Public Exchequer Funds Are Allocated For Specific Administrative And Operational Expenses For Liquidation Process, Not For Employee Benefits: Calcutta High Court
The Calcutta Excessive Courtroom held that utilizing public exchequer funds for medical or terminal advantages from an Official Liquidator’s institution fees account is mostly not permissible. These funds are sometimes allotted for particular administrative and operational bills associated to the liquidation course of, not for worker advantages.
The Calcutta Excessive Courtroom thought-about an utility filed by the Firm Paid Workers working within the Workplace of the Official Liquidator, Excessive Courtroom at Calcutta looking for the grant of terminal medical advantages together with exemption from Earnings Tax underneath Part 10(10) of the Earnings Tax Act.
The Bench of Justice Krishna Rao noticed, “It’s not denied that at current there may be an collected fund of fastened deposit of Rs. 50,98,62,300.80/- which is mendacity within the Credit score of Official Liquidator’s Institution Fees Account. Funds accessible within the Credit score of Official Liquidator Institution Fees Account refers back to the cash held by the Official Liquidator particularly for overlaying the bills of their workplace, together with employees’s salaries, operational price and different associated fees. This account is distinct from different accounts associated to the liquidation of particular corporations and is used to make sure the sleek functioning of the Official Liquidator’s Workplace.”
Senior Advocate Ranjan Bachawat represented the Candidates, whereas Senior Advocate Manju Bhuteria represented the for the Official Liquidator.
Case Transient
An utility was filed underneath Guidelines 308 and 309 of the Firms (Courtroom) Guidelines, 1959, by the Firm Paid Workers working within the Workplace of the Official Liquidator, Excessive Courtroom at Calcutta, looking for the grant of terminal medical advantages together with exemption from Earnings Tax underneath Part 10(10) of the Earnings Tax Act.
The Firm Paid Workers submitted that the current retirement advantages for the common Firm Paid Workers will not be sufficient to keep up the remaining life and since it isn’t enough to teach their youngsters and to settle them. It was additionally submitted that He in the best way of excessive residing price together with schooling, medical and upkeep of the households of the Firm Paid Workers, the emoluments, as acquired upon retirements, are literally hardship to keep up the remainder of their life.
Whereas the Official Liquidator contended that there is no such thing as a provision for pension or any medical advantages for the Firm Paid Workers after superannuation. It was additional submitted that the common Firm Paid Workers doesn’t have any entitlement of Contributory Provident Fund (CPF) or Central Authorities Well being Scheme (CGHS) services and at current the common Firm Paid Workers are getting Rs. 2000/- per thirty days as medical allowances.
Courtroom’s Evaluation
The Courtroom opined that the account of Official Liquidator’s Workplace is used to cowl bills incurred by the Official Liquidator’s Workplace in finishing up the liquidation course of, akin to authorized charges, publication prices and administrative overhead. These funds are sometimes allotted for particular administrative and operational bills associated to the liquidation course of, not for worker advantages.
The Courtroom referred to the choice of the Supreme Courtroom in Official Liquidator vs. Dayanand & Ors.(2008) whereby it was held that the salaries and allowances payable to the Firm Paid Workers ought to be suitably elevated within the wake of big escalation of residing prices. The Hon’ble Courtroom additional directed the Official for rising the emoluments of the Firm Paid Workers.
Nonetheless, the Courtroom noticed, that it didn’t discover any causes for permitting the terminal profit as prayed for by the Firm Paid Workers however it can’t be ignored that medical prices in India are rising. Thus, the Official Liquidator is directed to pay Rs. 3000/- per thirty days as Medical Allowance to the Firm Paid Workers from the first July, 2025 .
Accordingly, the Software was disposed of.
Trigger Title:Fireplace & Basic Insurance coverage Firm Of India Ltd. (In Liqn.) -Andchandan Kumar Ganguly And Ors. V. The Official Liquidator, Excessive Courtroom, Calcutta
Look:
Candidates: Mr. Ranjan Bachawat, Sr. Adv. Mr. Sarosij Dasgupta, Adv Mr. Nilay Sengupta, Adv. Mr. Sujit Banerjee, Adv
The Official Liquidator: Ms. Manju Bhuteria, Sr. Adv. Ms. Arundhati Barman Roy, Ms. Shreya Choudhary, Adv.
