Baroda Rayon Employees Ekta Union ... vs Baroda Rayon Corporation Ltd & 8 on 8 May, 2015

[Cites 162, Cited by 0]

Gujarat High Court

Baroda Rayon Employees Ekta Union ... vs Baroda Rayon Corporation Ltd & 8 on 8 May, 2015

1. In this group of matters, the main matters i.e. Special Civil Applications have arisen on account of dispute between the employer and its workmen on various aspects, which gave rise to the Industrial Dispute, which came to be referred to the Competent Tribunal at the relevant time. All these matters have been appearing upon the original proceedings and developments and incidents arising therefrom, therefore, they were always listed together and were heard and are being disposed of by this common judgment.

2. The difference and dispute, as it is stated hereinabove, is in respect of the employer and workmen or their heirs and therefore, the historic background in which the development of events took place would require to be adverted to in order to appreciate the real controversy and parties' approach, conduct and their stand taken in these matters time and again. Therefore, the facts as could be gathered from these matters deserve to be set out herebelow, and thereafter individual matters, prayers and contentions could be set out, that would make things clear and more elucidating for appreciating the controversy in question.

3. The employer is a Company registered under the Companies Act and engaged in manufacturing activities. The workmen are in the employment of the Company. Both the Page 15 of 674 C/SCA/15599/2008 JUDGMENT parties under the provisions of Section 2(p) of the Industrial Disputes Act, 1947 (hereinafter referred to as 'the I.D. Act' for short), arrived at a settlement, which was reduced into writing and executed on 27.10.2003 by and on behalf of the employer Company and workmen. The said settlement executed in terms of Section 2(p) of the I.D. Act refers to a memorandum of understanding arrived at between the parties, which was also in the nature of 2P settlement only on 22.6.2002. It also referred to about earlier Memorandum of Understanding dated 5.5.2002 so that the Company may overcome its financial crisis and help around 3112 employees - workmen engaged by the Company. It may not be out of place to mention here that the said 2P settlement recites in its beginning that the settlement was required to be executed on account of financial crisis pleaded by the employer as even at that time also about 3112 employees workmen were being provided work by paying them wages only at 60% of rate and remaining employees workmen who could not be engaged were paid at 35% rate of original wages and there was likelihood of not providing 60% of those who are engaged. The employer did not pay the amount of gratuity payable to the workmen concerned, the PF and ESI dues etc. It was pleaded that the Company had huge financial liabilities towards Employees, Bankers Financial Institutions and other creditors. The agreement further recites that secured and unsecured creditors have agreed to sacrifice their interest to a Page 16 of 674 C/SCA/15599/2008 JUDGMENT large extent and the union/ employees have also agreed to forgo large part of their dues. Thus, this was done with a view to sustain the employment of 3112 employees. The MOU and 2P settlement only contains recitals that company therefore decided to dispose of its surplus lands lying outside the factory so as to see that dues of the bankers and Financial institutions i.e. the secured creditors, were paid off their dues as per the settlement with the result that interest and other burdens which the Company was facing would be no longer payable which factor may enable the company to work as economically viable unit. The union was agreed to these terms as 3112 employees were to receive their sustenance by working with company and receiving wages.

3.1 It was provided for revising the pay structure, the allowance payable and company's liability to discharge its statutory responsibility qua employees on phased manner basis. It also contains a clause that so far as wages and dues of the workmen payable prior to December, 2003 were concerned, the Company agreed to pay total of Rs.18 crores lump sum amount in full and final satisfaction of all their wages dues/ wages claims against the Company. The amount of gratuity payable to the eligible employees who had already resigned, retired died etc would be paid as mentioned thereunder. Out of 18 crores payable by the Company as per Item No. 4, first the Company Page 17 of 674 C/SCA/15599/2008 JUDGMENT would disburse Rs.6000/- to each one of the eligible employee on or before 30th October, 2003. It also referred to gratuity amount to be paid as per the agreement and from 1.1.2004 the workmen who could not be offered work would be paid an amount equivalent to 35% of wages etc. payable per month as per the present prevalent then till the time such employees were offered work. However, with effect from 1.7.2004, even if the work was not provided they were to be paid at par along with other employees.

3.2 After the payment of Rs.6000/- each of 18 crores, the remaining amount would be paid to the eligible employees concerned and from 1.7.2004 Rs.1000/- per month to be paid along with regular wages. The management had agreed to give continuity of service to all the employees and therefore, the dues which were payable on that account were agreed to be computed in two parts viz (a) period of service of the employees concerned in the Company till December, 2003; and (b) period of service of the employees concerned for the period after 1.1.2004 and the gratuity was accordingly to be paid and wages were to be paid 100% instead of 80% upto December, 2003 and after 1.1.2004, the gratuity would be computed as per the provisions of the Payment of Wages Act on the basis of wages then payable to the employees concerned and eligibility of 5 years was not to be operative. The Company accepted its Page 18 of 674 C/SCA/15599/2008 JUDGMENT liability to make good payment of 6.61 crores towards PF dues, Rs. 1.73 crores payable towards ESI dues as well as 48 lacs payable as LIC premium to the employees. It was also agreed by them to pay DFT, HDFC and Gruh Finance Loan installments, if deducted but not paid.

3.3 As against this, workmen also agreed that they would not raise their demand for bonus for more than statutory limit of 8.33% of wages for a period of five years but the bonus would be paid as per the provisions of the Bonus Act. No Leave Encashment Allowance, medical reimbursement allowance would be payable. The Age of retirement was shown as 60 years. The independent agencies named thereunder or similar were appointed for realizing of workmen load etc after involving the representatives of the union and employees in the process. The residential quarter falling vacant would not be allotted to any employee and Company once again reiterated that it would dispose of its surplus land so as to see that dues of the employees, bankers, and financial institutions who were the secured creditors were paid of their dues as per the settlement. It was agreed by the company that the land on which the workers and staff residential quarters, schools, entire factory premises and utilities were located would not be disposed of as surplus land as shown in the plan and all the proceeds out of sale of surplus lands would be utilized for the payment of dues of Page 19 of 674 C/SCA/15599/2008 JUDGMENT financial institutions, Surat Municipal Corporation, bankers, BRC cooperative credit society etc., capital expenditure and working capital. In case if there was requirement of selling of accommodation occupied by staff, they were to be provided alternative accommodation to the then existing occupants on the same terms and conditions. The packing, Canteen, security and school would be run on the basis of no profit - no loss. The new recruits to be employed by the Company in future were to be paid wages as per the discretion of the Company subject to that no employee would be employed for wages less than payable under the provisions of the Minimum Wages Act. Those who desire to be employed, had to report within time given there, and it was mentioned that in case if company was not in a position to continue to work, then employees would be entitled for full wages and benefits as if concessions were not given. Each employee were required to file the proforma undertaking

4. The development of events, as could be gathered from the memo of petition, showed that there was a dispute with regard to various aspects including non-compliance of the terms and conditions of the settlement talked hereinabove dated 27.10.2003 and therefore, as per the provisions of the I. D. Act, the conciliation proceedings commenced and ended in failure report, based thereupon, the competent authority referred the dispute for adjudication to the Tribunal vide order dated Page 20 of 674 C/SCA/15599/2008 JUDGMENT 28.9.2005, wherein, it came to be registered as Reference I.T. No. 15 of 2005.

5. RELEVANT FACTS, ORDERS AND PROCEEDINGS IN SPECIAL CIVIL APPLICATION NO. 134 OF 2006:

5.1 In the aforesaid Reference, on account of various handicaps and problems and on account of contentions qua company's recalcitrant approach in compliance with statutory dues, the workmen prayed for appropriate order by way of restraining the Company from alienating its assets as there was serious apprehension qua company alienating the assets so as to jeopardize the legitimate dues and claim of the workmen and elaborate orders came to be passed by this Tribunal on 6.12.2005, whereunder, the Company was restrained from dealing in its assets in any manner and directed reinstatement of those, who had been terminated numbering 7 employees. This order was assailed by the Company employer by preferring Special Civil Application No. 134 of 2006 with following reliefs:

"Para-8:

(A) Your Lordships may be pleased to admit this petition;

(B) Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other Page 21 of 674 C/SCA/15599/2008 JUDGMENT appropriate writ or order holding and declaring that the impugned order is without jurisdiction and that the impugned order is violative of Articles 14 and 19(1)(g) of the Constitution of India and that the same is irrational, harsh and oppressive, erroneous and unjustified and untenable in law;

(C) Your Lordships may be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction quashing and setting aside the impugned order dated 6.12.2005 (Annexure - A) passed by the Industrial Tribunal in Reference (IT) No. 15/2005;

(D) Pending hearing and final disposal of this petition, Your Lordships may be pleased to pass, as and by way of interim relief, appropriate order and direction staying implementation, execution and operation of the impugned order dated 6.12.2005 and restrain the respondents from taking any action in pursuance or for implementation of the pending order dated 6.12.2005;

(E) An ex-parte ad-interim relief in terms of para 8(C) above may kindly be granted;

(F) Any other further relief as may deem fit in the facts of the case be granted."

5.2 In this petition, on 20.2.2006, the Court (Coram:

K.A. Puj, J.) (as he then was) issued notice making it returnable Page 22 of 674 C/SCA/15599/2008 JUDGMENT on 6.3.2006. The said order reads as under:

"Notice, returnable on 06th March, 2006.

In the meantime, the impugned order passed by the Industrial Tribunal, Surat be stayed to the extent of the direction given by the Tribunal to reinstate the employees whose names are mentioned in the operative part of the order dated 06.12.2005. So far as disposal of the assets of the petitioner company is concerned, if BIFR issues any direction it is open for the the petitioner to approach this Court for suitable modification in the order."

5.3 Thus, it becomes clear from the order that Court did not stay the restraint order passed by the Tribunal as per order dated 6.12.2005, impugned in this petition. That order was stayed only qua and to the extent it contains direction for reinstatement of the employees whose names were mentioned in the operative part of the order dated 6.12.2005, meaning thereby, the restraint order remained operative from the date when it was issued i.e. 6.12.2005.

5.4 This Court (Coram: H.K. Rathod, J.) (as he then was) on 20.4.2006 passed elaborate order, wherein also, the Court did not disturb in any manner the restraint order passed by the Tribunal on 6.12.2005 which is impugned in this Special Civil Page 23 of 674 C/SCA/15599/2008 JUDGMENT Application No. 134 of 2006 and para-7 and 8 of said order reads as under:

"7. However, it is made clear to the Industrial Tribunal, Surat that because of the pendency of the present petition, the proceeding of pending Reference No.15 of 2005 shall not be held up and the Tribunal shall have to proceed with the same in accordance with the same. Learned Advocates appearing for the parties made a request for expeditious hearing of the pending reference before the Industrial Tribunal and assured this Court that they will cooperate the hearing before the Industrial Tribunal in respect to pending Reference No.15 of 2005. The Industrial Tribunal, Surat is directed to expedite the reference.

8. Subject to aforesaid observations and directions, as referred above, interim order passed by this Court on 20th February,206 is made confirmed."

Thus, as could be seen from the last paragraph of the order, the original order dated 20.2.2006 came to be confirmed meaning thereby that the order was to enure till final disposal of this petition i.e. Special Civil Application No. 134 of 2006.



5.5          In the interregnum period, as there was no payment,


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        C/SCA/15599/2008                             JUDGMENT

applications came to be filed and ultimately, in those proceedings this Court on 1.11.2012, passed detailed order narrating facts and allowing Civil Application No. 5310 of 2010 filed by workmen for seeking appropriate direction qua the payment of 17B wages and dismissed the Civil Application No. 5760 of 2010. The operative part of said order dated 1.11.2012 reads as under:

"para- 13. So far as main petition being Special Civil Application No. 134 of 2006 is concerned, this Court is of the considered view that since there is non-compliance of section 17B of I.D. Act, this Court has observed that there is clear breach of statutory provision of law on the part of the petitioner company which conduct would disqualify the employer to continue with the petition as the compliance with provisions of section 17B is mandatory and non compliance therewith, should result into non prosecution of the petition itself. However, since civil application No. 5760 of 2010 was pending, this Court is of the view that straightway dismissal of Special Civil Application No. 134 of 2006 without affording opportunity to the employer to pay arrears of 17B would amount to non affording an opportunity. Hence, though the employer does not deserve any further opportunity as could be seen from the earlier orders and narration mentioned herein above, this Court is inclined to pass the following order.

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C/SCA/15599/2008 JUDGMENT The workmen be paid 17-B wages and arrears on or before 6/11/2012 and obtain receipts thereof from the workmen, failing which the petition being Special Civil Application No. 134 of 2006 shall stand dismissed qua the challenge to the order of reinstatement against present workmen. Baring that, the petition is surviving, i.e. challenge to reinstatement will stand dismissed without any further recourse to this Court.

Para- 14. Thus, Civil Application No. 5310 of 2010 is disposed of as being allowed. Civil Application No. 5760 of 2010 stands dismissed, and notice is discharged. However, the employer is directed to pay 17-B wages to the workmen, including arrears on or before 6/11/2012, failing which challenge to reinstatement in Special Civil Application No. 134 of 2006 will stand dismissed."

5.6 This order dated 1.11.2012 was assailed in Letters Patent Appeal being Letters Patent Appeal No. 1472 of 2012. During the proceedings whereof, workmen concerned and company agreed to offer engagement of the workmen at Mumbai with prevalent wages, allowances and accommodation, which was accepted by the workmen and accordingly, Letters Patent Appeal came to be disposed of. The relevant observation of Division Bench while disposing Letters Patent Appeal No. Page 26 of 674 C/SCA/15599/2008 JUDGMENT 1472 of 2012 dated 20.2.2013 are as under:

"para- 3. It has been stated by Mr.Joshi, learned Sr. Counsel for the appellants that the appellant Company was and is ready to pay the present pay scale prevailing for the equivalent post to the workmen concerned and additionally, conveyance allowance and accommodation shall also be provided.

4. Mr. Bukhari, learned Counsel for respondents No.3 to 6, states that if the appellant Company is ready to offer the aforesaid facilities namely; accommodation and conveyance allowance and present pay- scale paid for the equivalent post, respondents No.3 to 6 would be agreeable to accept the same in lieu of payment of wages under Section 17B of ID Act.

5. It has been prayed by the learned Counsel for both the sides that the appeal may be disposed of in the same line.

6. It appears that the question of compliance of Section 17B of the ID Act would arise in the event the reinstatement is not to be effected. If the reinstatement is to be effected, naturally the prevailing pay- scale is to be paid, but when such an offer is made by the employer, the employee cannot say that he will not join the work even if the other facilities as that of conveyance and Page 27 of 674 C/SCA/15599/2008 JUDGMENT accommodation are made available.

7. Under these circumstances, we find that the payment of wages under Section 17B of the ID Act could not have been directed. We may record that we are inclined to interfere in the appeal in view of the specific declaration made on behalf of the appellants that the present pay-scale for the post in question shall be paid and the conveyance allowance and accommodation shall also be provided to the concerned workmen.

8. Hence, it is directed that the appellants shall pay the present prevailing pay-scale for equivalent post and shall also pay conveyance allowance and provide accommodation to the workmen concerned, if the workmen concerned join the duty at the offered place. The aforesaid arrangement shall continue until final disposal of the main Special Civil Application. If the declaration made is not complied with by the appellants for paying the present pay-scale, conveyance and accommodation, it will be open to the respondent workmen concerned to raise the said aspect before the learned Single Judge and it would be open to the learned Single Judge to consider the same for awarding of monitory benefits at the time of final disposal of the petition.

9. The appeal is allowed to the aforesaid extent. The impugned order of the learned Page 28 of 674 C/SCA/15599/2008 JUDGMENT Single Judge is set aside. Considering the facts and circumstances, no order as to costs."

5.7 Now let us resume the chronology again. It is pertinent to note and on record here that the Company employer moved an application being Civil Application No. 11914 of 2007 in Special Civil Application No. 134 of 2006 for seeking modification of the order dated 20.4.2006. In said Civil Application No. 11914 of 2007, the Company has prayed the following reliefs:

"Para-9:

(A) YOUR LORDSHIPS may be pleased to admit and allow the present application;

(B) YOUR LORDSHIPS may be pleased to modify the order dated 20.4.2006 directing deletion of th condition imposed in the order dated 6.12.2005 by the opponent no. 2 in Reference (IT) No. 15/2005 to the extent it restrains the applicant Company from selling, transferring and alienating the properties of the applicant company identified under the scheme sanctioned by the Board for industrial and Financial Reconstruction for the applicant company;

OR ALTERNATIVELY:

YOUR LORDSHIPS may be pleased to Page 29 of 674 C/SCA/15599/2008 JUDGMENT modify the order dated 20.4.2006 staying the operation, implementation and execution of the order dated 6.12.2005 passed by the opponent no. 2 in Reference (IT) No. 15/2005 to the extent it restrains the applicant company from selling transferring and alienating the properties of the applicant company identified under the scheme sanctioned by the Board for Industrial and Financial Reconstruction for the applicant company;

(C) YOUR LORDSHIPS may be pleased to permit the applicant company to sell, dispose of and transfer the properties of the applicant company in accordance with the scheme sanctioned by the Board for Industrial and Financial Reconstruction;

(D) YOUR LORDSHIPS may be pleased to grant interim relief permitting the applicant company to sell, dispose of and transfer the properties of the applicant company during the pendency of the present application in accordance with the scheme sanctioned by the Board for Industrial and Financial Reconstruction subject to the final adjudication of the present application;

(E) YOUR LORDSHIPS may be pleased to grant ad-interim relief in terms of paragraph 9 (D) above;"

5.8 This Civil Application came to be moved on Page 30 of 674 C/SCA/15599/2008 JUDGMENT 13.8.2007 and the application contained reasons as could be seen from the application that the Company had moved an application before the BIFR. The scheme was sanctioned on 1.6.2006, which provided for disposal/sale of assets of the company for settlement of the liability in rehabilitation needs of the Company. Therefore, as provided in the order dated 20.2.2006, while issuing notice, the Court had observed that the petitioners were to approach the Court for suitable modification in the order relying thereupon, this Civil Application being Civil Application No. 11914 of 2007 in Special Civil Application No. 134 of 2006, the prayers have been stated hereinabove.

5.9 In this Civil Application, namely Civil Application for orders No. 11914 of 2007 in Special Civil Application No. 134 of 2006, this Court (Coram: H.K. Rathod, J.) (as he then was) passed the following order on 16.5.2008:

"1. Heard learned Senior Advocate Mr. Kamal B. Trivedi with learned advocate Mr.Naik for M/s.Trivedi & Gupta on behalf of applicants - original petitioners and learned advocate Mr.Dipak R. Dave for the opponent.

2. Present Civil Application is filed by applicants for modification of the order passed by this Court on 20.2.2006 in SCA No.134 of 2006, which is quoted as under :

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C/SCA/15599/2008 JUDGMENT " Notice, returnable on 06th March, 2006.

In the meantime, the impugned order passed by the Industrial Tribunal, Surat be stayed to the extent of the direction given by the Tribunal to reinstate the employees whose names are mentioned in the operative part of the order dated 06.12.2005. So far as disposal of the assets of the petitioner company is concerned, if BIFR issues any direction it is open for the the petitioner to approach this Court for suitable modification in the order."

3. Thereafter, on 20.4.2006, this Court has confirmed the earlier order passed by this Court, which is quoted as under :

1. Heard the learned Advocate, Mr.K.M.Thakar, appearing on behalf of petitioner, learned Advocate Mr.Dipak Dave and learned Advocate, Mr.P.S.Chari, appearing on behalf of respondent.

2. In the present petition, the petitioner -

Company has challenged the interim order passed by Industrial Tribunal, Surat upon Exh.9 in Reference (IT) No.15 of 2005 dated 6th December,2005. The Industrial Tribunal, Surat has passed an interim order to the effect that during the pendency of reference till it decided finally, it is directed to the petitioner not to sell the land and properties Page 32 of 674 C/SCA/15599/2008 JUDGMENT to any person or to transfer or to dispose of such property and land to any other person. The Industrial Tribunal, Surat also granted reinstatement of Shri M.A.Kagji, Shri N.J.Zhariwala, Shri Jayendrabhai M. Shah, Shri N.D.Panjangira, Shri Jitendra A. Patel, Shri Pravinbhai Gangadwala and Shri Rajnikant Karsanbhai. The said reinstatement has been granted on the ground that when the service of such workmen was terminated, at that occasion, the conciliation proceeding was pending before the Conciliation Officer. Therefore, the questions arise that in pending reference where the termination was under challenge which require adjudication by the Industrial Tribunal during the pendency of such reference and demand, whether Industrial Tribunal has jurisdiction or power to pass such kind of interim order granting reinstatement of such workmen in service or not?; whether Section 10(4) permits the Industrial Tribunal to pass such order or not? And whether it can be considered to be full relief during the pendency of dispute itself or not? These are the legal questions arise in the present petition which require detail examination. Hence, Rule. Learned Advocate, Mr.D.R.Dave, and learned Advocate, Mr.Chari, waives service of notice of rule on behalf of respondent.

3. This Court has initially issued a notice made it returnable on 6th March,2006 by an order dated 20th February,2006, which is quoted as under :

Page 33 of 674

C/SCA/15599/2008 JUDGMENT "Notice, returnable on 6th March,2006.

In the meanwhile, the impugned order passed by the Industrial Tribunal, Surat be stayed to the extent of the direction given by the Tribunal to reinstate the employees whose names are mentioned in the operative part of the order dated 6.12.2005. So far as disposal of the assets of the petitioner company is concerned, if BIFR issues any direction it is open for the petitioner to approach this Court for suitable modification in the order."

4. In view of the above interim order passed by this Court, maintaining the same interim order, it is directed to the petitioner to pay last drawn wages inclusive of maintenance allowance to the workmen - Shri M.A.Kagji, Shri N.J.Zhariwala, Shri Jayendrabhai M. Shah, Shri N.D.Panjangira, Shri Jitendra A. Patel, Shri Pravinbhai Gangadwala and Shri Rajnikant Karsanbhai from the date of award dated 6th December,2005 till 30th April,2006 within a period of one month from the date of receiving the copy of this order. It is further directed to the petitioner to pay regularly continuous last drawn wages as required under Section 17B of the I.D.Act,1947 to the concerned workmen, as referred above, till the main SCA is finally decided by this Court.

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5. It is to be noted that by an interim order, the Industrial Tribunal has granted reinstatement. Therefore, this Court has directed to the petitioner to pay wages under Section 17B of the I.D.Act,1947. Still, main reference is to be decided by the Industrial Tribunal, Surat which is pending before the Industrial Tribunal. Learned Advocate, Mr.Dave, submitted that in affidavit-in-reply filed by respondent in Para.3.21, a specific averment has been made to the effect that all the workmen are unemployed, not employed in any establishment and not gainfully employed during the interim period from the date of order. Learned Advocate, Mr.Dave, also submitted that he will file individual affidavit of each workman, as referred above, as required under Section 17-B of the I.D. Act,1947 within a period of 10 days and same will be placed on record of this Court and copy of which will be supplied to the petitioner. After receiving affidavit from the respondent Union in respect to these workmen, in case if petitioner is having any material to show that all the workmen or any of them are employed in any establishment or they are gainfully employed, then, it is open for the petitioner to approach, on that occasion, to this Court by filing necessary Civil Applications. Till this order remains, they should have to implement the directions issued by this Court.

6. Learned Advocate, Mr.K.M.Thakar, submitted that by inadvertence, one fact which is incorrectly mentioned in the Page 35 of 674 C/SCA/15599/2008 JUDGMENT petition that in respect to these workmen, whose names referred above, an individual reference is pending. Therefore, he submitted that petitioner be permitted to delete the said incorrect fact wherever mentioned by the petitioner in the petition. Permission accordingly granted.

7. However, it is made clear to the Industrial Tribunal, Surat that because of the pendency of the present petition, the proceeding of pending Reference No.15 of 2005 shall not be held up and the Tribunal shall have to proceed with the same in accordance with the same. Learned Advocates appearing for the parties made a request for expeditious hearing of the pending reference before the Industrial Tribunal and assured this Court that they will cooperate the hearing before the Industrial Tribunal in respect to pending Reference No.15 of 2005. The Industrial Tribunal, Surat is directed to expedite the reference.

8. Subject to aforesaid observations and directions, as referred above, interim order passed by this Court on 20th February,206 is made confirmed."

4. In present Civil Application, in Para.9(B), following prayers are made by the applicants :

(A) Your Lordships may be pleased to admit Page 36 of 674 C/SCA/15599/2008 JUDGMENT and allow the present application.

(B) Your Lordships may be pleased to modify the order dated 20.4.2006 directing deletion of the condition imposed in the order dated 6.12.2005 by the opponent No.2 in Reference (IT) No.15/2005 to the extent it restrains the applicant company from selling, transferring and alienating the properties of the applicant company identified under the scheme sanctioned by the Board for Industrial and Financial Reconstruction for the applicant company;

OR ALTERNATIVELY Your Lordships may be pleased to modify the order dated 20.4.2006 staying the operation, implementation and execution of the order dated 6.12.2005 passed by the opponent No.2 in Reference (IT) No.15/2005 to the extent it restrains the applicant company from selling, transferring and alienating the properties of the applicant company identified under the scheme sanctioned by the Board for Industrial and Financial Reconstruction for the applicant company;

(C) Your Lordships may be pleased to permit the applicant company to sell, dispose of and transfer the properties of the applicant company in accordance with the scheme sanctioned by the Board for Industrial and Financial Reconstruction;

Page 37 of 674

C/SCA/15599/2008 JUDGMENT (D) Your Lordships may be pleased to grant interim relief permitting the applicant company to sell, dispose of and transfer the properties of the applicant company during the pendency of the present application in accordance with the scheme sanctioned by the Board for Industrial and Financial Reconstruction subject to the final adjudication of the present application;

(E) Your Lordships may be pleased to grant ad-interim relief in terms of Paragraph 9(D) above;

(F) Your Lordships may be pleased to grant any other and further relief/s as may be deemed just and proper in the interest of justice and fitness of things."

5. The BIFR has granted the permission to the applicants to sell the assets of the applicants - original petitioners as per Annexure- III (Page-50 and 51) and last Item at Page-51 plant, machinery and equipments of POY plant of BRC on as is where is basis.

6. Learned Senior Advocate Mr.K.B.Trivedi has made it clear that present applicants seek permission from this Court by way of modification of earlier order to sell the property, plant and machinery and equipments of POY plan of Page 38 of 674 C/SCA/15599/2008 JUDGMENT BRC at Surat on as is where is basis only. Except that, no modification or permission is sought by original petitioners.

7. The order passed by BIFR dated 1.6.2006 where the respondent - present opponent Union was a party to the proceedings and in their presence, aforesaid order was passed by BIFR on 1.6.2006. This order is not challenged by present opponent to the higher forum till date and no stay is operating against the aforesaid order passed by BIFR dated 1.6.2006.

8. Considering the entire order passed by BIFR dated 1.6.2006 and condition incorporated in the order for selling the property in question (Page-50 and 51), the earlier order passed by this Court is modified to the effect granting permission to the original petitioners to sell the properties - plant and machinery and equipments of POY plan of BRC at Surat on as is where is basis as per Clause VII

(ix) of Annexure-III which provide "any sale of assets of the company would be effected through Asset Sale Committee(s) as per the guidelines issued by BIFR. The entire sales proceeds would be used as per the scheme sanctioned or as per the directions of BIFR.". Whatever the sale price is received by the petitioner, same shall be deposited before the Registry of this Court immediately with a copy of sale deed and that amount will not be utilized by the petitioner for any other purpose.

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             9.   Considering        the        aforesaid

observations and directions, the matter is adjourned to 23.6.2008 for further orders."

[emphasis supplied] 5.10 On 23.6.2008, this Court (Coram: H.K. Rathod, J.) (as he then was) passed the following order:

"Learned Advocate Mr. KB Naik for M/s. Trivedi and Gupta for the petitioner submits that in view of the order of this court, sale is not finalised and bids have been invited which will take some time to finalize upto 14.7.2008. Learned Advocate Mr. Dave submits that the respondent has not been called upon by the applicant. However, the applicant shall have to comply with the order of this court before finalizing bids. Accordingly, matter is adjourned to 14.7.2008."

5.11 This Civil Application and record pertaining thereto indicate that thereafter there was no further development or orders so far as prayer for modification and/or sale as per the direction of BIFR is concerned.

5.12 It reveals from the record that one gentleman called Mahendra Shankarbhai Patel preferred Civil Application being Civil Application No. 5308 of 2008 in Special Civil Application Page 40 of 674 C/SCA/15599/2008 JUDGMENT No. 134 of 2006 on 30.4.2008 with following prayers:

"(A) Your Lordships will be pleased to admit and allow this application;

(B) Your Lordships will be pleased to join the applicant as party respondent No.3 in the main Special Civil Application No 134 of 2006 in the interest of justice;

(C) Such other and further relief that is just, fit and expedient in the facts and circumstances of the case may be granted"

Thus, prayers were made on the ground that revenue survey No. 151 and 57 admeasuring 5,60,000 sq.mt. situated in the sim of village: Udhana village and owned by the employer company and one party named by the applicant being Mahavir Potubhai, Power of Attorney of Rajendra K. Patel, Chairman of M/s. Shiv Industries Cooperative Society has purchased the aforesaid land on 11.10.2002 and then after one Shri Raman L. Ahir has purchased the land bearing survey No. 151 and 57 admeasuring 5,60,000 sq.mt. and copy of agreement to sale was annexed, which was annexed, which suppose to have been executed on 11.10.2004 and some land is plotted in sub-plot No. 9 to 51 admeasuring 7647.12 sq. yard is put to sale. He was likely to incur huge losses and he submitted that he had filed Regular Civil Suit No. 139 of 2008 before the learned Civil Judge (SD) Surat and thus, he had shown to be interested party Page 41 of 674 C/SCA/15599/2008 JUDGMENT for seeking relief for being joined and impleaded as party, which came to be allowed by this Court (Coram: H.K. Rathod, J.) (as he then was) vide order dated 1.5.2008. The relevant observation of the Court reads as under:

"para-4. Therefore, considering the averments made in this application and also considering the submissions of the learned advocates for the parties, prayer made in para 8(B) of this application is allowed. Accordingly, applicant is considered to be party respondent No.3 in the main matter being SCA No.134 of 2006, at the costs of the applicant. Opponent NO.1 original petitioner shall have to supply copy of the petition with all annexures thereto to the present applicant within ten days from the date of receipt of copy of this order.

para-5. With these observations and directions, this civil application is disposed of."

5.13 It appears from the record that employer Company and the petitioner in Special Civil Application No. 134 of 2006 preferred Letters Patent Appeal No. 1263 of 2008 in Civil Application No. 5308 of 2007 in Special Civil Application No. 134 of 2006, praying as under :

"para-6:

(A) Your Lordships may be pleased to Page 42 of 674 C/SCA/15599/2008 JUDGMENT quash and set aside the impugned judgment and order dated 1.5.2008;

(B) Your Lordships may be pleased to grant any other and further relief/s as may be deemed just and proper in the interest of justice and fitness of things."

Thus, the order passed by this Court on 1.5.2008 permitting said Shri Mahendra S. Patel to be party respondent no. 3 was assailed by the employer and the averments and grounds mentioned would indicate that the opponent no. 1 Mahendra S. Patel was not an essential party nor was he said to be a necessary party and hence the order joining him could not have been passed by this Court.

5.14 This Letters Patent Appeal came to be allowed vide order dated 7.4.2010 by the Division Bench of this Court (Coram: Miss. R.M. Doshit & M.D. Shah, JJ..) on the ground that in a dispute between the workmen and company, third party buyer of land and sale is cancelled could not have been joined as party proper and controversy of that rests there.

Thus, proceedings which had arisen out of and in respect of interim order passed by the Tribunal on 6.12.2005 in respect of assets as well as for reinstatement of the 7 employees named thereunder culminated into preferring of this Special Civil Page 43 of 674 C/SCA/15599/2008 JUDGMENT Application No. 134 of 2006 and other Civil Application, which have been discussed hereinabove. Civil Application No. 11914 of 2008 was ordered not being disposed of and only operative order is that of this Court dated 16.5.2008 and the matter rests there.

6. It is most appropriate to mention here that the demands raised by the Union workmen were as many as 18 and the agreed to them were touching upon or in respect of the non- compliance of terms and conditions of the settlement. The demand no. 9 was pertaining to payment of gratuity to those, who are entitled to receive same as per the settlement, meaning thereby, it was a cause espoused or likely in respect of those claimants in whose case, there was an unequivocal admission on the part of company employer to pay them gratuity amount, in other words, there was no lis or dispute qua the entitlement to receive gratuity. The dispute was in respect of non-payment thereof, as agreed by the employer that demand was forming part of general demands numbering 18, which came to be referred to the competent authority i.e. Tribunal, as stated hereinabove. As the demand was pertaining to those claimants, who were in dire need of imminent help, the said demand was taken up for adjudication for giving some imminent succor to those who were left out or who could not wait till the process of entire adjudication which was likely to take some more time.

Page 44 of 674

C/SCA/15599/2008 JUDGMENT Accordingly, the adjudication of that issue was taken up, which resulted into passing of award, which is generally referred as 'Part-I' award vide order dated 20.10.2007.

7. RELEVANT FACTS IN SPECIAL CIVIL APPLICATION NO. 3916 OF 2008:

7.1 The said Part-I award rendered in I.T. Reference No. 15 of 2005 gave rise to filing of petition being Special Civil Application No. 3916 of 2008. In this matter, it would be advantageous and expedient to make a reference as the things have developed.

7.2 The employer Company, by way of this petition being Special Civil Application No. 3916 of 2008 challenged the Award dated 20.10.2007 and prayed that this Court may declare that the Award is unconstitutional, illegal, inequitable, discriminatory, unreasonable and beyond the jurisdiction and authority and prayer was made for quashing and setting aside the same.

Prayers of Special Civil Application No. 3916 of 2008 read as under:

"(A) YOUR LORDSHIPS may be pleased to admit and allow the present petition;

Page 45 of 674

C/SCA/15599/2008 JUDGMENT (B) YOUR LORDSHIPS may be pleased to issue writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction holding and declaring that the impugned award is unconstitutional, illegal, inequitable, discriminatory, unreasonable, beyond jurisdiction and without authority of law and the said reference for demand of gratuity is not maintainable and that the Ld. Industrial Tribunal, Surat does not have jurisdiction to entertain the demand in Reference (IT) No. 15 of 2005 for gratuity;

(C) YOUR LORDSHIPS may be pleased to issue writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction, quashing and setting aside the impugned award dated 20.10.2007;

(D) YOUR LORDSHIPS may be pleased to stay the execution, operation and implementation of the impugned award dated 20.10.2007 during the pendency and final disposal of the present petition;

(E) YOUR LORDSHIPS may be pleased to grant an ex-parte ad-interim relief in terms of Para 10(D) above;

(F) YOUR LORDSHIPS may be pleased to grant any other and further reliefs as may be deemed just and proper in the interest of justice and fitness of things;"

Thus, what is essentially challenged to the Award, was Page 46 of 674 C/SCA/15599/2008 JUDGMENT based upon the grant of lack of jurisdiction and Tribunal to pass Part-I award. In this matter, as the record indicates, the petition was filed on 29.2.2008 and notice came to be issued on 14.3.2008. Thereafter, the matter has not seen the day so far for its admission, as there appears to be no admission order in the matter. The development in the matter indicates that at time, there was an order of payment of Rs.10 lacs. During pendency of this petition, though there was no order of admission there seems to be an order passed by this court recording that the counsel could not argued the matter and dismissed the same for default and of-course, it was restored later on and vide order dated 26.2.2009, this Court (Coram: M.R. Shah, J.) recorded objection for adjourning the matter and while adjourning the matter, it was specifically observed that last chance was granted to the petitioner Company. On 15.4.2009, this Court (Coram:

M.R. Shah, J.) recorded that on earlier occasion, learned counsel appearing for the Company stated that talks of settlement was going on. Though, it was disputed and it was reported that Company through its advocate submitted that to show the bonafide of the Company, the petitioner shall deposit Rs.10 lacs with the Registry of this Court on or before 22.4.2009, meaning thereby, on the petition challenging Part-I award, under which, the original settlement terms was subject matter of adjudication in terms of demand No. 9, which came to be allowed, no interim relief or respite was granted to the Company but company had Page 47 of 674 C/SCA/15599/2008 JUDGMENT voluntarily deposited Rs.10 lacs without their being any effective order staying the operation and implementation of the award. In other words, by 15.4.2009, there was absolutely no order whatsoever qua any respite to the Company, on the contrary, the Company had to deposit Rs.10 lacs and further as could be seen from the development occurred in the matter, the Company had to voluntarily agreed for selling its scrape only for meeting its part of liability and that too in the present petition, under which, the scrape which otherwise, runs into crores of rupees was deposited, to be sold so as to meet with the liability. Till date the matter has not even earned its admission and time and again it has been listed along with matters, as they are off- suits like Civil Applications for direction, Contempt Petitions etc. Suffice it to say at this stage that, in this petition the petitioner Company has challenged the Part-I award, which had remained yet to be discharged fully without their being any effective orders on the part of the Company. In other words, the liability is outstanding as on date also. The details of development qua the selling of scrape, off-suits of Civil Application, as it is stated, are to be dealt with, as and when the Court comes to deal with those applications.

8. RELEVANT FACTS, ORDER AND PROCEEDINGS IN SPECIAL CIVIL APPLICATION NO. 15599 OF 2008:

(1) The workmen of this Company employer through their Page 48 of 674 C/SCA/15599/2008 JUDGMENT Union preferred Special Civil Application No. 15599 of 2008 on 17.12.2008 and prayed as under:

"5. AA writ of mandamus and/or any other appropriate writ, order or direction be issued:

(i) to direct the respondent No. 1 to immediately make the payment of salary of the employees from August, 2008 and further to direct the respondent no. 1 to go on making payment of salary to its employees in accordance with law;

(ii) to declare the action on the part of the respondent no. 1 in withholding the salary of the employees working with it as illegal, unconstitutional and violative of fundamental rights of the members of the petitioner and further be pleased to direct the respondent nos. 2 and 3 to immediately ensure compliance of the provisions of the Industrial Dispute Act, Minimum Wages Act and other Labour law;

(iii) to direct the respondent no. 1 to make the payment of Gratuity, PF and other due and payable amount to those employees who have retired, resigned and/or died;

(iv) Be pleased to direct the respondent nos. 2 to 4 to take immediate action against the respondent no. 1 for the compliance of provisions of labour law as also ensuring immediate payment of due salary to the employees, gratuity and provident fund Page 49 of 674 C/SCA/15599/2008 JUDGMENT amount to the concerned employees.

B. Pending the hearing and final disposal of this petition, the respondent No. 1 may be directed to immediately make the payment of salary of the employees from August, 2008 and further to direct the respondent no. 1 to go on making payment of the salary to its employees in accordance with law as well as respondent no. 1 may be directed to make the payment of Gratuity, PF and other due and payable amount to those employees who have retired, resigned and/or died in the interest of justice;"

Thus, essentially, the petition was filed as the wages were not paid to the petitioner workmen and declaration that the non- payment of wages was illegal, contrary to the provisions of the I.D. Act, provisions of the Minimum Wages Act and other labour legislation and sought directions in respect of payment of salary of the employees, who retired, died and resigned etc. The main plank for making the aforesaid submission was settlement executed by and between the parties, which was the subject matter of order dated 27.10.2003 passed by the Tribunal in Reference Case No. 15 of 2005. In this petition, the Court issued notice on 16.1.2009 making reference to the order passed in Special Civil Application No. 134 of 2008 dated 16.5.2008. This Court on 24.1.2008, while issuing notice, passed detailed order, which reads as under:

Page 50 of 674

C/SCA/15599/2008 JUDGMENT "1. Heard Mr. Dave, learned counsel for the petitioner and Mr. Nirav Joshi, learned counsel for the Nanavati Associates.

