Workmen entitled to priority payment: High Court

Ahmedabad, Apr 16 (UNI) The Gujarat High Court has held that workmen are entitled to priority payment under the Companies Act 1956.

Justice M R Shah, while delivering the judgement last week, held that claims of all workmen within the meaning of section 2(s) of the Industrial Disputes Act irrespective of any wage limit were to be considered while making payment under section 529-A of the Companies Act 1956.

An application was moved by Workers union, Gujarat Mazdoor Sabha and GST Employees Union, claiming that workers' dues as ''priority dues'' came under section 529-A of the Companies Act, This application was objected by the banks and secured creditors on the ground that those drawing salary of over Rs 1600 were not entitled to priority under section 529-A of the Companies Act.

Gujarat Steel Company Ltd was ordered to be wound up by the High Court during December, 2001, and thereafter its properties were put to sale and an amount of Rs 54 crore was realised. Both unions had prayed for disbursement of workers' dues out of the sale amount as priority dues.

After hearing the concerned parties, the court directed the official liquidator to verify the claims of the workers on the basis of the judgement and file a report within four months.

UNI