PETITIONER:
WORKMEN OF M/S ROHTAS INDUSTRIES
Vs.
RESPONDENT:
ROHTAS INDUSTRIES & ORS.
DATE OF JUDGMENT18/10/1995
BENCH:
KULDIP SINGH (J)
AGRAWAL, S.C. (J)
CITATION:
1996 AIR 467 1995 SCC Supl. (4) 5
JT 1995 (7) 629 1995 SCALE (6)58
ACT
HEADNOTE
JUDGMENT
WITH
WRIT PETITION (CIVIL) NO.443 OF 1986 Workers of Dehri-Rohtas Light Rly. Co.
Versus Secretary of the Govt. of India and Ors.
ORDER
Rohtas Industries Limited (hereinafter referred to as ‘the Company’) was running a large industrial undertaking comprising of units for manufacturing cement, paper & board, asbestos, vulcanised fibres and vanaspati at Dalmia Nagar in District Rohtas of the State of Bihar. The Company has three associate companies, namely, Ashoka Cement Ltd., Parshava Mining and Trading Company Ltd. and Dehri Rohtas Light Railway Company Ltd. The Company was employing about 10,000 workmen. Troubles started in 1982-83 and ultimately the units of the Company were closed with effect from September 9, 1984 resulting in denial of employment to the workmen. A petition (Company Petition No.3 of 1984) was filed for winding up of the Company before the Patna High Court and in the said petition the Patna High Court on May 22, 1986 appointed the Provisional Liquidator. During the pendency of the said petition, the workmen of the Company moved this Court by filing this writ petition under Article 32 of the Constitution. The petition was entertained by this Court with the object of reviving the industry and rehabilitating the workmen. Notice was issued to the State of Bihar and the Union of India so as to enable the Court to solve the human problem of unemployment of large number of workmen. While the matter was pending consideration, the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short ‘the Act’) came into force. As per suggestion of the learned Attorney General, the Court on October 28, 1987 passed an order whereby the Central Government was directed to make a reference to the Board of Industrial and Financial Reconstruction (BIFR) to frame a scheme under the Act and submit the same to the Court. The BIFR submitted a report on April 22, 1988 wherein it was stated that three of the units of the Company, namely, cement, asbestos and vanaspati could be revived but the paper unit could not be revived. Keeping in view the said report of the BIFR as well as the statements filed on behalf of the State of Bihar and Union of India and the memorandum prepared by the learned Attorney General of India filed before this Court, the Court passed an order dated October 24, 1989 wherein it was observed :
If the Company is not revived and gets
liquidated, the liabilities would turn
out to be far in excess of the assets
and notwithstanding first or second
charge on the assets, the creditors may
not appreciably benefit. This Court
cannot lose sight of the fact that
living to about 10,000 families has been
denied for over five years and apart
from national loss, the workmen have
been put to serious jeopardy. In these
circumstances, we are satisfied that it
is of paramount importance that the
Company in respect of the viable units
should be revived and allowed to come
into production."
The Court directed the State of Bihar to appoint an authorised officer from the senior IAS cadre with appropriate commercial background to be the Rehabilitation Commissioner and the Provisional Liquidator appointed by the High Court in the winding up proceedings was directed to hand over to the Administrator all the assets of the Company which he had taken over under order of the Court and the several other assets of the Company which had not been taken over the Provisional Liquidator shall vest in the appropriate officer upon being designated and he was entrusted with the power to lake such steps as are necessary to take over possession of such assets of the Company. It was also directed that the assets of the company encumbered with financial and other institutions shall not be available to be proceeded against for a period of one year from the date of the order and there shall be a moratorium for a period of one year in regard to proceedings taken and pending of or to be taken against the Company hereafter and limitation shall remain suspended under the said order of the Court. The State Government undertook to deposit an amount of Rs.15 crores with the Administrator and the Court directed the Union of India to advance a similar amount of Rs.15 crores to the State of Bihar from out of plan assistance for the State and it was directed that the said sum of Rs.15 crores be paid by the State Government to the Administrator which amount shall be utilized, in due course, for payment of arrear of wages and for disbursement of secured loans of financial institutions and other parties for which security of the Company’s assets had been furnished. The Administrator was directed to set up one Committee to examine the claims of the owners of the Company and other parties including financial institutions.