2. The employees Union has approached this Court for seeking relief essentially against the respondent No.1 and also against the respondents No.3 and 4 in respect of the statutory dues pending since long, which resulted into untold hardships on the part of the workmen.

3. Shri Dave, learned counsel has submitted that in the petition filed by the Company challenging the award being Special Civil Application No.134 of 2006 and the order was passed on 16.5.2008, whereunder the specific direction is made, which can be set out as under :

"8. Considering the entire order passed by BIFR dated 1.6.2006 and condition incorporated in the order for selling the property in question (Page-50 and 51), the earlier order passed by this Court is modified to the effect granting permission to the original petitioners to sell the properties

- plant and machinery and equipments of POY plan of BRC at Surat on as is where is basis as per Clause VII (ix) of Annexure-III which provide "any sale of assets of the company would be effected through Asset Sale Committee(s) as per the guidelines issued by BIFR. The entire sales proceeds Page 51 of 674 C/SCA/15599/2008 JUDGMENT would be used as per the scheme sanctioned or as per the directions of BIFR.".

Whatever the sale price is received by the petitioner, same shall be deposited before the Registry of this Court immediately with a copy of sale deed and that amount will not be utilized by the petitioner for any other purpose."

4. Mr. Dave, learned counsel has pointed out that in fact surreptitiously the attempt is made to bye-pass the directions contained in the aforesaid order, so as to defeat the legitimate claim of the petitioner. This is pointed out with a view to substantiate the maintainability of the independent petition and as reason for not been in making appropriate application in pending proceedings. Today, the fact remains to be noted that the Company has issued Circular on August 27, 2008, whereunder though it is promised that the employees are not required to report for their work in regular shift, however, they would be also at present on all working days during which the operation activities will remain suspended. Mr. Dave, learned counsel submitted that obstinately this Circular cannot be said to be creating any prejudice, but it is to be viewed along with the conduct of the Company which lead no other view but interference to retiring the individual workman, so as to a serious action on the ground of dereliction of duties and take out wages from him for the period he has worked for the company. The facts remains from August 2008, no employees is Page 52 of 674 C/SCA/15599/2008 JUDGMENT paid single penny nor are the retired employees paid their terminated benefits including gratuity etc. For maintainability of this petition, Mr. Dave, learned counsel relied upon upon the decision in the case of Miscellaneous Mazdoor Sabha V. State of Gujarat & Ors. Reported in GLR 1992 (2) and Apex Court's decision in the case of People's Union for Democratic Rights and Others Vs. Union of India and others reported in AIR 1982 1473.

5. Shri Nirav Joshi, learned counsel for Nanavati Associates, who appears on caveat for the respondent Company, has pleaded under the instructions, however he has contended that as an alternative remedy is available, the petition is not maintainable.

6. This court is under the considered view that when the Company is already before this Court and it is at the Company's instance, some orders have been passed by this Court including depositing the sale proceedings, as can be seen from the order cited hereinabove, the remedy which has been substantiated as an alternative remedy would certainly not remain so efficacious as to bring about the desirous occur to eh present employees numbers in around 2000 and few retired and remained in force numbers is 2050 present working about 1000 retired employees, who have not seen the fruits either of the litigation or of their working. In view of this when the concerned Page 53 of 674 C/SCA/15599/2008 JUDGMENT Authority has also been approached with serious complaint with regard to the contention of the Company respondent No.1 and no action is initiated as submitted by the learned counsel at the bar. This Court is considered view that the objection of availability of alternative remedy is not available to the respondent No.1 and therefore, in these peculiar facts and circumstances of the case, this court is of the view that at this stage, keeping the contention open, the Court has to take some action so as to bring some relief to 3000 and odd workers, who have been left out without salary in these days of galloping inflation, the issuance of the notice would not among to closing and/or setting any contention of the party to maintain this petition, NOTICE returnable on 16.1.2009. Mr. Nirav Joshi, learned counsel waives service of the notice on behalf of the respondent No.1. In the meantime and by returnable date, the respondent No.1 is directed to place on record its reply by way of affidavit and no further time shall be granted in this, failing which it will be presumed that the contentions of the petitioner with regard to surreptitiously alienating the property, so as to defeat right of the petitioner would be believed. The respondent No.2 and 3 shall also take appropriate steps in accordance with law on the complaint received without being influenced in any way by pendency of this petition or petition filed by the Company. If it goes to show any inaction on the part of the respondents No.2 and 3 in respect to the Page 54 of 674 C/SCA/15599/2008 JUDGMENT complaint, also would be viewed very seriously by this Court. Direct service is permitted to other respondents."

(2) On 6.3.2009, this Court (Coram: Ravi R. Tripathi, J.) (As he then was) passed the following order:

"The Chairman of the Board of Directors of respondent No.1, The Baroda Rayon Corporation Limited, is directed to remain personally present before this Court on 9.3.2009 at 10.30 A.M. It will be in the fitness of things if the Chairman is informed to come with a definite proposal and the amount to be paid to the employees who are not paid since August 2008 or else the Court will have no other alternative but to take necessary coercive steps for having sold the property - the land, which was otherwise injuncted by this Court.

Direct service is permitted today.

A copy of this order be made available to Mr. Nirav Joshi, learned advocate appearing for M/s. Nanavati Associates for respondent No.1 for its onward communication for compliance.

The matter is adjourned to 9.3.2009."

Thus, the Court clearly observed that the order was passed Page 55 of 674 C/SCA/15599/2008 JUDGMENT on account of inaction on the part of Company in making payment of dues to the workmen since at least August, 2008.

(3) On 9.3.2004, the Court (Coram: Ravi R. Tripathi, J.) (As he then was) passed the following order:

"Pursuant to order dated 6th March 2009, whereby the Chairman of the Board of Directors of respondent no.1-Baroda Rayon corporation Limited was directed to remain personally present before this Court today at 10.30 AM, learned senior advocate Mr.Mihir H. Joshi, learned advocate appearing for respondent no.1-Baroda Rayon corporation Limited states that Shri Pratapsinh Gaekwad, who was Managing Director till 12th August 2008 is present before the Court as the Chairman of the of the Board of Directors of the respondent- Corporation has suffered a fracture on a wrist. Shri Pratapsinh Gaekwad requests that an indulgence be granted to condone the absence of the Chairman Board of Directors of respondent no.1. Learned senior advocate Mr.Joshi also wants time to file a detailed application setting out the circumstances which led to execution of sale deed despite there being Tribunal's order in the month of December 2006, which is neither vacated nor altered by this Court in February 2006 and also placing on record all the relevant factors and the proposed action by which the interest of workers will be secured in a best possible manner.

Page 56 of 674

C/SCA/15599/2008 JUDGMENT

2. For the present presence of the Chairman of the Board of Directors of respondent no.1-Baroda Rayon corporation Limited is dispensed with. The petition is adjourned to 23rd March 2009."

(4) On 31.3.2009, the Court passed the following order:

"The learned advocate for the petitioner seeks permission to implead following parties as party respondents:-

1. Clearwater Capital Partners India Pvt. Ltd.

2. Yes Bank Ltd.

3. Axis Bank Ltd.

4. Halcyon Enterprises Pvt. Ltd.

Permission is granted.

Office is directed to issue NOTICE to the newly added respondents returnable on 15.04.2009. It will be open for the petitioner to serve the newly added respondents by Registered Post A.D., in addition to regular mod of service."

(5) On 17.4.2009, the Court passed the following order:

"It is reported jointly by the learned advocates appearing for the contesting parties that the parties have exchanged the Page 57 of 674 C/SCA/15599/2008 JUDGMENT proposals for an amicable settlement of the dispute.

It is expected that all the parties, i.e. creditors, company and the workers, will put their heads together and if required, by meeting in person, to see that such an object is achieved.

S.O. to 24.04.2009."

(6) On 24.4.2009, the Court passed the following order:

"Mr.Dipak Dave, learned advocate for the petitioner and Mr.Gandhi, learned Advocate for Nanavati Associates apprise the Court that the meeting for exploring the possibility of an amicable settlement of the dispute involved in the matter have though progressed but have not covered the entire distance.

The learned advocates are of the opinion that possibly with the indulgence of the Court that path may become easier.

Mr.Dave, learned advocate for the petitioner states that respondent no.5 could not be served at the address available with the petitioner.

Learned advocate for respondent to supply fresh address of respondent No.5.

Page 58 of 674

C/SCA/15599/2008 JUDGMENT The Registry is directed to issue Notice to respondent No.5 on a new address returnable on 5th May, 2009.

Direct Service permitted."

(7) On 12.5.2009, the Court passed the following order:

"Heard learned Senior Advocate Mr. Mihir Joshi with M/s. Nanavati Associates for respondent company. The learned advocate for the respondent company to place on record statement of debts and assets of the company and also the figure of sales. S.O. to 15.5.2009."

(8) On 15.5.2009, the Court passed the following order:

"Learned senior advocate Mr.Mihir H. Joshi with Messrs Nanavati Associates appearing for respondent no.1 places on record a copy of instructions received by him wherein figures of various debts and assets of the company are set out. The learned senior advocate states that further details of these figures will be supplied on reopening after vacation. Adjourned to 16th June 2009."

(9) On 22.6.2009, the Court passed the following order:

Page 59 of 674

C/SCA/15599/2008 JUDGMENT

1. There is consensus among learned counsels appearing for respective parties that in this matter let there be mediation so as to put an end to the entire dispute between the parties. Hence it is ordered to be referred to the Mediation Center, so that the counsels can have the benefit of mediation and the matter be settled. In case it is not settled, the matter be placed before this Court for final disposal.

2. It would be open to the counsels to approach Mediation Center for follow-up on a date fixed by the Center. However, learned counsels say that they will approach the Center on 25/6/2009.

3. Registry is directed to immediately transmit the matter to the Mediation Center."

(10) The interim report of mediator dated 11.9.2009 came to be placed on record, which reads as under:

"GUJARAT HIGH COURT MEDIATION CENTRE AHMEDABAD.

MEDIATION CASE NO. 90 OF 2009 REFERRED FROM:

SPECIAL CIVIL APPLICATION NO. 15599 OF 2008:

             Baroda Rayon Employees Ekta
             Union              ... Mr. Dipak R. Dave.
                       V/s.


                              Page 60 of 674
 C/SCA/15599/2008                             JUDGMENT



      Baroda Rayon Corporation Ltd.
      &7            .. Nanavati Associates- I.

      Mediator : Mr. P.C. Master:

                   INTERIM REPORT:

The petitioner is Union who has espouse the cause of the workers who were working in the Baroda Rayon Corporation for their legal dues and grievances as stated and explained in details in the petition being S.C.A. No. 15599 of 2008.

During the pendency of this petition, this Hon'ble Court (Coram: Hon'ble Mr. Justice. S.R. Brahmbhatt) by order dtd. 22.6.2009 referred the matter to mediation center and the said matter is referred to me for mediation.

During the pendency of mediation, the parties and their advocates appeared. The parties have deliberated and discussed the matter at length and after negotiating the various aspect of the matter, the parties have shown interest to settle the whole dispute for which the parties are exchanging their offers and the terms and conditions.

However, today i.e. on 11th September, 2009 about 125 to 130 employees including ladies and gents who were and are the workers of the company and residing in the quarters provided by the company have remained present for ventilating grievances. They have made grievance that the light and water is not being supplied by the company properly and they hardly get water about 20 minutes and that too not clean water Page 61 of 674 C/SCA/15599/2008 JUDGMENT which can be used for drink and electricity which is supplied by the company is only for two hours and that too at present the electricity wires of the company are disconnected and it is a say of the company that the electricity wires has been stolen by someone. The workers have made hue and cry as the electricity and water which is essential requirement for the living of human being, are not been provided, though the management has been informed. They have also given in writing the representation about re-starting light and water by the Company.

It appears from the papers of the petition that, the Union has earlier made the grievances before Hon'ble Court about light and water and that point of time, the Company has filed an affidavit of Assistant Manager (Legal) ion 2nd February, 2009 before the Hon'ble Court and in the said affidavit it has been stated in paragraph 5 sub para-2 that the respondent Company has no objection if this Hon'ble Court directs Surat Electricity Board and Surat Municipal Corporation to supply electricity and water provided it would not create any residential right in favour of the employees past as well as present who are occupying the residential accommodation provided by the Respondent Company, and they agree to pay said supply directly to the concerned authorities and has also say something about alternative offers also. In view of this the Union and workers have stated that they are prepared to take water connection as well as electricity connection from the concerned authorities, and therefore, they may be allowed to move the Hon'ble Court by filing a Civil Application for appropriate orders and directions.

Page 62 of 674

C/SCA/15599/2008 JUDGMENT The Union and the workers have seriously made the grievances that they are not getting the water and electricity continuously, not only that may times electricity and waters are being stopped because of some financial difficulties and therefore, it is absolutely necessary to have some necessary directions from Hon'ble Court and therefore, the parties are particularly Union may be allowed to move the Hon'ble Court for necessary direction for supply of water and electricity.

It may be necessary to point out the Hon'ble Court that in today's meeting it has been decided during the negotiation that the Union and the workers will take steps to start the electricity immediately and they will bear the expenses till the necessary orders are obtained and for which the company will not take any objection. The Company's Ld. Advocate Ms. Kshamta who is present has assured that she will inform the company immediately for not taking any objection if the workers who are residing in the quarters starts electricity immediately, on their own.

Further negotiation will be held thereafter for settling the dispute.

On behalf of the Union Ld. Advocate Mr. Deepak Dave states that he would like to move the Hon'ble Court by filing the Civil Application on 14th September, 2009."

(11) And final report dated 30.12.2009 along with accompanying documents, which have been signed by the Page 63 of 674 C/SCA/15599/2008 JUDGMENT counsel for the parties under the instructions of the parties were submitted, which reads as under:

"No. MDTN/21/2010 Date: 15-01-2010.

To The Principal Registrar (Judicial) High Court of Gujarat At Sola, Ahmedabad - 60.

Sub.: Settlement of case in Medication.

Sir, With reference to the subject noted above, I am to state that you had sent copy of case papers of Baroda Rayon Employees Ekta Union V/s. Baroda Rayon Corporation Ltd. & 7 in Special Civil Application No. 15599 of 2009, with the copy of the order of the Hon'ble Court. The Hon'ble Court (Coram: S.R. Brahmbhatt, J.) referred the case to the Mediation Centre to resolve the dispute between the parties by order dated 22.6.2009.

The parties appeared before the Mediator Mr. P.C. Master at the Mediation Centre. As per the report of the Mediator Mr. P.C. Master, the parties have deliberated and discussed the matter at length and after negotiating the various aspects of the matter, the parties have shown interest to settle the whole dispute for which the parties have exchanged their offers and terms and conditions, which are stated in Enclosure-I herewith.

Therefore, I am sending herewith the Page 64 of 674 C/SCA/15599/2008 JUDGMENT original note of Mediator Mr. P.C. Master along with the Enclosure-I signed by the advocates for the parties, with a request to place it before the Hon'ble Court.

Thanking you.

Yours faithfully (R.G. Devdhara) I/c. Coordinator, Organizing Committee, High Court Mediation Centre."

"GUJARAT HIGH COURT MEDIATION CENTRE AHMEDABAD.

MEDIATION CASE NO. 90 OF 2009 REFERRED FROM:

SPECIAL CIVIL APPLICATION NO. 15599 OF 2008:


Baroda Rayon Employees Ekta
Union                   ...                 Mr. Dipak R. Dave.

V/s.

Baroda Rayon Corporation Ltd.
&7                 .. Nanavati Associates- I.

                Mediator : Mr. P.C. Master

                          REPORT:

The petitioner is Union who has espouse the cause of the workers who are/were working in the Page 65 of 674 C/SCA/15599/2008 JUDGMENT Baroda Rayon Corporation for their legal dues and grievances as stated and explained in details in the petition being S.C.A. No. 15599 of 2008.

During the pendency of this petition, this Hon'ble Court (Coram: Hon'ble Mr. Justice. S.R. Brahmbhatt) by order dtd. 22.6.2009 referred the matter to mediation centre and the said matter is referred to me for mediation.

During the pendency of mediation, the parties and their advocates appeared before me. The parties have deliberated and discussed the matter at length and after negotiating the various aspect of the matter, the parties have shown interest to settle the whole dispute for which the parties are exchanging their offers and the terms and conditions, which are stated in Enclose-I herewith.

It may be noted that during the pendency of this mediation one interim report was filed before the Hon'ble Court for passing necessary order with regard to the difficulties faced by the employees who are residing in the quarters provided by the Company with regard to light and water and the Hon'ble Court was pleased to pass order in C.A. No. 10103 of 2009. Thereafter, further negotiation took place between the parties i.e. the Union and the Employer. Earlier Mr. Keyur Gandhi, Advocate for Nanavaty Asso. was appearing before the mediator but however later Mr. Kunan Naik, Advocate for Trivedi & Gupta Advocates appeared in the matter. After prolong discussion and deliberation with the parties, I felt that parties are agreeable to settle the whole dispute between them. The company has principally agreed and shown its willingness to pay the dues of the employees and therefore the company has agreed to disposal of its Page 66 of 674 C/SCA/15599/2008 JUDGMENT assets in accordance with law. The company has also agreed to provide audited balance sheet upto March, 2009 which will include details of the property of the Company.

Union has stated that it is also ready for settling the dispute with the company and for disposal of the property i.e. sale of the assets of the company, it will bring a buyer who can pay the dues of the banks/financial institutions, employees and other legal dues of the different authorities and said buyer (purchaser) will make an application before the Court for the purchase of the assets of the company by giving full details. The union has also agreed to provide detailed break up of outstanding dues of the labours.

Both the parties state that to settle the entire matter and so as to put the entire matter at rest, consent of banks/financial institutions as well as statutory authorities is required and therefore some orders will have to be passed by the Hon'ble Court and therefore, it is necessary to place the matter before the Hon'ble Court so that, parties can file necessary application for completing the formalities. Therefore, the company and the Union have agreed before me to settle the whole dispute between them for the payment of dues of the employees and the company is prepared to dispose of its assets and for that purpose, Union will bring a buyer who can pay the dues of the banks/financial institutions, statutory authorities and employees. But because of technical difficulties which is coming in the way the matter is required to be placed before the Court for passing necessary orders like obtaining the consent of banks/ financial institutions, statutory authorities etc. and by this way this matter is being sent back to the Hon'ble Court for further adjudication.

Page 67 of 674

C/SCA/15599/2008 JUDGMENT Hence, as the company and union principally agreed to settle the disputes between them, this mediation is successful to that extent.

It goes without saying that according to the union, the union is representing all the workers of the company that is past and present who have not been paid their legal dues and company is also ready to pay the legal dues of all the employees of the company on sale of the assets (properties) of the company.

I appreciate the roll of the Advocates of both the parties.

Date: 30.12.2009 Sd/-

(P.C. Master) Mediator"

Encl.: Agreed undertaking between the Co. & Union.

ENCLOSURE-I:

1) The Union has agreed to find a buyer for the assets of the company for a value of around Rs.500 crores, who shall make an application before the Hon'ble High Court of Gujarat in SCA No. 15599/2008 for purchase of assets of the company and the union will insist that the buyer may deposit reasonable amount under the orders of the Hon'ble Court.

2) The company has agreed for disposal of all its assets in accordance with law.

3) The company has agreed to provide audited balance sheet upto March, 2009 which will Page 68 of 674 C/SCA/15599/2008 JUDGMENT include details of the assets of the Company.

4) The union has agreed to provide detailed breakup of outstanding dues of the labour.

5) The company and the union has agreed that the proceeds received from the buyer will be applied in clearance of the dues of the banks/financial institutions/ other secured creditors, the statutory dues, the labour dues and then all legal dues / legal liabilities of the company.

            Sd/-                                  Sd/-
   Deepak R. Dave                     Trivedi & Gupta Advocates
Advocate for the Union                Advocate for the Company
Under the instructions of             Under the instructions of
the Client.                           the client"

(12) The petitioner of Special Civil Application No. 15599 of 2008 i.e. Union preferred Civil Application No. 599 of 2010 in Special Civil Application No. 15599 of 2010. The said Civil Application came to be filed on 24.1.2010, which contained the following prayers on the ground that buyer was found by them, which would purchase the land and property and assets of the Company at an amount which would meet with company's all statutory liability as well as contractual liability between the workmen towards wages etc. Page 69 of 674 C/SCA/15599/2008 JUDGMENT Prayers in Civil Application No. 599 of 2010 "para-14:

(A) Be pleased to admit and allow this application;

(B) Be pleased to permit the applicant to implead "Gayatri Trading & Co. Through its Partner, Devendrasinh K. Desai, Having office at Plot No. 44/1, Pruthvi Industrial Estate, Danudyog Sahakari Sangh Ltd., Pipariya, Silvassa-396 230 D&NH" as respondent no. 9 and "The Secretary, Revenue Department, New Sachivalaya, Gandhinagar" as respondent no. 10 in the main petition;

(C) Be pleased to permit the applicant to add the prayer clause Nos. 5(A)

(v) and 5(A)(vi) as mentioned in paragraph No. 11 hereinabove in the main petition;

(D) Any other and further relief or reliefs to which this Hon'ble Court deemed fit, in the interest of justice; may kindly be granted."

(13) In the proceedings of Civil Application No. 599 of 2010, this Court on 2.2.2010 passed the following order:

"1). Shri K.B. Naik submitted that he is aware about the orders passed by this court (Coram: R.R. Tripathi J.)(As he then was) on 12.5.2009 and 15.5.2009. He is also Page 70 of 674 C/SCA/15599/2008 JUDGMENT aware about the agreement between the parties whereunder, the company was under obligation to provide audited balance sheet up to March,2009, which would include the details of assets of a company.

2). In view of this, he seeks time only up to 8th February,2010 for producing the balance sheet up to March,2009.

             3). Quarterly      balance        sheet   so     far
             prepared.

4). Those documents should be part of the affidavit which is to be filed by the responsible officer not below the rank of a Director.

5). In view of this, the matter is posted on 8th February,2010. The petitioners in the petition are also to provide the exact figure of dues under different heads and this will also include all dues towards gratuity amount for which a separate petition being Special Civil Application No.15599 of 2008 is filed, which is pending before this court."

(14) The workman filed an affidavit in these proceedings indicating the dues while taking the same on record, the Court passed the following order on 8.2.2010, which reads as under:

"Workers affidavit is taken on record, Page 71 of 674 C/SCA/15599/2008 JUDGMENT which indicates dues of the workers.

Mr. Joshi, learned Senior Counsel with Mr. Naik for respondent No. 1 submitted that Civil Application has been taken out being Civil Application (St) No. 1700 of 2010 for seeking extension of time to comply with the directions issued by this Court dated 2.2.2010. The office is directed to list Civil Application (St) No. 1700 of 2010 along with this Civil Application on 09.02.2010."

Thus, from the aforesaid order, it becomes clear that one more application being Civil Application (Stamp) No. 1700 of 2011 has been filed in this Civil Application for extension of time for filing affidavit as envisaged in the order dated 2.2.2010.

(15) On 4.3.2010, this Court (Coram: H.K. Rathod, J.) (as he then was) passed the following order:

"Heard learned advocate Mr. Nayak for M/s. Trivedi and Gupta appearing on behalf of Baroda Rayon Corporation Limited - Company, learned Senior advocate Mr. R.R. Marshal with learned advocate Mr. Savan Pandya appearing on behalf of Gayatri Trading Corporation Limited - Purchaser, learned senior advocate Mr. Kavina with learned advocate Mr. Singhi appearing on behalf of Yash Bank - Secured Creditor, learned advocate Mr. Mayur Pandya with learned advocate Mr. Dipak Dave Page 72 of 674 C/SCA/15599/2008 JUDGMENT appearing on behalf of Union, learned advocate Mr. Dipak Raval appearing on behalf of Employees concerned and learned advocate Mr. A.K. Clerk appearing on behalf of Workmen.

According to learned advocate Mr. Dipak Dave, total amount as per their calculation being a dues of workmen would come to more than Rs.300 crores, which covers the dues of clients represented by learned advocate Mr. Dipak Raval and learned advocate Mr. Clerk.

This figure of dues amount of more than Rs.300 crores is not accepted by Baroda Rayon Corporation Limited - Company.

Therefore, it is directed to Baroda Rayon Corporation Limited - Opponent No.1 Company to calculate the due amount of each employee including those who have retired, died and existing employees till the date on which they become entitled, meaning thereby that total dues of each workman must have to be calculated according to law by Baroda Rayon Corporation Limited - Opponent No.1 Company and to be placed by affidavit on record before this Court on 9 t h March 2010.

For calculating due amount by Baroda Rayon Corporation Limited, if any help or material is required from Union, that will Page 73 of 674 C/SCA/15599/2008 JUDGMENT have to be supplied by learned advocate Mr. Dipak Dave to Company.

Learned advocate Mr. Nayak made a clear statement before this Court on behalf of Company that there is no objection on behalf of Company for selling entire properties mentioned in Affidavit-in- Reply dated 18th February 2010 belongs to Baroda Rayon Corporation Limited - Opponent No.1 Company.

Accordingly, matter is adjourned to 9th March 2010."

Thus, the Company employer was directed to calculate the dues and to be placed by affidavit before this Court on 9.3.2010.

(16) It seems that on 9.3.2010, one lady named Manisha Patel daughter of Kanubhai Patel, adult, filed an affidavit along with annexure, which reads as under:

"I, Manisha Patel, daughter of Shri Kanubhai Patel, adult, presently residing at Surat, do hereby solemnly affirm and state on oath as under:

1. I humbly state that the subject Civil Application was listed before the Hon'ble Court on 4.3.2010. The Hon'ble Court on Page 74 of 674 C/SCA/15599/2008 JUDGMENT

4.3.2010 passed an order directing the opponent company to calculate the dues of the workman of the opponent company including those workmen who had retired and died and place with an affidavit on the record before the Hon'ble Court. I humbly state that pursuant to the direction, the opponent company has calculated the dues of the workmen upto 31.8.2008 (i.e. upto the date when the opponent company closed down its operations) which is produced herewith and marked as ANNEXURE - AI."

Annexure - A1 reads as under:

Sr Description                                 Total      Grant
                                                          Total
                                                          Figure in
                                                          lacs
1   Gratuity                                   2502
    (a) On Roll as on 31.08.2008
    (b) Left as on 31.8.2008                   1035
    (c) Death                                  114        3651
2   Bonus
    (a) April - 2006 To March 2007             75
    (b) April - 2007 To March 2008             75
    (c) April - 2008 to August 2008            31         181
3   PF as on 31.07.2008                        604
4   ESI as on 31.07.2008                       230
                                                          834
5   Adhoc Allowance (5%)

                             Page 75 of 674
         C/SCA/15599/2008                              JUDGMENT




    (a) 5% w.e.f. 01.01.2007 (arrears of 12    70
    months)
    (b) 5% w.e.f. 01.01.2008 (arrears of 6     38         108
    months)
6   Past Salary / wages Dues /wages Claim      767        767
    (18 Crs.)
    (paid Rs.1033)
7   LIC & Gruh Finance                         48         48
8   Salary - Wages
    Aug-2008                                   148        148

    Grand Total                                5737       5737

The deponent of the affidavit unfortunately has not mentioned as to in what capacity she could filed the affidavit on behalf of the Company. Be that as it may.

(17) On 10.3.2010, this Court (Coram: H.K. Rathod, J.) (as he then was) passed the following order:

"Heard learned advocate Mr.Dipak Dave for workmen, learned advocate Mr.Kunal Naik for M/s.Trivedi & Gupta on behalf of respondent No.1, learned AGP Ms.Mathur for respondent Nos.2 and 3, learned advocate Mr.Sandeep Singhi for respondent No.6, and learned Senior Advocate Mr.R.R.Marshall for Gayatri Trading & Company (applicant in CA No.1440 of 2010).

Page 76 of 674

C/SCA/15599/2008 JUDGMENT Today, learned advocate Mr.Naik places on record a dues of workmen which has been calculated by Company in CA No.599 of 2010. Copy thereof is supplied to learned advocate Mr.Dave. Same is taken on record.

Today, matter is discussed with all learned advocates appearing for respective parties with a view to find out some solution.

Learned Senior Advocate Mr.Marshall submitted that he will put condition on record that on that basis the applicant is prepared to purchase the property of Company as mentioned in affidavit dated 18.2.2010 and details of assets given at Annexure-I (page-17).

Learned Senior Advocate Mr.Marshall also wants to verify title of lands, details of which is given at Annexure-I and for that, he requires one week's time. For that also, he requests that let the Company may respond to his request for verification of the title in respect to lands at Annexure-I (page-

17).

Learned advocate Mr.Naik submitted that Company will give all facilities to check and verify in respect to title of lands which is mentioned at Annexure-I (page-17). He also makes it clear that the Baroda Rayon Corporation Ltd. Will provide all co- operation for verification of the tile in respect to lands as mentioned at Annexure-I Page 77 of 674 C/SCA/15599/2008 JUDGMENT (page-17).

Therefore, considering request made by learned Senior Advocate Mr.Marshall, the matters are adjourned to 19.3.2010."

(18) Thus, the matter was adjourned to 19.3.2010 and on 19.3.2010, this Court (Coram: H.K. Rathod, J.) (as he then was) passed the following order:

"At the request of learned advocate Ms. Sejal Bhatt for M/s. Trivedi and Gupta counsel of respondent No. 1, the matter is adjourned to 31.3.2010."

(19) On 31.3.2010, the Court (Coram: H.K. Rathod, J.) (as he then was) passed the following order:

"Learned advocate Mr. Naik for M/s. Trivedi & Gupta placed on record affidavit on behalf of opponent Nos.1 and 2 which is ordered to be taken on record. Copy thereof is required to serve to each respective parties by learned advocate Mr. Naik.

Learned advocate Mr. Naik made it clear before this Court that condition which has been given by learned senior advocate Mr. Marshal is not accepted by present respondent - Baroda Rayon Corporation Ltd.

Page 78 of 674

C/SCA/15599/2008 JUDGMENT Therefore, let other side may file necessary reply to affidavit-in-reply filed by Corporation.

Accordingly, matter is adjourned to 5 t h April 2010 ."

(20) On 5.4.2010, the Court adjourned the matter to 12.4.2010 in view of the fact that in under cognate matter being Civil Application No. 2968 of 2010 in Special Civil Application No. 3916 of 2008, the Court (Coram: H.K. Rathod, J.) (as he then was) vide order dtd 25.3.2010 referred the matter for placement thereof to the Hon'ble the Chief Justice.

(21) On 12.4.2010, the Court (Coram: H.K. Rathod, J.) (as he then was) passed the following order:

"Considering the request made by learned advocate Mr.Naik for M/s Trivedi and Gupta that the entire group is already listed before the Hon'ble Mr.Justice S.R.Brahmbhatt and this Civil Application is one of it. Therefore, it may be transferred to same bench.

Registry is directed to notify present Civil Application No.599 of 2010 before Hon'ble Mr.Justice S.R.Brahmbhatt on 16.04.2010."

Page 79 of 674

         C/SCA/15599/2008                              JUDGMENT



(22)          As it is stated hereinabove and as record indicates

that the employer Company filed one Civil Application No. 1436 of 2010 (which was converted from Civil Application (Stamp) No. 1700 of 2011, that has been referred to in the earlier portion of the order), with following prayers:

"Prayers in Civil Application No. 1436 of 2010:

Para-10:

(A) Your Lordships may be pleased to admit and allow the present petition;

(B) Your Lordships may be pleased to stay the order dated 2.2.2010 or in the alternative, extend the time for production of balance sheet upto March, 2009 and quarterly balance sheet for a further period of 45 to 60 days;

(C) Your Lordships may be pleased to grant any other and further relief/s as may be deemed just and proper in the interest of justice and fitness of things"

The following averments made in the application need to be set out in order to appreciate the development of the events. Paras 3, 4, 5 and 6 of said Civil Application reads as under:

Para -3: The applicant company humbly states and submits that the operations of the Page 80 of 674 C/SCA/15599/2008 JUDGMENT applicant company came to be stopped in the circumstances where it was not getting any cooperation from the opponent no.1 union and there was no access to the record of the applicant company for a long period. After stoppage of operations a deadlock was created between the applicant company and the opponent no. 1 union. Thereafter gradually settlement talks started and both the sides put their efforts for amicable resolution of their differences. In view such developments the applicant company also started its efforts to put its house in order and since the applicant company did not have any staff available for looking after the work, the work of finalization of accounts came to be assigned to the private accountants. However, the said accountants also could not complete finalization of accounts due to various difficulties faced by them. The applicant company vide its letter dated 22.5.2009 assigned the job to finalize the accounts. Thus the applicant company was trying its level best to complete and finalize its accounts at the earliest. However, since the systems and the physical record wherein the data was stored were in a non-used condition for along time coupled with the difficulty that the accounting staff of the applicant company was not available to help the third party accountants. The third party accountant started the work but in the middle of it left the work undone which added to the difficulties of the company.

4. The applicant company humbly states Page 81 of 674 C/SCA/15599/2008 JUDGMENT and submits that various factors contributed as inroads in finalization of accounts but the applicant company has been trying its best to complete the same at the earliest.

The applicant company has also engaged services of the Chartered Accountants who have in turn outsourced the work of finalization of accounts of the applicant company to the other third party accountants and they are in the process of finalizing the same. The applicant company humbly states and submits that in the meanwhile during the course of mediation proceedings between the applicant company and the opponent no. 1 union a consensus was arrived at between the applicant company and the opponent no. 1 union which resulted into consensus report dated 30.12.2009. A copy of the report is annexed hereto and marked as ANNEXURE - A.

5. The applicant company humbly states and submits that as per the report dated 30.12.2009, the proposed buyer found by the union would make an application before the Hon'ble Court. However, till date the buyer has not come forward to make such an application. In the meanwhile, the opponent no.1 union has made an application being CA No. 599 of 2010 which came up for hearing on 2.2.2010. This Hon'ble Court during the course of hearing of the said Civil Application expressed that the applicant company should submit its audited balance sheet upto March, 2009 with quarterly balance sheet and the union should submit dues under Page 82 of 674 C/SCA/15599/2008 JUDGMENT different heads on 8.2.2010. The applicant Company has not been functioning since August, 2008 and all its operations are closed down, thus, no quarterly balance sheet is prepared. A copy of the order dated 2.2.2010 is annexed hereto and marked as ANNEXURE - B."

(23) The said Civil Application came to be filed on 8.2.2010. On 9.2.2010, this Court passed the following order:

"This application for seeking extension of time is requested to be adjourned by the applicant as the respondents should not have any objection in applicant's coming forward and placing on record the assets and liability, as the workers have after due diligence arranged a buyer who is ready & willing to deposit Rs.25.00 crores to show their bonafide that the buyer is genuine and sincere. The buyer has also filed Civil Application No. 1440 of 2010. Shri Joshi, learned senior advocate appearing for Mr. Naik for M/s Trivedi & Gupta submits that the company has some difficulty in producing audited balance sheet on account of paucity of time. However if the Court deems fit the statement of assets and summary of liabilities as on date be placed on record.

In view of this positive approach of all the parties, this Court is of the view that the prayer for seeking time is deferred and in the meantime the applicant shall produce on record along with the affidavit of the Page 83 of 674 C/SCA/15599/2008 JUDGMENT responsible person the statement of assets and summary of liabilities on record. Same shall be done on or before 18/2/2010.

Adjourned to 18/2/2010."

Thus, there is no further order except this in Civil Application for extension of time. In other words, it could be said that extension of time application remained as it is, meaning thereby, the order passed by this Court on 2.2.2010 for production of audited balance sheet remained non-complied.

(24) The proposed purchaser, who was prayed to be impleaded in light of the averments and grounds mentioned in Civil Application No. 599 of 2010 in Special Civil Application No. 15599 of 2008 also preferred Civil Application No. 1440 of 2010 in Special Civil Application No. 15599 of 2008 for joining as party respondent and for appropriate direction. The prayers made in that application which came to be filed on 9.2.2010 reads as under:

Prayers in Civil Application No. 1440 of 2010:

"para-9: For the reasons stated hereinabove and such others, which may be advanced at the time of hearing, the Page 84 of 674 C/SCA/15599/2008 JUDGMENT applicant most respectfully prays that:

(A) This application may kindly be admitted and allowed;

(B) This Hon'ble Court may be pleased to join the applicant as respondent no. 9 in Special Civil Application No. 15599 of 2009;

(C) The respondent No. 2 Company may be directed to place on record the list of all its assets which shall be sold to the applicant and upon fulfillment of the said requirement the applicant shall deposit Rs.25 crores as refundable deposit.

(D) Clear and marketable titles of all the assets of the respondent no. 2 company, unless legally sold to the third parties, free from all encumbrances may be given to the applicant on the applicant depositing Rs.500 crores before this Hon'ble Court on the terms and conditions which may be agreed between the applicant and the parties;

(E) On depositing Rs.25 crores by the applicant as refundable deposit, this Hon'ble Court may be pleased to permit the applicant to deploy its own security personnel within the premises of the respondent no. 2 company;

(F) Grant such other and further reliefs as deemed fit in the interest of justice;"

Page 85 of 674

        C/SCA/15599/2008                             JUDGMENT



(25)         The application contained averments and reference to

the mediation and agreement arrived at between the parties during mediation. It is stated in said application that Company is ready and willing to sale to the buyer found out by the Union, the sale proceeds whereof would utilize for discharging company's liability for the secured creditors as well as workmen.

(26) On 9.2.2010, the Court passed the following order:

"Heard learned advocates for the parties. Prayer for joining party would be considered after the requisite information is brought on record. Respondent no.2 has also filed application being Civil Application No. 1436 of 2010, wherein they have sought time for placing on record the requisite information. This civil application is ordered to be kept along with the main matter for the time being."

(27) The observations made in the order dated 23.4.2010 indicated that the affidavit for the workmen had submitted that adjourning of the matter may not preclude the workmen from exploring the possibility of finding new buyer with better offer.

(28) One more Civil Application No. 6212 of 2010 came to be filed on 22.6.2010 in Special Civil Application No. 15599 of 2008 with following prayers:

Page 86 of 674

C/SCA/15599/2008 JUDGMENT "Para-9:

(A) This application may kindly be allowed;

(B) This Hon'ble Court be pleased to permit the applicant to be joined as respondent no. 10 in Special Civil Application No. 15599 of 2008;

(C) The respondent no. 2 company may be directed to place on record the list of all its assets, which shall be sold and conveyed to the applicant and upon fulfillment of the said requirement the applicant shall deposit Rs.30 crores by way of bank guarantee as refundable deposit.

(D) Clear and marketable titles of all the assets of the respondent no. 2 company, unless legally sold to the third parties, free from all encumbrances may be given to the applicant on the applicant depositing Rs.480 crores before this Hon'ble Court on the terms and conditions which may be agreed between the applicant and the parties;

(E) On depositing Rs.30 crores by way of bank guarantee by the applicant as refundable deposit, this Hon'ble Court may be pleased to permit the applicant to deploy its own security personnel, guards within the premises of the respondent no. 2 company;

Page 87 of 674

C/SCA/15599/2008 JUDGMENT (F) Grant such other and further reliefs as deemed fit in the interest of justice;"

(29) In this proceeding, the Court passed the order on 23.6.2010, which reads as under:

"1. Heard learned advocate for the respective parties.

2. There is by and large consensus between the learned advocates for the parties that there cannot be any objection if sufficient time is granted to both the sides to have inspection of the property in question.

3. Shri Naik, learned advocate for the company has stated that the properties and assets to be auctioned having clear marketable title is enlisted on page 17 of Civil Application No. 1440 of 2010. Shri Naik learned advocate for the company submitted that the inspection could be permitted on or before 26.6.2010 around 9:00 a.m. In the morning and the applicant or his advocate Shri K.M.Parikh for the applicant may intimate the names of the inspecting party. The inspecting party will be consisting of 3 persons who may be permitted to have access to the property in question so that they may come out with appropriate offer, which they have made in addition to the offer they have already made in this application.

