The Official Liquidator Of M/S Testeels LTD (In Liqn) vs. Na
Held
The Court held that the Official Liquidator is required to follow the directions issued by the Hon'ble Division Bench and the Chief Labour Commissioner. The Division Bench had directed concerned Government Agencies, including the Labour Commissioner, to pay minimum wages to temporary/part-time workers. Based on this, the Chief Labour Commissioner issued a circular directing all authorities to make payments of minimum wages as per the circular. Therefore, the Official Liquidator is bound to comply with these directions. The Court granted the relief prayed for in the report, permitting the Official Liquidator to make payments of minimum wages as prescribed by the Labour Commissioner from time to time to the security guards deployed by the security agencies. The Court did not expressly leave any issue undecided.
Facts
The Official Liquidator (OL) of M/s. Testeels Ltd. (In Liqn.) filed a report seeking permission to allow M/s. Shubham Protection Force, a security agency, to raise their security bills at par with other empaneled agencies. This would include minimum wages plus applicable CGST and SGST. The OL referred to a previous order dated 11.12.2019 permitting payments to Shubham Protection Force from the company's liquidation funds. Shubham Protection Force had requested to raise bills based on minimum wages plus GST. The Court also noted a prior Division Bench order dated 21.08.2014 directing the Gujarat Government to provide minimum wages to part-time/temporary workers, which led to the Chief Labour Commissioner prescribing wage rates for watch and ward employees in Gujarat, and a subsequent circular on 09.04.2014.
Key Issues
1. Whether the Official Liquidator is permitted to allow M/s. Shubham Protection Force to raise their security bills to include minimum wages plus applicable CGST and SGST, at par with other empaneled security agencies, for safeguarding the assets of the company in liquidation? The petitioner (Official Liquidator) argued that as per Section 457 of the Companies Act, 1956, it is the duty of the OL to protect the properties of the company in liquidation. The Court has inherent powers under Rule 9 of the Companies Rules, 1959, to issue necessary orders. The OL relied on Section 457(2A)(a) of the Companies Act, 1956, and Rule 9 of the Companies Rules, 1959. The petitioner further contended that following the Division Bench's order dated 21.08.2014 and the subsequent circular from the Chief Labour Commissioner, the OL is obligated to pay minimum wages to security guards deployed by the agency and also watch and ward charges. The respondent side (NA) did not record any arguments.
Sections Cited
Section 457, Section 457(2A)(a), Rule 9
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER
The Official Liquidator has filed the further report with following modified prayers:- “a. This Hon’ble Court may be pleased to allow M/s. Shubham Protection Force, Security Agency in the matter of M/s. Testeels Ltd. (In Liqn.) to raise their security bills as per Minimum wages plus applicable tax i.e. CGST and SGST at par along with other empaneled security agency, as stated in para 8, 9 and 10 of report dated 22.09.2022 of Official Liquidator. b. Such other and further orders and directions as may deem fit and prop
The judgment continues below.
Read the full judgment
A free account opens 10 full GST judgments a month (one account works on both bharattax.net and this site). Re-reading one you have already opened does not count again.
The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.
Reproduced from the public record of the Gujarat High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.