In accordance with said directions given by this Court, the State of Bihar designated an officer to work as Administrator (Rehabilitation Commissioner) who took over the assets of the Company and a sum of Rs.30 crores was paid by the State Government to the Rehabilitation Commissioner. Out of the said sum of Rs.30 crores a sum of Rs.6 crores was given by the State government by way of grant and Rs.24 crores was to be repaid by the company. The Rehabilitation Commissioner, by his efforts, was able to start four of the units providing employment to 2900 workmen. But due to financial constraints, the units could not function in a way as to earn profits and had to be closed after some time. The Rehabilitation Commissioner moved the Court seeking more funds but the State of Bihar and the financial institutions expressed their inability to advance the funds. In the circumstances, the Court felt that the best course would be to dispose of the whole undertaking and that in order to ensure that the undertaking fetches an adequate price it should be disposed of as a running concern. The Court, by order dated September 8, 1993, directed the State of Bihar to advance a further sum of Rs.10 crores as loan to the Company for the resumption of the production of the units of the undertaking and in order to enable the State Government to pay the said amount, the Union of India was directed to advance to the State of Bihar a sum of Rs.10 crores from out of the plan assistance for the State or any other account. The Rehabilitation Commissioner was directed to have the assets of the undertaking valued by an approved valuer and the Commissioner and Secretary, Department of Industries, Government of Bihar, was directed to publish an advertisement in five prominent national newspapers (English language) and three national newspapers (Hindi language) inviting offers for the purchase of the entire industrial undertaking of the Company as a running concern. It was also directed that out of the amount received by the disposal of the undertaking of the Company the Rehabilitation Commissioner shall first repay the loan of Rs.10 crores advanced by the State of Bihar in pursuance of the said order before discharging any other liability of the Company. In response to the advertisement which was issued in pursuance of the directions contained in the order dated September 8, 1993, 14 offers were received by the State of Bihar for the purchase of the units as a whole and the maximum officer was for Rs.15 crores for the entire complex. The said offers were placed before the Court for consideration and on March 3, 1994 this Court observed :
Keeping in view the total assets of the
company which have been assessed by the
Rehabilitation Commissioner at about Rs.
250 crores, it is not possible for us to
even consider any of the 14 offers
received by the State of Bihar."
On May 2, 1994 the Court passed an order wherein it was observed that "the best course would be to revive the reference which was made to BIFR by the Central Government in pursuance of the order of this Court dated October 28, 1987." The Court, therefore, directed that the reference that had been made by the Central Government to the BIFR in pursuance of the directions given by this Court in the order dated October 28, 1987 be revived and a report be submitted by the BIFR to the Court in relations to the following matters :
(a) Whether the Company is capable of
being rehabilitated in a manner that it
can operate profitably so that its net
wealth would ultimately become positive
and the units become financially stable
and self-supporting.
b) The short-tern measures, if any,
which can be taken immediately.
c) The long-term measures required to
rehabilitate the Company."
The BIFR was also directed that the proposal submitted by the Rohtas Industries Workers’ Co-operative Society Ltd. may also be considered.
The BIFR appointed Industrial Financial Corporation of India (IFCI) for preparing a report and IFCI, in turn, appointed Soni Industrial Revival Consultants (SIRCON) to prepare schemes as per the directions of this Court. SIRCON submitted its report on ‘Techno-Economic Viability Status of the Associates Companies of Rohtas Industrial Ltd.’. After considering the said reports submitted by SIRCON and the three proposals which were received by the BIFR from Rohtas Industrial Workers’ Cooperative Society Ltd; Shri L.N. Dalmia and Speedcrafts Pvt. Ltd., the BIFR submitted its report dated May 22, 1995.