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C/SCA/15599/2008 JUDGMENT

4. At this stage learned advocate Shri Naik for the company as well as Shri Marshall, learned advocate submitted that this application itself contains certain averments and terms and conditions which might not be agreeable to all. Therefore, the inspection or permission to inspection and even carrying out of inspection of the property on 26.6.2010 shall not be treated in any way as conceding to any of the condition or proposal mentioned in the application.

5. Shri Naik's anxiety is misconceived as the Court is of the view that there shall not be any objection to giving inspection to this applicant as the opportunity is given to all to react to this application. No prejudice is likely to cause giving permission to such inspection which goes without saying that terms and conditions mentioned in this application are not accepted by the parties and they will have right to react to these terms and conditions. The terms and conditions mentioned in this application are certainly binding on the applicant. The inspection as it is stated hereinabove, be carried out in cooperation with the officer of the company who may be equipped with appropriate information with regard to certificate, number of properties and any other documents reasonably available with him. The matter may come up for hearing on 29th June, 2010.

Page 89 of 674

C/SCA/15599/2008 JUDGMENT

6. This Civil Application be heard with Civil Application No.1440 of 2010 in Special Civil Application No. 15599 of 2008 along with other allied matters. Direct service permitted."

(30) The said Civil Application No 6212 of 2010 was ordered to be heard along with Civil Application No. 1440 of 2010.

(31) On 30.6.2010, the Court passed the following order:

"Shri Joshi, learned Senior Advocate appearing for respondent no. 2 Company seeks time for filing appropriate composite reply to the Civil Application, wherein, the applicant has made proposal.

Shri Parikh, learned advocate appearing for the applicant submits that applicant along with his representatives have inspected the property in question and he is abiding by the proposal as it is made in the application.

Shri Marshall, learned advocate appearing for another bidder has submitted that even that applicant is also abiding and standing by his proposal as on date.

Shri Singhi, learned advocate appearing for respondent no. 7 at this stage submitted that Page 90 of 674 C/SCA/15599/2008 JUDGMENT bidders, if they are volunteered to deposit Rs.25 crores on their accord without creating any right in their favour, let them deposit the same so as to test their bonafide and the same shall not be in any way prejudicial to the Company.

The request of Shri Singhi could be considered after the composite reply of the respondent Company is on record as Shri Joshi, learned advocate for respondent Company submitted that reply would be tendered to all the concerned by 6.7.2010 and matter may come up by 9.7.2010.

S.O to 9.7.2010 at 4.30 p.m."

(32) On 9.7.2010, the Court passed the following order:

"Shri Parikh, learned advocate appearing for the applicant in Civil Application No. 6212 of 2010 and Shri Marshall, learned advocate appearing for the applicant in Civil Application No. 1400 of 2010 shall place on record by way of affidavit, to be affirmed by competent person of the organization with regard to the offer and the payment schedule in case the offer is crystallized and the properties are sold.

There is an agreement in principle between the advocate of the workmen as well as company to explore possibilities of referring the matter with regard to the dues of the Page 91 of 674 C/SCA/15599/2008 JUDGMENT workmen to the agreed Arbitrator for which, the name of the Arbitrator will be exchanged between the parties.

Put up on 30.07.2010."

(33) On 30.7.2010, the Court passed the following order:

"1. Shri Parikh, learned advocate appearing for the applicant in Civil Application No. 6212 of 2010 has tendered affidavit containing payment schedule in case the offer is accepted of the subject property.

2. Shri Marshall, learned advocate appearing for the applicant in Civil Application No. 1440 of 2010 under instructions of his clients, the applicant hereinabove has submitted that his client is now ready and willing to enhance the offer for subject property to Rs.400 crores with a request that once it is accepted to all, the property may not be again put to public auction, as if it is agreed by all, including Company whose property in question, then, there is no useful purpose for putting it to public auction and it may delay the entire process and depositing initial amount may also would not be agreeable to the offerers.

3. Shri Marshall has submitted that as per his instructions, the amount of Rs.400 crores could be tentatively paid as under:

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C/SCA/15599/2008 JUDGMENT

(i) Rs.50 crores within 15 days from the date of offer being accepted in the Court;

(ii)Rs.350 crores could be paid within a period of 90 days from the date of offer being accepted in the Court.

So the entire amount could be completed within 3Â½ months from the date of offer being accepted in the Court.

4. Shri Naik, learned advocate appearing for the respondent Company submitted that the initial offer of the applicant in Civil Application No. 1440 of 2010 was Rs.300 crores and even the enhanced offer is falling short of the original expected amount. However, respondent Company would like to place its view on the record by way of short affidavit which would be in respect of offers of Shri Marshall and Shri Parikh, learned advocates.

5. At the joint request of parties, matter is kept on 13.8.2010. In the meantime, let the representative of the workmen and Company exchange the names of agreed Arbitrator so as to determine the exact amount payable to the workmen against the dues."

(34) On 13.8.2010, the Court passed the following order:

Page 93 of 674

C/SCA/15599/2008 JUDGMENT "1. There is general consensus among learned counsels for the parties that let two offers be recorded in the court's order so that it may later on not be possible for the offerers to back out.

2. Shri Parikh, learned advocate appearing for the applicant in Civil Application No. 6212 of 2010 has submitted that under the revised offer, the property, which is agreed by all is to be purchased for total amount of Rs.486 crores with additional liability of stamp duty, which will be borne by offerer. The amount of Rs.55 crores would be paid within 15 days from the date of finalizing the offer and remaining amount will be paid in equal three installments to be completed within 3½ months from the finalization of the offer and by way of earnest money, the applicant is ready and willing to deposit Rs.1 crore, which will be non-refundable in case the offer is accepted and offerer is unable to abide by the offer and same may be utilized for the purpose of payment to the workmen. He further submits that the applicant is ready and willing to file an undertaking to this effect before this Court along with an EMD on or before 20.8.2010.

3. Shri Marshall, learned Senior Advocate appearing for the applicant in Civil Application No. 1440 of 2010 under instructions from his client submitted that the revised offer of his client is Rs.460 crores with further liability of 50% of the Page 94 of 674 C/SCA/15599/2008 JUDGMENT stamp duty amount to be borne by the applicant and 50% of the stamp duty amount to be borne by the Company and Rs.75 crores will be deposited within 20 days from the date of finalization of the offer and remaining amount will be paid in two equal installments, first installment would be paid on 60th day and second installment would be paid on 90th day from the date of acceptance of the offer and by way of earnest money, the applicant is ready and willing to deposit Rs.1 crore, which will be non-refundable in case the offer is accepted and offerer is unable to abide by the offer. He further submits that the applicant is ready and willing to file an undertaking to this effect before this Court along with an EMD on or before 20.8.2010.

4. At this stage, Shri Marshall, learned advocate submitted that negotiations are still going on and offer of applicant is likely to be revised upward or increase.

5. In view of aforesaid, it is directed that an amount of Rs.1 crore will be deposited on or before 20.8.2010 by each of the offerers with the Registry of this Court. The amount will be paid by demand draft/pay order, drawn in the name of Registrar, High Court of Gujarat and Registrar of this Court is directed to deposit the said amount with the nationalized bank in a separate account, which may be governed by further orders that may be passed in the matter.

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6. The matter may come up on 27.08.2010. It is expected that on that day, both the parties will have to come out with concrete further upward revision in the bids and terms and conditions and parties will not be permitted to go back on their offer which have been recorded hereinabove. The parties have to come out with clear terms, conditions and upward offer if any so that there cannot be any future scope of any dispute. It is further clarified that the aforesaid EMDs would not create any right in the offerer to have the property as it is subject to further orders in the matter.

7. Counsel for the workmen as well as counsel appearing for the Company have agreed to proceed in right earnest for finalizing the name of Arbitrator for deciding the dues of the workmen. This Arbitration would not include the parties named in Special Civil Application No.9045 of 2009, 9298 of 2009 to 9381 of 2009, 1619 of 2010, 1620 of 2010 as their dues are crystallized. It is clarified that no further adjournment shall be granted in the matter and the matter will be finalized on 27.08.2010.

S.O to 27.08.2010."

(35) On 27.8.2010, the Court passed the following order:

"Pursuant to order dated 13.8.2010, as Page 96 of 674 C/SCA/15599/2008 JUDGMENT could be seen from the office note dated 26.8.2010, the applicant of Civil Application No. 1440 of 2010 has deposited an amount of Rs.1 crore, however, the applicant of Civil Application No. 6212 of 2010 has not deposited any amount.

Shri S.C. Bhatt, learned advocate for Shri Parikh, learned advocate for the applicant in Civil Application No. 6212 of 2010 has submitted that Shri Parikh has filed sick note today.

Learned advocates have submitted that name of the agreed arbitrator is yet to be finalized.

In view of this, let the matters be posted for further hearing on 03.09.2010. In the meanwhile, it is expected that the applicant in Civil Application No. 1440 of 2010 would still revise his offer so as to make it congenial for the Company and others."

(36) On 3.9.2010, the following order was passed:

"1. None appears for the applicant in application No. 6212 of 2010. Shri Marshall, learned counsel appearing on behalf of applicant in application No. 1440 submits that the applicant has shown his willingness to enhance his offer by Rs.5=00 Page 97 of 674 C/SCA/15599/2008 JUDGMENT crore, which would now make the offer as Rs.465=00 crores. He also submits that enhancement of this Rs.5=00 crore is a positive step, but the earlier terms & conditions which have been imposed in the earlier order may work to his agreed amount of offer of Rs.460=00 crores only. He submits that the time of 3 weeks as requested by the company, if granted, then the applicant of that application may persuade the company to accept the offer for the property in question.

2. Shri Kunan Naik, learned counsel submits that the company is bound by the commitment made during mediation proceeding and shall not back out. However on account of sizable difference between the amount as originally agreed and the amount being quoted today, the company would require some time. He submits that if three weeks time is granted, company would not need any further time to arrive at an appropriate decision in this regard as to whether the offer is acceptable to them or not. In the meantime by 8th September 2010 mutually agreed arbitrator's name would be conveyed to the workmen's representative / advocate and company representative and workmen's representative would sit together for drafting joint terms of reference with regard to workmen's dues which is admittedly not included the dues which have been otherwise crystallized in respect of workmen in Special Civil Application No. 9045 of 2009 with Special Civil Application No. 9298 of 2009 to 9381 of 2009, 1619 of Page 98 of 674 C/SCA/15599/2008 JUDGMENT 2010, 1620 of 2010 and Special Civil Application No. 4667 of 2008.

3. Shri Singhi, learned counsel, who is appearing for the secured creditor submits that he would make appropriate submission as the secured creditor's interest is also involved in the entire proceedings.

4. The company as well as the applicant of application no.1440 of 2010 shall file appropriate affidavit indicating their respective stand and, if there is an agreement between the two with regard to terms & conditions of the offer of the property, same shall be filed on or before 22/9/2010, with copy to the respective parties and the matter be listed on 24/9/2010.

5. The Court proposes to pass appropriate order in respect of application no. 6212 of 2010, as learned advocate who represent the applicant in this application is not present today. This application is also adjourned to 24/9/2010.

6. Matters are adjourned to 24/9/2010."

(37) On 24.9.2010, the Court passed the following order:

"1. Shri Marshall and Shri Kunan Naik have filed respective affidavits as envisaged Page 99 of 674 C/SCA/15599/2008 JUDGMENT in the earlier order. Shri Marshall has submitted that the map annexed to the affidavit contains a parcel of land which had in fact been sold by the company long back. Therefore, there was requirement of clarification as to the exact area, precincts and vicinity of the land in question along with its measurement containing 155 acres of land offered for sale. The matter is therefore required to be adjourned.

2. At this stage Shri Singhi submits that the company or its executives may work upon from map which is annexed to the affidavit filed by Shri Marshall's client, and crystallize the exact area as envisaged herein above.

3. In the meantime, today itself Shri Naik and Shri Subhash Chaudhari for the workmen have agreed that during course of the day they will place on record of this matter the agreed terms of the reference, as the arbitrator has been agreed upon by both of their clients and there be a joint reference with regard to the dues of the workmen, which is admittedly not included the dues which have been otherwise crystallized in respect of workmen in Special Civil Application No. 9045 of 2009 with Special Civil Application No. 9298 of 2009 to 9381 of 2009, 1619 of 2010, 1620 of 2010 and Special Civil Application No. 4667 of 2008.

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4. Shri Mihir Joshi submits that the details as discussed above will be submitted to Mr. Marshall on or before 1/10/2010 and the matter may come up on 4/10/2010.

5. Registry is directed to notify this civil application along with cognate matters on 4/10/2010."

(38) On 4.10.2010, the Court had to pass following order, which reads as under:

"1. Learned Senior Advocate Shri Marshall, under instructions of the applicant, submits that in light of the two more offers in respect of the subject land and in light of the serious discrepancy in the exact land in question, the applicant is ready and willing to bear the expenses that may be incurred or charged by the Land Record Inspector or the Land Record Officer of the area for ascertaining the exact land, its ownership with title documents etc. In case if there is requirement , the applicant is ready and willing to bear the expenses of having the land surveyed by the approved Surveyor or Land Surveying Agency also. The matter may, therefore, be adjourned to 6.10.2010 so that the Court may pass appropriate order.

2. Learned advocate Shri Naik for the Page 101 of 674 C/SCA/15599/2008 JUDGMENT respondent No.2, when called upon to answer as to what is the position of the land and its title, submitted that the Company may produce the title deed, as desired, latest by 6.10.2010. Orders accordingly. The matter may come up on 6.10.2010. On. 6.10.2010 a responsible officer of the company shall make an affidavit indicating the exact Survey numbers, which are non- encumbered in any manner and available for sale with copies of title or documents as Annexure to this affidavit and explain that in case if this Survey numbers are falling less than the declared 155 acres than in what manner company is going to make up this figure of 155 acres. S.O to 6.10.2010."

(39) On 6.10.2010, the Court passed the following order, which reads as under:

"1. Learned advocate Shri Naik for opponent No.2 has tendered affidavit on behalf of the Company and he submits that the deponent of the affidavit is duly authorized to file this affidavit on behalf of the Company. The affidavit contains the Survey number of various parcel of lands and has copies of the title documents. The copy of the affidavit along with annexure is duly served upon all the concerned representatives of the parties.

2. On account of difference between the parties and their counsel with respect to actual measurement of the land, available Page 102 of 674 C/SCA/15599/2008 JUDGMENT for sale, the learned advocates for the parties have made joint request for assigning the measurement work of the aforesaid parcel of lands to District Inspector of Land Records, Surat.

3. Learned Assistant Government Pleader Ms. Mathur has submitted that she has inquired with the concerned officer and ascertained the approximate expenses likely to be incurred in undertaking the measurement of the aforesaid parcel of lands.

4. Shri Marshall, learned Senior Advocate for the applicant M/s. Gayatri Trading & Co., under instructions of the applicant, has submitted that the applicant is ready and willing to bear the expenses for measurement, which would not be creating any right in favour of the said applicant i.e. M/s.Gayatri Trading & Co. The amount of Rs.20,000/- would be deposited with the District Inspector of Land Records, Surat within a week from today.

5. The District Inspector of Land Records, Surat is directed to undertake the measurement of the parcel of lands belonging to the respondent Company M/s. Baroda Rayon Corporation Limited, Post Fatehnagar, Udhna, District:Surat and especially those parcel of lands, which have been mentioned in the affidavit dated 6.10.2010. The District Inspector of Land Page 103 of 674 C/SCA/15599/2008 JUDGMENT Records,Surat is expected to complete the measurement work within 10 days from the date of the receipt of this order, which shall accompany the copy of the affidavit filed by the Company on 6.10.2010 so as to give clear picture to the DILR of the land to be measured by him. The DILR is expected to give description of the property and other appurtenant if any to the land, for which the measurement exercises are undertaken by him. The DILR may also submit appropriate sketch/map of the land parcels, measurement whereof is undertaken by him. The entire exercise is expected to be completed within 10 days of the receipt of the order.

6. The office is directed to make available copy of this order to the learned Assistant Government Pleader for its onward transmission to the DILR, Surat for compliance. Office is also directed to independently sent writ to the District Inspector of Land Records, Surat which shall also accompany copy of the affidavit, which contains the exact Survey number for which the measurement is ordered. S.O to 20.10.2010."

(40) On 22.10.2010, this Court passed the following order:

"1. The District Inspector of Land Records Shri Dokia is present before the Court today and he is submitted that the extract of 7/12 Page 104 of 674 C/SCA/15599/2008 JUDGMENT forms received so far reveal that the total land of the Company is to the tune of 318 acres and he submitted that it would be possible for his office to undertake the measurement of the entire land and submit the report with appropriate details with respect to the construction on the land, if any, and the ownership of the land as on date could be reflected from the document that may be submitted to him and which could be crosschecked with the government record. He submitted that the Settlement Commissioner and Director of Land Records has framed charges vide order dated 31.12.2002 for undertaking the measurement, which would come to Rs.60,400/.

2. At this stage, Shri Marshall, learned Senior Advocate for the applicant ,under the instructions of the applicant, submitted that the said amount shall be deposited with the concerned treasury office after obtaining challan from the office of DILR, Surat latest by 25.10.2010. He submitted that the work of measurement may commence so as to report expeditiously on the record.

3. Shri Dokia, District Inspector of Land Records, submitted that the measurement work will be commenced from tomorrow i.e. 23.10.2010.

4. Shri Naik, learned advocate for the company submitted that the company, as per Page 105 of 674 C/SCA/15599/2008 JUDGMENT his instructions, does not own 318 acres of land and, therefore the measurement be confined to 155 acres of land only.

5. At this stage, learned advocate Shri Dave as well as learned advocate Shri Subhash for the workman submitted that during the mediation proceedings, the company has committed and agreed for disbursing all its assets to fulfill its obligations towards workers dues and, therefore, the entire area belonging to the company be permitted to be measured.

6. I am of the view that of the area which the DILR suggested today i.e. 318 acres of land based upon the record, would not harm any party rather it would help in ascertaining the exact area which could be available for sale without any encumbrance and hence it is observed that the DILR, Surat who is present before the Court, shall undertake the measurement work from tomorrow itself. The requisite fee as agreed by the applicant would be deposited in the concerned Treasury Office on or before 26.10.2010. Shri Dokia submits that he is hopeful of completing the measurement within a period of 15 days.

7. Shri Naik submitted that the company's representative would cooperate with the DILR and submitted that the relevant record, as required by the DILR will be made available to him.

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8. The report be filed on or before 15.11.2010. The copy of the report shall be made available. Office is directed to make copies and be made available to the learned advocates by charging certified copy's expenses. The matter may come up for hearing on 18.11.2010."

(41) On 18.11.2010, the Court passed the following order:

"Today, it is reported that the office has received report. As per the observations made in para no.8 of the order dated 22/10/2010, now, office is to make xerox copies of the report, retain the original report on the file of this matter, and the xerox copies be made available to learned advocates those who are appearing for the respective parties in this proceedings. The charges for supplying copies would be as if the certified copies are supplied, but only xerox copies are to be supplied.

Xerox copies be supplied to learned advocates as far as possible, latest by 22/11/2010. Adjourned to 26/11/2010."

(42) On 26.11.2010, the Court passed the following order:

"1. There is consensus between learned counsels for the parties for adjourning the matter on 03.12.2010 as the new offers have also come by way of independent applications and all the Page 107 of 674 C/SCA/15599/2008 JUDGMENT interested shall have to place on record the respective offers on separate affidavit with their terms and conditions, payment schedule, their financial profile and back ground.

2. Ms. Nair, learned AGP has submitted that she would communicate the concerned District Inspector of Land Records, Surat to help the Company in shorting out and earmarking the exact portion of land for selling.

3. Mr. Naik, learned advocate submits that no further time would be required and in view of this, matter is ordered to be placed on 3.12.2010.

4. Copy of this order be made available to Ms. Nair, learned AGP so as to enable her to communicate to the concerned officer."

(43) On 3.12.2010, the Court passed the following order:

"Shri Naik, learned advocate has supplied the colour map, showing the exact parcel of land available for sell including plant and machinery. The same is taken on record. All the counsels have agreed that now their clients will be in a position to make offers as envisaged under last order dated 26.11.2010. The interested applicants, those who have already filed applications for participating in the process, are to submit their affidavits as per order dated 26.11.2010 as soon as possible latest by 7.12.2010."

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        C/SCA/15599/2008                              JUDGMENT



(44)         On 10.12.2010, the court passed the following oder:

"1. The General Secretary of petitioner Union has filed affidavit. The same is taken on record. The applicant in Civil Application No. 1440 of 2010 has also filed an affidavit, the same is taken on record.

2. Shri Jain, learned advocate appearing for the applicant in Civil Application No. 11350 of 2010 submits that as envisaged in the earlier order, he has already filed the affidavit in the Registry, however, the same has not been placed on record by the Registry. Shri Jain submits that he would inquire with the Registry and do the needful to place the said affidavit on record of Civil Application No. 13350 of 2010.

3. Learned advocates appearing for the applicants in Civil Application No. 14154 of 2010 and 11845 of 2010 respectively have requested for further time on account of some teething problem in filing the affidavits and prayed that they may be granted some indulgence and be permitted to place their affidavits on record, as the Union has taken up serious contention with regard to actual land being available for sell. In view of these contentions and prayers, this Court is of the view that applicants of Civil Application No. 14154 of 2010 and 11845 of 2010 are permitted to file their offers on affidavit as envisaged in Page 109 of 674 C/SCA/15599/2008 JUDGMENT the earlier order and copy thereof be served to all the concerned in advance.

4. In view of the aforesaid, it is in the fitness of thing to observe that offerers shall also exchange their offers interse through their advocates and it is expected that company's advocate shall place it in a tabular form the offers and conditions.

5. If any revision is contemplated by any offerers despite their offer available on record, the same also may be placed on record and serve upon the other side on or before 18.12.2010 so that on 24.12.2010, the matter shall be proceeded further with clear picture.

S.O to 24.12.2010."

(45) On 24.12.2010, the Court passed the following order in Special Civil Application No. 15599 of 2008 and Special Civil Application No. 3916 of 2008 and it was ordered that connecting Civil Applications were also to be placed along therewith.

"Heard Shri P.H. Parekh, learned counsel with Shri Sumit Goel, Shri Mihir Joshi, learned counsel with Mr. Kunan Naik, for M/s Trivedi & Gupta, and other advocates appearing for their respective parties.

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C/SCA/15599/2008 JUDGMENT At the request of learned counsels for the parties, matters are adjourned to 20/1/2011.

Registry to notify main matters with connected civil applications on 20/1/2011."

(46) It is required to be noted at this stage, in the meantime, the following Civil Applications being Civil Application No. 752 of 2011 and Civil Application No. 754 of 2011 came to be filed in main matter being Special Civil Application No 15599 of 2008 and Civil Application No. 4772 of 2011 with Civil Application No. 755 of 2011 in Special Civil Application No. 134 of 2006 and in all the Civil Applications, notices were issued making returnable on 10.2.2011 in all the matters and matters were adjourned to 10.2.2011.

Prayers in Civil Application No. 752 of 2011:

"(a) quash and set aside the resolution dated 23.6.2006 passed by the Board of Directors of the Respondent no. 1 company authorizing Mr. Hemant Dhirubhai Desai to execute the sale deeds.

(b) declare that the sale deed dated 11.10.2006, 08.11.2006, 13.11.2006 and 14.11.2006 executed by the Respondent no.

1 company in favour of Shri Laxmi Narayan Industrial Co-operative Service Society Limited are illegal, null and void, non-est in Page 111 of 674 C/SCA/15599/2008 JUDGMENT law and inoperative and to set aside the aforesaid four sale deeds;

(c) direct that the consideration purported to be received by the Respondent No. 1 company under the aforesaid four Sale deeds may be deposited in this Hon'ble Court by the directors of Respondent no.1 Company being Proposed Respondent No. 9 to 17 from their personal funds and the same may be suitably distributed to the workmen.

(d) direct the recovery of the assets / properties of the company purportedly sold under the aforementioned four sale deeds dated 11.10.2006, 08.11.2006, 13.11.2006 and 14.11.2006;

(e) restrain the board of directors of the Respondent No. 1 company from transferring, disposing of or alienating any of the properties / assets of the Respondent No. 1 Company without the express permission of this Hon'ble Court.

(f) initiate proceedings for perjury against the persons who had authorized the filing of false affidavits on behalf of the Company before this Hon'ble Court;

(g) pass such other and further orders as this Hon'ble Court deems fit in the facts and circumstances of the case and in the Page 112 of 674 C/SCA/15599/2008 JUDGMENT interests of justice."

Prayers in Civil Application No. 753 of 2011:

"(a) implead the persons mentioned in paras 5, 6 and 7 of the present application as Respondent Nos. 9 to 21 in the Special Civil Application No. 15599 of 2008;

            (b) allow       the      present   impleadment
            application;

(c) take the amended cause title annexed and marked as Annexure - A on record;

(d) pass such other or further orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case."

Prayers in Civil Application No. 754 of 2011:

"(a) implead the persons mentioned in paras 5, 6 and 7 of the present application as Respondent Nos. 4 to 16 in the Civil Application No. 4772 of 2008;

            (b) allow       the      present   impleadment
            application;

(c) take the amended cause title annexed and marked as Annexure - A on record.

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(d) pass such other or further orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case."

Prayers in Civil Application No. 755 of 2011:

"(a) allow the present amendment application in terms of the proposed amendment mentioned in para-4 of the present application;

(b) take on record the amended Civil Application annexed hereto and marked as Annexure - A to the present application; and

(c) pass such other or further orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case."

Prayers in Civil Application No. 756 of 2011:

"(A) Your Lordships may be pleased to convict the opponents for deliberate and willful contempt of orders of this Hon'ble Court and to sentence them adequately, unless the opponents purges themselves of the deliberate and willful contempt of court by depositing the entire sale proceeds of the sales executed by virtue of sale deeds Page 114 of 674 C/SCA/15599/2008 JUDGMENT produced collectively at Annexure - B supra.

(B) declare that the order dated 1.6.2006 passed by the BIFR sanctioning the rehabilitation scheme is vitiated by fraud and suppression and therefore null and void, illegal and non-est in law;

(C) declare that the sale deeds dated 11.10.2006, 08.11.2006, 13.11.2006 and 14.11.2006 executed by the Respondent No.1 company in favour of Shri Laxmi Narayan Industrial Co-operative Service Society Limited are illegal, null and void, non-est in law and inoperative and to set aside the aforesaid four sale deeds;

(D) direct that the consideration purported to be received by the Respondent No. 1 company under the aforesaid four Sale deeds may be deposited in this Hon'ble Court by the proposed Respondent Nos. 4 to 12 from from their personal funds and the same may be equally distributed to the workmen.

(E) direct the recovery of the assets / properties of the company purportedly sold under the aforementioned four sale deeds dated 11.10.2006, 08.11.2006, 13.11.2006 and 14.11.2006;

(F) restrain the respondents from dealing Page 115 of 674 C/SCA/15599/2008 JUDGMENT with the assets, both movable and immovable of the company.

(G) direct that the entire assets both movable and immovable of the company may be handed over to the applicant/ workers union.

(H) direct the respondents to purge the contempt by restoring all the properties of the company and assets belonging to the company, which have been sold in violation of the aforementioned restraint orders.

(I) direct the respondents / contemnors to remain present in person before this Hon'ble Court;

(J) Be pleased to award the present applicant exemplary costs of this litigation and be pleased to quantify the same.

(K) Any other and/or further relief/s that this Hon'ble Court may deem fit looking to the facts and circumstances of the case may be awarded to the petitioner."

(47) On 11.02.2011 in Civil Application Nos. 753 of 2011 and Civil Application No. 754 of 2011 in Civil Application No. 4772 of 2008 in SCA No. 134 of 2006, it was noted that learned advocates have instructions to appear for respondent Nos. 9, 10, Page 116 of 674 C/SCA/15599/2008 JUDGMENT 16, 17, 18, 19, 20 and 21. Proposed opponent Nos. 11 to 15 are yet not served, where then, not served, as they were reported to have ceased to be the Directors. Learned counsel Shri Vyas and Anuj Trivedi sought time for filing affidavit. It was directed that affidavit is to be filed on or before 21.2.2011 and the matters were adjourned to 23.2.2011.

(48) On 23.2.2011 in Civil Application No. 753 of 2011 in Special Civil Application No. 15599 of 2008 and in Civil Application No. 754 of 2011 in Special Civil Application No. 134 of 2006, the Court passed the following order on 23.2.2011:

"1. Shri K.B. Naik, learned advocate appearing for respondent Company, who is petitioner in Special Civil Application No. 134 of 2006 submits that as per the instructions received by the Advocate, no one is presently Managing Director of the company. The last Managing Director, who demitted his office was Mr. Pratapsinh Sangramsinh Gaekvad, who demitted his office vide resignation on or before December, 2008 and exact date of resignation and acceptance of resignation would be given within days time and right on date, there is no Chairman in the company and no one is holding the post of Chairman.

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2. At this stage, Shri Naik submitted that precise information in this behalf be furnished and placed on record to the Court on short affidavit by 24.02.2011. The requisite documentary evidences in support of the valid resignation and valid appointment for charge holding, if any, be also furnished on affidavit of one of the active Directors of the Company on 24.02.2011.

3. S.O to 24.02.2011."

(49) On 24.2.2011 in Civil Application No. 753 of 2011 in Special Civil Application No. 15599 of 2008, it was observed that the affidavit-in-reply as ordered in Civil Application No. 753 of 2011 has been filed today and taken on record and matters were adjourned to 25.2.2011.

(50) On 7th March, 2011 in Civil Application No. 753 of 2011 in SCA 15599 of 2008 an in Civil Application No. 753 of 2011 in CA No. 4772 of 2008 in SCA No. 134/2006, it is observed that rejoinder affidavit was taken on record. It is to be noted that in Civil Application No. 1134 of 2011 in SCA No. 15599 of 2008 is filed on 3.3.2011 and in which no order has been passed by this Court.

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C/SCA/15599/2008 JUDGMENT WRITTEN SUBMISSIONS OF SHIR D.D. VYAS, LEARNED SENIOR ADVOCATE IN CIVIL APPLICATION NOS. 753 AND 752 OF 2011:

(51) The development of events as could be seen from the proceedings, it could be broadly bifurcated that the entire group as mentioned hereinabove in the inception consist of main matters, Civil Applications, Misc. Civil Applications and Civil Application in Civil Applications, Civil Application for amendment and in the main matter. So far foregoing discussion and narration is concerned, the same is in respect of the main matters wherefrom the Civil Applications and Misc. Civil Applications have been arisen and in order to maintain the chronological order, there could be reference to either the Civil Applications or Misc. Civil Applications or prayers but it would not be out of place to specifically adhere to consider all the Civil Applications, its purport and facts and therefore, the Civil Applications and Misc Civil Applications are considered as civil applications preferred by those aspirants to purchase the properties and outcome thereon. The Misc. Civil Applications are essentially for seeking setting into motion the contempt machinery so as to bring home the guilt on the part of the alleged contemptnor and the Civil Applications contained prayer for joining the land owners or land holders or occupants as party respondents as despite their being prohibitory orders in forced is concerned, has not only alienated the property but parted with Page 119 of 674 C/SCA/15599/2008 JUDGMENT the possession of those parcels of lands, which is pleaded to be in blatant violation of the order passed by the Tribunal and not disturbed by this court till date.

(52) In the events of those Civil Applications, counsel for the workmen heavily relied upon number of decisions of the Apex Court to indicate that any transaction made contrary to the order or interim order made by the Court, can be assailed on the same ground without even joined the beneficiary as party thereto, as on the face of it, the beneficiary never enjoyed better title and when the act of alienating of the property is in violation of the Court's interim order then no title much less any defective title, so as to cloth with him any right to defend such position.

Besides filing of the Civil Applications and granting extensive right of hearing on those applications to the parties and their counsel, would indicate that there was sufficient time and opportunity given to those occupier of the lands parcel, who have been alleged to have been beneficiary of the transaction which are contrary to and dehors the interim orders enuring in the matter. At one point of time, it was pleaded on behalf of the counsel that not only it is the entitlement enuring on behalf of the parties to seek complete compliance of the order or interim order passed by this court but a duty is cast upon the Court to uphold the majesty of law and see to it that what is done dehors the Court's order may be set at right and undone and if one Page 120 of 674 C/SCA/15599/2008 JUDGMENT looks at the matter, then, the liberty in respect of opportunity of being heard or reserving any right, after joining party, are requested to be viewed as if nothing but a protracting tactic adopted by the counsel and therefore, on this ground also, it was urged that order which have been flouted needs to be enforced in its totality and resultant beneficiary may not be permitted to contend in any manner, though at any point of time it was also argued that in case if the lands are available with the company barring land, which was alienated, is capable of satisfying / justifying the claim of the workmen and secured creditors, then the position of those, who have been occupying the land on alleged breach of Court's order may not be disturbed.

(53) Learned counsel Shri Vyas appearing for the proposed respondent Nos. 19 to 21 contended that amendment applications may not be tenable in eye of law as they did not fulfill the requisite criteria for granting amendment in a pending matter. It was contended that the presence of party and amendment are essential for deciding controversy between the parties. It shall not amount to injustice either the party. It cannot be permitted to be abuse of process of law. Following authorities were relied upon in support of the submission that amendment may not be granted when it changes cause of action and the structure of the original petition: (i) 1953 Kolkatta 15;

(ii) 1969 SC 1288 in case of S. Kartar Singh Vs. Chaman Lal Page 121 of 674 C/SCA/15599/2008 JUDGMENT and others, (iii) 2000 SC 614 in case of B.K.N. Pillai Vs. Pillai and another, (iv) 2009 (2) GLR 1579 in case of ALKAPURI CO-OPERATIVE HOUSING SOCIETY LTD VS. JAYANTIBHAI NAGINBHAI (DECD.) THROUGH LRS,

(v) 2001 (6) SCC 163 in case of VISHWAMBHAR AND OTHERS VS. LAXMINARAYAN (DEAD) THROUGH LRS AND ANOTHER.

(54) It was further argued that the opponent nos. 20 and 21 could not have been joined in their personal capacity.

(55) Learned counsel for the respondent thereafter submitted that the main matter was not maintainable as it was barred by constructive res-judicata inasmuch as these very applicants had preferred Special Civil Application No. 4094 of 2010, copy of which was on the record of Special Civil Application No. 15599 of 2008 but it contains specific challenge to the transaction on the ground of illegality and fraud and there was an averment to the effect that petition cannot be proceeded with even on the submission of illegal transaction and fraud as also reference has been made that the transaction is illegal considering the proceedings by the respondent No. 1 before the BIFR and specific contention thereto was made at page no.45 and also relief clause 6(A)(ii) at Page No. 46. It was further alleged that Special Civil Application No. 4094 of 2010 has Page 122 of 674 C/SCA/15599/2008 JUDGMENT been dismissed by the Division Bench of this Court vide order dated 13.5.2010.

(56) This was explained in detail by the concerned counsel for the workmen that plea of resjudicata or constructive resjudicata would not be available to defend the cause of petitioner as the petitioner's petition being Special Civil Application No. 4094 of 2010 was not even subject matter of relief there in respect of the order passed by the State dated 2.7.2009, which in fact, had been also challenged at the relevant point of time by original land owner or interested party by one Shantilal J. Patel Vs. State of Gujarat in SCA No. 10394 of 2009 and SCA No. 10395 of 2009, in which, Division Bench of this Court on 30.9.2009 passed detailed orders and had been pleased to observed that the State has not been granted any relief for alienating the land which are described in the second table of the communication dated 2.7.2009. These orders were perused by the Court and they were pressed into service to point out that mere reference to the main petition being Special Civil Application No. 15599 of 2008 in the pleadings without being specific prayer in support of the submission cannot be treated as either resjudicata or constructive resjudicata so as to defeat the cause of petitioner in a substantive petition.



(57)         It was also argued that Division Bench while


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disposing of said Special Civil Application preferred by the Union challenging the very same order also did not press those grounds available. The Division Bench observed that remedy lies elsewhere meaning thereby, order which is not mentioned on the above facts cannot be said to be decided or lis settled between the parties and therefore, on this ground it was alleged that this type of pleadings are made with a view to thwart the process of justice and therefore, same be viewed in accordance therewith.

(58) It is also required to be mentioned at this stage that in light of the pending proceedings before the BIFR, the present petition would not be of any avail and once the BIFC is in seizin, this court may not entertain the petition. The reliance was placed upon the decision of the Apex Court reported in (i) 2010(3) SCC 353 in case of S. Nagraj (dead) by Lrs. And others Vs. B.R. Vasudeva Murthy and others, (Head Note G, para-63) and (ii) 2011 (3) SCC 408 in case of M. Nagabhushana Vs. State of Karnataka and others, (para-12 to 25.) (59) Learned counsel appearing for those respondents thereafter placed heavy reliance upon the contention that subject matter of the petition has been referred to the arbitrator where the question has been referred as to what were the dues to be Page 124 of 674 C/SCA/15599/2008 JUDGMENT paid to the workmen (inclusive of retired / resigned/ died/ terminated) of the Baroda Rayon Corporation Limited by Baroda Rayon Corporation Limited. Since the whole subject matter is referred to arbitration, there is no cause left to be decided in the aforesaid petition and in view of provision of Section 5 of the Arbitration Act, no proceedings can be continued, for which reliance is being placed on (i) 2003(6) SCC 503 in case of Hindustan Petroleum Corpn. Ltd. Vs. Pinkcity Midway Petroleums (para-14 and 15), (ii) 2007 (3) SCC 686 in case of Agri Gold Exims Ltd Vs. Sri Lakshmi Knits & Wovens and others (para-22) and (iii) 2009 (2) GRL 1281 in case of Gujarat Informatics Ltd. Vs. Creative Infocity Ltd. (para-31) and submitted that if there is arbitration, even writ under Article 226 may not be entertained, for which, reliance is placed on (i) 2007 SC (supplement) 1733 = 2007 (14) SCC 680 in case of EMPIRE JUTE COMPANY LIMITED AND OTHERS VS. JUTE CORPORATION OF INDIA LIMITED AND ANOTHER. Para-18 of said judgment reads as under:

"The power of judicial review vested in the superior courts undoubtedly has wide amplitude but the same should not be exercised when there exists an arbitration clause. Te Dshri ivision Bench of the High Court took recourse to the arbitration agreement in regard to one part of the Page 125 of 674 C/SCA/15599/2008 JUDGMENT dispute but proceeded to determine the other part itself. It could have refused to exercise its jurisdiction leaving the parties to avail their own remedies under the agreement but if it was of the opinion that the dispute between the parties being covered by the arbitration clause should be referred to arbitration, it should not have proceeded to determine a part of the dispute itself."

(60) Shri Vyas, learned counsel appearing for respondents thereafter contended that the application was not maintainable in view of the provisions of Section 32 of SICA Act, for which reliance is placed on (i) 2008 (7) SCC 619 in case of Tata Motors Limited Vs. Pharmaceutical Products of India Limited and another, (ii) (2006) 3 SCC 434 = 2006 SC 1489 (paras 179, 319, 324, 325, 326 and 342) in case of BOMBAY DYEING AND MFG CO. LTD (3) VS. BOMBAY ENVIRONMENTAL ACTION GROUP AND OTHERS,

(iii) 2005(8) SCC 219 in case of NGEF Ltd Vs. Chandra Developers (P) Ltd and another, (61) Shri Vyas, learned counsel appearing for respondents, apart from aforesaid submissions made hereinabove, submitted that the application is not maintainable since the prayer asked for is barred by limitation and therefore, the same cannot be granted in as much as the transactions in Page 126 of 674 C/SCA/15599/2008 JUDGMENT question are allegedly have been illegal relates back to November, 2006 and application has been made in 2011 for which, reliance is placed on the decision of the Apex Court reported in (i) 1997 SC 772 in case of T.L.Muddukrishana and another Vs. Smt. Lalitha Ramchandra Rao , (ii) 2008 SC 2171 in case of Ashutosh Chaturvedi Vs. Prano Devi & Ors., (para-11), (iii) 2008 (7) Scale 471 in case of Rajkumar Gurawara (Dead) Thr. L.RS. Vs. M/s.S.K. Sarwagi & Co. Pvt. Ltd and Anr., (iv) 2001(6) SCC 163 in case of Vishwambhar and others Vs. Laxminarayan (dead) Through Lrs. And another = 2001 SC 2607.

