D PITCHANDI Vs. MANAGEMENT OF BINNY LTD

JUDGEMENT

(1.) The brief material facts of the case, which led the petitioners to file these writ petitions are stated as follows:- (i) The Binny Limited (hereinafter referred to as "the respondent/Company") incurred cash losses consecutively for two years, i.e, in the years 1992 and 1993, and as on 31.3.1993, the networth of the respondent/Company had been completely eroded. Hence, the respondent/company filed a reference under Section 15(1) of the SIC Act on 7.7.1993 and the same was registered as Case No.48 of 1993. (ii) The Board of Industrial and Financial Reconstruction (for brevity "the BIFR") declared the respondent/Company as a sick industrial company within the meaning of Section 3(1) of the SIC Act and appointed IDBI as the Operating Agency to formulate a rehabilitation scheme in respect of the respondent/company. (iii)Several hearings took place before the BIFR in respect of rehabilitation of the respondent/company and the BIFR vide its order dated 13.6.1994 sanctioned a rehabilitation scheme for the respondent/Company, which includes settlement of dues to consortium banks, financial institutions and the debenture holders as one time settlement, as well as the dues payable to the workers. The scheme envisages restructuring the respondent/company by giving off the Engineering Division into two separate companies, viz., Binny Engineering Works Ltd. (BEWL) and Binny Processors Ltd (BPL). (iv) However, by order dated 12.1.1996, the BIFR de-registered the respondent/company from its purview for the reason that the networth of the respondent/company had exceeded its accumulated losses as on 31.3.1995. (v) But, upon a writ petition, viz., W.P.No.1198 of 1997, filed by the workers of the respondent/Company alleging deviation in the implementation of the scheme, this Court by order dated 25.2.1998 in the said W.P.No.1198 of 1997 set aside the order dated 12.1.1996 of the BIFR regarding de-registration of the respondent/company. (vi) Pursuant to the order of this Court dated 25.2.1998 in W.P.No.1198 of 1997, the respondent/Company submitted a fresh rehabilitation proposal to the BIFR which provided for:- (a) bifurcation of the assets and liabilities of the respondent/company between the original promoters and the co-promoters; (b) Voluntary Retirement Scheme for the entire workforce both at Chennai and Bangalore units; (c) relocation of the manufacturing facilities and processing house from Chennai to Singaparumal Koil, near Kancheepuram, as well as Bangalore Silk Mills at a new location in Bangalore; and (d) investment in subsidiary, namely Binny Engineering Ltd (BEL). Even though the said revised proposal was broadly accepted by the financial institutions and the State Bank of India, the same was not accepted by other consortium banks. (vii) Pending the above proceedings before the BIFR, the respondent/Company and the workers entered into a settlement under Section 12(3) of the Industrial Disputes Act on 28.3.1998, in the presence of the then Hon'ble the Chief Minister, which provided for Voluntary Retirement Scheme and settlement of Compensation and terminal benefits to the employees. The terms of the settlement read as follows:

(2.) It is pertinent to observe that the basis of settlement of the dues to the workers is arrived at based on Clauses 3(B)(ii), 7(d)(iii) and 7(d)(iv) of the scheme sanctioned by the BIFR by proceedings dated 31.10.2001, as modified by the proceedings dated 13.12.2001. Clauses 3(B)(ii), 7(d)(iii) and 7(d)(iv) read as follows:

(3.) Aggrieved by Clauses 3(B)(ii) and 7(d)(iii) of the sanctioned scheme approved by the proceedings of the BIFR dated 31.10.2001 modified by proceedings dated 13.12.2001, the petitioners in W.P.No.37671 of 2002, seek a writ of Certiorarified Mandamus to call for the records of the 3rd respondent herein in Case No.48 of 1993 dated 26.12.2001 in so far as deciding the issue of payment of V.R.S. compensation, terminal benefits and payment of interest thereon under Clause 3(B)(ii) and Clause 7(d)(iii) of the sanctioned scheme instead of settling the entire settlement entered into between the parties concerned under Section 12(3) of the Industrial Disputes Act, dated 28.3.1998 with terminal benefits and the accrued interest thereon, quash the same and to direct the 1st respondent herein to allot necessary extent of land for resettling the petitioners herein as allotted to the workers of Binny Karnataka Limited who were facing eviction orders from the quarters.