The conclusions of the BIFR, as stated in the report dated May 22, 1995, are as follows :
i) No viable and feasible proposal for
revival of the RIL or any of its units
has been received from the Rohtas
Industries Workers’ Cooperative Society
Ltd or any other private party. It
follows that the RIL can be revived only
if the State Government and the
financial institutions/banks can provide
the requisite funds.
ii) RIL as a whole (excluding their
three associated companies) are viable
only under Variani IV i.e., if the State
Government brings in the entire amount
of Rs.225.71 crores required for
rehabilitation as equity, makes OTS of
the dues of financial institutions and
banks by paying them Rs.22.24 crores,
and provides massive reliefs by
tax/royalty. Cement, Asbestos and Paper
Units are also independently viable
under Variant IV with these reliefs.
iii) Cement unit is independently viable
under Variant II, i.e., if the entire
amount of Rs.155.50 crores is brought by
the State Government as equity. It is
also viable under Variant IV, i.e., if
there is OTS of the dues of financial
institutions and banks and the entire
cost of rehabilitation of Rs.159.79
crores is brought in by the State
Government as equity.
iv) Asbestos unit is independently
viable under Variant III, i.e., if 50%
of the amount of Rs.342 lacs required
for rehabilitation is brought by the
State Government as equity and 50% is
arranged as loan and there is OTS of the
dues of financial institutions involving
a payment of Rs.106 lacs. It is also
viable under Variant IV, i.e., if the
entire amount of Rs.342 lacs is brought
in as equity by the State Government and
there is OTS of the dues of the
financial institutions and banks.
v) Paper unit is viable only under
Variant IV, i.e., if the entire amount
of Rs.57.65 crores required for
rehabilitation is infused as State
Government’s equity, there is OTS of the
dues of financial institutions and banks
involving a payment of Rs.15.35 crores,
and the State Government provides
reliefs by way of deferment of sales tax
for eight years (Rs.9.60 crores).
vi) Vanaspati Unit is non-viable under
all the four Variants.
vii) Variant IV is the only viable
alternative as Cement, Asbestos and
Paper Units are independently viable and
the RIL as a whole is also viable under
this Variant. Under Variant III, only
Asbestos Unit is viable independently
and RIL as a whole is non-viable. Under
Variant II, only Cement Unit is viable
and the RIL as a whole non-viable. Under
Variant I neither any Unit nor the RIL
as a whole is viable.
viii) Non of the three associated
Companies, viz, Parshava Mining &
Trading Co. Ltd. (PMTL), Dehri Rohtas
Light Railway Co. Ltd. (DRLR) and Ashoka
Cement Ltd. (ACL) is viable.
ix) There are three crucial factors for
achieving long-term viability, if the
RIL is to be revived under Alternative
IV.
a) Adequate supply of raw material is
to be ensured. This may involve renewal
of existing mining leases exploration of
new areas and grant of new leases, in
the case of Cement Unit. Similarly,
existing forest leases may have to be
renewed and/or some other leases
granted, and alternative sources of raw
material like bagasse, waste paper and
pulp also explored for the Paper Unit.
b) Adequate power supply is to be
ensured.
c) The management is to be revamped,
strengthened and professionalised and
made accountable. There has to be a
broad based Board of Directors with
representatives of the State Government,
the concerned financial institutions and
banks, workers and professionals.
Professionals also need to be inducted
in senior managerial positions,
particularly in Finance/Accountants,
Production and Personnel/Industrial
Relations, Internal audit, concurrent
audit, proper purchase and sales
procedures, costing system and
Management Information System have also
to be introduced."
After considering the said report of the BIFR, this Court passed an order dated July 21, 1995 wherein it was observed :
"The cumulative effect of the report is
that there is no possibility of the
revival of this industry through the
efforts of this Court as at present. The
BIFR has also discussed various
proposals for the revival of the
industries received by it. Two proposals
are worth mentioning. Proposal of Shri
L.N. Dalmia and his son-in-law Shri L.N.
Mittal is still under consideration.