(62) Learned counsel Shri Vyas further submitted that the application is not maintainable as (i) it is champartous litigation and it is not being proceeded by the real party, but by another person financing the litigation as is clear from the proceedings

(ii) deliberately false statement has been made on affidavit; (iii) suppression of material facts and (iv) applicant is not interested in money, but is interested in the land only since it is being litigated at the instance of third party.

(63) Then, there was one general argument, which is enlisted in his written submission that which could be said to be

(i) the application is not maintainable since it is barred by delay, latches and acquiescence. (ii) That the Company was on the Page 127 of 674 C/SCA/15599/2008 JUDGMENT verge of closing prior to October, 2003. Thereafter, there is settlement between the Company and Employees' Association. Because of the proceedings by the Secured Creditor, the Company has come to stand steal and therefore, it was agreed by and between the company and Employees' Association that the surplus land be sold and sale be appropriated towards the dues of Secured Creditors and Financial Institutions, (iii) pursuant thereto, a Memorandum of Understanding was entered into by the Company with Uma Developers and in turn with Laxmi Narayan Cooperative Society was floated by them, which has been accepted by the Company. The total amount of consideration was paid as is clear from Page No. 506 of the petition. There is reference in the CDR about the sale of this property as also in the report of BIFR, to which the applicant was a party and thereafter the actual sale has been executed pursuant to the report of BIFR. Thereafter, learned counsel Shri Vyas for the respondent again pressed into service the factum of Special Civil Application No. 10394 of 2009 and 10395 of 2009, which in my view, was nothing but repetition of the submission mentioned hereinabove, therefore, same could be safely brushed aside.

(64) More Civil Applications being Civil Application Nos. 3051 of 2011 in Special Civil Application No. 15599 of 2008 and Civil Application No. 3052 of 2011 in Special Civil Page 128 of 674 C/SCA/15599/2008 JUDGMENT Application No. 134 of 2006 came to be filed on 7.3.2011 with following reliefs:

Prayers in Civil Application No. 3051 of 2011

(a) appoint a Court Receiver of all properties and assets of the Company including the assets covered by the four sale deeds dated 10.10.2006, 8.11.2006, 13.11.2006 and 14.11.2006 respectively and direct the Court Receiver to immediately take over the possession of the assets of the Company both movable as well as immovable and the lands covered by the aforesaid four sale deeds;

(b) restrain the board of directors of the Company from transferring disposing of, alienating, parting with possession or in any other manner dealing with any of the properties/ assets of the Company;

(c) appoint the applicant union as an agent of the Court Receiver with power to run the factory of the company situated at village Udhana and Bhedwad, District Surat;

(d) direct the Company to disclose on affidavit before this Hon'ble Court the names and addresses of the Chairman, Managing Director and all the Directors of the company since 2002 till date with date of appointment and date of retirement and with date of taking charge along with the Page 129 of 674 C/SCA/15599/2008 JUDGMENT relevant details and documents thereto;

(e) direct the Company to produce before this Hon'ble Court all the Board Resolutions passed by the Company from the year 2002 till date;

(f) direct the Company to produce the power of attorney executed by as well as under the orders of the Board of Directors in favour of Shri Hemantbhai Desai for execution of the Sale Deeds;

(g) direct the Company to bring back the raw materials as mentioned in the representation of the applicant union dated 22.8.2008;

(h) direct the Labour Commissioner and the Secretary, Labour and Employment Department to file an affidavit before this Hon'ble Court with regard to the status of various actions taken by them including the criminal cases filed by them against the company as mentioned in their affidavit dated 19.1.2009 filed in SCA No. 15599 of 2008 for violation of various provisions of the Industrial Disputes Act, Payment of Gratuity Act and the Minimum Wages Act;

(i) direct the then Chairman of the Company namely Shri Sangramsinh Gaekwad to remain personally present before this Hon'ble Court as required in the Page 130 of 674 C/SCA/15599/2008 JUDGMENT order dated 6.3.2009 passed by this Hon'ble Court;

(j) direct the Company to place on record the details of the figures of various debts and assets of the Company and also the figures of sales and also the latest audited balance sheet of the company as required by the orders dated 12.5.2009, 15.5.2009 and 2.2.2010 passed by this Hon'ble Court in SCA No. 15599 of 2008;

(k) direct the Company to pay the admitted dues of the employees of Rs.60 crores as admitted by the Company in its affidavit dated 18.2.2010 filed in C.A. No. 1440 of 2010 with interest at the rate of 12% per annum till the date of payment;

(l) direct the Company to pay the admitted gratuity dues of Rs.14.79 crores as admitted by the Company before the Industrial Tribunal in Part I award dated 20.10.2007;

(m) direct that the arbitration proceedings may be completed as expeditiously as possible in any case within a period of 3 months;

(o) pass such other and further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case and in the interest of justice;"

Page 131 of 674

C/SCA/15599/2008 JUDGMENT Prayers in Civil Application No. 3052 of 2011.

"(a) appoint a Court Receiver of all properties and assets of the Company including the assets covered by the four sale deeds dated 10.10.2006, 8.11.2006, 13.11.2006 and 14.11.2006 respectively and direct the Court Receiver to immediately take over the possession of the assets of the Company both movable as well as immovable and the lands covered by the aforesaid four sale deeds;

(c) appoint the applicant union as an agent of the Court Receiver with power to run the factory of the company situated at village Udhana and Bhedwad, District Surat;



          (e)     direct the Company to produce before

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      this Hon'ble Court all the Board

Resolutions passed by the Company from the year 2002 till date;

(f) direct the Company to produce the power of attorney executed by as well as under the orders of the Board of Directors in favour of Shri Hemantbhai Desai for execution of the Sale Deeds;

(g) direct the Company to bring back the raw materials as mentioned in the representation of the applicant union dated 22.8.2008;

(h) direct the then Chairman of the Company namely Shri Sangramsinh Gaekwad to remain personally present before this Hon'ble Court as required in the order dated 6.3.2009 passed by this Hon'ble Court;

(i) direct the Company to place on record the details of the figures of various debts and assets of the Company and also the figures of sales and also the latest audited balance sheet of the company as required by the orders dated 12.5.2009, 15.5.2009 and 2.2.2010 passed by this Hon'ble Court in SCA No. 15599 of 2008;

(j) direct the Company to pay the admitted dues of the employees of Rs.60 crores as admitted by the Company in its Page 133 of 674 C/SCA/15599/2008 JUDGMENT affidavit dated 18.2.2010 filed in C.A. No. 1440 of 2010 with interest at the rate of 12% per annum till the date of payment;

(k) direct the Company to pay the admitted gratuity dues of Rs.14.79 crores as admitted by the Company before the Industrial Tribunal in Part I award dated 20.10.2007;

(l) direct that the arbitration proceedings may be completed as expeditiously as possible in any case within a period of 3 months;

(m) pass ad-interim ex-parte order in terms of prayers (a) to (l) above.

(n) pass such other and further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case and in the interest of justice;"

(65) On 8.3.2011, the Court passed the following order in Civil Application No. 3051 of 2011 in Special Civil Application No. 15599 of 2008 and Civil Application No. 3052 of 2011 in Special Civil Application No. 134 of 2006:-

"Submissions of Shri P.H. Parekh, learned senior counsel on civil applications are over. Shri Naik, learned counsel for respondent no.1, seeks time to make submission on these two applications and Page 134 of 674 C/SCA/15599/2008 JUDGMENT prayers made there under. At his request applications are kept on 25/3/2011. To allay the apprehension expressed by the applicants and their counsel with regard to continuous dealing with the property of the company, Shri Naik submits & states that the orders dated 20/2/2006 and 20/4/2006 will scrupulously be followed and the workmen need not be apprehensive of any alienation because of the grant of time in these applications.

Adjourned to 25/3/2011."

(68) The Court passed the following order on 25.3.2011 in Civil Application No. 3051 of 2011 and Civil Application No. 3052 of 2011:

"Learned advocate Ms. Tejal Bhatt on behalf of Shri K.B. Naik for M/s Trivedi & Gupta for the respondent no.1 company submits that, the statement made by Shri K.B. Naik, recorded under the order dated 8/3/2011 shall be scrupulously adhered to and bound on the company, its directors and those who are in affairs of the company till further orders. It is stated at the Bar that Shri Naik has personal difficulty and he is actually engaged on his legs in other Court. In view of this statement, matters are adjourned to 30/3/2011. Reply, if any, to these two applications shall be filed by respective respondents with copy to the Page 135 of 674 C/SCA/15599/2008 JUDGMENT other side.

Adjourned to 30/3/2011."

(69) On 30.3.2011 the court passed the following order in Civil Application No. 3051 of 2011:

"The statement of learned counsel for the applicant workmen are over. Written submissions have been filed, same have been taken on record. The proceedings in Company Petition No. 91 of 2002 were also perused. They are ordered to be sent back to the office, and office is directed to make it available if it is required on subsequent date of hearing. At the request of learned counsel for the company, adjourned to 6/4/2011."

(70) On 7.4.2011, the Court passed the order in SCA 15599 of 2008:

"Heard learned advocates appearing for the parties.

The learned advocate for the respondent who have sought to be joined as party on account of bare entering into the sale deed and other like Secured Creditor and Directors. At the request of learned counsel, on account of personal difficulty, S.O. to 18th April, 2011."

Page 136 of 674

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(71)         On 18.4.2011, the Court passed the following order
in CA No. 3051 of 2011:

"The additional affidavit is tendered, the same is placed on record, as the learned counsel for some of the directors are yet to be made.

Hence, S.O. to 19th April, 2011."

(72) On 15.6.2011, the Court passed the following order in SCA No. 15599 of 2008:

"1. In this group of matters an affidavit is filed, affirmed on 12/5/2011. Copy of the said affidavit was served. It is important to note that learned advocate appearing for the company has made statement on earlier occasion with regard to adhering to the orders passed by this Court, i.e. orders passed in Civil Application No. 3051 of 2011 dated 8/3/2011 and 25/3/2011, which reads as under:

"Order Dated 8/3/2011:

Submissions of Shri P.H. Parekh, learned senior counsel on civil applications are over. Shri Naik, learned counsel for respondent no.1, seeks time to make Page 137 of 674 C/SCA/15599/2008 JUDGMENT submission on these two applications and prayers made there under. At his request applications are kept on 25/3/2011. To allay the apprehension expressed by the applicants and their counsel with regard to continuous dealing with the property of the company, Shri Naik submits & states that the orders dated 20/2/2006 and 20/4/2006 will scrupulously be followed and the workmen need not be apprehensive of any alienation because of the grant of time in these applications. Adjourned to 25/3/2011."

(73) On 25/3/2011, the Court passed the following order:

"Learned advocate Ms. Tejal Bhatt on behalf of Shri K.B Naik for M/s Trivedi & Gupta for the respondent no.1 company submits that, the statement made by Shri K.B. Naik, recorded under the order dated 8/3/2011 shall be scrupulously adhered to and bound on the company, its directors and those who are in affairs of the company till further orders. It is stated at the Bar that Shri Naik has personal difficulty and he is actually engaged on his legs in other Court. In view of this statement, matters are adjourned to 30/3/2011. Reply, if any, to these two applications shall be filed by respective respondents with copy to the other side. Adjourned to 30/3/2011."

2. Today an oral submission is made at length for the petitioner that demolition Page 138 of 674 C/SCA/15599/2008 JUDGMENT activities and constructions activities are going on which is contrary to the earlier orders passed. Learned counsel for the company Shri K.B. Naik submitted that, as per his instruction it is only repairing the walls so as to avoid encroachment and theft. In view of this, the Court is of the view that in addition to the orders in prohibitory nature already existing, let there be an order of restraining the company, its employees agents and servants from undertaking any sort of activities, including putting up of construction of wall or demolition and/or construction of any other building till appropriate instructions are received in this application. In other words status-quo as on date without eroding or watering down the earlier orders is ordered to be maintained till further order. The restraint orders shall be adhered to scrupulously. Learned advocates are appearing for the parties, and therefore there is no requirement of serving the order. Learned advocate for the company Shri K.B. Naik has submitted that there is no requirement of serving this order and he will pass on instruction to the company and or its agents & servants that this moment onwards to restrain them from carrying out any activity of the nature which can be said to be of construction, demolition or that type of activities.

3. Learned advocate for the company shall reflect upon by an appropriate reply affidavit to be sworn by a responsible person not less than the director in respect Page 139 of 674 C/SCA/15599/2008 JUDGMENT of the notice attached to the affidavit, and said reply shall have all the documents attached with it to meet with the allegations made in this affidavit."

(74) On 17.6.2011 in SCA No. 15599 of 2008, the Court passed the following order:

"1. In the midst of the submissions, learned advocate for the workmen submitted that despite there the order of this Court dated 15.06.2011, further restraining Company from going-on any activities of demolition, construction, repairing and any other activity of like nature, the Company through its employees, agents and servants have started demolition of administrative buildings as well as employees quarters.

2. Learned advocate Mr.Nayak for the Company submitted that in fact the purport and gist of the order in no uncertain terms conveyed to one Shri Damodarbhai Patel, Director of the Company on the very same day. Be that as it may. At this stage, it would be open for the workmen to put-up appropriate application indicating breach of any aforesaid order. S.O.21.06.2011."

(75) Thereafter Civil Application Nos. 9650 of 2011 in SCA No. 15599 of 2008 and Civil Application No. 9518 of 2011 in SCA No. 15599 of 2008 were filed on 7.9.2011, prayers of which are as under:

Page 140 of 674

C/SCA/15599/2008 JUDGMENT Prayers in Civil Application No. 9518 of 2011:

"(A) to allow the present application;

(B) to permit the present applicant to join as respondent in Special Civil Application No. 15599 of 2008;

(C) on payment / deposit of Rs.50 crores and the furnishing of the bank guarantee for due payment of six monthly installments as mentioned above, the present applicant may be permitted:

(i) to inspect the assets proposed to be purchased and to verify its measurements by taking into consideration the revenue record i.e. 7/12, DILR measurement maps and the existing conditions of plants and machineries;

(ii) to engage his own security personnel along with the present security personnel in order to protect all the assets proposed to be purchased vide this offer since the applicant is having apprehension that the properties of opponent No.2 company may be pilfered away;

(iii) to start and carry out the development at the site of the assets sought to be purchased requiring the removal and shifting of the plant and machineries and Page 141 of 674 C/SCA/15599/2008 JUDGMENT demolition of the building structures etc. and otherwise to deal and transact for the plant, machineries and buildings;

(iv) to have the undertaking signed by all the secured creditors that on payment of all the installments their charge/ encumbrance over the assets proposed to be purchased by the present applicant shall cease and they will execute and register the release deeds in respect of the same to ensure that the assets sought to be conveyed is free from all encumbrances whatsoever;

(v) to have the undertaking from opponent no. 2 - company to the effect that no further charges are created in respect of the assets sought to be purchased by the present applicant and if any payment is due from opponent no.2 to any person, institution or individual shall be paid by him from its other assets and under no circumstances the present applicant and/or the assets sought to be purchased by the applicant shall be liable for the same.

(D) On payment of the final installment of the total consideration, opponent No. 2 may please directed to execute one or more conveyance - deeds in favour of the present applicant and/or such person as may be nominated by the applicant in respect of the assets sought to be purchased by dividing the same into movable and immovable assets and putting up their respective value Page 142 of 674 C/SCA/15599/2008 JUDGMENT and conveying clear and marketable title to the same by handing over vacant, peaceful and actual possession free from all encumbrances;

(E) On the opponent No. 2's failure to execute the conveyance deeds as stated in clause (d), the Court receiver may please be appointed to execute such conveyance deeds on behalf of the opponent No. 2 in favour of the applicant and/or such person as may be nominated by the applicant in respect of the assets sought to be purchased by dividing the same into movable and immovable assets and putting up their respective value and conveying clear and marketable title to the same by handing over vacant, peaceful and actual possession free from all encumbrances;

(F) Such other and further relief/s as may be deemed just in the facts and circumstances of the present case may kindly be granted;"

(76) Prayers in Civil Application No. 9650 of 2011 reads as under:

"(a) YOUR LORDSHIPS may be pleased to pass appropriate orders joining the applicants as party - respondents in the main petition i.e. Special Civil Application No. 15599 of 2008 and the various applications therein.

Page 143 of 674

C/SCA/15599/2008 JUDGMENT

(b) YOUR LORDSHIPS may be pleased to grant such other and further reliefs as the Hon'ble Court may deem fit in the facts and circumstances of the case."

(77) On 13.9.2011 in Civil Application No. 9518 of 2011 with Civil Application No. 9133 of 2011 in SCA No. 15599 of 2008, the Court passed the following order:

"Learned counsel Shri Mihir Joshi has requested that the affidavit in reply filed on behalf of respondent no.2 in Civil Application No. 9133 of 2011 be treated as reply filed also in Civil Application No. 9518 of 2011, and after the same is filed cause title be changed. Order accordingly. Learned counsel is seeking time. At his request matters are kept on 14/9/2011."

(78) On 20.9.2011, the Court passed the following order in CA No. 9518 of 2011 in SCA No. 15599 of 2008:

"The interested bidders, who have already come forward with concrete offer without any further delay, as to whether they are ready to accept the property, which is mentioned as it is, without scrap laying on the compound and shall put up final offer with minimum period of payment for the entire amount offered and the property would be thereafter passed thereon.

Page 144 of 674

C/SCA/15599/2008 JUDGMENT The company's objections will be considered by the Court, if admissible under law. The entire group of petitions be kept on 27.09.2011."

(79) It is to be noted that on 26.9.2011, Civil Application No. 10154 of 2011 in SCA No. 15599 of 2011 is filed with following prayers:

"Prayers in CA 10154 of 2011:

A. This Hon'ble Court be pleased to allow this application;

B. This Hon'ble Court be pleased to permit the applicant to be joined as party respondent in Special Civil Application No. 15599 of 2008;

C. This Hon'ble Court be pleased to direct respondent no. 2 company by order to hand over clear and marketable titles of entire assets of the respondent no. 2 company being 155 acres of land, plant, machineries, building, workers colonies, more particularly declared in affidavit dt. 18.2.2010 filed by respondent no. 2 company in C.A. No. 1440 of 2010, free from all encumbrances and the actual peaceful and vacant possession of the said assets with clear titles be given to the applicant on depositing Rs.Five Hundred Page 145 of 674 C/SCA/15599/2008 JUDGMENT Crores (Rupees Five Hundred Crores only) before this Hon'ble Court.

D. This Hon'ble Court be pleased to permit the applicant to deploy its own security personnel, guards within the premises of respondent no. 2 company along with existing security after depositing of Rs.50 crores only;

E This Hon'ble Court be pleased to permit the applicant to start and carry out the development at the site of the company requiring the designing, removal and shifting the plant and machineries, and to do required demolition of buildings structures, etc. and otherwise to deal and transact for the plant, machineries, and buildings on deposition of Rs.200 crores only.

F This Hon'ble Court be pleased to permit the applicant to grant such other and further reliefs as may be deemed fit by this Hon'ble Court in the interest of justice."

(80) It is also to be noted that on 27.9.2011, one more Civil Application No. 10183 of 2011 came to be filed in SCA No. 15599 of 2008 with following prayers, in which, no order passed by this Court till date.

Page 146 of 674

C/SCA/15599/2008 JUDGMENT Prayers in Civil Application No. 10183 of 2011:

"(a) this Hon'ble Court be pleased to allow this Application in terms of para 11(i) to 11

(xii) above;

(b) this Hon'ble Court be pleased to allow the Applicant to be impleaded as necessary Respondent in the proceedings of the Special Civil Application No. 15599 of 2008;

(c) any other reliefs as this Hon'ble Court deems fit and proper in the interest of justice;

(81) On 28.3.2011 in Civil Application No. 9518 of 2011 with Civil Application No. 10154 of 2011 with Civil Application No. 1440 of 2010 with Civil Application No. 11350 of 2010 in Special Civil Application No. 15599 of 2008, the Court passed the following order:

"1. The applicants, who have expressed their interest and made offers in respect of the Company's property, have filed their revised offers also. Some of the applicants are yet to file the same by way of proper affidavits. It is therefore in the interest of justice that those, who are interested in filing their final offers with appropriate undertaking as to forfeiture of the earnest money in case their failure in compliance with their offer, may submit their final offers Page 147 of 674 C/SCA/15599/2008 JUDGMENT with a copy to learned advocate appearing for the Company as well as learned advocate for the workmen and union on or before 30.9.2011. The company, union and workmen shall file their response, if any, to these offers by 04.10.2011 with a copy to all.

2. At this stage, learned advocate appearing for the Company submitted that company's objection to sell may be considered. Learned advocate appearing for the workmen and Union contended that the Company has no right to object to the sale, as the entire exercise of inviting bids and scrutinizing the terms and conditions of payment is commenced and going on, on account of consensus between the parties and consent of the Company, which has been recorded time and again before the Mediator as well as before this Court. This contention is disputed by learned advocate appearing for the Company.

3. Be that as it may.

4. Parties, through their advocates shall exchange their affidavits and counters, if any, by 04.10.2011. Matters are adjourned to 05.10.2011.

5. Registry is directed to keep copy of this order in each matter."

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(82)           On 28.9.2011, Civil Application No. 9133 of 2011

filed in SCA No. 15599 of 2008 has been disposed of by this Court.

(83) On 11.10.2011, in SCA No. 15599 of 2008 with SCA No. 134 of 2006 with SCA No. 9298 of 2009 the Court passed the following order:

"Matter was argued by learned advocate for the workmen. Shri Naik submits that learned advocate Shri Joshi is actually on his legs, hence Court may adjourn the matters. At his request matters are adjourned to 12/10/2011."

(84) It is to be noted that on 11.10.2011 one Civil Application No. 10802 of 2011 is filed in SCA No. 15599 of 2008 with following prayers:

Prayers in Civil Application No. 10802 of 2011:

"A. This Hon'ble Court may be pleased to admit and allow the said Civil Application;

B. This Hon'ble Court be pleased to permit the applicant to be joined as party respondent in Special Civil Application No. 15599 of 2008.

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C/SCA/15599/2008 JUDGMENT C. This Hon'ble Court be pleased to direct opponent no. 2 herein i.e. THE BARODA RAYON CORPORATION LIMITED by order to hand over clear and marketable titles of entire assets of the opponent no.2 herein i.e. THE BARODA RAYON CORPORATION LIMITED being 155 Acres of Land, Plant, Machineries, Building, Workers, Colonies, more particularly declared in affidavit dated 18.2.2010 filed by the opponent no. 2 herein i.e. THE BARODA RAYON CORPORATION LIMITED in Civil Application No. 1440 of 2010 inclusive of Water Plant at Tapi River free from all encumbrances and the actual peaceful and vacant possession of the said assets be given to the applicant on depositing of Rs.525=00 Crores only before this Hon'ble Court.

D. This Hon'ble Court be pleased to permit the applicant to deploy its own security personnel guards within the premises of opponent no. 2 herein i.e. THE BARODA RAYON CORPORATION LIMITED along with existing security after depositing of Rs.50=00 crores only.

E. This Hon'ble Court be pleased to permit the applicant to start and carry out the development at the site of the company requiring the removable and shifting the plant and machineries, and to do required demolition of buildings structures etc. and otherwise to deal and transact for the plant, Page 150 of 674 C/SCA/15599/2008 JUDGMENT machineries and buildings on deposition of Rs.150=00 Crores only.

F. Such other and further relief that is just, fit and expedient in the facts and circumstances of the case may be granted."

(85) On 12.10.2011 in SCA No. 15599 of 2008 and in cognate matters, the Court passed the following order:

"1. Learned counsel for the Company Shri Joshi with Shri Naik, as well as learned advocates for the workmen parties to these petitions have requested for taking up the matters and passing appropriate order for disbursement. Learned counsel Shri Joshi with Shri Naik for the company states that, apropos the statement made on 20/9/2011, based upon the affidavit of the company, an amount of Rs.8,78,00,000/- was to be deposited towards payment of dues of those employees and towards those employees who have died or who have reached the age of superannuation. The company is, therefore, depositing Rs.8,78,00,000/- by 18/10/2011 before the concerned Industrial Tribunal, Surat. The advocates for the workmen have submitted that this depositing of money may be without prejudice to the rights & contentions of the workmen being agitated in the petitions, and in addition the amount to be paid to the heirs of the employees who have died or retired, it may be ordered to be distributed amongst all the workmen who are waiting since long as part payment towards their claims which may be Page 151 of 674 C/SCA/15599/2008 JUDGMENT adjusted against their final claim.

2. In view of this, let the company deposit an amount of Rs.8,78,00,000/- (Rs. Eight crores and seventy eight lakhs only) on or before 18/10/2011 before the Industrial Court, Surat. The said amount be distributed in equal proportion to all the concerned workmen, list whereof be prepared by the workmen in consultation with their advocates and advocates of the company. On presentation of this list by 19/10/2011 or by 20/10/2011 whichever is early, the Tribunal shall disburse the amount in equal proportion to the persons figuring in the list by proper identification of person and by way of account payee cheque or by bank draft.

3. The said disbursement would naturally be without prejudice to the rights & contentions of both the sides in any manner. The Industrial Tribunal, Surat, shall monitor disbursement of the amount as stated herein above.

4. Matters to come up on 21/10/2011."

(86) On 21.10.2011 in SCA No. 15599 of 2008 and in cognate matters, the court passed the following order:

"1. On 12.10.2011, this Court has passed the following order:

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1. Learned counsel for the Company Shri Joshi with Shri Naik, as well as learned advocates for the workmen parties to these petitions have requested for taking up the matters and passing appropriate order for disbursement. Learned counsel Shri Joshi with Shri Naik for the company states that, apropos the statement made on 20/9/2011, based upon the affidavit of the company, an amount of Rs.8,78,00,000/- was to be deposited towards payment of dues of those employees and towards those employees who have died or who have reached the age of superannuation. The company is, therefore, depositing Rs.8,78,00,000/- by 18/10/2011 before the concerned Industrial Tribunal, Surat. The advocates for the workmen have submitted that this depositing of money may be without prejudice to the rights & contentions of the workmen being agitated in the petitions, and in addition the amount to be paid to the heirs of the employees who have died or retired, it may be ordered to be distributed amongst all the workmen who are waiting since long as part payment towards their claims which may be adjusted against their final claim.

2. In view of this, let the company deposit an amount of Rs.8,78,00,000/- (Rs. Eight crores and seventy eight lakhs only) on or before 18/10/2011 before the Industrial Court, Surat. The said amount be distributed in equal proportion to all the concerned workmen, list whereof be prepared by the workmen in consultation with their advocates and advocates of the Page 153 of 674 C/SCA/15599/2008 JUDGMENT company. On presentation of this list by 19/10/2011 or by 20/10/2011 whichever is early, the Tribunal shall disburse the amount in equal proportion to the persons figuring in the list by proper identification of person and by way of account payee cheque or by bank draft.

3. The said disbursement would naturally be without prejudice to the rights & contentions of both the sides in any manner. The Industrial Tribunal, Surat, shall monitor disbursement of the amount as stated herein above.

4. Matters to come up on 21/10/2011."

2 Today, learned advocate for the workmen has submitted that the amount is not disbursed and the reasons is said to be the Tribunal's inability to issue these many cheques, as well as nonreceipt of money in the account of Tribunal. Learned Counsel for the company has submitted that the payment is deposited by banker's cheque. Be that as it may.

3. The learned advocate for the workmen as well as learned advocate for the company has suggested that the transfer and the disbursement of the amount as ordered by the Court may be made instead of account payee cheque, by way of electronic fund transfer into the workmen's and legal heir's account, as the case may be, after Page 154 of 674 C/SCA/15599/2008 JUDGMENT appropriate verification which should be done as expeditiously as possible, so that those who are concerned shall identify and see to it that before 26.10.2011 the workmen may receive the amount, which is ordered to be received by them.

4. The list is prepared and the list is consisting workmen's name against whom the payment is to be made. In case of deceased workman, the payment is to be received by his legal heir. The workmen and/or legal heir shall prepare a small undertaking to the following effect;

"I____________________ (name of the worker and/or legal heir, as the case may be) undertake that the account number, bank's name and branch name as given here under is my account number and payment made into the account is payment received by me and I shall have no other dispute qua this amount or receipt there from, once it is deposited in the account number given herein below.

"4.1 Such undertaking should be signed by concerned workman and/or legal heir.

4.2 Whenever the undertaking is filed by the legal heirs that undertaking shall also be containing of this paragraph that, he is entitled to receive the same. He/she is ______________ (son/daughter/ wife/brother) to the deceased employee and Page 155 of 674 C/SCA/15599/2008 JUDGMENT this amount is received by him/her on behalf of all the legal heirs and no-one will claim this amount thereafter.

4.3 This undertaking be furnished before the company with the copy to the Tribunal as soon as possible.

5. The company and its director Shri Damodar Patel, are hereby directed to depute two officers who shall be responsible for verifying the details as expeditiously as possible and co-operate in seeing to it that workmen shall receive the amount on or before 26.10.2011. The Tribunal shall on receiving the list, duly verified by the officers of the company and shall issue instructions to the bank in which the Tribunal as an account wherein the money is laying to process the payment to the concerned workmen by way of electronic fund transfer system (ECS) without delay.

7. It is informed to the Court that during vacation also one member of Tribunal is available, who function as such for urgent matters. Therefore, that member shall see to it that the appropriate instruction is passed on to bank for processing the payment into the concerned workmen's account, as stated herein above.

8. At this stage, Shri Dave has submitted that apart from these 3036 workmen about 10 members are missed out. It goes without Page 156 of 674 C/SCA/15599/2008 JUDGMENT saying that as agreed between the parties with regard to other 10 names, there is no requirement of making a fresh order. Same procedure will be effected to those employees also. Parties are agreed to that.

9. Matter is kept on 09.11.2011. Direct Service today is permitted. Petitioners are also permitted to serve this order by FAX at their cost."

(87) On 7.12.2011 in SCA No. 15599 of 2008 and in cognate matters, the court passed the following order:

"1. In this group of matters there are applications filed by bidders, interested in purchasing the property of the company. However, as there was some discrepancies in the description of the property to be sold, at one point of time even the help of District Inspector of Land Records was also taken, who has submitted his report indicating clearly the land belonging to the company. The bidders have offered various prices on different payment terms and conditions and sometimes in respect of some applicants/bidders their genuineness was also raised.

1.1 It was, therefore thought it fit to formulate uniform Bid format which may be used by the bidders making there offers, so that all the bidders may be equal and Page 157 of 674 C/SCA/15599/2008 JUDGMENT equally bound by there offers and forfeiture clause and it should be by way of there undertaking to this Court.

2. The learned advocates of the bidder applicants, the company and workmen have by and large arrived at a common format and the terms and conditions, in which the offer is to be made by the bidders. The company's Counsel has indicated minor modifications in the terms and conditions to be forming part of the Bid and the amount of earnest money, etc.

3. At this stage, learned Counsel Shri Vyas representing the proposed party to be impleaded in the main matter submitted that consensual terms may not amount to include the property which have been sold by the company pursuant to BIFR proceedings and if in case the Court is inviting the Bids, let there be specific measurement of the land excluding the land, which is already sold.

4. At this stage, learned advocate for the workmen contended that the workmen do not give up their rights to include the land which the company has, as per their submission, sold contrary to the prohibitory order passed by the Courts including Tribunal and this Court. However, for present land which is clearly available for sale, which is 110 acres may be subject matter of present Bid, as it is hoped that Page 158 of 674 C/SCA/15599/2008 JUDGMENT bidders' offers would cover sufficiently towards dues to the company as well as workmen.

5. At this stage, learned advocate appearing for the company contended that company's objections to sale may be considered.

6. Learned advocate appearing for the union and workmen has contended that company has no right to object sale, as entire exercise of inviting Bids and finalizing the terms and conditions on account of consensus between the parties and consent of the company, which is recorded before the mediator as well as before this Court. This contention is disputed by learned advocate for the company.

7. Thus, the Court is of the view that terms of Bid on which by and large there is consensus between all the advocates and parties are finalised as under:

7.1 The bidders shall make their Bid only in the following format:

1) The bidder is a _________________ (here state whether company, partnership firm, sole proprietorship, etc.). This affidavit is filed on its behalf by the Page 159 of 674 C/SCA/15599/2008 JUDGMENT _______________ thereof who is duly authorized and empowered to do so, and bind the firm/partners/company/bidders to the terms stated hereafter.

2) The bidder is submitting its Bid to purchase the land admeasuring approximately 110 acres of the ownership of The Baroda Rayon Corporation Limited and buildings, plant and machinery situated thereon, all on as is where is basis.

3) The bidder offers to purchase the said assets for a sum of Rs.___________ (Rupees ___________) The bidder has today deposited a sum of Rs.50,00,00,000/-

(Rupees Fifty Crores Only) by Demand Draft in the Registry of this Court as Earnest Money Deposit. The bidder undertakes to deposit such further amount so as to constitute 25% of the Bid amount upon acceptance of its offer and the balance within 30 days thereof.

4) The bidder is submitting its Bid by accepting the following terms:

(a)That the bidder is aware of the present proceedings against the Company and the orders passed therein.

(b)The bidder shall be deemed to have inspected the assets of the Company being put up for sale, as set out in para 2 and is submitting the Bid on as is where is basis.

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(c)That the submission of the Bid shall neither invest the bidder with any right whatsoever in or in relation to the said property, nor a right to intervene in the pending legal proceedings.

(d)That the submission of the Bid or consideration thereof does not tantamount to acceptance of the prayer made by the Union to sell the assets of the Company and that the finalization of the Bid will only be upon the Court accepting such prayer of the Union after hearing the parties to the writ petitions.

(e)That the bidder shall furnish Bank Guarantee or any other security for the amount of total consideration to the satisfaction of the Court to establish its financial wherewithal to abide by the terms of its offer.

(f)That the acceptance of the Bid will not entitle the Bidder to raise a claim to initiate proceedings in respect of property of the Company which has already been transferred by it, even in the event of such transfer being set aside by the Court.

(g)The bidder shall not withdraw its offer once submitted at any time and in case of bidder withdrawing offer for any reason, the amount deposited along with the Bid Page 161 of 674 C/SCA/15599/2008 JUDGMENT shall stand forfeited and that shall be utilized towards the satisfaction of the dues of the workmen/employees only.

Bidder also agrees that in case of his default in abiding by the terms and conditions of the Bid, at any time the amount deposited with Bid shall stand forfeited and that amount shall be utilized for the purpose of satisfying the dues of the workmen/employees.

(h)That even the bidder and the highest bidder shall have no right whatsoever to claim the property for which the Bid is offered.

(i)That the bidder shall have no right to object to the settlement between the company and workmen/employees only on account of their depositing the initial amount at the time of making Bid.

(j)The deposit of entire amount with Bid shall not create any right in the bidder to object to any move of inviting Bids higher then Bids received from the open market.

5) The bidder states that this is its final offer and all earlier offers and conditions as may have been stated in respect of the same stand withdrawn.

      6)      The bidder undertakes to abide by

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      what is stated herein-above.

8. At this stage, learned Counsel for the Company submitted that amount of initial deposit shall be Rs.75,00,00,000/- (Rupees Seventy Five Crores Only) and not Rs.50,00,00,000/- (Rupees Fifty Crores Only) and period for depositing the final amount shall be 30 days and not 75 days.

8.1 The Court is of the view that when the bidders are only invited to make offers and no right is created in their favour, it would not be appropriate to burden them with greater amount then Rs.50,00,00,000/- (Rupees Fifty Crores Only) and the period of 30 days also may not be adequate for bidder for depositing the entire amount once there Bid is accepted. Hence, the Court is unable to accept the submission with regard to increasing the initial money and decreasing the days.

9. This invitation of Bid is without prejudice to the contention of the parties. At this stage, the Court is of the view that the Bid should be submitted in the aforesaid format on or before 16.12.2011, to which learned advocate for the company submitted that this longer time would result into unnecessarily spreading rumours and encouraging speculation.

9.1 The Court is of the view that the time granted upto 16.12.2011 for making Bid is Page 163 of 674 C/SCA/15599/2008 JUDGMENT required to be granted and apprehension of speculation activities will have no adverse effect upon the present proceedings or the interest of the parties.

10. This Court is of the view that the apprehension is though not entirely misconceived but bidder have to have some time and hence this objection is over ruled.

11. At this stage, this Court is of the view that it is open to the company to set out by way of affidavit and undertaking to be submitted to the Court by 16.12.2011, as to what are the dues, as per the company, outstanding to be paid to the workmen/employees and how much time the company would take in paying them entirely.

12. The Bid, if not strictly in the aforesaid terms will not be considered.

13. The secured creditor has not given any consensus and the Court is of the considered view that so far no action is initiated at the end of them for realizing the amount. The secured creditors' consent is not even required as it is time and again made clear to all that the entire proceedings of sale would take care of the interest of secured creditors as well as workmen/employees.

S.O. To 19.12.2011."

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(88)         It would be most appropriate to advert to the facts at

this stage that the order under which there was an invitation to bidders and the terms recorded in order dated 7th December, 2011 with the order dated 15th December, 2011. The L.P.A. preferred being L.P.A. No.527 of 2012 in S.C.A. No.2859 of 2012, wherein the reply was filed and in reply, in order to resist the contention qua the impediment created on account of arbitration proceedings, the workmen have brought on record the statement of claim, as well as, written statements, which would clearly indicate that a specific stand taken and both the sides were articulately mentioned that the disposal of the property of the company for paying the workmen's dues is kept out of purview of arbitration proceedings. In other words, there was absolutely ad idem between the parties and counsel and all the concerned qua the issue of disposal of assets of the company for discharging company's liability qua the workmen's dues and these factors therefore, will have to be borne in mind. This was also pointed-out in the affidavit on internal page no.1065 affirmed on 8th August, 2012.

(89) It is also required to be noted at this stage that the parties constantly endevoured to put an end to the controversy and hence at a given point of time, the Court passed an order on 7th December, 2011 as stated hereinabove, wherein the proforma Page 165 of 674 C/SCA/15599/2008 JUDGMENT of bid was also settled.

(90) This order was subject matter of L.P.A. on behalf of the Company being L.P.A. No.527 of 2012 in S.C.A. No.15599 of 2008, wherein the Division Bench while disposing of the appeal recorded as under :-

"1. During the course of hearing of the appeal, there was limited consensus among all the learned counsel appearing on both sides that the impugned order dated 07.12.2011 was an interim order in the petitions which are pending and which are also required to be heard for final disposal. It was further conceded that the terms of bid which were finalised and recorded in para 7 of the impugned order could not be complied within the prescribed time limit on account of either the bids expected to be received were not received or because some bids were received after the due date. But in any case the impugned order has not resulted into sale or even finalisation of the bidding process for the lands of the appellant-company. Against that backdrop of facts, it was agreed and fairly conceded that even pursuant to the original petitions, fresh orders may be required to be made and all the parties concerned were required to be given an opportunity of being heard by the learned Single Judge before making any further order in the main petition.

