DUNLOP FACTORY EMPLOYEES UNION Vs. DUNLOP INDIA LTD

JUDGEMENT

(1.) THE writ petitioner is the Workers' Union which seeks for a declaration that the sale deed executed by the first respondent in favour of the sixth respondent is null and void. The first respondent company went into financial difficulties and therefore, a reference was made to the Board of Industrial and Financial Re-construction ('bifr' in short) for framing a scheme. Originally, the Industrial Development Bank of India (IDBI) was appointed as the operating agency and thereafter, it was replaced by the State Bank of India. During the course of the proceedings, the petitioners also took part. It was decided that it was necessary to sell some of the immovable properties belonging to the first respondent in order to facilitate rehabilitation. The first respondent owns properties all over India. The manner in which such sale should take place was also laid down. As against the order of the BIFR, an appeal was filed before the Appellate Authority for Industrial and Financial Re-construction ('aaifr' in short ). On 17. 6. 2004, the property was sold to the sixth respondent. It is this sale deed executed in favour of the sixth respondent that is assailed in this writ petition.

(2.) LEARNED counsel for the petitioners Mr. M. Jayaraman would submit that though the scheme framed provides for rehabilitation of the factory by selling the property at Ambattur, the first respondent has made the re-commencement of the factory impossible. According to the learned counsel for the petitioners, wells are essential for manufacture of tyres, which is the business activity that the respondent engages in. The property that has been sold to the sixth respondent contains active wells belonging to the first respondent and therefore, it will not be possible to start the factory without the wells. It is next submitted that though guidelines were framed for the sale of properties at Mumbai, Calcutta, Chennai, Goa, etc. , the property at Ambattur was not referred to in the order either of the BIFR or the AAIFR. Thirdly, it was submitted that the order dated 17. 5. 2002 would show that prior permission from the Government was necessary for the sale of the property and on this ground also, the sale should be declared as void. Learned counsel also pointed out the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 (SICA) and would submit that after the date of repeal of the original Act, all proceedings stand abated.

(3.) LEARNED senior counsel Mr. G. Masilamani appearing on behalf of the first respondent would submit that the workers of the petitioner Union have no locus standi to attack the sale deed, much less ask for an injunction. According to the learned senior counsel, the Repeal Act has a saving clause which saves all actions legitimately taken during the period when the Act was in force and in any event, the AAIFR had passed final orders directing the Asset Sales Committee (ASC) to go on with the sale and therefore, the repeal of the Act would hardly affect the consequences flowing from the order passed by the AAIFR. Learned senior counsel would submit that the Asset Sales Committee comprises of responsible officials, viz. , Nominees of Banks, Debenture Holders, BIFR, etc. and therefore, it is highly unlikely that they would venture into a sale without complying with all the formalities. There are no allegations in the writ affidavit that the property has been undervalued. According to the learned senior counsel, there are 21 wells and two borewells in the property belonging to the first respondent and the portion of land sold to the sixth respondent contained 9 wells and one borewell, while 12 wells and one borewell still remain with the first respondent. Out of the 9 wells, only 4 are usable wells and therefore, the sale of that portion of factory property which contained those 9 wells will not in any way affect the rehabilitation process of the first respondent company.