DAYAKAR REDDY Vs. M D ALLWYN AUTO LIMITED

JUDGEMENT

(1.) This special leave petition was listed for final hearing as it involves the question of closure of a company and the consequent fate of the workmen employed by the company. It was, therefore, heard at length. After considering the material on record and the rival submissions, we are of the opinion that the State Government was justified in granting permission for closure under Section 25 (0) of the Industrial Disputes Act.

(2.) Allwyn Auto Ltd. was not a sick company taken to BIFR. The company which had become sick was Hyderabad Allwyn Ltd. Under the Scheme framed by BIFR, the Auto division of Allwyn was to be transferred to Allwyn Auto Ltd. To implement the Scheme, Allwyn Auto Ltd. was brought into existence in 1993. It was a State Government Undertaking. Under the Scheme certain amount of fund was to be made available to this company by the Government and the transferee company namely, Voltas Ltd. was to allow it to continue to occupy the premises available to it under a lease, for a period of 5 years from 1993. It was expected of Allwyn Auto that it will make some profit towards the end of five years and become a viable unit. However, the hopes turned out to be false because in spite of the Government pumping in about Rs. 13 crores, the company went on making losses and the total loss by the year 1997 was about Rs. 12 crores. The lease was also expiring in 1998 and there was no possibility of getting it extended any further. The company and the Government found it difficult to get any other location where it could set up the unit afresh. It was under these circumstances, that the company decided to close down its undertaking. Therefore, it cannot be said that the decision of the company to close down was not bona fide.

(3.) After the proposal was received by the Government, discussions had taken place with the trade unions and the representations of the workman on many occasion. A Voluntary Retirement Scheme was also proposed. Two meetings took place before the Labour Commissioner. After taking into consideration the material which was available with it, the State Government took the decision that the company deserved to be closed down.