2. Apart from the above limited consensus, Page 166 of 674 C/SCA/15599/2008 JUDGMENT it was agreed by the appellant-company that even after an ad-hoc payment of around 11 crores rupees by November, 2011, the company had accepted admitted liability towards the workmen in the region of Rupees 20 crores which the appellant- company was required and prepared to immediately pay regardless of delay in sale of their land. It was however, for the parties to workout the manner and the proportion in which such amount is to be disbursed to the workmen concerned. It was further agreed and conceded on behalf of the appellant-company that the payment as aforesaid, now offered to be made, is without prejudice to the rights and contentions of the parties and as soon as such payment is accepted by or on behalf of the workmen concerned, it would amount to only part or full payment of the admitted liability towards the workmen, without prejudice to any other and further claims of legal dues of such workmen. The appellant having made such offer of payment in accordance with the affidavit dated 24.02.2012 of the Director of the appellant- company and such offer having been unilaterally made, learned counsel for the original petitioners have agreed to accept such amount in such manner and such proportion as may be fixed by learned Single Judge after hearing the parties concerned and without prejudice to the rights and contentions of the parties as also the other claims of the parties.

3. Accordingly the appeal does not Page 167 of 674 C/SCA/15599/2008 JUDGMENT survive for any order on merit and it is disposed of by consent of the parties with liberty to all the parties to take necessary contentions before learned Single Judge before any further orders are made in the petitions which are pending.

ORDER IN CIVIL APPLICATIONS NO.

3525 of 2012 and 2859 of 2012 In view of the order passed in the Letters Patent Appeal, these Civil Applications do not survive and are accordingly disposed of."

(91) This takes us to the filing of various applications by the bidders, those who were aspiring to purchase the properties as according to the company and/or rather company and its associates, the original bidder, who opted to purchase the property at a fixed rate is treated to have backed-out as he incorporated a condition, which was leading to opening-up all further avenues and larger avenues for litigation, which would not have ended in any fruitful result, which could have been justified these aspects. Keeping those controversies alive, it was agreed by all at the relevant time, to have all offers from open market, so that everyone's claim and dues may be fulfilled out of the assets of the company.



(92)         The bidders' applications have been referred


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hereinbelow, but the Court need not elaborately dwell thereupon as suffice it to say at this stage that they were interested in purchasing the property and assets and enlistment of the company therein or the offers would not very pertinent at this stage in this decision.

(93) It is to be noted at this stage that Civil Application No. 13135 of 2011 in CA No. 11350 of 2010 in SCA No. 15599 of 2008 is filed on 14.12.2011 with following prayers:

Prayers in Civil Application No. 13135 of 2011:

"A)Your Lordships may be pleased to admit and allow this application.

B) Your Lordships may be pleased to extend the offer period two weeks from 26/12/2011 instead of 16/12/2011.

C) Any other and further relief/s which may deem fit and proper be granted in the interest of justice."

(94) On 22.2.2012, the Court passed the following order in SCA 15599 of 2008:

"1. Shri Naik, learned advocate for the Company seeks time and request that the matter be posted only on 29/2/2012. His request is accepted on a condition that this Page 169 of 674 C/SCA/15599/2008 JUDGMENT matter is pending since long, and therefore, looking to the development of events in this matter and the patience shown by the workmen who have been not paid money since long which are legitimately due to them, doling out of small chunks in between may not absolve the company of its fundamental liability to the workmen in the system which we have adopted. Therefore, the Court is of the considered view that the company shall file an affidavit through its Managing Director / responsible director who is discharging duties of managing director as to what are the actual dues as per the company's calculation payable to the workmen. This figure would be without prejudice to the rights & contentions of all the parties concerned. The matter is posted on 29/2/2012 with specific direction to the company to place on record what is the amount payable to the workmen as on 1/3/2012. This direction is required to be complied with by the director who is discharging duties of managing director, namely Shri Damodarbhai Patel. Failure on the part of said director will amount to defiance of this order, which will be visited with appropriate direction, including that of Contempt of the Court.

2. The proposed offerers applications are on record and the Court will pass appropriate order on the next date. If the company wants to respond to those applications it may respond.

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3. Office to post this matter on 29/2/2012 along with all connected matters."

(95) On 3.5.2012 one more Civil Application No. 5931 of 2012 in SCA No. 15599 of 2008 filed on 3.5.2012 with following order and in said Civil Application, till date no order is passed:

"prayers in Civil Application No. 5931 of 2012:

(A) Your Lordships be pleased to allow this application and be pleased to order to permit the applicant to be joined as a party respondent in special civil application No. 15599 of 2008 (B) Your Lordships may kindly be pleased to grant such other and further relief as may be deemed fit in the interest of justice."

(96) On 14.06.2012 in Civil Application No. 752 of 2011 in SCA No. 15599 of 2008, the Court passed the following order:

"Learned advocate Shri Naik appearing for the Company submits that unfortunately the counsel of the Company is unable to attend the court for this matter and therefore, he seeks sometime. Learned advocate for the workman Shri Dave submitted that in case of genuine difficulties, there cannot be any Page 171 of 674 C/SCA/15599/2008 JUDGMENT objection but this matter is unnecessarily prolonged, hence very short time is granted.

Accordingly this matter along with main matter being Special Civil Application No. 15599 of 2008 and allied matters are adjourned to 16.06.2012."

(97) On 20.6.2012 the Court passed order in Civil Application No. 9650 of 2011 in SCA No. 15599 of 2008 which reads as under:

"Learned Sr. counsel Shri Oza with Ms. Renu D.Chaudhary for the petitioners seeks time to place on record by way of affidavit the compliance and the requirement as mentioned in the order dated 25.07.2011 passed in M.C.A. No.1858 of 2011. S.O. to 25.06.2012."

(98) Civil Application No. 8477 of 2012 in SCA No. 15599 of 2008 is filed on 18.7.2012 with following reliefs and in said Civil Application, till date no order is passed:

"A. Your Lordships be please to allow and admit the present application and permit the applicant to join as party respondent in Special Civil Application 15599/2008.

(B) Your Lordships be please to accept the amount of rupees 50 corer Bank guarantee, and further permit the applicant appropriate time to furnish Bank guarantee Page 172 of 674 C/SCA/15599/2008 JUDGMENT of rupees 300 corer on or before 3 weeks or any appropriate time that the Hon'ble Court' deems fit.

(C) Your Lordships be please to grant the applicant the Actual, Physical and Vacant Ownership and Possession of the Land Situated at Moje Uddhna, bearing survey number 151 paiki 1, 2, 3 paiki admeasuring 110 acres in all 5,32,454 Sq. Yards along with constructed building and Machinery and plants and other properties mentioned in the application herein.

(D) Your Lordships further be please to direct the respondent Baroda Rayon Corporation ltd. to Hand over the registered documents of the property to the applicant and give the applicant a clear Marketable title of the property free from all encumbrances and convey the property to the applicant vide appropriate sale deed in favor of the applicant.

(E) Your Lordships further be please to grant permission to the applicant to place his security guards and grant necessary permission to carry out development activity on the said land.

(F) Your Lordships be please to any just and proper order in the Interest of Justice and good conscience."

(99) Civil Application No. 8202 of 2012 in SCA No. 15599 of 2008 is filed on 20.7.2012 with following prayers and Page 173 of 674 C/SCA/15599/2008 JUDGMENT in said Civil Application no order is passed till date.

Prayers:

"(A) Your Lordships be pleased to allow this application and be pleased to order to permit the applicant to be joined as a party respondent in Special Civil Application No. 15599 of 2008;

(B) Your Lordships may kindly be pleased to grant such other and further relief as may be deemed fit in the interest of justice."

(100) In Special Civil Application No. 15599 of 2008, the Court passed the following order on 24.9.2012:

"Leave to substitute respondent no.9 is granted. Notice to the newly substituted respondent. Notice is waived by learned advocate Mr. Gandhi appearing for the substituted respondent. Adjourned to 3/10/2012."

(101) On 3.11.2012 in SCA No. 15599 of 2008, the Court passed the following order:

"Shri Kunan Naik submits that the special indulgence granted to the company's counsel to argue could not be availed by him as he is actually on his legs before the Page 174 of 674 C/SCA/15599/2008 JUDGMENT Full Bench today. Shri Dipak Dave insisted for concluding the arguments.

This Court is of the view that one more opportunity is required to be given to learned counsel for the company.

Hence adjourned to 5/11/2012. No further opportunity will be granted.

[ S.R. BRAHMBHATT, J ] After the above order was passed, Shri Thakore could appear and requests for some more indulgence, as he could not make it on account of he being actually on his legs before Full Bench. He submitted that he is aware that the arguments of all the parties and counsels are over and opportunity to him for addressing the Court was granted as special indulgence, as the counsel wanted to narrate the instances and development of instances to justify the inability of the company to keep the operations going on. Therefore, he ensures the Court that the indulgence if afforded on 7/11/2012 same will be availed only for the limited purpose and no further arguments shall be advanced, as the counsels of all the parties have completed their submissions in this group of matters and he is aware that one group of gratuity matters are already over today. He further submits that in case he is actually unable to make it on 7/11/2012, some other senior counsel Page 175 of 674 C/SCA/15599/2008 JUDGMENT engaged by the company be permitted to make submissions.

Shri Dipak Dave has strongly objected to this proposition and submitted that if the arguments are complete, the Court may put up for orders.

This Court is of the view that though the counsels for the parties have completed their arguments, a request for addressing the Court need not be denied as peculiar facts & circumstances are pleaded which prevented the counsel from addressing the Court today. Therefore, only with a view to afford an opportunity to counsel the matters are kept on 7/11/2012. Submission of other counsels are already over.

Therefore the remaining group of matters be posted on 7/11/2012 and the submission of counsel be completed, or else request for filing of written submissions will be considered on that day.

Adjourned to 7/11/2012."

(102) In Special Civil Application No. 15599 of 2008 and cognate matters, on 7.11.2012 the Court passed the following order:

"The Court passed the order on last occasion when the matter was listed on 3.11.2012, which reads as under:

Page 176 of 674

C/SCA/15599/2008 JUDGMENT "Shri Kunan Naik submits that the special indulgence granted to the company's counsel to argue could not be availed by him as he is actually on his legs before the Full Bench today. Shri Dipak Dave insisted for concluding the arguments.

This Court is of the view that one more opportunity is required to be given to learned counsel for the company. Hence adjourned to 5/11/2012. No further opportunity will be granted.

[ S.R. BRAHMBHATT, J ] After the above order was passed, Shri Thakore could appear and requests for some more indulgence, as he could not make it on account of he being actually on his legs before Full Bench. He submitted that he is aware that the arguments of all the parties and counsels are over and opportunity to him for addressing the Court was granted as special indulgence, as the counsel wanted to narrate the instances and development of instances to justify the inability of the company to keep the operations going on. Therefore, he ensures the Court that the indulgence if afforded on 7/11/2012 same will be availed only for the limited purpose and no further arguments shall be advanced, as the counsels of all the parties have completed their submissions in this group of matters and he is aware that one group of gratuity matters are already over today. He Page 177 of 674 C/SCA/15599/2008 JUDGMENT further submits that in case he is actually unable to make it on 7/11/2012, some other senior counsel engaged by the company be permitted to make submissions.

Shri Dipak Dave has strongly objected to this proposition and submitted that if the arguments are complete, the Court may put up for orders.

This Court is of the view that though the counsels for the parties have completed their arguments, a request for addressing the Court need not be denied as peculiar facts & circumstances are pleaded which prevented the counsel from addressing the Court today. Therefore, only with a view to afford an opportunity to counsel the matters are kept on 7/11/2012. Submission of other counsels are already over. Therefore the remaining group of matters be posted on 7/11/2012 and the submission of counsel be completed, or else request for filing of written submissions will be considered on that day.

Adjourned to 7/11/2012."

Shri Naik, learned advocate for the respondent submitted that unfortunately no arrangement could be made for bringing the counsel to make submissions on development and instances in the company and hence, now the request is made on behalf of the company to permit to file short written submission covering the aspect of development and instances in the company Page 178 of 674 C/SCA/15599/2008 JUDGMENT only and same be permitted to be filed on or before 25.11.2012.

Shri Dave, learned advocate submitted that the arguments are concluded and liberty be reserved to the petitioners workmen union also to file brief written submissions to the written submissions that may be filed by the Company on 26.11.2012.

The court has heard the learned advocates for the parties. The written submissions are to be exchanged and filed on or before 26.11.2012. Further order qua dictation of the judgment would be made thereafter.

All the matters are adjourned to 26.11.2012. Registry is directed to keep the copy of this order in all the matters."

(103) Civil Application No. 2185 of 2012 in SCA No. 15599 of 2008 is filed on 21.12.2012 with following orders, in which also, there is no order till date.

"Prayers:

(A) Your Lordships may be pleased to allow this application.

(B) Your Lordships may be pleased to permit/allow Mahalaxmi Construction Pvt.

Ltd.; to be joined as a nominee / assignee of the applicant in the above stated Page 179 of 674 C/SCA/15599/2008 JUDGMENT proceedings pending before this Hon'ble Court.

(104) On 24.12.2012 in SCA No. 15599 of 2008, the Court passed the following order:

"The Court has already passed an order on 07.11.2012 in these group of matters and now it is listed for dictation of orders.

In other group of matters being Special Civil Application No. 314 of 2006 and Special Civil Application No. 3916 of 2008 and other matters, the arguments are not over and are adjourned to 09.01.2013 today and as the observations in said matters have bearing in these matters and as the arguments are over in this group of matters, the dictation of order in these matters is differed till 09.01.2013. Hence, these matters be posted on 09.01.2013 for orders."

(105) On 10.01.2013, the Court passed the following order in SCA No. 15599 of 2008:

"Time is requested by Shri Trivedi, learned advocate for the respondent no.1, as he is actually in other matters during the interregnum period. At his request matter is Page 180 of 674 C/SCA/15599/2008 JUDGMENT th adjourned to 28 January, 2013. He assures that the matter may proceed on that day."

(106) On 28.1.2013 in SCA No. 15599 of 2008, the Court passed the following order:

"As agreed by counsels for limiting the submissions and looking to number of matters today, this matter along with other allied matters are adjourned to 12.02.2013 at the request of counsels, as the date is agreed."

(107) In Civil Application No. 13135 of 2011 in Civil Application No. 11350 of 2010 in SCA No. 15599 of 2008 the Court passed the following order on 27.2.2013:

"This Civil Application is a part of the group i.e. S.C.A.No.15599 of 2008, which has already been heard and posted to 14/03/2013. Shri Jain, learned advocate for the applicant was making grievance with regard to hearing him. Therefore, he was invited to make submissions, unfortunately, when the matter was called-out, he was not available. It should therefore, to be disposed of along with other group of matters i.e. S.C.A.No.15599 of 2008, which is posted to 14/03/2013. Orders accordingly."

Page 181 of 674

         C/SCA/15599/2008                             JUDGMENT




(108)         Civil Application No. 4364 of 2013 in SCA No.

15599 of 2008 is filed on 12.4.2013 with following prayers, in which, no order is passed by the court till date.

"(A) This Honourable Court be pleased to admit and allow this Application and permit the present applicant to join as party respondent to bid for property of respondent No.2 Company in Special Civil Application No.15599 of 2008.

(B) Your Lordships be pleased to accept the amount of Rs.50 crores/bank guarantee/demand draft towards EMD and further grant the applicant appropriate time to furnish bank grantee of Rs.350/- as per order of the Hon'ble Court as this Hon'ble deems fit.

(C) Your Lordships be pleased to grant the applicant actual physical and vacant ownership and possession of the land situated at Mouje Udhana bearing Survey No.151 paiki 1, 2, 3 paiki admeasuring 110 acres in all 5,32,454 Sq. Yards alongwith constructed building and machinery and plants and other properties mentioned in the application herein.

(D) Your Lordships further be pleased to direct the respondent No.2 Company to hand over the registered documents of the property to the applicant and give the Page 182 of 674 C/SCA/15599/2008 JUDGMENT applicant clear marketable title of the property free from all encumbrances and convey the property to the applicant vide appropriate Sale Deed in favour of the applicant.

(E) Your Lordships further be pleased to grant permission to the applicant to place his security guards and grant necessary permission to carry out development activity on the said land.

(F) This Honourable Court be pleased to grant any other and further relief/s as may be deemed fit in the facts and circumstances of the case."

(109) The Court on 12.11.2013 passed the following order in SCA No. 15599 of 2008.

"All the counsel of the respective parties have jointly requested for deferring the diction of judgment till 09.01.2014, as majority difference are sorted out and the compromise is likely to be arrived at between the parties. Accordingly, put up on 09.01.2014."

(110) On 4.12.2013 the Court passed the following order in SCA No 15599 of 2008:

"Learned counsel for workmen as well as the Company have jointly requested to defer the dictation, as the parties are seriously attempting to settle the dispute.

Page 183 of 674

         C/SCA/15599/2008                               JUDGMENT



              S.O. to 12.12.2013."


(111)         On 9.1.2014 in SCA No. 15599 of 2008 and cognate

matters, the Court passed the following order:

"Shri Nayak, learned counsel for the company, submits that the compromise formula is being worked-out and therefore, with consent this group of matters may be st adjourned to 21 January, 2014.

st Orders accordingly. S.O. to 21 January, 2014. Office is directed to place copy of this order in each matter. "

(112) On 21.1.2014 in SCA No. 15599 of 2008 and cognate matters, the Court passed the following order:

"Shri Nayak, learned counsel for the Company has submitted, under instruction, that the Company had misconception qua payment of calculation of interest after 2008 onward and, in his personal capacity, he has impressed upon the Company that Company should calculate interest from 2008 onwards till December 2013 i.e. the date till the calculation of interest is to be made, as the consensual figures have not been arrived at. He ensures the Court that one week time is granted, differences will be threshed out and payment could be made so that grievances of the workmen could be Page 184 of 674 C/SCA/15599/2008 JUDGMENT redressed. At his request, matters are kept on 28.01.2014."

(113) On 28.1.2014 in SCA No. 15599 of 2008 and cognate matters, the Court passed the following order:

"Learned counsels for the parties have jointly requested that this matter be adjourned to 03.02.2014, as latest by tomorrow i.e. on or before 29.01.2014 evening, they will be exchanging their calculations of the amount which becomes payable under the award and as in accordance with law. Thereafter, if, there is a differences, the parties will be sitting together for exchanging their views for settling the dispute, if any, in respect of the amount. This, of course, goes without saying that it would be without prejudice to rights and contentions of the parties. S.O. To 03.02.2014."

(114) On 3.2.2014 in SCA No. 15599 of 2008 and cognate matters, the Court passed the following order:

"1. Mr. Mihir Thakor and Mr. Chaudhari and all other concerned, i.e. counsel for the workmen as well as the company, and not for private civil applicants, submits that the last meeting for arriving at a settlement had taken place on Friday i.e. 31/1/2014, the differences and agreements have been reduced into writing by Mr. Thakor and he Page 185 of 674 C/SCA/15599/2008 JUDGMENT is of the earnest hope and opinion that the differences and breaches would be bridged as both the parties will see not prolonging the matter so as to deprive the parties without an end result. He is submitting that the matters be posted on 7/2/2014.

2. Mr. Thakor has further submitted that his entire endeavour is with a view to bring about an amicable settlement and his role is of mediator which everyone accepts in this proceedings and he has no role of taking any stand. Shri Naik as well as Mr. Dave and Mr. Chauhan for the company and workmen respectively also agree that major differences have been worked out and both of them have tremendous hope that Mr. Thakors mediation will bring an amicable settlement.

3. Adjourned to 7/2/2014."

(115) On 7.2.2014 in SCA No. 15599 of 2008 and cognate matters, the Court passed the following order:

"Learned counsels of the respective parties have regretted that their sincere efforts did not yield any results in compromising or settling the dispute as the difference between the two sides was unbridgeable. Shri Thakor acted as a mediator. All the parties and their respective counsels also along with Shri Thakor attempted sincerely.

Page 186 of 674

C/SCA/15599/2008 JUDGMENT Be that as it may; when the settlement is not arrived at, the law should take its own course. Put up for dictation of orders on 17/2/2014."

(116) On 4.3.2014 in SCA No. 15599 of 2008 and cognate matters, the Court passed the following order:

"In this group of matters, Shri Naik, learned advocate appearing for the company submitted that originally it transpired that the written submissions in respect of the further development covering all the aspects were not placed on record and it was open to the learned advocate for the workmen also to place on record his reply to the written submissions. His file has got written submissions though they have not been tendered and placed on record. He therefore, submits that if a days time is granted, a composite submission in respect of all these matters could be placed on th record. Put-up on 5 March, 2014.

Office is directed to place copy of this order in each matter."

(117) Similarly, following Civil Applications have been filed by the respective parties in aforesaid group of matters:

(1) Civil Application No. 4772 of 2008 in Special Civil Application No. 134 of 2006 is filed on 15.04.2008 with following prayers:

Page 187 of 674

C/SCA/15599/2008 JUDGMENT Prayers in Civil Application No. 4772 of 2008:

"(A) Your Lordships may be pleased to convict the opponents for deliberate and willful contempt of order of this Hon'ble Court and to sentence them adequately, unless the opponents purges themselves of the deliberate and willful contempt of court by depositing the entire sale proceeds of the sales executed by virtue of the sale deeds produced collectively at Annexure 'B' supra.

(B) Be pleased to award the present applicant exemplary costs of this litigation and be pleased to quantify the same.

(C) Any other and/or further relief/s that this Hon'ble Court may deem fit looking to the facts and circumstances of the case may be awarded to the petitioner."

(2) Civil Application No. 6307 of 2008 is filed on 4.5.2008 with following prayers:

"(A) YOUR LORDSHIPS may be pleased to admit and allow the present application;

(B) YOUR LORDSHIPS may be pleased to call for the papers of Civil Application No. 11914 of 2007 and kindly take up the same for hearing.

Page 188 of 674

C/SCA/15599/2008 JUDGMENT (C) YOUR LORDSHIPS may be pleased to grant any other and further relief/s as may be deemed just and proper in the interest of justice and fitness of things;"

The application was moved but without any further action thereon, as could be seen from the proceedings and record. In short, one more attempt was made to indicate that the prayers for seeking extension is heard, which was incorporated in Civil Application No. 11914 of 2007, whereon also, no order in favour of the Company have been passed.

(3) Civil Application No. 2968 of 2010 in Special Civil Application No. 3916 of 2008 is filed by the applicant, who had chosen to lift scrap as observed hereinabove for the amount agreed so that without affecting others, some respite could be accorded to the workmen, on 22.3.2010 with following reliefs:

             "A    May be pleased to Admit this Civil
             Application;

             B     Be pleased to pass appropriate Orders

and/or directions extending the time by a period of 6 months for payment of outstanding dues and thereby modify the schedule for payment of dues and further be pleased to permanently delete the clause of payment of 8% interest on delayed payment.

Page 189 of 674

        C/SCA/15599/2008                              JUDGMENT



             C      Be pleased to direct the opponent

Company to cooperate the applicant in lifting of goods to the tune of Rs.85,000/- as per Order passed by this Hon'ble Court on 25.2.2010 in M.C.A. No. 430/10 and moreover, permit the applicant to lift the goods worth the amount deposited by the applicant till date i.e. 43 lacs minus the worth of goods actually lifted i.e. 2829687 lacs, and in the alternative be pleased to direct the refund of deposit amount i.e. 15 lacs to the applicant.

D Be pleased to pass such other/further Orders deemed fit in the facts and circumstances of the case."

(4) Civil Application No. 5562 of 2010 in Special Civil Application No. 15599 of 2008 is filed on 4.12.2009 with following prayers:

"(A) This Civil Application may be allowed.

(B) The present applicant may be permitted to raise his claim against the present opponent by joining him as a party claimant in SCA 15599 of 2008 as being necessary party to the proceedings.

(C) Costs of this application be awarded to the present applicant.

(D) Any other and/or further relief/s that this Hon'ble Court may deem fit looking to the facts and circumstances of the case may Page 190 of 674 C/SCA/15599/2008 JUDGMENT be awarded to the present applicant."

The applicant appears to have been a security agency, who as per the say in the application, had been engaged for safeguard the property of opponent no. 1 i.e. Company way back on September 1993 and contract was renewed and he has claimed dues of Rs.45 lacs and odd, as could be seen from para-6 of the application. This Court (Coram: Bhagwati Prasad, J.)(as he then was) was pleased to issue notice on 21.6.2010, which was made returnable on 23.7.2010 and thereafter, no further orders are made in this application. The opponents are Baroda Rayon Company Limited, Baroda Rayon Employees Ekta Union and others.

(5) Civil Application No. 10377 of 2010 is filed on 3.9.2010 in Civil Application No. 6212 of 2010 in SCA No. 15599 of 2008, i.e. the interested party for purchasing the property in question. The applicant, as per his say, vide order dated 13.8.2010 to show the bonafide, the applicant was to pay Rs.1 crore and he could not comply therewith and hence the application is filed with following reliefs:

"(A) This Hon'ble Court be pleased to allow C.A. for extension of time filed by the applicant.

Page 191 of 674

C/SCA/15599/2008 JUDGMENT (B) This Hon'ble Court be pleased to recall the order dated 13.8.2010 passed by this Hon'ble Court in C.A. No. 6212/2010 and allied matters and consequently, the time granted by this Hon'ble Court to deposit Rs.1 Crores as E.M.D. on or before 20.8.2010 may kindly be extended till 9.9.2010 and in consequences thereof, applicant be permitted to deposit amount of Rs.1 crores as E.M.D. with the Registry of this Hon'ble Court on or before 9.9.2010 without imposing any condition so far and consequently, the applicant be allowed to participate as prospective offerer in the above matter in respect thereof as mentioned in C.A. No. 6212 / 2010.

(C) Grant such other and further reliefs as deemed fit in the interest of justice;"

(6) Civil Application No. 11350 of 2010 in Special Civil Application No. 15599 of 2008 is filed by one more interested party in purchasing the property on 22.9.2010 with following reliefs:

"(A) This application may kindly be allowed.

(B) This Hon'ble Court be pleased to permit the applicant to be joined as respondent no. 10 in Special Civil Application No. 15599 of 2008;

Page 192 of 674

C/SCA/15599/2008 JUDGMENT (C) The respondent No. 2 Company may be directed to place on record the list of all its assets, which shall be sold and conveyed to the applicant and upon fulfillment of the said requirement the applicant shall deposit Rs.10 Crores as non refundable deposit.

(D) Clear and marketable titles of all the assets of the respondent No. 2 company, unless legally sold to the third parties, free from all encumbrances may be given to the applicant on the applicant depositing Rs.471.60 crores (Rupees Four Hundred and Seventy one Crores and Sixty Lacs only) before this Hon'ble Court on the terms and conditions mentioned hereinabove which may be agreed between the applicant and parties;

(E) On depositing 10 crores by the applicant as refundable deposit, this Hon'ble Court may be pleased to issue allotment letter and to permit the applicant to deploy its own security personnel, guards and to construct office within the premises of the respondent No. 2 company;

(F) Grant such other and further reliefs as deemed fit in the interest of justice;"

(7) Civil Application No. 14154 of 2010 in Special Civil Application No. 15599 of 2008 is filed by one more interested party in purchasing the property on 24.11.2010 with following reliefs:

Page 193 of 674

 C/SCA/15599/2008                                       JUDGMENT




      "(A) This    application          may   kindly     be
      allowed.

(B) Be pleased to permit the applicant to be joined as respondent in Special Civil Application No. 15599 of 2008;

(C) On payment of Rs. 50 Crores, the applicant may be permitted to engage his own security personnel along with present security personal and upon deposit of Rs.150 Crores the applicant be allowed to construct office, to demolish the present structure as per necessity with regard to development, to have development rights and also have authority to remove machineries and scrap and any other movable / immovable assets lying in the purchased property which is sold to the applicant and declared by the opponent no.

2 on affidavit.

(d) Clear and marketable titles of the opponent no. 2 company, unless legally sold to the third parties, free from all encumbrances may be given to the applicant on the depositing of total consideration of Rs.477 Crores (Rupees Four Hundred Seventy Seven Crores only) before this Hon'ble Court on the terms and conditions mentioned hereinabove which may be agreed between the applicant and parties;

(e) Grant such other and further reliefs as deemed fit in the interest of justice;"

Page 194 of 674

        C/SCA/15599/2008                              JUDGMENT




(8)          Civil Application No. 14236 of 2010 in Special

Civil Application No. 15599 of 2008 is filed by one more interested party in purchasing the property on 25.11.2010 with following reliefs:

"(a) Be pleased to allow this Civil Application by permitting Applicant to be impleaded as Party Respondent in Special Civil Application No. 15599 of 2008.

(b) Be further pleased to direct Respondent No. 2 to place on record all the list of assets which is to be sold and conveyed to the Applicant or to his nominee on such terms and conditions as this Hon'ble Court may deem just, fit and proper in the facts of the matter.

(c) Costs of this Application."

(d) Any other relief which Hon'ble Court may deem just, fit and proper in the facts of the matter."

(9) Civil Application No. 16672 of 2010 in Special Civil Application No. 15599 of 2008 is filed by one more interested party in purchasing the property on 23.12.2010 with following reliefs:

"(a) to direct the Rahulraj Estates Pvt. Ltd.

Page 195 of 674

C/SCA/15599/2008 JUDGMENT to deposit Rs.25 Cr. within a period of 15 days from the date of acceptance of their offer and balance amount within reasonable time and further be pleased to accept and confirm the offer of Rahulraj Estates Pvt.

Ltd. For Rs.477 Cr. in the interest of justice.

(b) not to accept the report dated 15.11.2010 submitted by the District Inspector of Land Records office, Surat.

(c) to direct a fresh survey of the entire property with the exact survey numbers giving details of all the structures including pipelines thereon under the supervision of Court Commissioner to be appointed by this Hon'ble Court.

(c) to permit all the parties to the petition may remain present at the time of survey in person or through their representatives;

(d) to direct that photography and video recording to be taken of the entire property under the supervision of the Court Commissioner so appointed; and

(e) to pass such other and further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case and in the interests of justice."

(10) Civil Application No. 1134 of 2011 in Special Civil Application No. 15599 of 2008 is filed by one more interested party in purchasing the property on 19.1.2011 with following Page 196 of 674 C/SCA/15599/2008 JUDGMENT reliefs:

"a) this Hon'ble Court be pleased to allow this Application in terms of para 10(i) to 10(xii) above;

b) this Hon'ble Court be pleased to allow the Applicant to be impleaded as necessary Respondent in the proceedings of the Special Civil Application No. 15599 of 2008;

c) any other reliefs as this Hon'ble Court deems fit and proper in the interest of justice."

(11) CIVIL APPLICATION No.62 of 2012 in S.C.A.No.15599 of 2008 is filed by one proposed purchaser with following relief:

"(A) Your Lordships may be pleased to allow this Civil Application;

(B) Your Lordships may be pleased to make appropriate clarification/ modification in order dated 07.12.2011 passed by this Hon'ble Court directing Baroda Rayon Limited to specify and demarcate the exact location of 110 Acres of land, which is offered for sale, along with all its plant and machinery by producing map or any other similar material on record;

Page 197 of 674

C/SCA/15599/2008 JUDGMENT (C) Your Lordships may be pleased to make further clarification in order dated 07.12.2011 passed by this Hon'ble Court that the amount of Rs.50 crores offered by the present applicant/offerer and any other amount deposited by them may be refunded to the present applicant/offerer with interest, if the sale is not finalized within a period of 90 days from the date of depositing such amount;

(D) Such other and further relief/s as may be deemed just in the facts and circumstances of the present case may kindly be granted;"

Thus, what is essentially prayed is modification in the order dated 7.10.2011, which was the order, whereunder, the Court by on consensus framed the bid document, which has been observed hereinabove.

(12) Civil Application No. 2187 of 2012 in S.C.A. No.15599 of 2008 is filed with following relief:

"(A) Your Lordships may be pleased to allow this application.

(B) Your Lordships may be pleased to pass appropriate order or direction to join the applicant as party respondent in SCA No.15599 of 2008.

(C) This Hon'ble Court may be pleased to Page 198 of 674 C/SCA/15599/2008 JUDGMENT direct respondent company to give physical inspection of assets in question and factory premise proposed to be sold of Baroda Rayon Corporation Ltd.

(D) Grant such other and further reliefs as this Hon'ble Court deem fit just and proper in the interest of justice."

(13) CIVIL APPLICATION No.8202 of 2012 in S.C.A. No.15599 of 2008 is filed with following reliefs:

"(A) Your Lordships be pleased to allow this application and be pleased to order to permit the applicant to be joined as a party respondent in special civil application no:

15599 of 2008.

(B) Your Lordships may kindly be pleased to grant such other and further relief as may be deemed fit in the interest of justice."

(14) CIVIL APPLICATION No.8477 OF 2012 in S.C.A. No.15599 of 2008 is filed with following reliefs:

"A. Your Lordships be please to allow and admit the present application and permit the applicant to join as party respondent in Special Civil Application 15599/2008.

B. Your Lordships be please to accept the amount of rupees 50 corer Bank Guarantee, and further permit the applicant Page 199 of 674 C/SCA/15599/2008 JUDGMENT appropriate time to furnish Bank guarantee of rupees 300 corer on or before 3 weeks or any appropriate time that the Hon'ble Court' deems fit.

C. Your Lordships be please to grant the applicant the Actual, Physical and Vacant Ownership and Possession of the Land Situated at Moje Udhana, bearing survey number 151 paiki 1, 2, 3 paiki admeasuring 110 acres in all 5,32,454 Sq. Yards along with constructed building and Machinery and plants and other properties mentioned in the application herein.

D. Your Lordships further be please to direct the respondent Baroda Rayon Corporation ltd to Hand over the registered documents of the property to the applicant and give the applicant a clear Marketable title of the property free from all encumbrances and convey the property to the applicant vide appropriate sale deed in favor of the applicant.

E. Your Lordships further be please to grant permission to the applicant to place his security guards and grant necessary permission to carry out development activity on the said land.

F. Your Lordships be please to any just and proper order in the Interest of Justice and good conscience."

(15) CIVIL APPLICATION No.12226 2012 In S.C.A. Page 200 of 674 C/SCA/15599/2008 JUDGMENT No.3916 of 2008 is filed with following reliefs:

"A. Your Lordships may be pleased to admit and allow this application;

B. Your Lordships may be pleased to allow this application by directing the opponents to release the due and payable amount of gratuity of her late husband to the applicant at their earliest in the interest of justice.

C. Your Lordships may be pleased to grant a lump sum amount as interim relief from the total amount of gratuity which is due and payable to the applicant at the earliest in the interest of justice.

D. Any other appropriate relief / reliefs as may be deemed fit and proper in the interest of justice may be granted.

(16) CIVIL APPLICATION No.2059 of 2013 in C.A No. 9650 of 2011 in S.C.A. No.15599 of 2008 is filed with following reliefs:

"(A) Your Lordships may be pleased to admit and allow this application.

(B) Your Lordships may be pleased to pass an order to the effect that the applicants with their Advocate can appear before the Hon'ble Arbitral Tribunal and can participate in the Arbitral Proceedings Page 201 of 674 C/SCA/15599/2008 JUDGMENT in the interest of justice.

(C) Your Lordships may be pleased to issue such other and further orders as may be necessary in the interest of justice."

(17) CIVIL APPLICATION No.2367 of 2013 in S.C.A. No.15599 of 2008 is filed with following reliefs:

"(A) This application may kindly be admitted and allowed;

(B) This Hon'ble Court may be pleased to direct the opponent Nos.1 and 4 to immediately accept and process the Forms of the employees for getting advance from their respective P.F. Account and the said opponents may also be directed to take up immediate procedure to make available the Provident fund amount of the employees lying in their respective accounts;

(18) CIVIL APPLICATION No.4364 of 2013 in S.C.A. No.15599 of 2008 is filed with following reliefs:

"(A) This Honourable Court be pleased to admit and allow this Application and permit the present applicant to join as party respondent to bid for property of respondent No.2 Company in Special Civil Page 202 of 674 C/SCA/15599/2008 JUDGMENT Application No.15599 of 2008.

(B) Your Lordships be pleased to accept the amount of Rs.50 crores/bank guarantee/demand draft towards EMD and further grant the applicant appropriate time to furnish bank grantee of Rs.350/- as per order of the Hon'ble Court as this Hon'ble Court deems fit.

(C) Your Lordships be pleased to grant the applicant actual physical and vacant ownership and possession of the land situated at Mouje Udhana bearing Survey No.151 paiki 1, 2 3 paiki admeasuring 110 acres in all 5,32,454 Sq.Yards alongwith constructed building and machinery and plants and other properties mentioned in the application herein.

(D) Your Lordships further be pleased to direct the respondent No.2 Company to hand over the registered documents of the property to the applicant and give the applicant clear marketable title of the property free from all encumbrances and convey the property to the applicant vide appropriate Sale Deed in favour of the applicant.

(E) Your Lordships further be pleased to grant permission to the applicant to place his security guards and grant necessary permission to carry out development activity on the said land.


      (F)      This Honourable Court be pleased to


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grant any other and further relief/s as may be deemed fit in the facts and circumstances of the case."

(19) CIVIL APPLICATION No.4443 of 2014 in Civil Application No. 5760 OF 2010 in S.C.A. No.134 of 2006 is filed on 3.3.2014 with following reliefs:

"A. Your Lordships may be pleased to admit this application;

B. Your Lordships may be pleased to suitably issue order and/or issue any direction, considering circumstances and difficulties facing the applicant - workers mentioned in para-4 (i) to 4 (xii) of this application, as applicants sincerely obeyed the order dated 20.2.2013 and day and day out facing difficulties, education of children are suffering and they have to maintain two houses during this hard days in small reduced salary, therefore, this Hon'ble High Court in the interest of justice may pass appropriate order or direction and/or by passing appropriate direction applicants may be permit to Udhna office of respondent Corporation.

C. That pending the hearing and final disposal of this application be pleased to pass ad-interim order or direction in favour of applicants as per para 9(B) pending this application. "

9. The written submission, which have come on record on Page 204 of 674 C/SCA/15599/2008 JUDGMENT behalf of the employer as per order dated 4.3.2014, of Shri Naik, learned advocate, reads as under:

LEGAL SUBMISSIONS ON BEHALF OF RESPONDENT NO.1 IS SUMMARIZED AS UNDER:

"(I) The petitioner has filed direct petition praying for payment of wages from the month of August, 2008 onwards and other benefits to the employees of respondent no.1.

(II) The respondent no.1 raises objection against the maintainability of the captioned petition on the following grounds:

i) The petitioner does not have locus standie to file the captioned petition inasmuch as none of the employees of respondent no.1 was/is the member of the petitioner after year 2007. The petitioner has projected that it is the only recognized trade union which is incorrect.

ii) The captioned petition is not maintainable for claiming the dues prayed for because the very dispute is referred to the arbitration with the consent of the petitioner. Assuming without admitting that the petitioner has locus standie.

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C/SCA/15599/2008 JUDGMENT Once the arbitration agreement is signed on behalf of the petitioner the captioned petition is not maintainable. More so when the Hon'ble Arbitral Tribunal has entered upon the reference and the Hon'ble Tribunal is adjudicating the disputes, for the same relief/s the captioned petition is not maintainable which would amount to pre-empting arbitration proceedings.

