BAGESHWARI PRASAD SRIVASTAVAS Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) The short question that arises for consideration in this writ petition is whether the employees of Bhadohi Woollens Ltd., a Government company (in brief company) which has been winded up. can be absorbed under the Uttar Pradesh Absorption of Retrenched Employees of Government or Public Corporations in Government Service Rules, 1991 (in brief Rules 1991).

(2.) The company was a 100% State-owned company. Its shares, in entirety, were held by U. P. State Textile Corporation Ltd., Kanpur and U. P. Export Corporation Ltd., Kanpur. In S. S. Verma v. G. M. Elgin Mills. 1989 (2) VPLBEC 179, it was held that even a Government company which is wholly owned and controlled by the State is an instrumentality of the State within the meaning of Article 12 of the Constitution. Since the company was owned and controlled by the two Government corporations, whose affairs were fully owned and controlled by the State, it was a Government company as defined in Article 12 of the Constitution, therefore, amenable to writ Jurisdiction of the Court.

(3.) The petitioners, rather all the employees of the company were appointed prior to 1.10.1986. They were working with the company continuously when it became sick. On 27.11.1995, the Board of Industrial and Financial Reconstruction (B.I.F.R.) on a reference made to it recommended to this Court for its winding up under Sick Industry [Special Provisions) Act, 1985. The recommendation was accepted on 20.2.1996 and the company was winded up. The assets of the company were handed over to the Official Liquidator on 6.4.1996. On 18.5.1996, the Managing Director of the U. P. Textiles Corporation, who it is not denied was also the Managing Director of the company, wrote a letter dated 18.5.1996 to the Principal Secretary, Industrial Development Department of the Government that there were 323 employees of the company who, in consequence of winding up, were entitled to be absorbed in accordance with Government orders. When nothing was done with regard to absorption, the employees filed two petitions being Writ Petition No. 13439 of 1997 and 24240 of 1997 seeking absorption in some other government department in accordance with Rules 1991. Since no counter-affidavit was filed in any of the petition, both the writ petitions were disposed of by judgment dated 15.1.1998 directing the respondents to consider the claim of absorption of the petitioners by a speaking order.