Orissa High Court
Unknown vs Dues Of Employees Of Kjl; on 18 August, 2020
Author: D. Dash
Bench: D. Dash
CMPAT NO. 36 OF 2001
I.A. NO. 05 OF 2019
&
MISC. CASE NO. 02 OF 2015
131. 18.08.2020: The matter is taken up through Video Conferencing
mode.
The application giving rise to the above numbered
Interlocutory Application has been filed by the Petitioner-
Company- M/s. Bhatia OSL Washeries & Minerals Limited
(BOSLWML) with a prayer to direct the Industrial
Development Corporation of Odisha Limited (IDCOL) which
is the holding Company of Konark Jute Limited (KJL) to
complete the process of physical takeover of KJL in their
favour.
It has been pointed out by the learned Counsel for
the BOSLWML as also the learned Counsel for the IDCOL
that one Misc. Case No. 02 of 2015 has been registered on
the application of IDCOL praying for issuance of a direction
to the BOSLWML that certain liabilities arising after
30.09.2010 till the date of takeover of KJL be paid to the
IDCOL. On their prayer, since it relates to the same subject
matter, said Misc. Case is also taken up for hearing.
2. Heard Mr. D.P.Nanda, learned Senior Counsel for the
BOSLWML and Mrs. Pami Rath, learned Counsel for the
IDCOL.
This Court vide order dated 29.04.2011 had finally
approved takeover of KJL in favour of the BOSLWML being
the highest bidder with an offer of Rs.34.00 Crore. The bid
amount within the granted extension of time has been
deposited on 17.08.2012. The BOSLWML, as per the order is
// 2 //
under the obligation to pay the liabilities mentioned in the
format of financial bid as well as the liabilities arising after
30.09.2010 till date of takeover to the IDCOL/ Government
upfront on or before the closing date (date of signing of the
agreement). Besides the above, the employees' dues as stated
in the format of the financial bid arising after 30.09.2010 till
the date of takeover is also to be paid upfront to the IDCOL
on or before the closing date (date of signing of the
agreement).
The BOSLWML has been paying all the up-to-date
dues of the employees working for KJL as per due rate, so
also the electricity and other charges every month as per the
demand raised by the IDCOL. By letter dated 14.10.2019,
the IDCOL has further asked for upfront payment towards
outstanding dues to the tune of Rs.14,49,40,019/- for
finalization of the process of takeover of KJL with the
signing of the agreement and physical takeover of KJL and
possession.
Said demands spread over four heads which are as
under:-
(i) VIR, V/S dues of employees of KJL;
(ii) Interest of Government Loan and Sales Tax
Loan for 108 months;
(iii) PF, ESI dues including principal, interest and
damage excluding the PF (Principal already
deposited); and
(iv) Liability of IDCOL paid towards expenditure in
KJL and employees.
// 3 //
The BOSLWML refuted the above noted demands as
laid in the above letter of IDCOL stating the reasons in detail
in their Interlocutory Application as at paragraph 6 to 8.
On 27.07.2020, the I.A. No. 05 of 2019 had been
taken up for hearing through Video Conferencing. On that
day, this Court having gone through the petition averments
as also the documents annexed thereto and earlier orders in
this connection, after hearing learned Counsel for the
BOSLWML and IDCOL had passed the following order:-
"Considering the submissions made and on
going through the averments taken in the petition as
also the documents annexed thereto; at this stage
without expressing any opinion either as to the
correctness of the demand or the extent of the liability
of the Petitioner-Company; this Court is of the view
that one more exercise of detail examination of the
matter by the IDCOL for a fresh decision in the matter
of their demand, taking into account, the denial of
liability and admission in part, to the extent as placed
by the Petitioner-Company in their proper perspective
is likely to put an end to the long run process of
takeover.
