In Re: Alembic Ltd. - Court Judgment

Excerpt:
- industrial disputes act, 1947. section 2(s): [m.s. shah, sharad d. dave & k.s. jhaveri,jj] workman part time employees held, part time employees are not excluded from the definition of workman in section 2(s) merely on the ground that they are part time employees. the ex abundante cautela use of the words either whole time or part time by the legislature in the definition of working journalist in the working journalists and other newspaper employees (conditions of service and miscellaneous provisions) act, 1955, does not mean that the definition of workman in the prior act i.e. industrial disputes act, 1947 intended to exclude part-time employees from the definition of workman. the expression part time has nothing to do with the nature of appointment, but it only regulates the duration of working hours for which and appointee is required to work. if a person fulfils the test of a workman, he cannot be excluded from the definition only on the ground that he is a part-time employee. however, the court will have to apply various tests applicable fort determining the relationship of employer and employee such as the control test, the integration or the organization test. the control test is one of the important tests, but is not to be taken as the sole test. it is also required to be examined whether the person was fully integrated into the employers concern or has remained apart from and independent of it. the other facts which may be relevant are as to who has the power to select and dismiss, to pay remuneration, to organize the work, etc. a full time worker usually works in a week for 40 hours or more depending on the award or agreement. if a person falls under the definition of workman under section 2(s) and does not fall in any excluded category, he will be covered by the definition of workman under the i.d. act, and he will be entitled to all the benefits under the said act. a perusal of section 2(s) indicates that it does not specifically refer to a part-time workman nor does it specifically exclude a part-time workman from the definition of :workman. since the number of hours is not the determining criterion for deciding whether a person falls within the definition of workman or not, it cannot be said that a part-time worker is not a workman within the meaning of the provisions of the i.d. act. however, to decide the status of a worker rendering services for less than 40 hours a week, various aspects are required to be considered. the control test, the integration test and all the other relevant tests are as much applicable for deciding the status of a person rendering service on part-time basis as these tests are required to be applied for deciding the status of a person rendering the services on full-time basis. since persons may be engaged for part-time work for various reasons, while deciding the question whether a person rendering services on part-time basis is a workman or not, the nature of the industry, the nature of services being rendered by the person, the terms and conditions of engagement and various other factors will have to be taken into consideration before coming to the conclusion whether such a person falls within the definition of workman under section 2 (s) of the i.d. act. sometimes looking to the nature of the establishment and its activities, the employer may need the services of a person only for a few hours in a day. depending on his requirement, the employer may employ two part-time workers instead of one full-time worker. similarly, it may be more convenient for the concerned person to do work on part-time basis rather than for full time. however, convenience per se of the employer or the employee by itself does not confirm or negate the status of such person as a workman within the meaning of the i.d. act, but the tests relevant for determining the status of a workman such as control test and integration test will be required to be applied. if a person is working with two employers on part-time basis on the same day, it may result into an anomalous situation and the court will have to consider the nature of engagement in both the establishments. however, mere possibility of such an anomaly resulting by itself does not take away the status of the concerned person as a workman from both the establishments, but while granting and moulding the reliefs the court will take these facts into consideration. - 1. this is a petition filed under sections 78 and 100 to 103 of the companies act, 1956, seeking confirmation to the proposal of capital reduction of the company in the form of utilizing its securities premium account as well as general reserve.k.a. puj, j.1. this is a petition filed under sections 78 and 100 to 103 of the companies act, 1956, seeking confirmation to the proposal of capital reduction of the company in the form of utilizing its securities premium account as well as general reserve.2. the petitioner-company herein is a listed public limited company and is engaged in the business of production and marketing of pharmaceutical products. the company generated a turnover of rs. 721.83 crores during the financial year ending on march 31, 2007. it is a profit making company with substantial reserves. the company's growth efforts included acquisition of various intangible assets, such as trademarks, copyright, designs, technical know how, licenses, franchises, etc., aggregating to rs. 176.83 crores. the management of the petitioner-company thought it appropriate to restructure the balance-sheet of the company so as to streamline its financial structure through elimination of intangible assets. the company has, therefore, proposed to adjust the debit balance of its intangible accounts against the credit balance of its share premium account and general reserve account under the provisions of the companies act. it is submitted that the restructuring will have no impact on the tangible net worth and tangible book