1. This is an application under Section 433(A) of the Companies Act for winding up of the respondent-company.
2. It is an admitted fact that the petitioners were appointed as trainees/captains on stipend of Rs.25,000/- each. They had executed separate agreements. It was stated that on being appointed as regular captains they would be paid total emoluments per month of Rs.40,000/-. Later it was enhanced to Rs.60,000/- per month vide letter dated 26-12-1995.
3. According to the petitioners their salary was paid irregularly and in part. The respondent had paid Rs. 50,000/- towards part payment of salary for the month of March 1996. Because it was enhanced to Rs.75,000/-per month from the month of March till the date of filing the petition, the respondent company did not pay the salary at the rate of Rs.75,000/- per month. They have resigned from the post of Trainees/Captains through resignation letter dated 23-6-1996. But the resignation letter is yet to be accepted. The respondent company did not pay the due salary inspite of statutory notice sent separately by both the petitioners on 26-6-1996. The respondent company has neglected to pay the salary due and therefore, the company should be wound up.
4. The respondent company through its counter has denied the claim of the petitioners and has alleged that both the petitioners were appointed to the cadre of Captain and they were not entitled to revision of salary from Rs.60,000/- to Rs.70,000/-. They have denied the genuineness of the letter dated 26-12-1995. In para 7 of the petition the respondent company alleged that it has spent huge amounts for the petitioners for their training and they are bound by the agreement executed by them. They have denied the legal notice dated 26-6-1996.
5. My learned predecessor has framed the following issues:
(1) Whether the respondent company is liable to be wound up for the reasons alleged in the petition ?
(2) To what relief?
6. The petitioners have filed their affidavit in an attempt to prove their allegations made in the counter. It is urged on behalf of the petitioners that the amount of salary is admittedly due and, therefore, it is a debt though the petitioners have resigned. But the resignation would take effect only from the date of acceptance by the respondent company which has not accepted the resignations as yet. Therefore, the respondent company cannot take advantage of either clause 4 or clause 6(e) of the agreement executed by the petitioners on 22-8-1994.
7. On the other hand, the learned Counsel for the respondent relying on The case of Pawan Kumar Khullar v. Kaushal leather Board Ltd., , has urged that the salary is a remuneration and not a debt and, therefore, the petition is liable to be dismissed on this ground only. It has been further contended that the provisions of Section 433 of the Companies Act could not be pressed into service for recovery of debt particularly when there is a bona fide dispute as raised by the company.
8. In the case of Kesoram Industries & Cotton Mills Ltd v. CWT,(1996)59 ITR767, the Apex Court after discussing various decisions has observed that-
"a debt means a sum of money which is now payable or will become payable in nature by reason of present obligation, debitum in presenti, solvendum in futuro."
A debt involves an obligation incurred by the debtor and the liability to pay a sum of money in present or future. The liability must, however, be to pay a sum of money i.e., to pay an amount which is determined or determinable in the light of factors existing on the date when the nature of the liability is to be ascertained."
9. The claim of short delivery of materials has been held to be debt in the case of Kudermukh Iron Ore Co. v. Kooky Roadways P. Ltd, 1990 Vol.69 Com. Cases 178. The unpaid salary of an employee is liable to be recovered from the employer, because the employer is obliged to pay it to the employee for the services rendered by it. As noted above, debt is a sum which is to be recovered from a person who is obliged to pay the same, and, therefore, no line of demarcation can be drawn between a remuneration due to be recovered and a sum which is to be recovered because a person has to pay for the price of goods which has been purchased by him on credit. With respect I am unable to agree with the view taken by the learned single Judge of the Madhya Pradesh High Court in the case of Pawan Kumar Kullar v. Kaushal Leather Board Ltd., (supra). I, therefore, hold that an unpaid salary is also a debt.
10. It is well settled that a resignation can be withdrawn before it is accepted by the appropriate authority and it becomes effective only from the date of its acceptance. The question is whether the acceptance of the resignation is a condition precedent for claiming compensation in the event an employee resigns and does not work after submission of the resignation.
11. Clause 4 of the agreement in question speaks that a trainee would be liable to pay compensation towards liquidated damages in the event of his failure to complete the training. What amount of liquidated damages the employee has to pay has been tabled at the foot of clause 4 of the agreement in question. Clause 6(e) of the agreement in question says that if the employee resigns during the period of training or while in service of the company or fails to fulfil his obligations in respect of training and employment for the specific period without the consent in writing of the company, he shall be liable to pay liquidated damages in addition to the damages prescribed in clause 4 of the same. Thus, it appears that clause 6(e) of the agreement is not confined only to the circumstances when an employee resigns, but it futher says in case he fails to fulfil his obligations in respect of the training and employment, he is liable to pay damages. This clause also says that if the employee resigns during the course of the training or while in service he is liable for damages and it does not speak about the acceptance of resignation. There is no gain saying the fact that if it is established that an employee has resigned or has failed to fulfil his obligation then the employer shall be entitled to liquidated damages.
12. This is a complicated question of fact whether the petitioners have failed to fulfil their obligation and are liable to pay damages or not, which cannot be decided until the evidence is recorded. As noted above, prima facie, it does not appear that acceptance of resignation is a condition precedent for claiming damages by the respondents because if an employee after resignation does not attend to his duty, it would be difficult to conclude that the employer is not entitled for damages.
13. There appears to be no force in the contention of the learned Counsel for the petitioners that no reliance can be placed on the reply affidavit of the respondent-company because there is no pleading regarding the claim of damages. The reason is that in paragraph 7 of the counter affidavit filed by the respondent; it is alleged that the respondent has spent huge amounts on the petitioners for their training and they are bound by the agreement executed by them. Though there is no specific allegation regarding the claim of damages but reference to the agreement has been made and, therefore, it cannot be said that affidavit by way of evidence has been given without pleadings and, therefore, it should be ignored. In the service regulations the procedure for accepting the resignation has been prescribed. From a perusal of this clause it is revealed that the resignation once accepted by the Board of Directors cannot be revoked. But it further says the employee will get his salary till the last day he has actually worked and the conditions laid down and accepted by the employee in the appointment letter issued to him or the agreement executed between the company and employee will be strictly adhered to. As noted above, it is a complicated question which is to be decided whether acceptance of resignation is a condition precedent for claiming liquidated damages in the event an employee resigns and does not attend his duties thereafter and therefore, it cannot be said that until the resignation letter is accepted the employee, would not be entitled to claim damages particularly because even if the resignation letter is not accepted there is a clause in the agreement that in the event of failure to fulfil conditions the employer would be entitled to claim liquidated damages. Whether the office was closed and whether the crafts were not available are disputed questions of fact which cannot be decided one way or the other without recording the evidence.
14. For the foregoing reasons, I reach the conclusion that the respondent-company has raised a bona fide dispute to the claim of the petitioners by way of setting up a counter claim, which can only be decided in the civil Court.
15. In the result, the petition fails and is hereby dismissed at the admission stage itself. However, the petitioners shall be at liberty to institute a suit for recovery of their alleged claim.