Authorities :

(i) (1976) 2 SCC 167 in case of M/s. Bisra Lime Stone Company Ltd and another Vs. Orissa State Electricity Board and another with Orissa Textile Mills Ltd. And another Vs. Orissa State Electricity Board and another (paragraphs 23 &

24)

(ii) (1980) 4 SCC 556 in case of Smt. Rukmanibai Gupta Vs. Collector, Jabalpur and others, (paragraph 10)

(iii)(2000) 9 SCC 238 in case of Tata Finance Ltd. Vs. Ajaya Kumar Biswal and others, (Head Note & paragraph 6)

(iv) (1996) 3 SCC 11 in case of Swetambar Sthanakwasi Jain Samiti and another Vs. Alleged Committee of Management Sri R.J.I. College, Agra and other, (paragraph 8) Page 206 of 674 C/SCA/15599/2008 JUDGMENT

(v) (2008) 2 SCC 545 in case of Hindustan Paper Corporation Ltd. Vs. Kagajkal Thikadar Sramik Union and others, (paragraph 7)

(iii) The captioned petition filed directly before this Hon'ble Court without availing alternative remedy is not maintainable as it involved highly disputed questions of facts. It is undisputed that the petitioner has raised industrial dispute that has been taken into conciliation and therefore the petitioner is not entitled to maintain the captioned petition simultaneously. The employees without informing respondent no.1 have undertaken gainful engagement elsewhere and thereby have abandoned their job and that therefore their entitlement and extent thereof is disputed which is required to be adjudicated. Thus the petitioner has not prosecuted the captioned petition with clean hands. If the employee during subsistence of contract of service takes up other gainful employment he would not be entitled to claim wages for such period. Deduction of wages as a result of voluntary act of an employee making him unable to offer for a job on a particular day requires fact-finding inquiry, which may not be feasible under the scope of place and proceedings. Even otherwise when statutory Page 207 of 674 C/SCA/15599/2008 JUDGMENT remedy is available to the employees direct petition is not maintainable before this Hon'ble Court.

Respondent no.1 being a company registered under the Companies Act, 1956 is not 'State' under Art. 12 of the Constitution of India, hence the captioned writ petition is not maintainable. In the case of employees being governed purely by the contract of employment, the decision of employee to terminate the services cannot be said to have any element of public policy and remedy would to seek redressal in civil law or labour law. Further when the writ petition is found to be not maintainable no relief of ad-hoc nature can be granted. Right of employment or non-employment is only a civil right and not fundamental right. Contract of personal service can only be enforced to the limited extent granted by the statute and therefore it cannot be equated with an infringement of fundamental right. In a situation where even after taking work from the employees if the employer does not pay even the minimum wages, it may be said that right to life is violated; however in the present case after clouser of manufacturing activities, the employees have started earning through other modes and hence Article 21 of the Constitution of India may Page 208 of 674 C/SCA/15599/2008 JUDGMENT not be invoked in the present case. In the present case there is not a single piece of evidence that the employees are dying of starvation or starving due to closure. Even in case of a rightful claim employee is to be relegated to proper forum for qualification of dues. Such allegations are orally made without any material. Powers under Articles 214 and 215 of the Constitution of India may not be exercised against the statutory provisions of an enactment.

Authorities :

(2005) 6 SCC 657 in case of Binny Ltd. and

(i) another Vs. V. Sadasivan and others, with D.S. Veer Ranji Vs. Ciba Specialty Chemicals (I) Ltd.

And others, (paragraphs 9, 10, 11, 16, 17, 29, 31, 32 & 33)

(ii) 2006 (3) GCD 2181 (Head Notes a, b & c, paragraph 5, 8, 9 to 12 & 16)

(iii) (2004) 4 SCC 268 in case of U. P. State Bridge Corporation Ltd. And others Vs. U.P. Rajya Setu Nigam S. Karamchari Sangh, (Head Note F, G, H & J, paragraph 11, 12, 14, 15 & 17)

(iv) (2003) 4 SCC 317 in case of Rourkela Shramik Sangh Vs. Steel Authority of India Ltd, and another, (Head Note B, paragraph 22 & 23) Page 209 of 674 C/SCA/15599/2008 JUDGMENT

(v) (2008)13 SCC 323 in case of Shivanand Gaurishankar Baswanti Vs. Laxmi Vishnu Textiles Mills and other,

(vi) 2010-III-260 (Head Note & paragraph 5, 6 & 7)

(vii) Decision of the Hon'ble High Court of Bombay in Writ Petition No.3023 of 2006 (paragraph 1, 2, 3, 5 & 8 to 13)

(viii) (2008) 12 SCC 675 in case of State of Uttar Pradesh and another Vs. Uttar Pradesh Rajya Khanij Vikas Nigam Sangharsh Samiti (Head Note A to G, paragraphs 37 to 47 & 50)

(ix) (2009) 5 SCC 791 in case of Commissioner of Customs and Central Excise Vs. Hongo India Private Limited and another, (Head Note E, paragraphs 27)

(x) (2006) 1 SCC 479 in case of U.P. State Brassware Corpn Ltd. And another Vs. Uday Narain Pandey (paragraph 18, 22, 25, 31, 61 &

63)

(xi) (2007) 10 SCC 765 in case of North-East Karnataka Road Transport Corporation Vs. M. Nagangouda, (Head Note, paragraphs 8 to 10 & 14 to 18)

(xii) (2007) 14 SCC 349 in case of Niranjan Page 210 of 674 C/SCA/15599/2008 JUDGMENT Cinema Vs. Prakash Chandra Dubey and another, (paragraphs 4 & 6 to 9)

(xiii) (2006) 1 SCC 498 in case of Kamala Nehru Memorial Hospital Vs. Vinod Kumar (Head Note B, paragraphs 8)

(xiv) (2005) 11 SCC 511 in case of State of Punjab and others Vs. Babita Kumari,

(xv) (2011) 2 SCC 575 in case of Transport and Dock Workers Union and others Vs. Mumbai Port Trust and another, (paragraphs 14, 22, 23 &

41) (xvi) 2001-III-LLJ 1009 (xvii) 1997-I-LLJ 379 (paragraph 12) (xviii) 1996-II-LLJ 897 (paragraph 6) (xix) 1999-II-LLJ 855

iv) The captioned writ petition is also not maintainable as it involves disputed questions of facts with regard to claim of money, which is required to be adjudicated upon by a fact finding authority.

Authorities :

  (i)         (1986) 2 SCC 553 in case of Life


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Insurance Corporation of India and others Vs. Smt. Kiran Sinha, (Head Note & paragraph 2)

(ii) (2000) 10 SCC 649 in case of Haryana Urban Development Authority and another Vs. Anupama Patnaik (Head Note & paragraph 3) III. The parties to the petition had opted to settle the disputes through mediation during the pendency of the petition wherein broad consensus was arrived at between the parties to settle the disputes. However, there was not agreement for sale of land. Even otherwise the petitioner has not acted as per the consensus and there was also misunderstanding between the parties with regard to available asset of respondent no.1 for sale that came to the notice of all when the buyer introduced by the petitioner demanded those assets, which had already been sold under Corporate Debt Restructuring Scheme. Thus in view of section 20 of the Contract Act, 1872 such consensus would not operate once mistake of essential fact with regard to subject matter of consensus was noticed. Further in absence of any concluded contract even otherwise such prayer for sale of land cannot be made requiring specific performance under writ jurisdiction of this Hon'ble Court.

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  Authorities :
  (i)     (1998) 3 SCC 471 in case of Tarsem Singh

Vs. Sukhminder Singh, (paragraphs 20 to 29 & 34 to 37)

(ii) (1998) 5 SCC 381 in case of Ganesh Shet Vs. Dr. C.S.G.K. Setty and others, (Head Note A & C, paragraphs 8, 10, 11 to 16, 24, 38 & 40) IV. The petitioner during the course of pendency of the writ petition has filed various civil applications which are not only beyond the scope of the petition but are for the causes which are unconnected with the captioned petition and are for causes which are otherwise time-barred. Such applications are made at the behest of third party buyer introduced by the petitioner alleging that respondent no.1 had sold the assets under CDR Scheme by fraudulently conniving with third party purchasers however the petitioner has neither joined such secured creditors who had framed and realized the dues under CDR Scheme nor the purchasers of the assets in the proceedings of the captioned petition. There is no allegation in the captioned petition that the land had been fraudulently sold to the third parties much less any Page 213 of 674 C/SCA/15599/2008 JUDGMENT detailed particulars of the alleged fraud. The sale of surplus non-manufacturing assets by respondent no.1 was part of CDR Scheme for discharge of its debt which was reduced to the extent of Rs.151.01 Crore and such sale had never resulted into change of service condition of any employee, hence the same does not become industrial dispute. The whole story of alleged fraud has been created at the behest of some buyer introduced by the petitioner. The onus to prove fraud lies on the party alleging the same. There must be express allegation, all the facts in support of the allegation must be laid with high degree of precision and it must be set out with full particulars. The petitioner has not pleaded such fraud and no particulars are placed before this Hon'ble Court not only that the petitioner has placed only suitable suggestive facts without giving details much less with higher degree of precision. Such allegations are not only baseless and unsubstantiated but are contrary to record. The sale of assets was within the knowledge of the employees since year 2004-05 and they had received the benefits out of it. The manufacturing activities would have come to close down had respondent no.1 not allowed CDR Scheme to take Page 214 of 674 C/SCA/15599/2008 JUDGMENT place inasmuch as all the assets of respondent no.1 were mortgaged to the secured creditors. The union had also consented to such sale before BIFR, hence with the change of representation/leadership the union cannot be allowed to say that it had no knowledge. It is only with a view to aid the third party buyer introduced by the petitioner such allegations are made as an afterthought at a belated stage.

Authorities :

(i) (2010) 5 SCC 104 in case of Shanti Budhiya Vesta Patel and others Vs. Nirmala Jayprakash Tiwari and others, (paragraphs 25 to

36)

(ii) (2010) 14 SCC 564 in case of Nirmal Jeet Singh Hoon Vs. Irtiza Hussain and others, (paragraphs 10 & 20) V. The submissions advanced on behalf of the petitioner are beyond the scope of the captioned petition for which no prayers have been made in the captioned petition. The petitioner cannot travel beyond the scope of the captioned petition and no prayers can be entertained which are beyond the scope of the captioned petition. Further such prayers for setting aside the sale are made which Page 215 of 674 C/SCA/15599/2008 JUDGMENT are otherwise beyond limitation. The petitioner cannot overreach ordinary civil remedy without filing substantive proceedings before the competent civil court.

Authorities :

(i) (2010) 11 SCC 557 in case of Manohar Lal (Dead) Br. Lrs. Vs. Ugrasen (Dead) by Lrs.

And others, with Ghaziabad Development Authority Vs. Ugrasen (Dead) by Lrs. And others, (head Note D, F & I, paragraphs 2, 30 to 34)

(ii) 1993 Supp (3) SCC 129 in case of Vinay Krishna Vs. Keshav Chandra and another, (Head Note & paragraph 16)

(iii) (2006) 5 SCC 515 in case of National Board of Examinations Vs. G. Anand Ramamurthy and others (Head Note E, paragraph 7) VI. Respondent no.1 had put in its best efforts to revive the company from the year 1999 onwards and had continued the manufacturing activities till August 2008 pursuant to which employment of around 3000 employees continued which otherwise would have ended in the year 1999 itself resulting into payment to the tune of around Rs.105.56 Crore. However it continued to Page 216 of 674 C/SCA/15599/2008 JUDGMENT suffer huge losses and therefore it had to close down its business. Respondent no.1 has suffered loss of around Rs.500 Crore in running the company till year 2009. None of the actions of respondent no.1 were deliberate or willful and in breach of any order passed by any Court. The assets had been sold by respondent no.1 under CDR Scheme to reduce its debt by Rs.151.01 Crore which has also been approved by BIFR. Apart from sale of assets, the promoters/investors have infused funds of around Rs.106.64 Crore from their own resources to run the manufacturing operations. The manufacturing operations could be run because of such sale of assets and efforts made by the management, otherwise the company would have been closed down in the year 2003 itself. The complete amount received from sale proceeds had been utilized in payment of debt due to secured creditors and statutory dues. The assets were sold, the possession was transferred and the consideration was received by the month of October 2005. Thus the sale was not in breach of any order of the Court. (Affidavit dated 2.7.2012 @ page 716 of SCA No.15599/2008).

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  VII.        The petitioner has not made any application

for appointment of receiver at the time of filing of petition but at the behest of a buyer introduced by it, the petitioner after three years has now made an application for appointment of receiver only with a view to pressurize respondent no.1 and that too in absence of any circumstance requiring appointment of receiver. The company has not disposed off any of its assets after year 2005 i.e. before filing of the captioned petition or during its pendency. Not only this appointment of received is sought against the assets already sold by respondent no.1 under CDR Scheme which is under the ownership of third parties who are not even joined as parties to the captioned petition. Thus such application deserves to be dismissed.

Authorities :

(i) 1992 (1) GLH 95 in case of (paragraph

10)

(ii) 1997 (2) GLH 103 in case of Narayandas Nathumal Hemrajani and Anr. Vs. Taraben Kalimuddin Mulla Mitawala & Ors., (paragraph Page 218 of 674 C/SCA/15599/2008 JUDGMENT

6)

(iii)2009 Vol.2 GLH 175 (paragraphs 8 & 9) VIII. That various Civil Applications filed by the petitioner not only attempts to introduce fresh causes of action without initiating substantive proceedings before the competent court but also suffers from mis-joinder of causes of action on the facts foreign to the controversy involved in the captioned petition. The petitioner has agitated purely private disputes of civil and commercial nature in a public law remedy. The petitioner/ applicant do not have locus standie to file such applications, which are even otherwise filed at the behest of a buyer introduced by the petitioner/ applicant. It is a settled position of fact that inherent powers of this Hon'ble Court under Article 215 would be subject to the statutory provisions of the applicable law and the jurisdiction could not be invoked for deciding disputes for which remedies are available under general civil law. The petitioner/applicant has sought to implead new parties which amounts to fresh initiation of proceedings against such parties which is otherwise barred by law. Such an attempt on the Page 219 of 674 C/SCA/15599/2008 JUDGMENT part of the petitioner/applicant is clearly with an ill-

intention and ulterior motive to pressurize the company by seeking to join its former and present Directors and therefore such application also deserves to be rejected. (Affidavit dated 22.2.2001 in C.A. No.752/2011, Affidavit dated 25.3.2011 in C.A. No.3051/2011, Affidavit dated 22.2.2011 in C.A. No.753/2011 and Affidavit dated 22.2.2011 in C.A. No.754/2011).

IX. In view of the cumulative facts and circumstances and the position of law, the whole attempt on the part of the petitioner/applicant is to secure sale of the properties at the behest of a buyer introduced by it even before the adjudication of dues of the employees. Therefore, the captioned petition and ancillary Civil Applications deserve to be rejected. Respondent no.1 has been and is willing to settle the disputes; however there is no fair and reasonable proposal coming forth from the employees. The statements, averments and submissions made in various affidavits filed on behalf of respondent no.1 or its former and present Directors be treated as part and parcel of present submissions.

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  X.                 Respondent no.1 in the captioned

petition has filed a petition before this Hon'ble Court challenging part-I award dated 20.10.2007 passed by the Ld. Industrial Tribunal, Surat in Reference (IT) No.15/2005 being SCA No.3916/2008. The Ld. Industrial Tribunal has directed payment of gratuity to the retired, resigned and died employees along with 10% compound interest. In the humble submission of the Respondent No.1 the Ld. Tribunal does not have jurisdiction to entertain claims with regard to gratuity inasmuch as under the provisions of the Payment of Gratuity Act, 1972 express provisions are made for adjudication of claims for gratuity. Further the said Act makes express provisions for payment of simple interest and not the compound interest. Thus the directions given in part-I award are completely without jurisdiction and against the provisions of the Payment of Gratuity Act. Without prejudice to the submissions made in the said petition, the Respondent No.1 humbly submits that during the pendency of the said petition the dispute with regard to all the dues of such retired, resigned and died employees including the dues of Page 221 of 674 C/SCA/15599/2008 JUDGMENT the gratuity of such employees which covers the claim of those employees who are covered by part- I award came to be referred to the Ld. Arbitral Tribunal and the Ld. Arbitral Tribunal has decided the dues of such employees in its award. Thus the part-I award even otherwise does not survive now and is therefore required to be set aside.

10. The list of dates and events as submitted by Shri P.H. Parekh, learned counsel appearing for the workmen reads as under:

LIST OF DATES & EVENTS:

Sr. Date             Events
no.
1   1958             Baroda      Rayon       Corporation     Limited

(hereinafter referred to as 'the Company ) was incorporated in the year 1958. Baroda Rayon Employees Ekta Union - petitioner herein is a registered trade union and its the only recognized union in the Company. The Company started its commercial production of Rayon Yard in the year 1962. There were around 3112 employees working in the company. The factory land of the Company comprise 325 acres situated at village: Udhana, Dindoli and Bhedwad District, Surat where the Company had established Power Plant, Water Treatment Plant, Effluent Treatment Plant, Railway Siding, Housing Colonies for its employees, Recreation facilities, school, guest Page 222 of 674 C/SCA/15599/2008 JUDGMENT house, etc.. The Company suffered heavy losses.

2 18.01.1998 PNB Asset Management Co. Ltd., a debenture holder, filed a Company Petition No. 6 of 1998 before this Hon'ble Court praying for winding up of the Company as the Company had failed in repayment of the redemption money and defaulted in payment of interest. As the Company was unable to repay its debts following winding up petitions were also filed before this Hon'ble Court :

(i) Company Petition No. 30 of 1998 filed by M/s. Kinetics Technology India Ltd.

(ii) Company Petition No. 226 of 1998 filed by Manish Engineers Pvt. Ltd.

(iii) Company Petition No. 272 of 1998 filed by Gannon Dunkerley & Co. Ltd.

Workers Union was not a party in any of the above winding up petitions.

3 6.12.1999 The Company suspended its manufacturing operations on 6.12.1999 and stopped paying wages to the workmen.

4 11.04.2000 Union Bank of India, a creditor, filed a Company Petition No. 91 of 2000 before this Hon'ble Court praying for winding up of the Company as the Company had failed to repay its dues. Apart from this the following winding up petitions were also filed in the year 2000- 2001 in this Hon'ble Court against the Company.

(i) Company Petition No. 252 of 2000 filed by Finornic Chemicals (India) Pvt. Ltd.

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(ii) Company Petition No. 307 of 2000 filed by R. Mody & Co.

(iii) Company Petition No. 162 of 2001 filed by Goel Roadways.

Workers Union was not a party in any of the above winding up petitions.

5 17.04.2000 In Company Petition No. 91 of 2000, this Hon'ble Court passed an interim injunction order which reads as follows:

1. I have gone through the petition and averments made in the petition. I have also heard the learned advocate Mr. Panesar for the petitioner. I have also gone through the profit and loss account ended up to 31st March, 1999 which has been produced on the record and also contents of para 11 which has been produced on page six of the petition.

2. I am prima facie satisfied to issue an interim injunction to the Baroda Rayon Corporation Limited (hereinafter shall be referred to as `the company') restraining the company its agents, servants etc. from alienating, encumbering, transferring, dealing with or creating any third party rights in any manner whatsoever in respect of all the immovable asset of the company. As regards rest of the prayer of para 19(D) of the petition, notice returnable on 26th April, 2000.

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                          D.S. Permitted. "

This order is in operation even today. A copy of the order dated 17.4.2000 is annexed herewith and marked as Annexure - A.

6 04.05.2000 Company Petition No. 91 of 2000 was again listed on 4.5.2000 on which date, this Hon'ble Court passed the following order:

"In this matter I have already passed order, dated 17.4.2000. Today when the matter has come on board Mr. Soparkar, learned advocate for the petitioner has pressed for hearing of the matter and Mr. Kalpesh Zaveri, ld.advocate for respondent has filed his affidavit along with balance sheet for the year 1998-99 and also the order of the Bombay High Court. After hearing the learned advocate for petitioner and after going through the paras 2.1, 2.2 and 2.8 on page 26 it appears that the company is trying to start new plants, i.e. Nylon Plant and Polyester Plant in the middle of May,2000. The company has 3800 workers (skilled & semiskilled) and the respondent company is an ongoing concern with a turnover of more than Rs.282 crores during 1998-99. The valuation of gross block of fixed assets of the respondent-company at cost as on 31.3.1999 including freehold land, internal roads, buildings, plant and machinery, railways sidings, power plant, water treatment plant, housing colony, school building, recreation Page 225 of 674 C/SCA/15599/2008 JUDGMENT clubs etc in more than 300 acres of freehold land known as Fatehnagar is Rs.10830.51 lacs. Liberty is granted to him to take appropriate judges summons."

A copy of the order dated 4.5.2000 is annexed herewith and marked as ANNEXURE - B. 7 25.06.2000 That pursuant to a settlement arrived at in June 2000 with workmen under Section 2(p) of the Industrial Disputes Act, the Company restarted its operation on 25.06.2000 but did not pay the wages for the period the operations were stopped.

8 31.03.2000 It is alleged by the Company that the net worth of the company was fully eroded by 31st March, 2000 due to the accumulated losses rendered the company sick within the meaning of Section 3(o) of SICA.

9 18.02.2002 The company again stopped the operations and also stopped paying the wages.

10 23.03.2002 The company restarted the operations but did not pay the wages for the period the operations were stopped.

11 03.04.2002 All the winding up petitions were listed together before this Hon'ble Court on 3.04.2002 when this Hon'ble Court admitted all the winding up petitions and passed the following order:-

"1 It is common ground between the parties that all the petitioning creditors, secured and unsecured, in the present group of petitions sent statutory notices to the respondent Company for the Page 226 of 674 C/SCA/15599/2008 JUDGMENT outstanding dues but the respondent Company failed to make payment or respond. The matters have been adjourned from time to time and the oldest matter is Company Petition No. 6 of 1998 wherein notice was issued as far back as 3/2/1998 and was made returnable on 24/2/1998.

2. Mr.A.H.Mehta,Mr.Darshan M.Parikh, Mr.H.H.Panesar, Mr.T.V.Shah were heard on behalf of various petitioning creditors. Mr.K.S.Jhaveri, appearing on behalf of the respondent Company has read extensively from the affidavit-in- reply filed in Company Petition No.91 of 2000. Mr.Jhaveri also placed reliance upon two decisions of this Court:

[i] 1997(1) G.L.H.59 (M/s.) Ashok Fashions Ltd. vs. M/s. Meghdoot Acid & Chemicals.

[ii] 2002(2) G.L.R.1594 Tata Iron & Steel Company Ltd. vs. Micro Forge (India) Ltd.

3. It was submitted by Mr. Jhaveri that in the light of the aforesaid two decisions it would not be necessary for the Court to order winding up merely because the petitioning creditors come forward with applications. Mr.Jhaveri also submitted that out of the four units of the respondent Company at-least two units are functioning and in case winding up Page 227 of 674 C/SCA/15599/2008 JUDGMENT order is passed it would render the workmen who are employed, jobless.

4. Bearing in mind the principles laid down in various decisions including the aforesaid two decisions relied upon by Mr.Jhaveri it is settled position that winding-up proceedings should not be resorted to as means of recovery nor should they be a recourse by way of pressurizing tactics. However, it is not possible to state in the set of present facts and circumstances that the petitioning creditors have come to the Court by way of the present petitions to seek recovery or use these proceedings to pressurize the respondent Company. In view of the fact that the respondent Company has not been able to fulfill its obligations and discharge its liabilities towards various creditors, on overall consideration of the facts and circumstances of the case these petitions are required to be admitted.

5 Admit.

6 Publication of the Advertisement to be deferred. S.O. to 03/05/2002. "

A copy of the order dated 3.4.2002 is annexed herewith and marked as Annexure - C. 12 03.02.2003 When all the attempts of the workmen failed, they filed a recovery application under Section 33C of the Industrial Disputes Act, 1947 being Recovery Application No. 133/2003 before the Labour Court, Surat, for the unpaid wages, Page 228 of 674 C/SCA/15599/2008 JUDGMENT which were more than Rs.51 crores at that time. The Company even did not pay the amount of gratuity, Provident Fund including the worker's contribution and ESI dues etc. 13 27.10.2003 Another settlement under Section 2(p) of the PP 21-33 of Industrial Disputes Act, 1947 read with Rule SCA 62 of the Industrial Disputes (Central) Rules 1957 was entered into. Under this settlement the Company represented that a new financier by the name Benson Overseas Holding Ltd., London had agreed to inject fresh finance to make the Company economically viable subject to the condition that the Company would be permitted to be managed by the professionals having large experience and efficiency of management and that all secured, unsecured creditors as well as the employees of the company agree to sacrifice their substantial interest to see that the Company was revived. The employees agreed to forgo a large part of their dues and entered into the said Settlement with the company and the new financier namely Benson Overseas Holdings Ltd., London. Further it was agreed that the Company would start working the factory gradually effective from November, 2003 and will try to work all the 4 Plants before 30th June, 2004 and all the employees would be paid their wages regularly. As against the workers' past wage dues of Rs.51 crores, the workers agreed to give up a substantial portion of their part dues and the company agreed to pay to the workmen a total of Rs.18 crores hump sum amount in full and final settlement of all their wages then due. However, the various concessions shown by the employees were subject to the condition that the company Page 229 of 674 C/SCA/15599/2008 JUDGMENT would not close down the business / a part of the business for the purpose of retrenching the employees and that in case of either closing down the business/ a part of the business resulting in the retrenchment / termination of the employees then the concessions given by the employees would be treated as not given and the employees would be entitled to the full wages and benefits as if the concessions were not given. Pleased see clause 14 of the Settlement which is set out below for ready reference. Clause 14 of the said settlement reads as under:

"14. These concessions are given with the specific understanding that the new management will not close down the business or a part of the business with the purpose of retrenching large mass of the employees but has been arrived at with a view to protect the employment of the employees presently employed in the company. In case new management either close down the business of part of the business and retrench/terminate the employees on the ground of close down of the business or part of the business, these concessions given will be treated as if none of these concessions are given and the employees will be entitled for full wages and benefits as if concessions are not given." (p-30) By the said settlement the Company accepted and agreed to discharge their statutory liability of Rs.6.61 crores towards gratuity to the employees who had retired, resigned or died.

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C/SCA/15599/2008 JUDGMENT The Company also accepted and agreed to discharge their statutory liability of Rs.6.61 crores towards PF dues and Rs.1.73 crores towards ESI dues. By the said settlement, it was decided to dispose of the surplus assets of the Company so as to see that the dues of the employees, banker and financial institutions, who were the secured creditors, were paid of their dues as per the proposed settlement. However, the settlement expressly provided that the land on which the workers and staff residential quarters, school, entire factory premises and utilities were located would not be disposed of as surplus land as shown in plan. Please see Clause 12 (ix) of the Settlement, which is set out below for ready reference. Clause 12 (ix) of the settlement inter alia provides as under:

"(ix) The Company has decided to dispose of its surplus land so as to see that the dues of employees, bankers and financial institutions who are the secured creditors are paid of their dues as per the proposed settlement ..... It is agreed by the Company that the land on which the workers and staff residential quarters, school, entire factory premises and utilities are located will not be disposed of as surplus land as shown in plan and all proceeds out of sale of the surplus lands will be utilized for the payment of dues of Financial Institutions, Surat Municipal Corporation....." (p.28) Note: The above clause in the settlement was violated by the Company as not only the Page 231 of 674 C/SCA/15599/2008 JUDGMENT surplus land mentioned in the settlement but also the land on which the residential quarters of workers and staff, guest houses is located as well as part of plant and machinery including the land where the pipelines are laid overhead as well as underground were purportedly sold.

14 09.12.2003 Despite the aforesaid injunction order dated pp 17.04.2000 passed in C.P. No. 91 of 2000, 488-500 of which is in operation even today, the company SCA entered into a Memorandum of Understanding with a developer namely M/s. Uma Developers whose Sole Proprietor is Sanjay Premjibhai Patel who is the son of Shri Premjibhai Patel, who is the real brother of Damodar Bhai Patel, a director of the Company. In this MoU the company agreed to sell to Uma Developers land admeasuring about 5,84,820 Sq. Yrd., at village: Udhana and Village Bhedwad in District Surat for a consideration of Rs.33.92 crores. The MoU provided that the sale shall be completed within 18 months of the execution of MoU. In the recitals at page-489, it was inter alia stated as follows:-

"AND WHEREAS the Transferor declares and confirms that it is fully competent and authorized and able to sell the said property which forms part of the large property belonging to the transferor subject to the said mortgage / charges/ attachment and that the Transferor is in the process of financial reconstruction without transferee being liable there under) and it has agreed to sell the said property to the Transferee."

Clause 7 of the MOU provided as follows:

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C/SCA/15599/2008 JUDGMENT "It is expressly agreed and the transferor and the transferee do hereby authorize the said M/s. Matubhai Jamietram and Associates, Advocates for the transferor to make payments of the amounts so deposited with them in accordance with the repayment schedule proposed by the transferor viz (a) Baroda Rayon Employees' Credit Society dues of Rs. 118 Lakhs, (b) Upfront payment of PF/ESIC and Gratuity dues of Rs. 317 Lakhs, (c) Settlement dues of term lenders of Rs. 3083 Lakhs, (d) Settlement dues of working capital banks of Rs.

1007 Lakhs and Equity of Rs. 5 Lakhs aggregating Rs. 4530 Lakhs out of the total outstanding dues of the transferor." (p. 493) Note 1: it is submitted that even the execution of this MoU as well as payment of any consideration under the MoU was in the teeth of the Injunction Order dated 17th April, 2000 as the said order inter alia injuncted the Company from creating any third party rights in any manner whatsoever. The injunction order dated 17.04.2000 was not even disclosed in this MoU.

Note 2: The aggregate of the aforesaid amount comes to Rs. 90.55 crores as against the consideration of Rs. 33.92 crores.

Clause 15 of the MoU clearly stated that the area of temple, school, workers' colonies and administrative building do not constitute the Page 233 of 674 C/SCA/15599/2008 JUDGMENT subject matter of sale.

Note 3: Under the four sale deeds however this land is also purported to be sold.

Note 4: The workers' union was not aware of the said MoU with M/s. Uma Developers.

Note 5: The Company did not adopt any transparent method like inviting bids through advertisement in newspapers etc; and choosing the highest bidder. The entire transaction was entered into in a clandestine manner with a view to defeat and defrauds the claims of the workmen, the statutory authorities and the shareholders of the company. There is nothing on record to show whether any valuation of the property was done and how the consideration/ price was arrived at. The entire transaction was shrouded in mystery and is vitiated by fraud.

15. 23.01.2004 In December 2003, the Company filed a reference before BIFR under section 15 (1) of the SICA and the same was registered as case No. 67/2004 on 23.1.2004.

16. 19.03.2004 Corporate Debt Re-structuring Scheme came pp.398-457 to be formulated by the Corporate Debt Re- of SCA structuring cell of BIFR pursuant to which a mechanism for re-payment of debt of secured lenders was worked out.

Note 1: Workers union was not a party to the said scheme.

Note 2: This scheme relies on the aforementioned S. 2(p) settlement entered into by the management with the workers. The Page 234 of 674 C/SCA/15599/2008 JUDGMENT scheme specifically envisaged the creation of a Corporate entity namely a Special Purpose Vehicle (SPV), the settlement of secured debts against the transfer of the surplus assets of the Company to such an SPV and the sale of the assets of SPV, and the making of an application by the Company under Section 391 of the Companies Act so as to obtain the approval of all other creditors to the proposed CDR scheme. The following clauses of the CDR scheme have been violated by the Company:

(i) Para 5.3 - Safeguards provided in the present scheme (Page 421 of the SCA No. 15599 of 2008)

(ii) Corporate Restructuring and Settlement of secured lenders' liabilities (Page 423

- 425 of SCA 15599 of 2008)

(iii) Para VII - Restructuring scheme (Page 425 - 426 of SCA 15599 of 2008)

(iv) Other terms and conditions (Pages 428 -

431 of SCA 15599 of 2008) It is submitted that without creating the SPV and transferring the surplus land to the said SPV and without moving any application under Section 391 of the Companies Act, the Company has purported to have sold the property in question in October/November, 2006 to Shree Laxmi Narayan Co-operative Industrial Service Society.

Note 3: A perusal of the CDR Scheme reveals that it is the result of a collusion and conspiracy between the banks and the Page 235 of 674 C/SCA/15599/2008 JUDGMENT company to defeat and defraud the workmen and the Govt. of their dues. The following relevant extracts from the CDR scheme reveal the real intent of the scheme:

"CORPORATE RESTRUCTURING AND SETTLEMENT OF SECURED LENDERS LIABILITIES The liabilities of secured lenders are proposed to be settled through SPV structure so as to protect the secured lenders dues from large manufacturing related liabilities mainly that of workers and statutory authorities. (p. 423 of SCA No. 15599 of 2008) It may be noted that "the Company has large statutory liabilities aggregating to above Rs. 390 millions as on March 31, 2008" as admitted in the CDR Scheme itself (Please see p. 418 para 4.3 of the SCA No. 15599 of 2008) In the said CDR scheme, the workers dues were also admitted as under:

"WORKERS DUES The workers dues have accumulated to over Rs. 710 million. In view of the current restructuring proposed by the Company as the new wage settlement signed between the management and the Workers Union, the liabilities have been reduced to Rs. 180 million which will be paid over a period of Page 236 of 674 C/SCA/15599/2008 JUDGMENT 5-6 years"

(p. 420 of SCA No. 15599 of 2008) It may be noted that out of Rs. 180 million, only about Rs. 10 million alone has been paid. Further the statutory dues like PF, ESI and Gratuity have not been paid. Furthermore, under the settlement, the various concessions given by the workmen would be treated as not given upon the closure of the operations [vide clause 14 of the settlement (supra)]. The factory was illegally closed down since August, 2008. Hence, all the concessions given/shown by the workmen by virtue of clause 14 would be treated as withdrawn and the company is liable to return the concessions including the Rs. 530 million out Rs. 710 million given as concession by the workmen.

17. 17.09.2004 Shree Laxmi Narayan Industrial Co-operative p. 503 ofService Society Limited-the alleged transferee SCA of land was registered under the provisions of Gujarat Co-operative Societies Act, 1961.

18. 28.09.2004 M/s. Uma Developers wrote to the Company pp. 501-502stating that they had promoted a Co-operative of SCA Society as required under the Gujarat Ownership Flats Act, 1974 under the name of Shri Laxmi Narayan Industrial Co-operative Service Society Limited for the purpose of development of the land under the MoU and requested the Company to transfer the specific performance of the MOU in favour of the said Industrial Society. It was also stated that the conveyance of the land is to be executed in favour of the said Society. This request was Page 237 of 674 C/SCA/15599/2008 JUDGMENT accepted by the Company by a letter dated 30.09.2004 (p. 505 of SCA) Note 1: Although the MoU entered into by the Company with M/s. Uma Developers was to sell land admeasuring 5,84,820 Sq. yards at Village Udhana and Village Bhedwad, what is purported to be sold is the land admeasuring 7,54,361 sq. yards at a consideration of Rs. 38.13 crores. Although the surplus land is supposed to be sold in accordance with the settlement arrived at under Section 2 (p) of the Industrial Disputes Act, not even a single rupee out of the sale consideration has been paid to the employees.

Note 2: Shri Laxminarayan Industrial Co- operative Service Society Limited is headed by one Mr. Liladhar B. Patel whose brother Mr. Damodar B. Patel is a director of the respondent company.

Note 3: What was transferred was the so called MoU [i.e. the Agreement to Sell] with Uma Developers for the sale of 5,84,820 sq. yards but what is purported to be sold under the four purported sale deeds of the year 2006 is 7,54,361.54 sq. yards.

19. 28.09.2004 Shri Laxminarayan Industrial Co-operative p. 504 ofService Society Limited also sent a letter to SCA the Company seeking the Company's response to the execution of specific performance of the MoU in their favour and also stated that the Society shall arrange for preparing Draft Agreements to be entered into between the company on the one hand the society on the other hand and Uma Developers as the Page 238 of 674 C/SCA/15599/2008 JUDGMENT confirming party.

20 27.01.2005 Industrial Park application (SIA Reg. No. 4/SIMP/ 05 dated 27.1.2005 under Industrial Park Scheme, 2002 notified by the department of industrial policy and promotion, Ministry of Commerce and Industry, Government of India vide S.O. No. 354(E) dated 1.04.2002 (Ref at 170 of SCA)

21. 9.04.2005 Shri Laxminarayan Industrial Co-operative Service Society Limited, unknown to the workmen, filed an application before the Ministry of Commerce and Industry, Department of Industrial Policy and promotion, Government of India for the approval of its proposal for setting up an Industrial Park in terms of the Industrial Park Scheme, 2002 notified by the Department of Industrial Policy and Promotion in respect of the land which has been purported to have sold by the four sale deeds of the year 2006 (Ref at p. 170 of SCA) 22 11.04.2005 The company did not adhere to the terms and conditions of the settlement dated 27.10.2003 and committed several breaches thereof. Apart from not paying the wages of the workmen, the statutory dues like PF (including the contribution of employees), Gratuity etc. were also not paid. The Company also did not bring any fresh finance from the so called new financier Benson Overseas Holdings Ltd., London as promised in 2(p) settlement. Hence, the workers union on 11.4.2005 raised eighteen demands with the company which Page 239 of 674 C/SCA/15599/2008 JUDGMENT pertained to the violation of the terms and conditions of the Settlement dated 27.10.2003

23. April 2005 The employees working in the Company were pp. 93-126 registered with a society called Baroda Rayon of C.A. No.Employees Cooperative Credit Society. One 754 of 2011 of the functions and activities of the said society was to lend money as loan to its members who were employees of the Company. As per Section 50 of the Gujarat Co-operative Society Act the employer is obliged to deduct the amount of loan installments from the salary of the employees and to pay the same to the said society. Accordingly the Company deducted a huge amount from the salaries of the workers- members till 21.10.1997 but did not pay the said amount to the said BRC credit Society. Hence, the BRC credit society approached the District Registrar under Section 50(3) of the Gujarat Co-operative Society Act for a recovery certificate claiming that an amount of Rs. 1,18,68,581.61 was recoverable as on 8.06.1999. The District Registrar issued a certificate under section 50(3) for recovery of Rs. 1,14,41,551/- with 18% interest. However, the said amount was not paid by the Company to BRC credit society and later on the Recovery Officer and the Administrator of the society colluded with the Company and the dues of the BRC Credit Society were settled only at Rs. 1,18,84,500/- thereby foregoing the entire interest amount. The aforesaid amount of Rs. 1m18,84,500/- was paid sometime in Page 240 of 674 C/SCA/15599/2008 JUDGMENT 2004 to the Society. Against this action of the recovery officer and administrator, a few members and office bearers of the BRC credit society filed SCA No. 7007 of 2005 before this Hon'ble Court, which is still pending.

24. 9.05.2005 The Government of Gujarat issued an order p. 173 ofbeing No. SCA GHM/2005/26/M/STP/102004/UOR-13/H.I in exercise of the power conferred by Section 9 of the Bombay Stamp Act, 1958 remitting the stamp duty chargeable on the instrument of conveyance executed by the developer of the Industrial Park for the purchase of land for setting up an Industrial Park and reduced by 50% the stamp duty chargeable on the instrument of conveyance.

25 21.06.2005 The Ministry of Commerce and Industry, p. 170 ofDepartment of Industrial Policy and SCA Promotion, Government of India conveyed its approval to the proposal of setting up the Industrial Park by Shri Laxminarayan Industrial Co-operative Service Society subject to certain terms and condition. This fact came to the notice of workmen only when they saw the sale deeds.

26. 1.08.2005 Order passed by the Conciliation Officer pp. 78-79 ofunder Section 33A of the Industrial Disputes SCA No.Act directing the Company not to do the 134 of 2006 changes which were threatened to be done by the Company namely the workers and staff quarters and the land on which they are situated and school facility should not be snatched from the workers and teachers of school and staff workers should not be intimidated and their service conditions should not be altered and status quo should be Page 241 of 674 C/SCA/15599/2008 JUDGMENT maintained.

27. 26.09.2005 Pursuant to the application made by Shri p. 175 ofLaxminarayan Industrial Co-operative Service SCA Society, the office of the Industrial Commissioner granted provisional registration to Shri Laxminarayan Industrial Co-operative Service Society under the scheme for financial assistance to Industrial Park introduced by the Industries and Mines Department. The said provisional registration was made subject to certain conditions. This fact came to the notice of workmen only when they saw the sale deeds.

