SIDCUL Vs. ARSHAD JAMAL AND ORS.

JUDGEMENT

(1.) A very interesting and peculiar situation which has arisen in the present case for consideration before this Court it is as to what would be the effect of a notified closure of a sick industry and as to what would be the scope of entitlement for the wages to the workman/respondent for a period after the declaration of notified closure of the sick Unit as such. In order to answer the aforesaid question, certain facts are required to be dealt with prior to considering the rival contentions of the parties to the writ petition, and its legal implications.

(2.) It is an admitted case that, in the erstwhile State of Uttar Pradesh, there was a statutory Corporation created under the Company Act, called as "U.P. State Textile Corporation Limited", under which the private respondent herein was an employee/workman and was then working as an electrician. During the tenure of his employment, when he was serving in the Unit, the Unit was declared to be sick after the invocation of the proceedings under section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (in short to be referred as "SICA"), and as a consequence thereto, on its formal declaration of a sick industry, the matter was referred to the Board of Industrial and Financial Reconstruction (in short to be "BIFR"), New Delhi.

(3.) Ultimately, after resorting to the proceedings under Section 15 of the SICA, the BIFR, had made a formal declaration of the U.P. State Textile Corporation Limited, as to be a sick Company under Section 3 (1)(o) of the SICA, 1985. On account of the industrial slump and recession, and the factories, of U.P. State Textile, which Corporations which were situated at Jaspur and Kashipur were suffering from industrial sickness, there was no possibility of its rehabilitation and due to there being disruption in the production activity since die, it is an admitted case of both the parties to the writ petition that the two Units of the UP State Textile Corporation, situated at Jaspur and Kashipur, they have finally closed down, since October 1988 by way of a declaration under SICA.