Therefore, it is hereby ordered / directed that:-
(i) the IDCOL would now examine the matter
concerning the demand raised vide letter dated
14.10.2019 as payable by the Petitioner-
Company taking into account the points as to
denial of said liability as also the admission to
the extent as indicated in the Interim Application
and take a decision afresh as to the said demand;
(ii) the Petitioner-Company would submit the copy of
the Interim Application along with the copy of
this order to the IDCOL and they may, if so
advised, supply any such other document/s in
support of their claim within two days hence; and
// 4 //
(iii) if so required by the IDCOL, the Petitioner-
Company would appear through their authorized
representative to explain any such matter on
such date and time as fixed;
The above exercise as aforedirected shall be
completed within two weeks with effect from the date
of submission of the copy of the Interim Application
etc. as above by the petitioner and the result thereof
shall be placed before the Court at the earliest".
3. Pursuant to the above order, the IDCOL having
examined the matter concerning the demands raised and
the contentions of the BOSLWML in denial of the said
liabilities as raised by the IDCOL, on hearing the
representatives of the BOSLWML has reconsidered the
matter in taking a final decision as to the clearance of the
liabilities on each of the head by the BOSLWML for
finalization of the process of takeover of KJL. The same has
been placed before this Court by an Additional Affidavit.
Paragraph-4 of the Additional Affidavit dated
13.08.2020 of the Deputy General Manager, (HRD), IDCOL
being relevant is reproduced hereunder:-
(a) "DEMAND OF Rs. 5,39,86,417/- TOWARDS
PROVIDENT FUND AND ESI DUES OF THE
EMPLOYEES OF M/S. KONARK JUTE LTD.
M/s. BOWML in their I.A. no.5 of 2019 had
prayed that they will to pay principal amount and
interest amount arising after 01.10.2010 directly
with the concerned authorities and requested the
Hon'ble Court to consider to waive the demand on
damages as Konark Jute Ltd. is a sick company.
Keeping in view such pleadings and also the
discussion on 04.08.2020, the Industrial
Development Corporation of Odisha Ltd. has
decided that M/s. BOWML may take up the
// 5 //
matter with the authorities directly subject to
orders of the Hon'ble Court and that it shall be the
exclusive liability and responsibility of M/s.
BOWML to pay the PF and ESI due occurring after
01.10.2010 to the concerned authorities.
(b) LIABILITIES OF THE INDUSTRIAL
DEVELOPMENT CORPORATION OF ODISHA LTD
ON ACCOUNT OF EXPENDITURE IN
M/S.KONARK JUTE LTD. AND PAYMENT OF
EMPLOYEES DUES AFTER 01.10.2010.
M/s. BOWML has shown its willingness to pay
the amount towards expenditure in M/s. Konark
Jute Ltd. and payment of employees dues after
01.10.2010 as per para-8 of the I.A. No.5 of 2020
(sic).
Keeping in view this willingness of M/s.
BOWML, the Industrial Development Corporation
of Odisha Ltd. (IDC) has decided that all liabilities
arising under this heading up to 30.09.2019 plus
further liability if any arising after 01.10.2019 till
signing of Share Purchase Agreement subject to
reconciliation shall be paid by of M/s. BOWML as
per bid condition.
(c) INTEREST CHARGED TOWARDS GOVERNMENT
AND SALE TAX LOAN.
M/s. BOWML, in its I.A. No.5 of 2020 (sic) has
disputed this claim raised by Industrial
Development Corporation of Odisha Ltd. (IDC) and
at paragraph-6 agreed to pay interest for 22
month 17 days i.e. 01.10.2010 to 17.08.2012 or
23 months, which comes up to Rs.28,49,010/-
according to them.
Keeping in view of the facts of the case and
issues put forward by the representatives of M/s.
BOWML, the Industrial Development Corporation
of Odisha Ltd. (IDC) has decided not to charge
// 6 //
interest on M/s. BOWML for loan after 31.08.2012
as the bid amount of Rs.34 Crore was paid by
M/s. BOWML as per financial bid format by
31.08.2012.