28. 28.09.2005 The demands of the workers were referred for pp. 83-92 ofadjudication to the Industrial Tribunal, Surat SCA 134 ofunder section 10 of the Industrial Disputes 2006 Act, 1947 being Ref. (IT) No. 15 of 2005 by the Chief Labour Commissioner.

29. 5.10.2005 An interim application was filed by the Union pp. 112-123in Ref (IT) No. 15 of 2005 since during the of SCA No.pendency of the reference the office bearers of 134 of 2006 the union were illegally terminated from service by the Company by way of Unfair Labour Practice to bring pressure on them.

30. 5.10.2005 The Industrial Tribunal in Ref (IT) No. 15 of pp. 124 of2005 passed an ad-interim order in terms of SCA No.para 13(1) of the application which means that 134 of 2006 till the final disposal of the original demand IT No. 15 of 2005 and the application made under section 33A before the conciliation officer and the order passed by the conciliation officer there be no changes or alterations made without the prior permission or approval and without following the provisions of law.

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31. 13.10.2005 Summons were issued by the Recovery Officer of ESI to the President of the factory of the Company (Ref at p. 174 of SCA No. 134 of 2006)

32. 14.10.2005 The Company filed a reply to the application pp. 125-156for interim relief filed by the union in Ref (IT) of SCA No.No. 15 of 2005.

134 of 2006 In para 4 of the application the union stated that the surplus land was costlier than gold and it was agreed to be sold on certain conditions. It was further stated that the company in collusion with the builder wanted to divide the land into plots and start sale of the land but the workers had not been paid their benefits and amounts according to the contract. The company be sale of the surplus land by obtaining advance consideration were directly transferring this money and they wanted to demolish the constructions and sell the land which was not surplus according to the agreement. It was further stated that the school where children of the employees were studying had been demolished and the children were being forcibly given leaving certificate and the teachers were being shifted as administration staff and then remove them from service.

In reply at para 37 at pp. 142 the company had denied what was stated in para 4. It was mentioned that by the sale of land dues of PF, ESI, had been paid and the amount was also Page 243 of 674 C/SCA/15599/2008 JUDGMENT used to start the establishment and to meet this unwillingly the step of sale of land was taken. It was further stated that the land was not sold by the company but it was sold by the Hon'ble Gujarat Debt (wrongly mentioned as deputy) Recovery Tribunal, Ahmedabad and that's why allegation of collusion with builders lobby and not paying the dues and about advance amount were made to keep the Court in dark and to get sympathy and to get illegal injunction. Company further stated that on account of financial difficulties there was no alternative but to close the activity and that's why it had to close the school and that had been grossly exaggerated.

In para 7 of the application (pp. 116-117 of SCA No. 134 of 2006) it was averred by the workmen that the company in breach of the settlement was trying to evict the employees from their residential quarters and was threatening to demolish the quarters and was trying to sell the land. Further it was stated that the management was threatening the office bearers of the union and was attempting to sell the land which was not surplus and was refusing to pay the money payable to the employees. It was further stated that the Company was making complaints against the employees and was taking illegal proceedings against the workers. It was further stated that management had held a meeting with Sangramsinh Gaekwad at Mumbai and they were informed about the improper activities and attempts to break the trade union so that they stop them from taking proper role and he was requested to ensure that employees were Page 244 of 674 C/SCA/15599/2008 JUDGMENT allowed to do their job. But the local management was more angry and was giving more harassment to the workmen.

In para 40 of the reply of the Company to para 7 of the application at p. 145 it was mentioned inter alia that the allegation of demolishing the quarters and sale of land was the imagination of the fertile brain and to mislead the tribunal. The complaint about the sale of land and the story about harassment and Unfair Labour Practice was false and because personal favour was not given to the employees they were making this false application. It was further stated that the alleged conversation in the meeting was false, imaginary and contrary to truth.

In para 9 of the application it was contended by the union that the harassment to the office bearers of the union had reached the highest level. The leading office bearers of the union were being suspended and they were not allowed to go to the union office. It was further stated that some of the protected employees were also removed without obtaining permission.

In para 42 at pp. 146-148 of the reply the Company denied the contents of para 9 of the application.

In para 9 of the application it was stated that some of the employees were bed-ridden in hospital, some were suffering from paralysis, heart attack, blood pressure and the families of those workmen were paralyzed but the Page 245 of 674 C/SCA/15599/2008 JUDGMENT management were not giving the amount agreed to in the settlement. It was stated that the management was interested in finishing the union activities and they wanted to achieve their secret objects by selling the property and to destroy the rights of the employees. The management was not permitting the workmen to work, their conditions of service were not followed and the maintaining of the number of employees as per settlement was not being followed. It was further stated that the management did not listen to anyone and was taking the law in their hands and that's why the present application was being filed.

In reply in para 45 at pp. 149-151 the Company stated that the Company was before the BIFR and the whole world would know under these circumstances the land could not be sold and despite this asking for stay showed bad intention. It was further stated that the allegation about selling the land was made because the management had not accepted to give illegal benefits. It was stated that the question of selling any land and asset did not arise at all. It was further stated that High Court had no authority to snatch away the right of the management to run the Company.

In para 10 of the application the Union averred at pp. 118-119 pointing out that the Conciliation Officer had passed an ad interim order under section 33 A on 01.08.2005, directing the company not to make any alterations and to maintain the status quo. It was stated that although the management had not challenged that order and the order was in Page 246 of 674 C/SCA/15599/2008 JUDGMENT force, they were not complying with the said order.

In reply to that said para, the management in para 43 mentioned that when section 33 did not apply no order could be passed. Despite this if any illegal order was passed that was a nullity and the question of complying such order did not arise and wrong order were not necessary to be challenged but they were to be kept aside.

Note: In fact SCA No. 7007 of 2007, the order dated 30.10.1999 passed by the DRT, is part of the record. The order pertains to land only at Pandesara. A copy of the order was addressed to Surat District Co-operative Bank Ltd. with a copy to Mr. S.P. Gaekwad, Chairman and Managing Director of Baroda Rayon Corporation and to Mr. J.N. Bambot, Vice President, finance of the Baroda Rayon Corporation and manager of the Baroda Rayon Corporation.

33. 19.10.2005 Mr. Pratapsinh Gaekwad met the Regional Officer of the ESI Corporation. (Ref at p. 174 of SCA No. 134 of 2006)

34. 20.10.2005 Letter from the recovery officer of ESI Corporation Limited addressed to Pratapsinh Gaekwad. It was mentioned in the letter that the written commitment given by him on 19.10.2005 was accepted on certain conditions of making the payments with interest at 12% and 15% for different periods and damages upto 25% under section 85(B) of ESI Act and on the condition of the company furnishing bank guarantee. (Ref at p. 174 of SCA No. 134 of 2006) Page 247 of 674 C/SCA/15599/2008 JUDGMENT

35. 24.11.2005 Letter from the Director (Recovery) of the Employees Provident Fund, New Delhi to the Regional provident Fund Commissioner, Vadodara informing that pursuant to the letter of the Respondent dated 25.10.2005 the competent authority had agreed to grant 60 equal installments for PF dues of Rs. 746.18 lacs against the Respondent Company.

36. 06.12.2005 The Industrial Tribunal, Surat in Ref (IT) No. pp. 34-84 of15 of 2005 passed an interim order, the SCA original of which is in Gujarati and when translated in English the relevant part reads as under:

"During the pendency of reference till it is decided finally, it is directed to the first party not to sell the land and properties to any person or to transfer or to otherwise alienate such property and land to any other person; the office bearers of the 2nd Party Union Shri M.A. Kagazi, N.J. Jariwala and active members Shree Jayndra Manilal Shah, N.D. Panjanigera, Jitendra A. Patel, Pravinbhai Gangadwala, Rajnikant Karasanbhai Patel, who are dismissed due to raising demands before Commissioner of Labour, should be reinstated to their original posts." (pp. 83-84)

37 9.12.2005 A public notice was issued by the General p. 368 ofSecretary of the Workers' Union in the SCA newspaper 'Divya Bhaskar' bringing to the notice of the general public that the Industrial Tribunal had passed an order on 6th December, 2005 restraining the company from selling the land and properties to any person or Page 248 of 674 C/SCA/15599/2008 JUDGMENT to transfer or to otherwise alienate such property and land to any other person.

38. 09.01.2006 The Company filed a Special Civil Application No. 134 of 2006 before this Hon'ble Court against the said order dated 06.12.2005 passed by the Industrial Tribunal, Surat in Ref (IT) No. 15 of 2005. In this writ petition the Company did not disclose that apart from the injunction order dated 6.12.2005 passed by the Industrial Tribunal, there was an injunction order dated 17.04.2000 passed by this Hon'ble Court in C.P. No. 91 of 2000 which was in operation at the date of filing of SCA No. 134 of 2000 and which is still in operation. The prayers D and E read as under:

"(D) Pending hearing and final disposal of this petition, your lordship may be pleased to pass, as and by way of interim relief, appropriate order and direction staying implementation, execution and operation of the impugned order dated 6.12.2005 and restrain the respondents from taking any action in pursuance or for implementation of the impugned order dated 6.12.2005;

(E) An ex-parte ad interim relief in terms of para 8(C) above may kindly be granted;"

39. 16.02.2006 The Company by a letter to BIFR requested for sanction of the Scheme under section 17 (2) of SICA.

40 20.02.2006 SCA No. 134 of 2006 was listed before this pp 85-86 ofHon'ble Court on which date the following Page 249 of 674 C/SCA/15599/2008 JUDGMENT SCA order was passed:

"Notice, returnable on 06th March, 2006. In the meantime, the impugned order passed by the Industrial Tribunal, Surat be stayed to the extent of the direction given by the Tribunal to reinstate the employees whose names are mentioned in the operative part of the order dated 06.12.2005. So far as disposal of the assets of the petitioner company is concerned, if BIFR issues any direction it is open for the the petitioner to approach this Court for suitable modification in the order."

Note: The stay of the aforementioned Industrial Tribunal order in so far as it restrained the sale of the land and properties to any person or to transfer or to otherwise alienate such property and land to the other person was not granted although prayed for by the Company.

41 03.03.2006 The Court Commissioner appointed pursuant to the order dated 28.02.2006 passed by Industrial Tribunal in REF (IT) No. 15 of 2005 submitted report giving details of all the structures on the subject property. The site inspection by the Court Commissioner was done in the presence of the representative and advocates of workers union and the Company. 42 20.04.2006 This Hon'ble Court passed an order in SCA pp 87-94 ofNo. 134 of 2006 confirming the interim order SCA dated 20.02.2006 and directing the Company to pay the last drawn wages inclusive of the maintenance allowances to the concerned 7 workmen from the date of the award dated Page 250 of 674 C/SCA/15599/2008 JUDGMENT 6.12.2005 till 30.04.2006 within a period of one month. Further direction was issued to the Company to pay regularly continuous last drawn wages as required under Section 17B of the Industrial Disputes Act, 1947 to the concerned workmen till the SCA is finally decided. The Industrial Tribunal, Surat was directed to expedite the reference.

43 The Sub-Registrar and Mamlatdar, Surat recorded that there were Sales Tax dues against the Company amounting to Rs.3,71,77,644/- as intimated by the Special Recovery Officer and it was subject to the terms and conditions of permission which might be granted under Section 13. This has been recorded in the column of other rights and encumbrances. This entry was made with respect to Village Bhedwad. (p.369).

The Talati in the revenue record with respect of Village- Bhedvad recorded that the President of the Workers' union made an application dated 9th April, 2008 pointing out that according to the order passed by the Industrial Tribunal, Surat in Ref (IT) No. 15 of 2005, the company was restrained from selling, transferring or disposing of the assets of the company and it also referred to the order passed by this Hon'ble Court dated 20th April, 2006 and states as under:

"Subject to aforesaid observations and directions as referred above, interim order passed by this Court on 20th February, 2006 is made confirmed." (p-

                         370)



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The Talati in the revenue record with respect to Village: Kapota recorded that the President of the workers' union made an application dated 9th April, 2008 pointing out that according to the order passed by the Industrial Tribunal, Surat in Ref. (IT) No. 15 of 2005, the Company was restrained from selling, transferring or disposing of the assets of the company and it also refers to the order passed by this Hon'ble Court dated 20th April, 2006 and states as under:

"subject to aforesaid observations and directions as referred above, interim order passed by this Court on 20th February, 2006 is made confirmed." (p-

371)

44 01.06.2006 BIFR sanctioned the Scheme for rehabilitation pp 95-153of the Company under Section 17(2) of SICA. of SCA The said scheme provided that the company had concluded a comprehensive One Time Settlement (OTS) plan with secured creditors before the Corporate Debt Reconstructing Forum. It was stated that all the past secured lenders were being settled and paid off through OTS. The Company gave a list of surplus assets which are already sold or to be sold under the Rehabilitation Scheme which list was marked as Annexure - III to the Scheme. In the said scheme one of the assets mentioned by the company was 5,84,820 sq.Yrds of land at village: Udhana and Village Bhedwad in District Surat which was falsely mentioned as already sold. The settlement reached under Section 2(p) of the Industrial Disputes Act, 1947 read with Rule 62 of the Industrial Disputes (Central) Rules, 1957 Page 252 of 674 C/SCA/15599/2008 JUDGMENT between the Company and the Union on 27.10.2003 was also enclosed and marked as Annexure - IV to the Scheme as per clause VII (A)(iii) so as to form part of the Scheme. One of the reliefs envisages under the Scheme was to implement the said settlement dated 27.10.2003. In para VII(A)(iii) of the scheme at p.101 the Company has acknowledged that the workers / employees of the company had agreed to waive substantial portion of the past unpaid dues under a comprehensive settlement and had agreed for a new wage structure which has resulted into substantial cost saving to the Company.

In Annexure - III to the BIFR sanctioned Scheme the Company has shown its following immovable properties "as already sold" by the Company.

(i) Land admeasuring 2,08,000 sq. yrd. Situated at village: Pandesara at Udhna Navasari Road, District; Surat.

(ii) Certain Misc. assets mentioned in Annexure - III;

(iii) The office premises at Jolly Maker Chamber No. 2, 1st Floor, Nariman Point, Mumbai- 40021;

(iv) Residential premises being Flat No. 702, Samudra Setu, Bhulabhai Desai Road, Mumbai - 400 026;

(v)Residential premises being Flat No. 301, Malva Rosa Cooperative Society, Bulls Royce Page 253 of 674 C/SCA/15599/2008 JUDGMENT Colony, Santacruz (East), Mumbai; &

(vi) Residential premises being 402, B-Wing Kamlakunj, Veer Savarkar Marg, Mumbai - 40028.

It is submitted that the sale of the aforesaid properties is in breach of the injunction order dated 17.04.2000 and are therefore null and void and liable to be set aside.

Clause (ix) of the Scheme under 'other terms and conditions' provided as follows:

"Any sale of assets of the Company would be effected through Asset Sale Committee as per the guidelines issued by the BIFR. The entire sale proceeds would be used as per the scheme sanctioned or as per the directions of BIFR."

Note 1: The alleged transfer i.e. the purported sale deeds in October/ November, 2006 has taken place contrary to the above condition.

Note 2: If the land admeasuring 5,84,820 sq. yards shown in the Annexure - III had already been sold as falsely claimed in the said Annexure, it could not have formed part of the Rehabilitation Scheme.

45 23.06.2006 Unknown to the workmen, the Board resolutions were passed by the company on 23.06.2006 where a decision was taken to sell the surplus land of the company in a teeth of the injunction order dated 17.04.2000 passed Page 254 of 674 C/SCA/15599/2008 JUDGMENT by this Hon'ble Court in C.P. No. 91 of 2000, restrain order dated 6.12.005 of the Industrial Tribunal and the orders passed by this Hon'ble Court dated 20.02.2006 and 20.04.2006 which were operating and are still in operation. Shri Hemant Dhirubhai Patel was appointed as a Power of Attorney to execute the necessary documents for the sale of surplus land. (Ref. p.165) Note 1: It is important to note that in some sale deeds the date of the resolution is mentioned as 23.06.2006 (p.165) whereas in some sale deeds the date of the resolution is mentioned as 23.06.2005 (p.215) Note 2: This itself established that the aforesaid land was not sold prior to the orders passed by this Hon'ble Court and the Company had made a false statement before BIFR.

46 10.10.2006 Four Sale Deeds were purported to have been (pp.236- executed by the Company in favour of Shri

256), Laxmi Narayan Industrial Co-operative 08.11.2006 Service Society Limited whereby an area of (pp.165- 7,54,361.54 sq. Yrd of factory land was

183) illegally and purportedly sold. For the said 13.11.2006 purported sale, the Company claims to have (pp214-234) received a ridiculously low price of Rs.38.13 14.11.2006 crores. A bare perusal of the four Sale Deeds (pp 184-show that the vacant land along with structures

202) was sold and a description of structures has been deliberately not disclosed in the description of property in the Sale Deeds.

Note 1: The said purported Sale was contrary to the Scheme sanctioned by BIFR. The Company was permitted to sell only the Page 255 of 674 C/SCA/15599/2008 JUDGMENT surplus land admeasuring 584820 sq. yards but what was purportedly sold was 7,54,361.54 sq. yards, Moreover, the said sale was in violation of the injunction order dated 17.04.2000 passed in C.P. No. 91 of 2000, ad-interim order dated 5.10.2005 and the interim order dated 6.12.2005 passed by the Industrial Tribunal as well as the interim orders dated 20.02.2006 and 20.04.2006 passed by this Hon'ble Court. Even the said sale of the surplus land was vitiated as the same was conducted by the Company directly and was not done by the Asset Sale Committee as envisaged by the BIFR sanctioned scheme. The said sale was also in breach of the Settlement dated 27th October, 2003 arrived at under Section 2(p) and also the BIFR order incorporating that settlement in the Rehabilitation Scheme. The purported Sale Deeds were executed on behalf of the purchaser society by the President of the Society namely Shri Liladhar Patel as well as the Secretary of the Society namely Shri Pravinbhai Jayantbhai Patel. On behalf of the company and Board of Directors the purported Sale Deeds were signed by Shri Hemant Dhirubhai Desai as the authorized person.

Note 2: Laxmi Narayan Industrial Co-

operative Service Society Limited is headed by one Mr. Liladhar B. Patel whose brother Mr. Damodar B. Patel is a director of the respondent Company.

Note 3: Although the consideration agreed between the company and Uma Developers for the sale of 5,84,820 sq. yards was Rs.33.92 Page 256 of 674 C/SCA/15599/2008 JUDGMENT crores, however, for the additional land sold i.e. 1.69,541.54 sq. yards [74361.54 (-) 584820]] a consideration of only Rs.4.21 crores was paid.

47 7.11.2006 The Company purportedly sold more land than pp.203-212 what was permitted by the BIFR and to of SCA hoodwink the Court and the workmen, a rectification Deed (in Gujarati described as "Sudhara no Dastvej") was purportedly executed whereby an area of 63,863.89 Sq. Yds. Of land was given for internal and external roads to the purchasers and the Company claimed that it was not sold although rights were created in favour of the purchasers on the said area. It is submitted that this rectification deed was an eye wash to show that the Company and its directors had not violated the limit of land which it was permitted to sell by BIFR. The alleged purchasers were given all the rights over the property, which in substance was nothing less than the sale to them. Even creating 3rd party interest, as was created by this document, was injuncted by the order of the Industrial Tribunal dated 6th December, 2005 and the orders of this Hon'ble Court dated 20th February, 2006 and 20th April, 2006.

Note: It is important to note that even by this rectification deed what has been excluded is only 63863.89 sq. yards of land and therefore, even after excluding this land still 1,05,677.65 sq. yards of land was purportedly sold in excess of what was permitted by the BIFR. 48 12.04.2007 The workers Union filed an application for the appointment of Court Commissioner before the Industrial Tribunal Page 257 of 674 C/SCA/15599/2008 JUDGMENT 49 26.07.2007 The Company filed a reply to the said pp 58-59 ofapplication for appointment of Court C.A.No. Commissioner inter-alia stating that the 754 of 2011 Company had only been carrying on the construction or addition in the factory premises.

50 20.10.2007 The Industrial Tribunal in Ref. (IT) No. 15 of pp 257-3292005 by Part I \Award directed the Company of SCA to pay Gratuity to the retired/ resigned/ dead employees. Before the Industrial Court the company admitted that as on 31st March, 2007 the gratuity dues of the workers and staffs / officers works out to Rs.14.79 crores (p.334) Note: Not one rupee has been paid to the workmen out of this admitted amount.

51 13.08.2007 Civil Application No. 11914 of 2007 was filed pp.84-89 ofby the Company in SCA No. 134 of 2006. In CA 754 ofthe said application in para-4 there is a 2011 reference that BIFR has made provision for disposal / sale of assets of the Company for the settlement of liabilities and rehabilitation needs of the applicant Company and that such assets have been identified more particularly at Annexure - III of the scheme. It is submitted that the said Annexure - III is at page 130 of SCA No. 15599 of 2008 which includes:

(i) land admeasuring 5,84,820 sq.m yards at village: Udhana and village : Bhedwad shown as already sold;

(ii) land admeasuring 2,08.000 sq. yards at village: Pandesara shown as already sold.

(iii) Misc. assets shown as sold to Page 258 of 674 C/SCA/15599/2008 JUDGMENT pay secured creditors.

(iv) office premises at Jolly Makers Chamber No. 2, 1st floor Nariman Point, Mumbai sold to settle the dues of India Securities Limited.

(v) Residential Premises being flat No. 702

Samudra Setu, Bhulabhai Desai Road, Mumbai sold to settle the dues of India Securities Limited.

(vi) Residential Premises being Flat No. 301, Malya Rosa Co-operative Society, Bulls Royce Colon, Santacruze, Mumbai sold to settle the dues of India Securities Limited.

(vii) Residential premises being 402, B, Wing Kamalakunj, Veer Savarkar Road, Mumbai.

(viii) Plant, Machinery and equipment of POY plant of BRC on as is where is basis.

Thus, it is clear from the above that not only the land admeasuring 5,84,820 sq. yards was sold but also all the above mentioned assets were sold except POY plant but no accounts are submitted by the Company in respect of sale consideration received from the sale of above said assets. Further the sale of all the aforesaid assets is in violation of the order passed by the Industrial Tribunal as well as this Hon'ble Court including the injunction order dated 17.04.2000 passed in C.P. No. 91 of 2000.

In the said C.A. No. 11914 of 2007 the Company made the following prayers:

Page 259 of 674

C/SCA/15599/2008 JUDGMENT "9. That in the premises aforesaid the applicants most humbly pray that:

(A) Your Lordship may be pleased to admit and allow the present application; (B) Your Lordship may be pleased to modify the order dated 20.04.2006 directing deletion of the condition imposed in the order dated 6.12.2005 by the opponent No . 2 in Reference (IT) No 15/2005 to the extent it restrains the applicant Company from selling, transferring and alienating the properties of the applicant company identified under the scheme sanctioned by the Board of Industrial and Financial Reconstruction for the applicant company.

Or Alternatively:

Your Lordship may be pleased to modify the order dated 20.04.2006 staying the operation, implementation and execution of the order dated 6.12.2005 passed by the opponent no. 2 in Reference (IT) No. 15/2005 to the extent it restrains the applicant company from selling, transferring and alienating the properties of the applicant company identified under the scheme sanctioned by the Board of for Industrial and Financial Reconstruction for the applicant company.

(C) Your Lordship may be pleased to permit the applicant company to sell, Page 260 of 674 C/SCA/15599/2008 JUDGMENT dispose of and transfer the properties of the applicant company in accordance with the scheme sanctioned by the Board for Industrial and Financial Reconstruction.

(D) Your Lordship may be pleased to grant interim relief permitting the applicant company to sell, dispose of and transfer the properties of the applicant company during the pendency of the present application in accordance with the scheme sanctioned by the Board for Industrial and Financial Reconstruction subject to the final adjudication of the present application.

(E) Your Lordship may be pleased to grant ad-interim relief in terms of paragraph 9(D) above.

(F) Your Lordship may be pleased to grant any other and further relief/s as may be deemed just and proper in the interest of justice and fitness of things.":

Note: In the said C.A. No. 11914 of 2007 the Company did not disclose that apart from the Injunction Order dated 06.12.2005 there is a prior injunction order dated 17th April, 2000 restraining the Company from alienating, encumbering, transferring, dealing with or creating any third party rights in respect of the immovable assets of the Company. Thus the Company played a fraud on this Hon'ble Court by seeking an order in C.A. No. 11914 of 2007 to nullify the earlier injunction order Page 261 of 674 C/SCA/15599/2008 JUDGMENT dated 17.04.2000 without even disclosing that such an order dated 17.04.2000 was passed and was in operation.

52 2008 The Company filed SCA No. 3916 of 2008 against the said Part - I Award dated 20.10.2007 passed by the Industrial Tribunal.

The said SCA was dismissed for default on 13th October 2008 by this Hon'ble Court (pp- 335-336 of SCA) 53 14.03.2008 The workers union filed Recovery Application pp.337-338 No. 10 of 2008 for recovery of the amount of SCA awarded by the Part-I Award before the Labour Court. The said Recovery Application is pending. The Company has filed a reply before the Labour Court in the Recovery Application No. 10 of 2008 praying for stay of the proceedings before the Labour Court. 54 15.04.2008 Workers' Union filed a Civil Application No. pp.467-471 4772 of 2008 in SCA No. 134 of 2008 praying of SCA for punishing the shareholder and Manager of the company for the deliberate and willful contempt of orders of this Hon'ble Court dated 20.02.2006 and 20.04.2006.

55 May, 2008 Company filed a reply to the above Contempt pp 472-528Application wherein it was inter alia stated of SCA that:

"I humbly state and submit that all the properties of which the registered sale deeds have been annexed as Annexure - B collectively to the present application form part of the assets identified as surplus / non manufacturing assets under the said Scheme. I humbly state and submit that sale of such properties has been approved by BIFR which took place before the orders came to be Page 262 of 674 C/SCA/15599/2008 JUDGMENT passed by this Hon'ble Court on 20.2.2006. It would be relevant and important to note that the registered sale deeds reflect the debts of payment of consideration which has taken place in the year 2003 to 2005 and such consideration received by the answering opponent has been utilized in payment of its debts towards secured creditors." (at p.475) It was further stated in the affidavit that:

"As stated above the properties have been sold way back in the year 2003...."

(at p.477) Note: The disbursement is also contrary to the order of this Hon'ble Court dated 24.12.2008 as well as Section 529A of the Companies Act. Further the Company suppressed the injunction order dated 17.04.2000 in this affidavit.

56 16.05.2008 This Hon'ble Court passed an order in Civil pp.154-161 Application No. 11914 of 2007 modifying the of SCA earlier order dated 20.04.2006 and permitting the Company to sell the Plant, Machinery and Equipments of POY Plant at Surat on as is where is basis as per Clause (VII)(ix) of the BIFR sanctioned scheme which requires sale to be effected through Asset Sale Committee. It was further directed that the sale price should be deposited in the Court with a copy of Sale Deed and the amount would not be utilized by the Company for any other purpose.

Page 263 of 674

C/SCA/15599/2008 JUDGMENT 57 24.07.2008 The workers' union represented to the pp.349-350 Company that at least the gratuity amount of of SCA the retired employees, the employees who had resigned and those who had died should be paid.

58 22.08.2003 The workers' union made representation to pp.351-352 several authorities with regard to the illegal of SCA activities carried out by the company of siphoning away raw materials of the company and also the withholding of the salary of the employees.

59 27.08.2008 In complete retaliation the Company issued a p.353 ofCircular inter alia stating that due to acute SCA shortage of funds to manage the working of the Company, the Company had decided to temporarily suspend all the operational activities of the company. It was further stated in the circular that the employees (except engaged in essential services) were not required to report for work in their regular shifts. However, they all would be treated as present on all working days during which the operational activities remained suspended.

Note: After this Circular from August, 2008 till date employees are not paid any salary though as per the Circular all the employees were to be treated as in service. Further no payment of whatsoever nature has been made by the Company to the employees.

60 29.08.2008 The workers' Union issued a Demand Letter pp 354-355to the Company with a copy to the Assistant of SCA Commissioner of Labour. The demand was admitted for conciliation by the Assistant Commissioner of Labour and at present the conciliation proceedings are pending.

Page 264 of 674

C/SCA/15599/2008 JUDGMENT 61 25.09.2008 The workers' union again represented to the p.358 ofcompany to make payment of salary to the SCA employees.

62 10.10.2008 One of the Creditors of the Company namely CCP obtained a status quo order against the Transfer of Plant, Machinery and Equipment of POY Plant from AAIFR.

63 26.10.2008 The Workers' Union made a representation to pp.356-357 the Company pointing out the pathetic of SCA condition of the employees and their family members. Copy of the said representation was forwarded to the Collector, Surat, Assistant Labour Commissioner, Surat, Deputy Labour Commissioner, Surat and the Factory Inspector, Surat. However, no action was taken on the said representation.

64 23.11.2008 Since the workers' union apprehended that the pp.359-364 land belonging to the Company might be of SCA illegally sold by the management, the employees held a dharna on the land belonging to the company. However, with the help of Police certain private persons without disclosing their identity evicted the employees from the land claiming that the land had been sold to the private persons. A false criminal complaint was also filed against some of the employees who were arrested by the police and were presented before the Executive Magistrate. Shri Premjibhai Patel, who is the real brother of Damodharbhai Patel who is a Director of the Company, filed one such complaint. The workers' union had also displayed on the land a public notice regarding the stay order of the Industrial Tribunal as well as this Hon'ble Court. However, the said public notice was removed by Shri Damodarbhai Patel who is the Director of the Page 265 of 674 C/SCA/15599/2008 JUDGMENT Company with the help of Police and also threatened the workers who were present there and again filed a false complaint against them. One of the workman namely Shri Bharat Patil filed a complaint of this incident to the Police Commissioner, Surat.

65 17.12.2008 The Workers Union filed Special Civil Application No. 15599 of 2008 inter alia paying as follows:

"A. A writ of mandamus and/or any other appropriate writ, order or direction be issued:

(i) to direct the respondent No. 1 to immediately make the payment of salary of the employees from August, 2008 and further to direct the respondent no. 1 to go on making payment of salary to its employees in accordance with law;

(ii) to declare the action on the part of the respondent no. 1 in withholding the salary of the employees working with it as illegal, unconstitutional and violative of fundamental rights of the members of the petitioner and further be pleased to direct the respondent nos. 2 and 3 to immediately ensure compliance of the provisions of the Industrial Dispute Act, Minimum Wages Act and other Labour law;

(iii) to direct the respondent no. 1 to make the payment of Gratuity, PF and other due and payable amount to Page 266 of 674 C/SCA/15599/2008 JUDGMENT those employees who have retired, resigned and/or died;

(iv) Be pleased to direct the respondent nos. 2 to 4 to take immediate action against the respondent no. 1 for the compliance of provisions of labour law as also ensuring immediate payment of due salary to the employees, gratuity and provident fund amount to the concerned employees.

66 24.12.2008 This Hon'ble Court issued notice in the SCA pp 37-39 ofNo. 15599 of 2008. The Labour LOD Commissioner and the Secretary, Labour and Employment Department were directed to take steps on the complaint made by the workers union without being influenced by the pendency of the Special Civil Application. The Company was asked to file a reply.

                (C.O.pp.1-3)


                              Page 267 of 674
        C/SCA/15599/2008                             JUDGMENT

67 15.01.2009 Company filed an affidavit in SCA No. 15599 pp 373-375of 2008 wherein the Company admitted that of SCA salary had not been paid to the employees since August, 2008. It was stated in the affidavit that:

"It is further submitted that upto July, 2008, the respondent Corporation has paid the salaries to its employees regularly and without delay. However from September, 2008 the operations of the corporation have remained closed due to adverse marker condition and non availability of finance. Due to severe financial constraints despite its best efforts to overcome the same, the respondent corporation has not been able to pay salary and retirement benefits to its employees." (at p.374) The company also submitted that it had not sold any of the assets in terms of the order dated 16.5.2008 passed by this Hon'ble Court and whatever properties are sold, had been sold pursuant to the BIFR order passed in the year 2006. It was further stated that the Company was trying its best to arrange for funds so that the operational activities could be restarted and dues of employees were paid.

68 19.01.2009 The Asstt. Labour Commissioner filed an pp.376-391 affidavit in SCA No. 15599 of 2008 inter alia of SCA stating that office of the Asstt. Labour Commissioner had taken all the necessary steps against the Company for suspending all operational activities w.e.f. 27.08.2008 including show cause notice for breach of Section 250 (1) of the Industrial Disputes Act, Page 268 of 674 C/SCA/15599/2008 JUDGMENT Rule 3(3) of the Payment of Gratuity Act, etc., He further submitted that the respondent's office had also taken actions for not paying salary to the employees since the suspension of the operational activities. Para-5 from the said affidavit is set out below:

"5. It is respectfully submitted that, respondents office has taken all necessary steps against the respondent no.1 for suspending the all operational activities with effect from 27.08.2008. Respondents office has also taken actions for not paying salary to the employees since the suspension of the operational activities. The details are as under:-

(a) Notice of suspension of the operation of the respondent no. 1 from 27.08.2008 was a sham arrangement. It was a closure of undertaking hence a show cause notice was issued for breach of section 25O(1) of Industrial Disputes Act, 1947 and prosecution proposal is sent to the Labour Commissioner, Gujarat State, Gandhinagar for sanction on 15.11.2008 and the same is sanctioned vide office order dated 13.01.2009 by the Commissioner of Labour. A copy of the same is annexed herewith and marked as Annexure - R-I in this reply. Thereafter a Criminal Case No.20 of 2009 is filed in the JMFC Court Surat on 16.01.2009.

(b) Treating suspension of operation as illegal closure a show cause notice was Page 269 of 674 C/SCA/15599/2008 JUDGMENT issued to the respondent company for breach of Rule 3(3) of Payment of Gratuity Act, 1972 and Gujarat Rules 1973. A prosecution proposal is sent to the Labour Commissioner Gandhinagar for sanction on 25.11.2008.

(c) For non implementation of an award of Industrial Tribunal Reference (IT) No. 15 of 2005, a prosecution proposal for sanction is sent to the Labour Commissioner, Gandhinagar on 20.10.2008 and the same is sanctioned by the Labour Commissioner, Gandhinagar vide office order dated 13.10.2009. A copy of the same is annexed hereto and marked as Annexure

- R-II in this reply. Thereafter a Criminal Case No. 19 of 2009 is filed in the JMFC Court Surat on 16.01.2009.

(d) For the breach of settlement respondent No. 1 company is prosecuted under the Industrial Disputes Act, 1947 and a Criminal Case No. 2043 of 2008 is filed in the Court of First Class Judicial Magistrate, Surat on 11.08.2008.

(e) Since the suspension of the operation respondent no. 1 company has not paid regular wages to its employees. For this every month Criminal Case is filed under the Minimum Wages Act, 1948.

The Criminal Cases Nos. 2569 of 2008 to 2572 of 2008. These cases are pending since 11.11.2008 in the Court of Page 270 of 674 C/SCA/15599/2008 JUDGMENT First Class Judicial Magistrate, Surat.

(f) Petitioner union has raised a dispute against the respondent company regarding illegal lock out, the same dispute is admitted in conciliation proceedings in Conciliation Case No. 67 of 2008.

(g) The retired workers had filed Gratuity Application before the controlling Authority, Surat under Payment of Gratuity Act and all the cases are disposed of by giving appropriate orders and in case of non- payment of of Gratuity amount, 197 recovery certificates are issued to recover the Gratuity amount as arrears of land revenue to the Revenue Authorities. A copy of the same is annexed herewith and marked as Annexure - R-III in this reply."

Note: The aforementioned proceedings are still pending. The respondent management is delaying the said proceedings and taking advantage of the delay in the said proceedings in spite of not denying even in the Counter affidavits filed in the present proceedings that the company had illegally closed the undertaking in breach of S.25O(1) of the I.D. Act, 1947. Further, the Company has also violated the provision of the Payment of Gratuity Act, the terms of the Settlement, the provisions of the Minimum Wages Act, for declaring illegal lock out etc;

Page 271 of 674

C/SCA/15599/2008 JUDGMENT Despite the aforementioned detailed gross violations, the respondent - Management have not been held accountable, while the workers and their family members have been languishing in poverty. Indeed some of the workers (as may as 10( have committed suicide, may of them have died for want of medical treatment etc. The children of the workers could not go to school because of the demolition of the school by the Management. 69 02.02.2009 The Company filed a further affidavit in SCA pp 393-No. 15599 of 2008 inter alia stating that:

397of SCA "As stated in our earlier affidavit, whatever asset/property sold by the respondent Company was as per the scheme sanctioned by the CDRC (Corporate Debt Restructuring Cell) and the BIFR and no asset / property has been sold by the respondent company subsequent to the order dated 16.05.2008 passed by this Hon'ble Court (at p.394).

It was further stated that out of the sale proceeds payments have been made to the financial institutions and bankers as per the scheme of CDRC and the Settlement Agreement dated 27th October, 2003 with the workers. In the affidavit, the Company further stated that:

"The respondent company is not in a position to sell any other asset/property at present to pay the arrears to the workmen, as all the assets of the respondent Company are charged to Page 272 of 674 C/SCA/15599/2008 JUDGMENT secured lenders." (at p.397) Note: The statement that out of the sale proceeds payments were made according to the settlement dated 27.10.2003 is wrong as not even a rupee was paid to the workers. Further the fact that there was an injunction order dated 17.04.2000 passed in C.P. No. 91 of 2000 was suppressed in this affidavit.

70 06.03.2009 This Hon'ble Court passed an order in SCA No. 15599 of 2008 which reads as under:

"The Chairman of the Board of Directors of respondent No.1, The Baroda Rayon Corporation Limited, is directed to remain personally present before this Court on 09.03.2009 at 10:30 A.M. It will be in the fitness of things if the Chairman is informed to come with a definite proposal and the amount to be paid to the employees who are not paid since August 2008 or else the Court will have no other alternative but to take necessary coercive steps for having sold the property - the land, which was otherwise injuncted by the Court."

(C.O. pp. 4-6) [Emphasis supplied]

71. 09.03.2009 The SCA No.15599 of 2008 was listed before this Hon'ble Court. On this date the Chairman of the Company was not present on the ground that he has suffered fracture on a wrist. The Senior counsel appearing for the Company sought time to file an application setting out the circumstances which led to the execution of the purported Sale Deeds despite there being Tribunal's order in the month of December, 2005 which is neither vacated nor altered by this Hon'ble Court in February, Page 273 of 674 C/SCA/15599/2008 JUDGMENT 2006 and also placing on record all the relevant factors and proposed actions by which the interest of workers will be secured in the best possible manner. (C.O. pp. 7-8)

72. 23.03.2009 Company filed an Affidavit before this pp. 458-466 Hon'ble Court interalia stating as follows :

of SCA "11. it is submitted that it is clear from the bare perusal of the BIFR scheme that the property in dispute has already been sold prior to the stay order granted by the industrial tribunal vide its order dated 6.12.2005. However, sale agreement could not be executed as No Due Certificate had to be obtained from the lenders before the execution of the sale deeds....." (at p.465).

Note : In this affidavit also the Company suppressed the injunction order dated 17.04.2000 which was in operation and is still in operation.

73. 31.03.2009 The workers union filed a rejoinder to the pp. 529-541 Affidavit dated 23.03.2009 of the Company of SCA wherein it was submitted that the action on the part of the Company in selling the surplus land and thereafter to appropriate the sale proceeds solely to discharge financial liabilities was illegal and unjust. It was further submitted that the MOU entered on 09.12.2003 was not fair as no bids were invited and no Valuation Report was called for. It was further submitted that the Corporate Debt Restructuring Package was not within the knowledge of the workers union since union was not a party before the Corporate Debt Page 274 of 674 C/SCA/15599/2008 JUDGMENT Restructuring Cell.

