,548.14 ps and Rs.83,140.37 ps being treated as an unsecured debt. The appellant was appointed, in the company under liquidation, as the Manager (Personal & Administration) by order dated 07.09.1987 on a basic pay of Rs.2,190/- per month in the scale of pay of 1350-2350 with admissible allowances i.e., D.A. Rs.350/-; HRA Rs.202.50/-; Conveyance Allowance Rs.30/-; Canteen subsidy Rs.30/-; Domestic Servant Allowance Rs.150/-; and VDA per month. He was extended the benefit of medical reimbursement of one month basic pay and D.A. per year; conveyance allowance upto Rs.120/- per month and for provident fund, gratuity and bonus as per company rules. The annexure to the said appointment letter details the general terms and conditions which governed the appellant’s appointment. Contending that he was also a workman, and was entitled to have his claim treated as a secured and preferential over-riding debt, the petitioner filed a claim petition in Form 66 before the Official Liquidator. The earlier order passed by the Official Liquidator, rejecting the petitioner’s claim, was set aside by this Court in its order dated 01.07.2009 in C.A. No.2 of 2007, and the matter was remitted to the Official Liquidator to determine the status of appellant i.e., whether he was a workman or an employee of the company under liquidation. In the order under challenge in this appeal, the Official Liquidator held that the appellant was appointed as the Manager (Personal & Administration) vide letter dated 07.09.1987; neither the appointment order, nor the general conditions attached thereto, disclosed the exact duties of the appellant except that he was responsible for machinery, tools and other materials; the general duties applicable to a person, in the cadre of Manager, was distinct from that of a workman; generally, in any undertaking, the Manager (Personal & Administration), would represent both the management and the workman to enforce labour legislations; to resolve labour unrest, and to take care of the man power needs in terms of organisational requirements; help in formulating HR policy etc; he would also be required to take care of the requirements of the employees in terms of remuneration, training and career advancement opportunities; the termination mode prescribed in the appointment order dated 07.09.1987 is not the mode of of termination stipulated under the Industrial Disputes Act or the Industrial Employment (Standing Order) Rules; letters dated 01.05.1988 and 20.09.1988 issued to the appellant by the company in liquidation, duly signed by the then Managing Director, showed that the appellant was assigned the work of a technical manager, and production manager respectively; the appellant was in-charge of the respective sections; subordinate staff, like Superintendents, SMFs and Manager (material), were required to assist and cooperate with him in the discharge of his assigned duties; the Superintendents and other Managers, who were supervising the work of the workmen of the company, were in turn reporting to the appellant; the appellant could not be equated to that of a workman of the company; the appellant was not a member of the workmen union; the circulars issued by the then Managing Director of the company under liquidation dated 14.04.1989, 03.05.1989, 07.11.1989 etc., showed that he was made in-charge of the factory and office during the Managing Director’s absence from headquarters; this clearly showed that workmen were subordinate to him, and he had control over them; the wage pattern in the “staff category” originated from the cadre of Assistant/Steno; thereafter were the Supervisors, Superintendents/Accountants, Assistant Officers, Dy. Managers, Managers and Sr. Managers; the pay of Assistant/Steno was Rs.683/- per month, while that of a Manager was Rs.1962.50 ps, and that of a Senior Manager was Rs.2530/-; a settlement was entered into, under Section 12(3) of the Industries Disputes Act, (evident from the note dated 05.10.1986 signed by the Managing Director of the Company), with the workmen and other administrative and supervisory staff; in terms of their wage pattern, certain allowances were applicable only to Managers or Deputy Managers including the appellants; other categories of employees were not entitled to such allowances, let alone workmen; there was a hierarchy and a huge difference in the scales of pay between a Manager and a workman; and the appellant was not a “workman”. Under Section 529-A(1)(a) of the Companies Act, in a winding up of a company, the workmen’s dues shall be paid in priority to all other debts. Under Section 530(1)(b)(c)(f), in a winding up, subject to the provisions of Section 529-A, there shall be paid in priority to all other debts, all wages or salary of any employee, in respect of services rendered to the company, and due for a period not exceeding four months; all accrued holiday remuneration becoming payable to any employee etc., and all sums due to an employee from a provident fund, a pension fund etc. Section 530(8)(bb) of the Act stipulates that the expression “employee” does not include a “workman”. Section 529(3)(a) stipulates that, for the purposes of Section 529, 529-A and 530, a workman in relation to a company shall mean an employee of the company who is a “workman” within the meaning of the Industrial Disputes Act, 1947. It is evident from a conjoint reading of Section 529-A and 530 of the Act that overriding preferential payments under Section 529-A is confined only to “workmen” whereas preferential payments under Section 530 is available to employees, not including workmen. Section 2(s) of the Industrial Disputes Act defines a “workman” to mean any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical operational, clerical or supervisory work for hire or reward, but does not include any person who is employed mainly in a managerial or an administrative capacity or who, being employed in a supervisory capacity, draws wages exceeding Rs.1600/- per month or exercises, either by nature of the duties attached to the office or by reason of the powers vested in him, discharges functions mainly of a managerial nature. It is evident from the documents and circulars relied upon by the Official Liquidator (referred to hereinabove) that the appellant was not doing any manual, unskilled or skilled work in an industry and, in fact, was made in-charge of the production and technical sections as a “Technical Manager” and “Production Manager” respectively. He was also entrusted with the charge of both the factory and the office, during the absence of the Managing Director from Headquarters. The scale of pay of the appellant as a Manager is far higher than that of an Assistant/Steno. A settlement was entered into between the management of the company under liquidation and the workmen, under Section 12(3) of the Industrial Disputes Act, and the benefits thereunder were extended only to workmen and not to the appellant. It is also evident from the order of the Official Liquidator that certain other monetary benefits and allowances like company lease accommodation, domestic servant allowance which were applicable only to Managers or Deputy Managers were extended to the appellant. Viewed from any angle, the appellant’s claim to be a “workman”, and consequently to be given overriding preference in payment of his dues under Section 529-A of the Companies Act has been, rightly, rejected by the Official Liquidator. The order of the Official Liquidator is a reasoned and well considered order, and does not necessitate interference in appeal. The Company Appeal fails and is, accordingly, dismissed. Date: 23.02.2012 ____________________________ RAMESH RANGANATHAN, J MRKR