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1993 Supreme(SC) 768

SUPREME COURT OF INDIA
Kuldip Singh : S.C.Agrawal
Workmen
Versus
Rohtas Industries Limited
Case No. : 5222 of 1985
Date of Decision : 9/8/93

Headnote:

Sick Industrial Companies Act, 1985 - Section 18 – Claim of compensation – Circumstances evidence - Against demand of State Electricity Board - Claims have been laid against the company and are perhaps awaiting adjudication - If company is not revived and gets liquidated liabilities would turn out to be far in excess of the assets and notwithstanding first or second charge on the assets, the creditors may not appreciably benefit - This court cannot lose sight of the fact that living to families has been denied for over five years and apart from national loss, the workmen have been put to serious jeopardy - In these circumstances, we are satisfied that it is of paramount importance that the company in respect of the viable units should be revived and allowed to come into production – Held, Commissioner and secretary, Department of Industries, Government of Bihar, shall publish an advertisement in five prominent national newspapers (English language) and three national newspapers Hindi language inviting offers for purchase of the entire industrial undertaking of the company as a running concern. The said advertisement shall be published within 10 days from the date of this order - In advertisement it should be indicated that the last date for receipt of offers would - Offered would be required to submit a bank guarantee along with the offer in of Commissioner and Secretary, Department of Industries, government of Bihar - Rehabilitation Commissioner shall move the court for appropriate directions after the offers have been received in pursuance of the advertisement – Court accept the suggestion given by advocate that while advertising for the sale of the concern, the State of Bihar shall also indicate that it is prepared to extend the incentives which are available to the industries which are set up in the backward area. advocate very fairly states that he will persuade State Government to accept same - Moratorium is extended by this Court for six months – Appeal disposal of

(1) ROHTAS Industries Ltd. is a large industrial undertaking having units for manufacturing cement, paper, vanaspati, asbestos and vulcanised fibres at Dalmianagar, District Rohtas, in the State of Bihar. It was employing about 10,000.00 workmen when it closed its operations in July, 1984. The said closure led to the filing of this writ petition by the workmen. It appears that proceedings for winding up of the company are pending in the Patna High court and provisional liquidator has been appointed. Having regard to the suggestion made by the learned Attorney General of India to which the counsel for the petitioners also agreed, this court passed an order on 28/10/1987 whereby the Central Government was directed to make a reference to the Board of Industrial and Financial Reconstruction (for short BIFR) constituted under the Sick Industrial Companies (Special Provisions) Act, 1985 for framing a scheme as contemplated under Section 18 of the said Act for revival of the industry. The BIFR submitted a report wherein it was indicated that three of the units of the industry, namely, cement, asbestos and vanaspati could be revived as the same appear to be viable 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 and filed before this court, this court passed the order dated 24/10/1989 wherein this court has observed:

"AS already noted, the company has been closed down for more than five years now. A lot of assets are fast becoming useless and will soon become junk. Several attempts were made to dispose of some of the stocks held by the Official Liquidator but for one reason or the other it has not been possible to complete the sale and though this court had directed that the sale proceeds would be utilised for payment of arrear-wages, that has not been feasible. Claims have been laid against the company and are perhaps awaiting adjudication. If the company is not revived and gets liquidated, the liabilities would turn out to be far in excess of the assets and notwithstanding first or second charge on the assets, the creditors may not appreciably benefit. This court cannot lose sight of the fact that living to about 10,000.00 families has been denied for over five years and apart from national loss, the workmen have been put to serious jeopardy. In these circumstances, we are satisfied that it is of paramount importance that the company in respect of the viable units should be revived and allowed to come into production."

(2) THIS court, inter alia, directed as under:

(1 The State of Bihar shall appoint an authorised officer from the Senior IAS cadre with appropriate commercial background to be the Rehabilitation Administrator.

(2 The Provisional Liquidator appointed by the High court of Patna shall hand over to the Administrator all the assets of the company which he has taken over under orders of the court. Such assets of the company which have not yet been taken over by the Provisional Liquidator shall upon the appropriate officer being designated vest in him forthwith and he is clothed with the necessary power under our present orders to take such steps as are necessary to take over possession of such assets of the company.

(3 The State government of Bihar has undertaken to deposit the amount of Rs 15 crores with the Administrator within eight weeks and a similar amount of Rs 15 crores shall be advanced by the Union of India to the State of Bihar from out of plan assistance for the State. The sum of Rs. 15 crores paid by the State Government shall be utilised, in due course, for payment of arrears of wages to the workers and for disbursement of secured loans of financial institutions and other parties for which security of the Companys assets had been furnished.

(4 Appointment of technical consultants and other comp























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