Shri Ashok Sen, learned senior counsel
representing Shri L.N. Dalmia states
that he would consult his client in the
light of the matters mentioned before
the Court and report back within four
weeks from today. The other offer is
from Speedcrafts Pvt. Ltd. The learned
counsel assisting us on behalf of
Speedcrafts Pvt. Ltd. also states that
he would also consult his client i n
similar terms and report back to the
Court. We are keeping the options open
so far as the suggestions which may come
from these two private parties."
Thereafter, when the matter was taken up on August 25, 1995, Shri Ashok Sen representing Shri L.N. Dalmia, gave a positive offer to the effect that he is prepared to pay Rs.60 crores in the manner to be indicated by him in his written officer. The said written offer of Shri L.N. Dalmia was filed in this Court on August 31, 1995. The State of Bihar as well as Union of India were directed to give their response in writing to the said offer. A copy of the offer was also sent to the BIFR with the directions that it shall consider the offer and give its comments. The matter was thereafter taken up on September 19, 1995 on which date the Court considered the comments of BIFR and response of the State of Bihar and the Union of India to the offer of Shri L.N. Dalmia. The BIFR in its comments on the said offer has expressed the view that the total liabilities of the Company (excluding the liabilities of the associated companies) as on march 3, 1995 are reported to be Rs.171.14 crores. The sacrifice involved in settling the above liabilities of Rs.171.14 crores for Rs.60 crores could be Rs.111.1 crores and the liabilities of the three associated companies also need to be assessed and quantified and added to this amount to arrive at the total amount of sacrifices involved. BIFR has further observed that besides the sacrifice mentioned above, monetary value of the reliefs and concessions to be provided by the State Government and the financial institutions and Banks also need to be quantified and added to the cost and the cost involved in connecting all railway sidings of the Rohtas industries with Dehri-on-Son too would need to be added to the cost of the scheme and the reliefs and concessions are of substantial value. BIFR has further stated that even after such massive sacrifices by the banks, financial institutions and the State Government, the employment of the entire work force of the Company is not likely to be ensured and their past dues would not be paid and that Shri Mittal also has not indicated precisely the sources from which funds of the order of Rs.560 crores would be mobilised and the Resourcefulness of Shri L.N. Dalmia and his associate Shri L.N. Mittal and their credibility needs to be assessed by some independent agency.
On behalf of the State of Bihar reply in the form of affidavit of Shri S.P. Singh, Deputy Director, Industries, Government of Bihar, has been filed wherein it has been stated that the offerer has sought several concessions from the State Government and that until and unless full financial implications of these concessions are indicated, it may not be in the interest of the State Government to agree to the proposal and this proposal can be considered by the State Government if the offerer agrees to pay Rs.34 crores in one instal ment to the State Government without any pre-condition and without any concessions and the offerer should also clear all the legal dues on account of commercial taxes, royalty, cess, electricity, registration, etc. The State Government has also pointed out the difficulties in the matter of allotment of forest land and the waste land sought by the offerer and grant of mining lease for limestone and the restoration of 2807 acres of land which has been declared surplus under the ceiling law. As regards concessions/reliefs sought by Shri Dalmia, it is stated that the State Industrial Policy, 1995 provides concessions/reliefs such as sales tax exemption/deferment and facility of either set-off or exemption on purchase of raw materials within the State if considered necessary for revival of the unit by the State Government and that the Industrial Policy does not provide facilities for exemption from royalty on bamboo, wood, limestone and electricity duty on captive generations beyond 25 M.W.
The response of the Union of India is contained in the affidavit of Shri Sohan Lal, Deputy Secretary working in the Department of Industrial Development (Industrial Renewal Section), Ministry of Industry, Government of India. In the said affidavit it is stated that the offer of Shri L.N. Dalmia has come from an individual and not from any corporate entity. Hence it is not possible to assess the soundness of the financial status of the offerer and that the offer is not accompanied by any realistic projections of profitability, cash flow, DSCR, etc. and the long term viability of the units, therefore, need to be looked into more closely. According to Union of India, the paramount interest in This case has been the protection of workers’ interest and their employment and that the offerer has proposed for employment of workers on need basis only without incurring any liability towards their past wages, etc. It has also been stated that the liabilities of the Company are approximately Rs.171.10 crores, some of which are required to be updated and the transfer of the assets free from the liabilities for only Rs.60 crores would violate the pre-emptive rights of the original owners and hence, their concurrence would be necessary. As regards the concessions sought for in the offer towards dues on account of railways, excise, import duty exemption, cement regulation account, etc., it has been submitted that all the statutory dues are required to be settled as per the existing rules, guidelines and statutory provisions only.
