WORKMEN OF ROHTAS INDUSTRIES ROHTAS KARAMCHARI SANGH WORKERS OF DEHRI ROHTAS LIGHT RLY CO Vs. ROHTAS INDUSTRIES:UNION OF INDIA:SECRETARY OF THE GOVERNMENT OF INDIA

JUDGEMENT

(1.) Rohtas Industries Limited (herein after referred to as ' the Company)' was running a large industrial undertaking comprising of units for manufacturing cement, paper and board, asbestos, vulcanised fibers 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:

(2.) 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 of the Court and the several other assets of the Company which had not been taken over by the Provisional Liquidator shall vest in the appropriate officer upon being designated and he was entrusted with the power to take such steps as are necessary to take over possessions 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 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.

(3.) In accordance with said directions given by his 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 crosses was paid by the State Government to the Rehabilitation Commissioner. Out of the said sum of Rs. 30 cores 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 institution 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 valuen 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 offer 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.