WORKERS OF M/S ROHTAS INDUSTRIES LTD. versus M/S ROHTAS INDUSTRIES LTD.

Despite the legal priority of banks over pledged assets, workers' claims for wages and subsistence due to their labor producing these stocks are accorded the highest priority; court directs sale of products in stock to meet workers' dues up to closure date, with balance used at discretion of Official Liquidator subject to Court orders.

Parties: Petitioner: Workers of M/s Rohtas Industries Ltd.; Respondent: M/s Rohtas Industries Ltd.
Jurisdiction: India
Judgment Date: 27 April 1987
Procedural Posture: Writ Petition / Original Jurisdiction
Outcome: Directions issued for sale of stock and payment to workers.
Legal Topics: Priority of Workers' Claims, Payment of Wages, Relief Undertakings

Labour Law Company Law Industrial Law Priority of Workers' Claims Payment of Wages Relief Undertakings

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Parties

Workers of M/s Rohtas Industries Ltd.

Petitioner

M/s Rohtas Industries Ltd.

Respondent

Procedural Posture

Writ Petition / Original Jurisdiction

Legal Issues

1 Whether the wages and salaries due to workers can be enforced against assets pledged with financial institutions
2 Priority of workers' claims over financial institutions in liquidation of assets
3 Effect of Bihar Relief Undertakings Notification on payment to workers

Ratio Decidendi

Court Disposition

Directions issued for sale of stock and payment to workers.

Orders

Official Liquidator to dispose of stocks valued at Rs.91,77,000 within two months.
From sale proceeds, workers to be paid their dues for period May 1984 to 8th July 1984.