value of the company's shares, while the apparent net worth and apparent book value will come down.3. by a special resolution of the company, duly passed in accordance with section 189 of the companies act, 1956, at a general meeting thereof, held after due notice as provided in the act on august 30, 2007, it was resolved as follows:resolved that pursuant to the provisions of section 78 read with section 100 of the companies act, 1956 (hereinafter referred to as 'the act') and other applicable provisions, if any, of the act, pursuant to article 59 of the articles of association of the company and subject to sanction of hon'ble high court of gujarat or national company law tribunal and also subject to such other consents, approvals, permissions and sanctions as may be required, an amount not exceeding rs. 29.17 crores out of the balance standing in the share premium account and an amount not exceeding rs. 102.58 crores out of the standing in general reserve both aggregating to an amount not exceeding rs. 131.75 crores be reduced by transfer to the credit of profit and loss account of the company for the year ending on march 31, 2008, to be utilized against debit to the profit and loss account for the year ending march 31, 2008, of an amount not exceeding rs. 176.83 crores out of the balance in the following asset accounts, namely, trademarks, copyrights, business and commercial rights and other intangibles (hereinafter called 'intangible assets'), after making due adjustment for deferred tax, which deferred tax adjustment will be reversed in the subsequent years by corresponding debit to the general reserve account.resolved further that the board of directors of the company (hereinafter called 'the board' which term shall be deemed to include any committee of board constituted to exercise its powers including the power conferred by this resolution or any person which the board may nominate/constitute to exercise its power, including the powers by this resolution) be and is hereby authorized:1. to give effect to such modifications, changes, variations, alterations, deletions, additions as may be suggested by the hon'ble high court of gujarat and other authorities.2. to settle any doubt, question or difficulty that may arise including but not limited to that with regard to computation, utilization or adjustment of share premium account, general reserves, intangible assets of deferred tax, including passing such accounting entries and/or making such other adjustments in the books of account as may be required.3. to do all such other acts, deeds, matters and things as may be required to give effect to this resolution.4. to delegate all or any of the powers herein conferred to any committee of directors or any other director or any other officer of the company.4. the petition was admitted by this court on november 30, 2007, and the same was ordered to be advertised in vadodara edition of indian express, english daily and loksatta-jansatta, gujarati daily. the said direction has been complied with by the company and the notice of the petition has been duly advertised in the aforesaid dailies on december 5, 2007. the same is confirmed by the affidavit dated december 7, 2007, filed by the clerk of the learned advocate for the petitioner. pursuant to the said advertisement no one has come forward to raise any objections opposing the sanction to the proposed capital reduction. it has also been pointed out that the proposed reduction of capital of the petitioner was approved by the bombay stock exchange and national stock exchange respectively vide letters dated september 14, 2007 and september 19, 2007, as required under the listing agreement. these letters are produced on record of this petition along with additional affidavit dated december 25, 2007, filed by shri rajkumar baheti, the director of the petitioner-company.5. it is further pointed out in the petition that the proposed reduction does not involve diminution of any liability or repayment of paid up capital. in fact, no reduction is envisaged in the issued, subscribed or paid up share capital of the company. since the share premium account forms the part of the capital in terms of section 78 of the companies act, 1956, the utilization of the amount lying in this account also needs to be treated as reduction of capital. in view of this, while admitting the petition this court granted dispensation of the procedure as required under section 101(2) of the act and under rules 48 to 65 of the companies (court) rules, 1959.6. i have heard mrs. swati soparkar, learned advocate for the petitioner. having perused the petition and more particularly the reasons given in support of the proposed reduction in my view there is no reason not to confirm the proposed action of the petitioner to reduce its capital. the said proposal does not prejudicially affect any one as it does not involve extinguishment or diminution of the capital of the company nor does it involve pay off of any capital received by the company. accordingly, the resolution dated august 30, 2007, is hereby confirmed.7. the form of the minute proposed to be registered under section 103(1)(b) is as follows:minute under section 103(1):the share premium account and general reserve account of alembic ltd. is by virtue of a special resolution of the company dated august 30, 2007 and by virtue of the sanction granted by the high court of gujarat on december 28, 2007, reduced from rs. 69.74 crores to rs. 40.57 crores and rs. 245.30 crores to rs. 142.72 crores respectively.8. thus, the prayers made in terms of para. 17(a) to (c) are hereby granted.9. the petitioner is directed to publish the notice of confirmation of reduction of capital and approving of minutes in the vadodara edition of indian express, english daily and loksatta-jansatta, gujarati daily, within 14 days of the registration of the order with the registrar of companies.the petition is accordingly disposed of with no order as to costs.