An additional affidavit of Shri Sidhnath Singh, Chairman of Rohtas Industries Workers’ Cooperative Society Ltd., has also been filed before this Court wherein it is stated that Shri L.N. Dalmia has already closed down his M/s Punalur Paper Mills Ltd. in Kerala State and has not paid salaries and wages of five months of about 1000 workers of that unit. Shri Sidhnath Singh has also made an offer on behalf of the Rohtas Industries Workers’ Cooperative Society to purchase whole of movable and immovable properties of the Company and its associated companies on payment of Rs.65 crores and has express readiness to absorb the workers of all the units. The Society has offered to make cash payment of Rs.16 crores after reopening of Ashoka Steel Unit, Vanaspati Unit, Cement Unit within a month and to pay the balance amount of Rs.49 crores in three equal installments.
Speedcrafts Pvt. Ltd. has also submitted a revised offer on August 21, 1995 for Rs.71.51 crores out of which Rs.40 crores will be paid to the State of Bihar by issuing zero interest debentures redeemable at par after 10 years and out of the balance amount of Rs.31.51 crores an initial payment of Rs.5.51 crores will be made at the time of transfer of the entire assets free from each and all encumbrances, liabilities, claims etc, and handing over of peaceful vacant possession and other Rs.20 crores will be paid over a span of 12 years (with an initial moratorium of two years) in equal yearly instalments.
After taking into consideration the report of the BIFR dated May 22, 1995 and its comments to the offer made on behalf of Shri L.N. Dalmia and the response made by the State of Bihar and the Union of India to the said offer as well as the additional affidavit of Shri S.P. Singh and the revised offer of Speedcrafts Pvt. Ltd., this Court on September 19, 1995 fixed the matter for September 29, 1995. But before that date the State of Bihar appears to have had second thoughts. an affidavit of Shri S.P. Singh, Deputy Director, Industries, Government of Bihar dated September 26, 1995 was filed by way of reply to the offer made by Shri L.N. Dalmia wherein it was stated that in response to the officer made by Shri L.N. Dalmia the State Government had reconsidered the matter and after review the State Government has decided that in the interest of restarting the industry as also for safeguarding the interests of labourers and employees in the said industry and having reconsidered the whole matter the State Government was agreeable to deferment of payment of the dues of the State Government over a period considered appropriate by the Court and were also willing to extend all help and facilities to any intending purchaser of the industries. In view of the said affidavit of Shri S.P. Singh, the Court, on September 29, 1995, passed the following order :
" Mr. S.P. Singh, Deputy Director
(Industries), Government of Bihar, Patna
has filed an affidavit dated September
26, 1995. It has been averred in the
affidavit that the State of Bihar, in
the interest of restarting the various
units of the Rohtas Industries as also
for safeguarding the interests of
labourers ad employees in the said
industries has reconsidered the whole
matter and is now agreeable to extend
all help and facilities to any intending
purchaser of the industries. The learned
counsel for Shri L.N. Dalmia and Mr.
B.B. Singh, learned counsel for the
state of Bihar, state that it would be
necessary for the parties to meet to
sort out various issues arising in this
matter. We adjourn the matter to 13th
October, 1995 at 2.00 p.m. In the
meanwhile the learned counsel for Shri
L.N. Dalmia, whose offer we have already
noticed in our earlier order, states
that the representatives of Shri Dalmia
would meet and have discussion with the
concerned officers of the Bihar
Government in the light of the affidavit
filed by Mr. S.P. Singh. After
discussion the State of Bihar and Shri
L.N. Dalmia may file a joint memorandum
of understanding before this Court
before October 11, 1995. In the event of
Shri L.N. Dalmia being satisfied in the
discussion with the State of Bihar he
should deposit a sum of rupees two
crores by way of a demand draft in the
name of the Registrar General of this
Court along with the memorandum of
understanding. The workers be paid
salary for the month of September,
1995."
