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"If any amount is realised through sale of immovable properties and sale of machinery within 90 days of sanctioning of the scheme, such amount shall be deposited in a separate interest bearing 'No lien account' with the Operating Agency. This amount along with the loans from the associate companies of the promoters and co-promoters shall be distributed by the Operating Agency for payment of the secured creditors, statutory liabilities and workers dues within 90 days and as per the scheme. However, in case the funds raised within 90 days by sale of assets and brought in by the promoter/co-promoter were not sufficient to pay all the secured creditors, statutory liabilities and workers dues, the amount lying in the 'No-lien' account to the extent of sale proceeds of the aforesaid assets would be distributed by the Operating Agency among first charge holders on pro rata basis. After demerger, each company would meet its various commitments, as per the provisions of the rehabilitation scheme sanctioned by BIFR."

7.7. The other most vital feature of the impugned scheme is relating to the provisions made for settlement of dues to the workers of B & C Mills, Chennai, which is provided as follows:-

"Payment of dues of workers of B & C Mills, Chennai:
There are number of workers unions at the B & C Mills, Chennai. The Madras Labour Union (which represents more than 90% of the workers) and B & C Staff Union are the recognised unions. The company had, on March 28, 1998, entered into a settlement with the workers which envisaged VRS to majority of the workers. Accordingly, first instalment of VRS compensation amounting to Rs. 2642 Lakhs was paid to the employees. The remaining dues of the workers were provided for payment in the sanctioned scheme of October/December 2001 as under:
(Rs. Lakh) PF Dues Balance ESIC dues Gratuity etc. to persons retired/resigned during 1996-2002 Arrears of salary etc Management Staff salary Total The workers dues aggregating Rs. 1432 lakhs pertaining to workers of both Chennai and Bangalore Units would be paid within 30 days from the date of sanction of the revised scheme by High Court of Madras or 31st July, 2003 whichever is later along with secured creditors and banks.
The interest amount of VRS payable to workers (Chennai unit) works out to Rs. 1005 Lakhs. A sum of Rs. 250 Lakhs has already been paid in May 2003 out of the funds released from Escrow a/c by IDBI as per the direction of the Hon'ble High Court of Madras. The balance sum of Rs. 755 Lakhs would be paid within 30 days of the sanctioning of the Scheme by High Court of Madras or 31st July 2003 which ever is later, along with secured creditors and banks. No interest is payable on the dues pertaining to Bangalore unit."

7.8. 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:

"Clause 3(B)(ii):
As per agreement with the workers, an aggregate amount of Rs. 6775 lakh was payable towards workers dues comprising VRS compensation, arrears of salaries and wages, PF, ESIC, etc. The Company has already made payment of Rs. 2642 Lakhs. The balance liabilities amounting to Rs. 4133 Lakhs; would now be discharged, within 90 days from the date of sanction of the scheme by BIFR. Interest calculated at 11.25% p.a. (SBI PLR) from September 15, 1998 till March 31,2001, along with interest from 27.5.1998 to 14.9.1998 to those employees who were not paid first installment, and from 27.5.1998 to 31.3.2001 in respect of those workers who had not been paid first installment, would be repayable in 4 equal annual installments, the first installment commencing from one year from the date of payment of principal. The company has clarified that interest is payable on the amount of Rs. 3374 Lakhs only, representing the liabilities directly payable to workers and workers' Co-op society. No interest is payable on balance amount of Rs. 759 Lakh which represents arrears of PF, ESIC and gratuity payable to management staff, etc. The total balance dues in respect of workers along with interest as above upto March 31, 2002 (cut off date), have been estimated at Rs. 5138 Lakhs (inclusive of interest of Rs. 40 Lakhs as stated above).