However, M/s. BOWML shall pay interest on
loan for the period of 01.10.2010 to 31.08.2012 to
which they have also agreed to at para-6 of the
pleading in I.A. No.5 of 2020(sic).
(d) VRS/VSS DUES:-
As regards to the claim of VRS/VSS dues it is
humbly stated that VRS/VSS Scheme with 35
days ex-gratia and other benefits was introduced
by Konark Jute Ltd. in September, 2012 for the
employees of Konark Jute Ltd. The Scheme was
implemented on the approval of the Government
of Odisha that it shall bear the 21 days ex-gratia
and other benefits. M/s. BOWML agreed to pay for
14 days ex-gratia amount under the said
VRS/VSS Scheme.
All VR/VS employees were relieved by
13.10.2012.
M/s. BOWML has paid 14 days ex-gratia
amount. But Government of Odisha could not pay
for 21 days ex-gratia and other benefits as a result
of which the said benefits were paid by IDCOL.
In this view of the matter, the Industrial
Development Corporation of Odisha Ltd. (IDC) had
filed Misc. Case No.02 of 2015 in the present
Company matter raising a demand on M/s.
BOWML under the heading of VRS/VSS as the
Scheme has resulted in reducing the liability of
BOWML after relieve of VR/VS employees. During
discussion on 04.08.2020 the representative of
M/s. BOWML was also requested to consider
reimbursement of VR/VS dues paid by IDCOL.
But the representative of M/s. BOWML did not
agree to the same."
// 7 //
4.
(a)(1) DEMAND TOWARDS PROVIDENT FUND AND
ESI DUES OF THE EMPLOYEES-KJL:-
Learned Counsel for the BOSLWML submits that
BOSLWML is willing to pay the principal amount and
interest arising after 01.10.2010 directly to the Statutory
Authority.
As regards the demand of damages, it is stated that
since the KJL is a sick Company, the demand of damages
as made is unreasonable and as such not payable.
Learned Counsel for the IDCOL submits that as per
the decision taken by the IDCOL, the BOSLWML may now
pay the principal amount and interest arising after
01.10.2010 directly to the concerned Authorities.
She however with regard to the demand of damages,
submits that it is for the Statutory Authorities to take the
call in the matter of exoneration /waiver /reduction as the
case may be, if any and therefore, the BOSLWML may take
up the matter with the said Authorities as to that limb of
demand of damages in accordance with law. She further
submits that as per the decision, the IDCOL would not to
bear any liabilities on these accounts after 01.10.2010.
(b)-1 LIABILITIES ON ACCOUNT OF EXPENDITURE
IN KJL AND PAYMENT OF EMPLOTYEES
DUES AFTER 01.10.2010.
Learned Counsel for the BOSLWML reiterating the
averments of paragraph-8 of the Interlocutory Application
submits that the BOSLWML is willing to pay the same, as
also the future liabilities towards that till signing of the
agreement.
// 8 //
Learned Counsel for the IDCOL submits that said
liability being thus admitted, the BOSLWML must pay the
same as would stand calculated till the signing of the
agreement subject to reconciliation, if any.
(c)-1 INTEREST TOWARDS GOVERNMENT AND
SALES TAX LOAN:-
It has been decided by the IDCOL not to charge the
interest on the above head after 31.08.2012 i.e. the date of
deposit of the bid amount and the BOSLWML has to pay
the interest on said loans for the period i.e. 01.10.2010 to
31.08.2012.
Learned Counsel for the BOSLWML in view of the
averments taken at paragraph-6 of the Interlocutory
Application does not counter the same.
(d)-1 VRS/VSS DUES:-
It has been stated by the IDCOL in the Additional
Affidavit that VRS/VSS Scheme had been introduced by the
KJL in September, 2012 for its employees with due
approval of the State Government. In consonance with the
Scheme and as agreed between the BOSLWML and IDCOL
and accepted as such, the BOSLWML has paid 14 days ex-
gratia amount. When the Government did not pay towards
21 days ex-gratia amount and other benefits, the IDCOL
has paid the same. So it is stated that since in such an
eventuality, the IDCOL has paid the said amount on their
behalf; it has thus resulted in reduction of the liability of
the BOSLWML as after such payment all the VR/VS
employees have been relieved by 13.10.2012.