When the matter was taken up on October 13, 1995 a statement in the form of submissions was filed on behalf of Shri L.N. Dalmia in the light of the discussions which Shri Dalmia had with the officials of the State of Bihar and the Chief Minister of Bihar from September 30, 1995 to October 3, 1995. The said submissions filed on behalf of Shri Dalmia indicate that there is wide divergence between the offer made by Shri L.N. Dalmia and the stand of the State Government on many matters which are crucial for the revival of the industry and Shri Dalmia has expressed his inability to proceed further with his offer in view of the stand taken by the State Government. A supplementary affidavit of Shri S.P. Singh dated October 9, 1995 has been filed and along with the said affidavit the draft memorandum of understanding as proposed on behalf of the Government of Bihar as well as the draft memorandum of understanding circulated by Shri L.N. Dalmia and the minutes of the discussions that were held between the Committee of the Government of Bihar and Shri L.N. Dalmia on October 1, 2 and 3, 1995 have been filed.
We have considered the submissions that have been submitted on behalf of Shri L.N. Dalmia as well as the Supplementary affidavit of Shri S.P. Singh dated October 9, 1995 and the documents filed therewith. Having regard to the report of BIFR dated May 22, 1995, the comments of BIFR on the offer of Shri L.N. Dalmia as well as the response of the State of Bihar and the Union of India to the said offer and the discussions which Shri L.N. Dalmia had with the officers of the State of Bihar on October 1, 2 and 3, 1995, we have to conclude regretfully that in spite of best efforts the object with which this Court had intervened in the matter by entertaining the writ petition, viz. to revive the undertakings, does not appears feasible. In these circumstances, the future course of action which commends us is that the proceedings in this writ petition should be brought to an end and the winding up proceedings pending before the patna High Court be resumed.
Before we give the necessary directions in that regard, we would briefly set out the present state of affairs with regard to the Company :
(i) The Rehabilitation Commissioner appointed as per
directions contained in the order dated October 24,
1989 is in possession and control of the property of
the company. To assist him there are officers, staff
and workmen. Since the units which had resumed
production while the matter was pending in this Court
have been closed, the Court has been giving directions
from time to time to reduce the strength of the
employees in order to cut down the recurring
expenditure on that account. By the last order passed
on July 21, 1995, the Rehabilitation Commissioner was
directed to reduce the number of workmen from 200 to
75, the staff from 75 to 40 and the officers from 25 to
10. As per the directions contained in the order dated
September 29, 1995 the salary of the officers, workmen
and the staff has been paid by the Rehabilitation
Commissioner for the period upto the month of
September, 1995.
(ii) Earlier staff was being employed by the
Rehabilitation Commissioner for the purpose of ensuring
security of properties in the complex. This involved
heavy expenditure by way of salary of such staff. It
was, therefore, decided to entrust the security to the
Central Industrial Security Force. When the
Rehabilitation Commissioner pointed out that a sum of
Rs.10 lacs was being spent every month on the Central
Industrial Security Force deployed in the industrial
complex for the purpose of security, the Court, by
order July 21, 1995, directed the Director-General,
Central Industrial Security Force to deploy the force
in such a manner from August 1, 1995 that the
expenditure on that force is reduced by 40%.