// 9 //
Learned Counsel for the BOSLWML submits that the
BOSLWML as agreed when has paid the ex-gratia amount
for 14 days; for the IDCOL's internal arrangement due to
some reason or other with the State Government in not
coming forward for payment towards 21 days ex-gratia
amount and other benefits; the BOSLWML is not to
shoulder that liability. According to him, BOSLWML having
discharged its obligation on that count so as to reduce its
liability and the other part having been performed by the
IDCOL, be it, without the financial assistance of the State
Government; the reason assigned that it has thereby
reduced the liability of the BOSLWML is untenable so as to
fasten the liability on that count upon BOSLWML and thus
their denial to pay the same is justified.
Learned Counsel for the IDCOL submits that the said
liability of payment of 21 days ex-gratia amount and other
benefits to the VR/VS employees having been cleared by
the IDCOL without the assistance of the State Government;
the BOSLWML in turn should come forward to pay the
same to the IDCOL since that payment towards
implementation of the Scheme has ultimately stood to
benefit the BOSLWML.
In response to the above, the learned Counsel for the
BOSLWML under instruction submits that although the
BOSLWML has no further liability in the matter yet having
reconsidered the request made by the IDCOL, the
BOSLWML is ready and willing to bear 50% from the
liability on that count out of the 35 days ex-gratia amount
// 10 //
subject to adjustment of 14 days ex-gratia amount already
paid by them.
5. With all the aforesaid, further keeping in view the
submissions made and on going through the averments
taken in the Interlocutory Application presented by the
BOSLWML as well as the Additional Affidavit filed by the
IDCOL and the documents annexed thereto; it is hereby
ordered/ directed that:-
(i) the Petitioner-Company (BOSLWML) shall pay
the liability towards Provident Fund & ESI
dues to the employees of the KJL arising after
01.10.2010 directly to the concerned
Authorities and take up the matter with them
for reconsideration of the demand on the head
of damages as per law, for which the IDCOL
will have no liability at all;
(ii) the Petitioner-Company (BOSLWML) shall clear
up all the liabilities on the head of expenditure
in KJL and payment of employees dues after
01.10.2010 till signing of the agreement,
subject to reconciliation, if any;
(iii) the Petitioner-Company (BOSLWML) shall pay
the interest charged towards the Government
and Sales Tax loans only for the period of
01.10.2010 to 31.08.2012;
(iv) the Petitioner-Company (BOSLWML) in
shouldering 50% of the liability towards the
VRS/VSS, out of the total of 35 days of ex-
gratia amount received by the said employees,
// 11 //
shall now pay the rest amount as would stand
after adjustment of the payment already made
by them towards 14 days ex-gratia amount;
(v) the Petitioner-Company (BOSLWML) shall
discharge all the above directed obligations/
liabilities as to payments within 10 days hence;
(vi) upon compliance of the directions as at (v) by
the Petitioner-Company (BOSLWML), the
IDCOL shall do all the needful towards
completion of the process of takeover of the
KJL including the signing of the agreement,
handing over and all other related acts in that
behalf; and
(vii) thereafter, the IDCOL shall place an Affidavit
before this Court to the above effect.
The I.A. no. 05 of 2019 as also Misc. Case no.
02 of 2015 are accordingly, disposed of.
In view of the present COVID-19 situation, learned
Counsel for the parties may utilize the soft copy of this
order available in the High Court's website or print out
thereof at par with certified copies in the manner
prescribed, vide Court's Notice No.4587, dated
25.03.2020.
..........................
D. Dash, J.
// 12 // CMPAT NO. 36 OF 2001
132. 18.08.2020: The matter be listed after four weeks.
.......................... D. Dash, J.
Narayan