(iii) The Rehabilitation Commissioner brought to
the notice of the Court that the electricity charges
were coming to Rs.5.5 lacs per month which amount
included the monthly minimum guarantee. By order dated
July 21, 1995 it was directed that keeping in view the
present status of the industry specially the fact that
it is lying closed since May 1994, the Bihar State
Electricity Board shall charge only the actual
consumption charges till further orders with effect
from August 1, 1995. It was also pointed out that
electricity was being supplied free of charge to
workers staying in the quarters and that many of them
are no longer on the rolls of the industry. By order
dated July 21, 1995 the Rehabilitation Commissioner was
directed not to spend any more money on supplying
electricity etc. or any other amenities to all those
workers, staff and officers who are no longer on the
rolls of the industry and this must be done with effect
from August 1, 1995. It was also made clear that the
workers shall pay the normal electricity and water
charges to the Electricity Department directly or
through the Rehabilitation Commissioner and if any
worker does not pay the charges his electric supply
would be disconnected. The Bihar State Electricity
Board has made a claim with regard to its dues which
according to the Board runs into few crores. The
Rehabilitation Commissioner has disputed the said claim
of the Board and has, on the other hand, submitted that
the company has suffered a loss of approximately Rs.752
lacs on account of burning of the transformer due to
the fault of the Board and further that the meters
recording the consumption were also found to be
defective by the Board itself and that the Board is
claiming the charges on the basis of the reading in
those defective meters.
(iv) As a result of resumption of production in some of
the units by the Rehabilitation Commissioner there is
raw material/finished products lying in stock. By order
dated July 21, 1995 the Rehabilitation Commissioner has
been directed to sell the said raw material/finished
products in stock preferably within the period of one
month. In his affidavit dated September 20, 1995, the
Rehabilitation Commissioner has stated that in
pursuance of the said directions offers have already
been invited for sale of approximately Rs.70 lacs worth
of raw materials/finished products/wasted/damaged
material out of which the sale has already been made of
Rs.7 lacs and that offers have been invited in respect
of the burnt out transformer and rejected copper cable
approximately of the value of Rs.20 lacs for which
confirmed offers for purchase have already been
received.
(v) In his affidavit dated September 20, 1995, the
Relief Commissioner has also stated that in respect of
the period during which the units had resumed
production an amount of Rs.234.84 lacs is payable
towards raw materials purchased on credit and a sum of
Rs.184.56 lacs was advanced by purchasers for supply of
products by the company. There is a total liability of
Rs.419.40 lacs under both these heads. It is stated
that there is a further liability for sales tax on
these transactions to the tune of Rs.400.23 lacs as on
March 31, 1995.
(vi) Out of a total amount of Rs.40 crores paid by the
State of Bihar the sum of Rs.6 crores was by way of
grant and Rs.34 crores is as loan. This amount was
advanced by the State of Bihar as per directions of
this Court.
(vii) The Claims Committee constituted by the
Rehabilitation Commissioner under the directions given
by this Court on October 24, 1989 has submitted its
report after assessing the various claims of the
creditors, the financial institutions and the workers.
Objections have been submitted against the said report
of the Claims Committee which are pending
consideration.
(viii) The moratorium of one year which was imposed
in respect of proceedings taken and pending or to be
taken against the company by order dated October 24,
1989 have been extended from time to time and the last
such extension was given till December 31, 1995 by
order dated July 21, 1995.
Now while putting an end to these proceedings and permitting resumption of the winding up proceedings in Company Petition No. 3 of 1984 pending before the Patna High Court, it is directed as under :
1. The winding up proceedings in Company Petition
pending before the Patna High Court will be resumed by
the Company Judge. The parties and the Rehabilitation
Commissioner shall appear before the Company Judge for
seeking necessary directions on November 20, 1995.
2. The Rehabilitation Commissioner shall -
(a) complete the sale of the raw materials/finished
products/wasted/damaged materials including the
burnt out transformer and rejected copper cable by
November 30, 1995;
(b) subject to availability of funds after incurring
the expenses towards payments under clauses (c),
(d) and (e), pay the dues towards the supply of
raw materials on credit for the running of the
units during the period of the pendency of these
proceedings as well as the amount received as
advance from purchasers for the products to be
supplied to them by December 31, 1995;
(c) pay the charges for the actual consumption of
electricity for the period upto November 30, 1995
by December 31, 1995;
(d) pay the charges for the security arrangements
through the Central Industrial Security Force for
the period upto December 31, 1995 by December 31,
1995;
(e) pay the salary of the staff employed for the
period upto December 31, 1995 by December 31,
1995;
(f) prepare an inventory of the properties, movable
and immovable, belonging to the company in his
possession and control by December 10, 1995;
(g) hand over the possession of the said properties to
the official Liquidator as per the inventory by
December 31, 1995;
(h) have the accounts for the period April 1, 1995
till December 31, 1995 duly audited and submit the
same before the Company Judge in the Patna High
Court by January 15, 1996;
(i) hand over the papers relating to the affairs of
the Company while he was in control of the same to
the Official Liquidator by January 15, 1996.
3. With effect from date the possession of the
properties, as per the inventory, is delivered to him
by the Rehabilitation Commissioner, the Official
Liquidator will assume charge of the assets of the
Company for the purpose of winding up proceedings.
4. The officers, workmen and the staff who are at
present employed in the undertaking of the Company
shall continue in employment till December 31, 1995.
For their further continuance in employment the
Official Liquidator will seek the necessary directions
from the Company Judge.
5. The present security arrangements through the
Central Industrial Security Force will continue till
December 31, 1995. For further continuance of these
arrangements, the Official Liquidator may seek the
necessary directions from the Company Judge.
6. The existing arrangement for supply of electricity
by the Bihar State Electricity Board shall continue
subject to the directions that may be given by the
Company Judge. No minimum guarantee charge will be
payable to the Bihar State Electricity Board and only
the actual consumption charges will be paid. The
respective claims of the Rehabilitation Commissioner
and the Bihar State Electricity Board with regard to
the supply of electricity during the period the Company
was under the charge of the Rehabilitation Commissioner
shall be considered by the Company Judge.
7. The State of Bihar will grant exemption from
sales/purchases tax in respect of sales/purchases made
by the company during the period the units were revived
by the Rehabilitation Commissioner while the matter was
pending before this Court.
8. The Report of the Claims Committee on the claims
of the financial institutions, creditors and the
workers will be considered by the Company Judge in the
light of the objections that have been submitted
against the said report.
9. The Company Judge may consider whether the
industrial undertakings of the Company can be revived
in the light of the offers that have been received from
Shri L.N. Dalmia, Speedcrafts Pvt, Ltd. and Rohtas
Industries Workers’ Cooperative Society Ltd. along with
any other offer that may be received.
10. In the event of sale of the assets of the Company
during the course of winding up proceedings, a sum of
Rs.34 crores which was advanced by the State of Bihar
as per directions of this Court in these proceedings
shall be paid to the State of Bihar out of the sale
proceeds before discharging any other liability of the
Company.
11. The Relief Commissioner shall stand discharged on
January 15, 1996.
12. The moratorium imposed under the order of this
Court shall cease to operate with effect from December
31, 1995.
13. It will be open to the Rehabilitation Commissioner
and the Official Liquidator to seek further directions
from this Court with regard to any matter pertaining to
the period this writ petition was pending in this
Court.
Shri Beck Julius, I.A.S. has been functioning as the Rehabilitation Commissioner since April 4, 1994. During that period this court found his work to be satisfactory and good. This may be treated as assessment of his performance as an officer of the Bihar Cadre of I.A.S. during that period and it may form part of his Performance Appraisal Report.
Before we part with this case, we must say that this is a sad finale to the episode. In order to secure the revival and rehabilitation of a large industrial undertaking, the closure of which was not only a national loss but had also rendered about 10,000 workmen jobless, this Court adopted the unprecedented course of assuming direct control over the functioning of the undertaking.
The writ petition are disposed of accordingly with no order as to costs.
A copy of this order shall be sent to the Registrar, Patna High Court for being placed before the Company Judge dealing with Company Petition No.3 of 1984. In addition, the following papers be sent with the order :
(a) copies of the orders passed by the Court in the
Writ Petition.
(b) copy of the reports of the BIFR dated April 22,
1988 and May 22, 1995 and the annexures thereto.
(c) copy of the report of the Claims Committee and the
objections filed against the said report.