74. 31.03.2009 The SCA No.15599 of 2008 was listed before this Hon'ble Court on which date notice was issued to the newly added respondents namely Clearwater Capital Partners India Private Limited, Yes Bank Limited, Axis Bank Limited, Halcyon Enterprises Private Limited. The said parties were impleaded by the workmen as the Company stated that they were the secured creditors of the Company and ought to be made parties to the SCA No.15599 of 2008. (C.O. p. 9).

75. 12.05.2009 SCA No.15599 of 2008 was listed before this Hon'ble Court on which date the following order was passed :

"Heard Learned Senior Advocate Mr.Mihir Joshi with M/s. Nanavati Associates for respondent company. The learned advocate for the respondent company to place on record statement of debts and assets of the company and also the figure of sales. S.O. to 15.5.2009" (C.O. p. 12)

76. 22.06.2009 This Hon'ble Court referred the parties in SCA No.15599 of 2008 to the mediation center to resolve the dispute between them.

77. 30.12.2009 The mediator prepared a report wherein it was mentioned that the Company had principally agreed and shown its willingness to pay the dues of the employees and therefore, the Company had agreed for disposal of its assets in accordance with law. The report further stated that union was also ready to settle the dispute and for the disposal of the assets of the Company, it would bring a buyer who can pay Page 275 of 674 C/SCA/15599/2008 JUDGMENT the dues of the financial institutions, employees and other dues of different authorities. The union also agreed to provide a detailed break-up of the outstanding dues of the labour. The report further stated that to settle the entire matter the consent of banks/financial institutions as well as statutory authority was required and therefore, some orders would have to be passed by this Hon'ble Court. Along with the report an enclosure signed by the advocates for the parties was also placed before this Hon'ble Court by the mediator in which it was interalia mentioned that the union had agreed to find a buyer for the assets of the Company for a value of around Rs.500 crores who should make an application before this Hon'ble Court for purchase of the assets of the Company.

78. 02.02.2010 Since the order dated 12.05.2009 was not complied with by the Company, it took time till 8th February, 2010 for producing the balance sheet up to March 2009. This Hon'ble Court directed that these documents should be part of the affidavit which is to be filed by the responsible officer not below the rank of a director.

Note : No such affidavit has so far been filed by any of the directors of the Company.

79. 09.02.2010 Civil Application No. 1440 of 2010 was filed pp. 1-10 ofby one Gayatri Trading & Co. (a partnership CA firm) showing its willingness to purchase the assets of the Company for a sum of Rs.500 crores on assumption that the Company was holding 325 acres of land, plant, machinery, buildings and workers colony. The applicant further stated that the offer was made on the Page 276 of 674 C/SCA/15599/2008 JUDGMENT basis that unless the Company had legally sold its properties to the third parties, the rest of the properties/assets should be deemed to be the Company's properties and assets. The said application also stated that the applicant was ready to purchase the assets for Rs.500 crores provided the employees' dues should be settled at Rs.280 crores. It was inter alia prayed that the applicant be joined as Respondent No.9 in SCA No.15599/09 and that the company be directed to place on record list of all its assets which shall be sold to the applicant. It was further prayed that clear and marketable title of all the assets of the company unless legally sold be given to the applicant on depositing Rs.500 crores.

80. 18.02.2010 Company filed an Affidavit in Civil pp. 11-18 ofApplication No.1440 of 2010 inter alia stating CA as follows :

"I humbly state that the sale of the part of the assets of the company took place in the year 2003-2004 under the corporate debt restructuring scheme, pursuant to which the company had cleared its liabilities to a considerable extent...... the land available to the company is not 325 acres but is only around 155 acres." (p. 13) The company filed a statement of assets (Annexure-1) and summary of unaudited liabilities of the company as annexure to the said affidavit wherein it was admitted that Rs.60 crores is due to the employees (p. 18). It was also stated that Gayatri Trading & Co. to show its bonafide should first deposit an amount of Rs.500 crores being 10% of the Page 277 of 674 C/SCA/15599/2008 JUDGMENT total consideration before this Hon'ble Court. It was further stated in the Affidavit that there was no understanding or agreement between the Company and the union that the dues of the employees would be settled at minimum of Rs.280 crores.

81. 22.02.2010 Gayatri Trading & Co. filed a rejoinder to the pp. 19-25 of Affidavit dated 18th March, 2010 filed by the CA Company wherein it was inter alia stated that the Applicant would not purchase the assets of the Company for Rs.5000 crores unless the dues of the workmen were settled at Rs.280 crores. It was further stated in the Affidavit that if there were other properties which had been found as not legally sold to other person, the Applicant would have claims over the said assets which should be deemed to have vested with the Applicant. On this condition the applicant expressed its willingness to purchase the entire assets of the company including the assets mentioned in Annexure 1 of the company's affidavit dated 18.02.2010 at the purchase price of Rs.500 crores.

82. 22.02.2010 The workers union filed an Affidavit in Civil pp. 26-43 of Application No.1440 of 2010 wherein it was CA inter alia stated that at the time of mediation it was conveyed to the representative of the Company that if the dues of the workmen were settled at Rs.280 crores then only the union may find out a buyer. It was stated that there was a passive consent all along before the mediation centre by the Company. It was further stated that now when the Company had realized that as against the liabilities of Rs.300 crores the union had found out a buyer of the assets which would fetch Rs.500 crores, the company had disputed its liabilities of the Page 278 of 674 C/SCA/15599/2008 JUDGMENT workmen dues.

83. 02.03.2010 Company filed an Affidavit in Civil pp. 44-52 of Application No.1440 of 2010 inter alia stating CA that Gayatri Trading and Co. may be directed to produce the relevant material to show its bonafides and credentials as well as its net worth for inspiring confidence that Gayatri Trading & Co. was capable of making a payment of Rs.500 crores. It was further stated in the Affidavit that the Registration Number of the partnership firm clearly shows that Gayatri Trading & Co. was registered only in the year 2010 which raised doubts as to its credentials, net worth and bonafides.

84. 04.03.2010 This Hon'ble Court passed an order in SCA No.15599 of 2008 directing the Company to calculate the due amount of each employee including those who had retired, died and existing employees till the date on which they became entitled. The order also records the statement made by the Counsel appearing for the Company that there was no objection on behalf of the Company for selling the entire properties mentioned in the affidavit in Reply dated 18th February, 2010. (C.O. pp. 18-20)

85. 16.03.2010 Gayatri Trading & Co. filed an affidavit pp. 58-64 of setting forth the conditions of its offer. It was CA stated that they were agreeable to purchase 155 acres of land as per the company's affidavit and all or any other assets that the company possessed for a consideration of 500 crores. It was stated that the sales tax dues of 15 crores against the company would be deducted from the amount to be paid by the purchaser and also the legal expenses, stamp duty and other incidental charges would be deducted. It further stated that the purchaser Page 279 of 674 C/SCA/15599/2008 JUDGMENT would have the right to litigate, repossess or get compensated for the property illegally sold by the company.

87. 31.03.2010 Company filed an affidavit in response to the pp. 53-57 of affidavit dated 6.03.2010 filed by Gayatri CA Trading & Co. wherein it was stated that the company was ready and willing to sell only those assets which were mentioned in Annexure 1 to the affidavit dated 18.02.2010 for a consideration of Rs.500 crores and the applicant have no right whatsoever on other assets of the company and therefore there is no question of applicant having right to repossess or get compensated for other assets. Company also refused the deduction of Rs.15 crores, stamp duty and other charges as claimed by the applicant.

88. 23.04.2010 This Hon'ble Court passed an order in Civil Application NO.1440 of 2010 which reads as under :

"Shri R.R.Marshall, learned Senior Advocate appearing with learned advocate Shri Savan N. Pandya for the applicant submits that in view of the discussion that transpired with regard to property, the applicant needs to put his fresh offer and the matter, therefore, may be adjourned to 30th April, 2010. He further submitted that the adjournment of the matter shall not now be treated as an impediment in the way of workmen to explore for better proposal or better buyer than the Applicant.

Shri Dipak R. Dave, learned advocate for the workmen submits that adjourning Page 280 of 674 C/SCA/15599/2008 JUDGMENT the matter may not preclude the workmen from exploring the possibility of fetching new buyer with better offer. Shri Dave's anxiety is taken care of. Stand over to 30.4.2010." (C. O. pp.25-

26)

89. 27.04.2010 Gayatri Trading & Co. filed a further affidavit pp. 65-71 of reiterating the offer made by affidavit dated CA 16.03.2010. In the alternative it offered to purchase 155 acres of land as stated in the company's affidavit dated 18.02.2010 inclusive of internal and external roads, plant and machinery for a total consideration of Rs.400 crores.

90. 30.04.2010 This Hon'ble Court passed an order wherein the submission of the Ld. Advocate for the workmen was recorded that Gayatri Trading & Co. had modified its offer and therefore the union be permitted to explore the possibility of fetching a new buyer who could give a better offer. Ld. Advocate for the workmen further stated that one more party was ready to make an attractive offer provided he was given an opportunity of inspection of the assets which were saleable, so that he might have correct assessment. The matter was adjourned to 6th May, 2010 with an observation that there should not be any objection in disclosing the identity of the proposed buyer. (C.O. pp. 27-28)

91. 06.05.2010 The Company filed an Affidavit in Civil pp. 72-75 of Application No.1440 of 2010 in response to CA the affidavit dated 27.04.2010 filed by Gayatri Trading wherein the company inter alia stated that the revised offer was not in consonance with the consensus arrived at between the company and union during mediation Page 281 of 674 C/SCA/15599/2008 JUDGMENT proceedings which required a buyer to offer Rs.500 crores and therefore such an offer was not acceptable to the company.

92. 30.07.2010 Civil Application No.6212 of 2010 filed by another prospective buyer namely Premier Farms projects Ltd. Came up before this Hon'ble Court alongwith C.A. No.1440 of 2010. The counsel appearing for Gayatri Trading under instructions of his client submitted that his client was now ready to enhance the offer for subject property to Rs.400 crores. Advocate appearing for company stated that the enhanced offer was also falling short of the original expected amount, however, the company would like to file affidavit in respect of the offers of Gayatri Trading and Premier Farms. Matter was adjourned to 13.08.2010. In the meanwhile the workers union and company were directed to exchange names of agreed arbitrator so as to determine the exact amount payable to the workmen against the dues. (C.O. pp. 29-31)

93. 13.08.2010 C.A. No.1440 and 6212 of 2010 came up before this Hon'ble Court. The offer of both the parties was recorded in the order. Premier farms offered to purchase the subject property for Rs.486 crores with additional liability of stamp duty which would be borne by the offerer. Gayatri trading revised the offer to Rs.460 crores with further liability of 50% of the stamp duty to be borne by the offerer and 50% to be borne by the company. This Hon'ble Court directed that an amount of Rs.1 crore be deposited on or before 20.08.2010 by each of the offerers with this Hon'ble Court. It was recorded that counsel for workmen and company have agreed to finalize the name of Page 282 of 674 C/SCA/15599/2008 JUDGMENT arbitrator for deciding the dues of the workmen. (C.). pp. 32-35)

94. 19.09.2010 Gayatri Trading & Co. filed an affidavit in C.A. No.1440 of 2010 inter alia stating that it was willing to purchase the land admeasuring 155 acres including plant machinery and buildings as per the company's affidavit for a consideration of Rs.465 crores. However it was submitted that the company was trying to back out from its earlier affidavits and was claiming that 155 acres included the internal roads in the land which was already sold to a third party and also the land which was acquired by Surat Municipal Corporation for default of taxes.

95. 23.09.2010 Sewang Real Estate Developers filed a Civil Application No.12778 of 2010 offering to purchase the entire assets of the company being land, building, plant and machinery and all or any of the assets possessed by the Company with clear marketable title which were also declared in the affidavit dated 18.02.2010 for a total consideration of Rs.468 crores.

96. 24.09.2010 Company filed an affidavit stating that the offer of Rs.465 crores of Gayatri Trading was not acceptable to the company. It was further stated that the property which was offered for sale came to around 155 acres of land along with plants, buildings, machinery thereof which included the internal, external roads, COP and alignments.

97. 04.10.2010 This Hon'ble Court passed an order in Civil Application No.1440 of 2010 directing that the matter might come up on 06.10.2010 on which date responsible officer of the Company should make an Affidavit indicating the exact Page 283 of 674 C/SCA/15599/2008 JUDGMENT survey numbers which were unencumbered in any manner and available for sale with copies of title or documents as annexure to this Affidavit and explain that in case if this survey numbers were falling less than the declared 155 acres then in what manner the Company was going to make up the figure of 155 acres. (C.O. pp. 41-42)

98. 06.10.2010 The Company filed an Affidavit pursuant to the order dated 04.10.2010 wherein it was stated that the land owned by the Company fell in three different villages- namely Udhna, Dindoli and Bhedvad. The relevant form No.6 of all the three villages was annexed to the Affidavit. It was further stated in the Affidavit that the total area of land presently owned by the company was 112.4 acres in village Udhna, 7.12 acres in village Dindoli and 35.11 acres in village Bhedvad which came to a total of 154.73 acres. It was also mentioned that the Surat Municipality Corporation had acquired approximately 10 acres of land for widening of Surat - Navsari Road but the compensation had not yet been paid and the land was still under the ownership of the Company. It was stated that the purchaser would be entitled to receive compensation for the acquisition of the said land.

99. 06.10.2010 The Civil Application NO.1440 of 2010 was listed before this Hon'ble Court on which date parties made a joint request for assigning the measurement work of the subject land to the DILR, Surat. This Hon'ble Court directed the DILR to undertake the measurement of parcel of lands belonging to the company. It was further ordered that the DILR was expected to Page 284 of 674 C/SCA/15599/2008 JUDGMENT give the description of the property and other appurtenant if any to the land. (C.O. pp. 44-

45)

100. 22.10.2010 This Hon'ble Court passed an order in Civil Application NO.1440 of 2010 recording the submission of the District Inspector of land records that it would be possible for his office to undertake the measurement of the entire land and submit a report with proper details with respect to the construction on the land, if any, and the ownership of the land as on date. This Ho'nble Court passed an order that the DILR, Surat should undertake the measurement work and the requisite fees, as agreed by the Applicant, would be deposited. DILR was directed to file the report on or before 15.11.2010. The matter was adjourned to 18.11.2010. (C.O. pp. 46-48)

101. 15.11.2010 DILR submitted a report pursuant to the order of this Hon'ble Court dated 22.10.2010.

102. 15.11.2010 Workers Union filed a statement of claim pp. 187-204 before the Ld. Sole Arbitrator Justice of CA C.K.Thakker (Retd.) as directed by the Hon'ble Arbitrator in the meeting dated 23.10.2010 giving a break up of the dues of the workmen. The workmen have claimed more than Rs.350 Crores as outstanding dues with interest @15%. The respondent Management was to file their written statement on or before 13.12.2010. However, no such written statement was filed by them. Even an application was moved seeking extension of three weeks and inspite of the expiry of the said three weeks, no written statement has been filed by respondent till date. The workers union has moved an application for closing the stage of filing Page 285 of 674 C/SCA/15599/2008 JUDGMENT written statement by the Management.

103. 24.11.2010 Civil Application No. 14154 of 2010 was filed by one Rahul Raj Private Limited wherein the said Applicant expressed its readiness and willingness to purchase the assets of the company for a total consideration of RS.477 crores on the assumption that the Company is holding minimum of 155 acres of land, plant, machineries, buildings and workers colony and the offer will be proportionately adjusted / revised as per the actual holding / assets of the company. (if found less.) The applicant has also expressed its readiness willingness to purchase the assets provided that the employees' dues are settled at Rs.280 crores.

104. November, One Acme Housing India P. Ltd. Filed a Civil 2010 Application No. 14236 of 2010 for joining as party in the SCA and making an offer to purchase all the assets of the company free from encumbrances and without being saddled by any other statutory and non statutory liability for Rs.500 crores or any other amount which this Hon'ble Court may deem proper.

105. 26.11.2010 This Hon'ble Court passed an order in Civil Application No. 1440 of 2010 wherein the consensus between the parties for adjournment of the mater to 3rd December, 2010 was recorded as new offers have come by way of independent applicants. This Hon'ble Court directed that all the interested parties should place on record their respective offers on separate affidavit with their terms and conditions, payment schedule, their financial profile and background. (C.O. Pp 51-52)

106. 03.12.2010 This Hon'ble Court passed an order in Civil Page 286 of 674 C/SCA/15599/2008 JUDGMENT Application No. 1440 of 2010 wherein it was recorded that the advocate for workers union had supplied a coloured map showing the exact parcel of land available for sale including the plant and machinery. The said map was taken on record. The order also records that all the counsels had agreed that their clients would be in a position to make offers as envisaged in order dated 26.11.2010. This Hon'ble Court ordered that the interested parties who had already made applications for participating in the process should submit their affidavits as per the order dated 26.11.2010 by 7th December, 2010. (C.O. pp.53-54)

107. December, Once Roongta Rising Stock Pvt. Ltd. Filed an 2010 affidavit in his Civil Application No. 11350 of 2010 offering Rs.333 crores for 108 acres of factory land of the company.

108. 10.12.2010 Workers Union filed an affidavit in Civil Application No. 1440 of 2010 inter alia stating that Gayatri Trading was delaying the matter due to unavailability of funds with them. It was further stated that there was a confusion created by the DILR report and the stand taken by the management without any clarification of survey Nos. and without disclosing the details of the property already illegally sold by the company. It was stated that the plant, machinery and colonies were shown as open lands and plots in DILR report. The Union further stated that a statement of claim had been filed before the Arbitrator along with details and break up of all dues of workmen which were now Rs.350 crores. Through this affidavit a prayer was made that a Court Commissioner be appointed for necessary Page 287 of 674 C/SCA/15599/2008 JUDGMENT verification of the actual status of the property.

109. 10.12.2010 Gayatri Trading filed an affidavit pursuant to the order dated 10.03.2010 passed by this Hon'ble Court giving an offer to purchase 155 acres single piece of land as the absolutely net area to be transferred by the company out of total land available presently with the company of 317 acres single piece of land for a total consideration of Rs.480 crores which includes legal charges, stamp duty and all incidental expenses. It was stated that the ultimate offer should be subject to the terms and conditions, demarcation of land approx. 155 acres single piece of land out of total area of 317 acres.

110. 10.12.2010 This Hon'ble Court passed an order in Civil Application No. 1440 of 2010 directing the offerers to exchange their offers inter se and the Company's advocate to place the offers in a tabular form. The applicant of Civil Application No. 14154 of 2010 and 11845 of 2010 were permitted to file their offers on affidavit as envisaged in the earlier order. Matter was adjourned to 24.12.2010. (C.O. pp.55-56)

111. 21.12.2010 Rahul Raj Estates Pvt. Ltd. filed an affidavit in Civil Application No. 14154 of 2010 inter alia stating that they were ready and willing to purchase the entire assets of the company on as is where is basis for a total consideration of Rs.477 cores after excluding the portion of the property which had been legally sold by the company. The said Rahulraj Estates has also made an offer to deposit Rs.25 crores within 15 days from the date of the acceptance of their offer which money could be released to Page 288 of 674 C/SCA/15599/2008 JUDGMENT the workmen.

112. 23.12.2010 The workers Union filed an application in SCA No. 15599 of 2008 inter alia praying that the offer of Rahulraj Estates might be accepted and they be directed to deposit Rs.25 crore within 15 days of acceptance of the offer. It was further prayed that the report of DILR be not accepted and a Court Commissioner be appointed under whose supervision a fresh survey be done of the subject property.

113. 24.12.2010 SCA No.15599 of 2008 was listed before this Hon'ble Court along with other connected SCAs and Civil Applications. The matter was argued for some time and it remained part- heard.

114. 17.01.2011 Workers' union filed the following applications :

(i) Application for directions being Civil Application No.752 of 2011 in SCA No.15599 of 2008 seeking appropriate directions from this Hon'ble Court.

(ii) Civil Application No.753 of 2011 in SCA No.15599 of 2008 praying for impleadment of the Chairman, Managing Director and all other Directors of the company who were in charge and were responsible to the company for the conduct of the business of the company at the time when the purported four Sale Deeds were executed. The workers' union also sought impleadment of Shri Hemant Dhirubhai Desai who executed the purported Sale Deeds on behalf of the company and also the transferee society and its President and Secretary.

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(iii) Civil Application No.754 of 2011 in C.A. No.4772 of 2008 in SCA No.134 of 2006 seeking the impleadment of the said Chairman, Managing Director and Directors of the company and also Shri Hemant Dhirubhai Desai and the transferee, its President and the Secretary as contemnors in Civil Application No.4772 of 2008.

(iv) Civil Application No.755 of 2011 in C.A. No.4772 of 2008 in SCA No.134 of 2006 for amendment of the Civil Application No.4772 of 2008 and along with that the amended Contempt Petition was also filed as Civil Application No.756 of 2011.

115. 20.01.2011 All the aforesaid Civil Applications were listed on which date this Hon'ble court issued notice returnable on 10th February, 2011. The request made by the counsel for the workers' union that the learned counsel appearing for the Company should accept notice on behalf of the Chairman, Managing Director of the Company was not accepted by the Company and therefore the union had to effect service on all the parties. This Hon'ble Court permitted direct service on the rest of the Respondents and also observed as follows :

"It is expected that the joining party application is in fact being formal application, appropriate reply, if any at all, be filed so as to curtail further time in hearing of the main matter."

116. 11.02.2011 All the aforesaid Civil Applications and the main SCA were listed before this Hon'ble Court. No affidavit in reply was filed to the applications mentioned in Sr. No.92 above and Page 290 of 674 C/SCA/15599/2008 JUDGMENT the following order was passed by this Hon'ble Court :

"In view of the order passed in Civil Application Nos.753 and 754 of 2011 and upon joint request of the learned counsels for the parties, stand over to 23rd February 2011 at 2:30 p.m."

117. 21.02.2006 The transferee who are respondents 14 to 16 in pp. 12-48 ofCA No.754 of 2011 and respondents 19 to 21 CA. No.753in CA No.753 of 2011 filed affidavits in reply of 2011 in both the Civil applications. pp. 13-20 of C.A. No.754 of 2011

118. 23.02.2011 Despite the order of this Hon'ble Court dated pp. 38-49 of11.02.2011 directing the respondents to file CA. No.754reply by 21.02.2011, the Respondent Nos.4 of 2011 and 5 (namely Sangramsinh Gaekwad and pp. 72-81 ofPratapsinh Gaekwad) did not file reply till C.A. 21.02.2011 and it was only on 23.02.2011 in No.753 ofthe afternoon at 1:30 pm that the Respondent 2011 Nos.4 and 5 filed their affidavits in reply to CA No.753 and 754 of 2011.

119. 23.02.2011 Despite the order of this Hon'ble Court dated pp. 21-32 of11.02.2011 directing the respondents to file CA. No.754reply by 21.02.2011, the Respondent Nos.11 of 2011 and 12 (namely B.H.Patel and Damodarbhai pp. 49-66 ofPatel) did not file reply till 21.02.2011 and it C.A. was only on 23.02.2011 in the afternoon at No.753 of1:30 pm that the Respondent Nos.11 and 12 2011 filed their affidavits in reply to C.A. Nos.753 and 754 of 2011.

120. 23.02.2011 Despite the order of this Hon'ble Court dated pp. 33-37 of11.02.2011 directing the respondents to file CA. No.754reply by 21.02.2011, the Respondent No.13 Page 291 of 674 C/SCA/15599/2008 JUDGMENT of 2011 (namely Hemant D. Desai) did not file reply pp. 67-71 oftill 21.02.2011 and it was only on 23.02.2011 C.A. in the afternoon at 1:30 pm that the No.753 ofRespondent No.13 filed its affidavits in reply 2011 to C.A. Nos.753 and 754 of 2011.

121. 23.02.2011 Despite the order of this Hon'ble Court dated 11.02.2011 directing the respondents to file reply by 21.02.2011, the Company did not file reply till 21.02.2011 and it was only on 23.02.2011 in the afternoon at 1:30 pm that the Company filed its affidavits in reply to C.A. No.752 of 2011.

122. 23.02.2011 This Hon'ble Court passed the following order :

"1. Shri K.B. Naik, learned advocate appearing for respondent Company, who is petitioner in Special Civil Application No.134 of 2006 submits that as per the instructions received by the Advocate, no one is presently Managing Director of the company. The last Managing Director, who demitted his office was Mr.Pratapsinh Sangramsinh Gaekwad, who demitted his office vide resignation on or before December, 2008 and exact date of resignation and acceptance of resignation would be given within days time and right on date, there is no Chairman in the company and no one is holding the post of Chairman.

2. At this stage, Shri Naik submitted that precise information in this behalf be furnished and placed on record to the Court on short affidavit by 24.02.2011. The requisite documentary evidences in Page 292 of 674 C/SCA/15599/2008 JUDGMENT support of the valid resignation and valid appointment for charge holding, if any, be also furnished on affidavit of one of the active Directors of the Company on 24.02.2011.

3. S.O. to 24.02.2011."

123. 24.02.2011 Damodarbhai Patel filed an affidavit in C.A. pp. 366-371No.752 of 2011 which is vague and does not of C.A. No.reply to the specific query of this Hon'ble 752 of 2011 Court. The affidavit inter alia states as follows:

"2. I humbly state that as per the record of the company the former Chairman of the company Shri Sangramsinh Gaekwad had resigned w.e.f. 3.12.2008 and the former Managing Director of the company Shri Pratapsinh Gaekwad had resigned from the company w.e.f. 3.12.2008. I state that I have been managing and looking after the affairs of the company since then."

124. 07.03.2011 The workers union filed rejoinder affidavits to the affidavits in reply filed by the transferees in C.A. Nos.753 of 2011 (pp.82-146 of C.A. No.753) and 754 of 2011 (pp. 73-126 of C.A. No.754). The workers union also filed rejoinder affidavits to the affidavits in reply filed by the Respondent nos.4 and 5 (pp. 50- 59 of C.A. No.754), 11 and 12 (pp. 60-67 of C.A. No.754) and 13 (pp. 68-72 of C.A. No.754) in C.A. No.754 of 2011.

125. 7.3.2011 The workers union filed two separate Civil Applications being C.A. No. 3051 of 2011 in SCA No. 15599 of 2008 and C.A. No. 3052 of 2011 in SCA No. 134 of 2006 inter alia Page 293 of 674 C/SCA/15599/2008 JUDGMENT praying for the appointment of a Court Receiver of all properties and assets of the Company including the assets covered by the four purported sale deeds dated 10.10.2006, 8.11.2006, 13.11.2006 and 14.11.2006 respectively, to appoint the applicant union as an agent of the Court Receiver with power to run the factory of the company and various other directions.

126 8.03.2011 The aforesaid applications being C.A. No. 3051 and 3052 of 2011 were listed before this Hon'ble Court on which date the following order was passed:

"Submissions of Shri P.H. Parekh, learned senior counsel on civil applications are over. Shri Naik, learned counsel for respondent no.1, seeks time to make submission on these two applications and prayers made there under. At his request applications are kept on 25/3/2011. To allay the apprehension expressed by the applicants and their counsel with regard to continuous dealing with the property of the company, Shri Naik submits & states that the orders dated 20/2/2006 and 20/4/2006 will scrupulously be followed and the workmen need not be apprehensive of any alienation because of the grant of time in these applications. Adjourned to 25/3/2011."

127 25.03.2011 The aforesaid applications being C.A. Nos.

3051 and 3052 of 2011 were listed before this Hon'ble Court on which date the following order was passed:

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C/SCA/15599/2008 JUDGMENT "Learned advocate Ms. Tejal Bhatt on behalf of Shri K.B. Naik for M/s Trivedi & Gupta for the respondent no.1 company submits that, the statement made by Shri K.B. Naik, recorded under the order dated 8/3/2011 shall be scrupulously adhered to and bound on the company, its directors and those who are in affairs of the company till further orders. It is stated at the Bar that Shri Naik has personal difficulty and he is actually engaged on his legs in other Court. In view of this statement, matters are adjourned to 30/3/2011. Reply, if any, to these two applications shall be filed by respective respondents with copy to the other side.

Adjourned to 30/3/2011."

During the course of hearing on 25.03.2011 this Hon'ble Court asked the Counsel appearing for the Company as to whether any injunction order was passed in any of the winding petitions which were filed against the Company. To this query, the Counsel appearing for the Company made a statement that as per his instructions no injunction order restraining the Company from dealing with its assets has been passed in the winding up proceedings.

128 March, Company filed a reply to the Civil Application 2011 No. 3051 of 2011 but no reply was filed to C.A. No. 3052 of 2011.

129 28.03.2011 The Advocate for the workers union served a copy of C.A. No. 3051 and 3052 of 2011 on Page 295 of 674 C/SCA/15599/2008 JUDGMENT the advocate for the directors of the Company (i.e. Gaekwad's and Patel's). However, while receiving the copy of advocate made the following endorsement on the covering letter:

"Received on 28/3/11 at 7:50 pm. We are not joined as parties in the below mentioned Civil Application. However, as the advocate has personally come to provide the same, we are accepting it. Hence, the same is only for academic purpose."

A copy of the said covering letter with endorsement is annexed herewith and marked as Annexure - D. 130 28.03.2011 The advocate for the workers union served a copy of C.A.No. 3051 and 3052 of 2011 on the advocate for the Transferees. However, while receiving the copy the advocate made the following endorsement on the covering letter:

"My clients are not a party to proceedings. Therefore unless joined by way of an application, my clients would not be bound to the orders passed in the said proceedings."

A copy of the said covering letter with endorsement is annexed herewith and marked as Annexure - E. 131 30.03.2011 The workers union made a search on the Gujarat High Court website of the various orders which have been passed in the winding up petitions filed against the Company. It was Page 296 of 674 C/SCA/15599/2008 JUDGMENT only then that the workers union came to know about the Order dated 17th April, 2000 passed in Company Petition No. 91 of 2000. This order was shown to this Hon'ble Court during the hearing on 30.03.2011 on which date this Hon'ble Court called for the file of Company Petition No. 91 of 2000 and also asked the Counsel appearing for the Company to inquire as to whether the Order dated 17th April, 2000 was still operating. This Hon'ble Court further passed the following order:

"The statement of learned counsel for the applicant workmen are over. Written submissions have been filed, same have been taken on record. The proceedings in Company Petition No. 91 of 2002 were also perused. They are ordered to be sent back to the office and office is directed to make it available if it is required on subsequent date of hearing. At the request of learned counsel for the company, adjourned to 6/4/2011."

The workers union through his advocate has now ascertained that the said injunction order is still operating.

132 18.04.2011 RahulRaj estate Pvt. Ltd. sent a duly notarized affidavit to the workers union wherein it inter alia described its plan of action for running the factory of the Company and payment of salary and past dues of the workers.

133 18.04.2011 Civil Application Nos. 3051 and 3052 of 2011 were listed before this Honourable Court on which date the workers union tendered an additional affidavit annexing the affidavit Page 297 of 674 C/SCA/15599/2008 JUDGMENT dated 18.04.2011 of RahulRaj Estates praying that the RahulRaj Estates be appointed as agent of the Court Receiver and be permitted to run the factory. The said additional affidavit was taken on record by this Hon'ble Court and the matter was adjourned to 19.04.2011. 134 18.04.2011 A shareholder of the Company namely Shri Kantilal Shah filed an application before this Hon'ble Court for initiation of contempt proceedings against the Company and its past and present directors and also the transferee being C.A. No. 238 of 2011 in C.P. No. 91 of 2000 for selling the properties of the Company in violation of the order of injunction dated 17.04.2000. The said shareholder also filed application for impleadment in C.P. No. 91 of 2000 being C.A. No. 236 of 2011 and an application for directions being C.A. No. 237 of 2011 in C.P. No. 91 of 2000.

135 18.04.2011 The aforesaid applications were listed before the learned Single Judge of this Hon'ble Court on which date the following order was passed:

"Learned counsel for the applicant submits that a note dated 18.04.2011 is filed in the Registry of this Court with a request to direct the Registry to give Registration Number of Stamp Numbers of all the above three applications so as to enable the learned counsel to mention before Hon'ble Chief Justice and also place the same before the appropriate Court. It is also mentioned in the note that three different civil applications in Company Petition No. 91 of 2000 are pending for adjudication before this Court and other connected matters of Page 298 of 674 C/SCA/15599/2008 JUDGMENT union / workers of Baroda Rayon Corporation is being heard by Hon'ble Mr. Justice S.R. Brahmbhatt.

Mr. Kunan Naik, learned advocate for the respondent No.2 - Baroda Rayon Corporation submits that this applications are not connected with applications pending and heard by Hon'ble Mr. Justice S.R. Brahmbhatt and request for time.

In view of the above, all these applications are to be adjourned on 25.04.2011."

11. WRITTEN SUBMISSIONS OF SHRI PRAVIN H. PAREKH, SENIOR ADVOCATE ON BEHALF OF BARODA RAYON EMPLOYEES EKTA UNION In S.C.A. No.134 of 2008 And S.C.A. No.15599 of 2008 ARE REPRODUCED AS UNDER "1. Baroda Rayon Employees Ekta Union is the respondent in SCA No.134 of 2006 and is the petitioner in SCA No.15599 of 2008. Baroda Rayon Corporation Ltd. is the petitioner in SCA No.134 of 2006 and is the respondent in SCA No.15599 of 2008. For the sake of convenience Baroda Rayon Employees Ekta Union is described herein as applicant Union and Baroda Rayon Corporation Ltd. is described herein as Company/respondent management. Land Page 299 of 674 C/SCA/15599/2008 JUDGMENT admeasuring 7.54.361.54 sq. yards belonging to the Company situated at village Udhana and Bhedwad, District Surat is described as "the property in question".

I. SALE OF THE PROPERTY IN QUESTION IS IN VIOLATION OF THE INJUNCTION ORDER DATED 6.12.2005 PASSED BY THE INDUSTRIAL TRIBUNAL AND THE INTERIM ORDERS DATED 20.02.2006 AND 20.04.2006 PASSED BY THIS HON'BLE COURT AND ALSO IN BREACH OF THE SECTION 2(p) SETTLEMENT, BIFR SCHEME AND CORPORATE DEBT RESTRUCTURING SCHEME AND THUS IS VIOD, NULLITY, AND NON-EST IN LAW AND LIABLE TO BE SET ASIDE.

2. The Respondent management (i.e. the Chairman, Managing Director and other directors of the Company) have in violation of the injunction order dated 6.12.2005 passed by the Industrial Tribunal, Surat in Ref (IT) No.15 of 2005 and the interim orders dated 20.02.2006 and 20.04.2006 passed by this Hon'ble Court in S.C.A. No.134 of 2006 and in breach of the settlement dated 27.10.2003 entered into between the Company and the applicant union under Section 2(p) of the Industrial Disputes Act, 1947 read with Rule 62 of Page 300 of 674 C/SCA/15599/2008 JUDGMENT the Industrial Disputes (Central) Rules, 1957. BIFR scheme dated 1.06.2006 and Corporate Debt ? Restructuring Scheme dated 19.03.2004 purportedly sold the property in question by four sale deeds dated 10.10.2006, 8.11.2006, 13.11.2006 and 14.11.2006 respectively.

3. It is submitted that the CDR scheme itself was a big fraud devised by the Company and the Banks (secured creditors) behind the back of the workmen and the statutory authorities to defeat and defraud the workers and the statutory authorities of their dues as well as the shareholders of the Company. The relevant clause of the CDR scheme reads as under:

 "CORPORATE              RESTRUCTURING AND
 SETTLEMENT             OF SECURED LENDERS
 LIABILITIES

The liabilities of secured lenders are proposed to be settled through SPV structure so as to protect the secured lenders dues from large manufacturing related liabilities mainly that of workers and statutory authorities. (p.423) As admitted in the CDR scheme itself, the Company had large statutory liabilities aggregating Page 301 of 674 C/SCA/15599/2008 JUDGMENT to about Rs. 390 millions as on 31st March, 2003 (p.

418), and the workers dues accumulated to over Rs.710 millions (p.420).

The workers under Section had agreed to forgo their dues substantially and agreed to receive Rs. 180 million subject to the Company not closing down the operations. Since the Company had both failed to adhere to the terms and conditions of the Settlement as well as closed down the operations and that too illegally without complying with the provisions of Section 25-O of the Industrial Dispute Act, the concessions given by the workers ought to be treated as if none of those concessions were given and the workers would be entitled for full wages and benefits (See Clause 14 of the Settlement).

Without prejudice to the contention that the CDR scheme itself is a blatant and fragrant attempt to defeat and defraud the workers and their dues, it is submitted that the said scheme has also not been adhered to and has been grossly violated by the Company.

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4. Since the Company did not adhere to the terms and conditions of the section 2(p) settlement dated 27.10.2003 and grossly violated the same, the applicant union raised 18 demands with the Company which demands were referred for adjudication by the Chief Labour Commissioner to the Industrial Tribunal under section 10 of the Industrial Disputes Act being Ref (IT) No.15 of 2005. The Industrial Tribunal, Surat in Ref (IT) No.15 of 2005 passed and interim order on 06.12.2005 (pp. 34-84 of SCA No.15599 of 2008), the relevant part of which reads as follows:

"During the pendency of reference till it is decided finally, it is directed to the first party not to sell the land and properties to any person or to transfer or to otherwise alienate such property and land to any other person; the office bearers of the 2nd Party Union Shri M.A.Kagazi, N.J. Jariwala and active members Shree Jayndra Manilal Shah, N.D. Panjanigera, Jitendra A. Patel, Pravinbhai Gangadwala, Rajanikant Karasanbhai Patel, who are dismissed due to raising demands before Commissioner of Labour, should be reinstated to their original posts."(pp. 83-84) The said order was in two parts wherein firstly the company was injuncted from selling the land and properties to any person or to transfer or Page 303 of 674 C/SCA/15599/2008 JUDGMENT otherwise alienate such land and property to any other person. The second part of the order directs the company to reinstate the office bearers and active members of the union to their original posts. The said order of the Industrial Tribunal was challenged by the company before this Hon'ble Court by filling SCA No.134 of 2005 on 9.01.2006 wherein as an interim relief it was prayed as follows:

"Pending hearing and final disposal of this petition, your lordships may be pleased to pass, as and by way of interim relief, appropriate order and directions staying implementation, execution and operation of the impugned order dated 06.12.2005 and restrain the respondents from taking any action in pursuance or for implementation of the impugned order dated 06.12.2005."

The said SCA No.134 of 2006 was listed before this Hon'ble Court on 20.02.2006 when the following order was passed:

"Notice, returnable on 6th March 2006.

In the meantime, the impugned order passed by the Industrial Tribunal, Surat be stayed to the extent of the direction given by the Tribunal to reinstate the employees whose names are mentioned in the Page 304 of 674 C/SCA/15599/2008 JUDGMENT operative part of the order dated 6.12.2005.

So far as the disposal of the assets of the petitioner company is concerned, if BIFR issues any direction it is open for the petitioner to approach this Court for suitable modification in the order." pp.85-86 of SCA No.15599 of 2008) From the above order it is clear that this Hon'ble Court stayed the Industrial Tribunal's order only to the extent of the direction given by the Tribunal to reinstate the employees. The stay of the Tribunal's order in so far as it restrained the Company from selling, transferring or alienating the land and properties was not granted although prayed for by the company. Further this Hon'ble Court gave a specific direction that if BIFR issued any direction with regard to disposal of assets of the company then the company had to approach this Hon'ble Court for modification in the order. The said order dated 20.02.2006 was confirmed by this Hon'ble Court by order dated 20.04.2006 (pp. 87-94 at p.

90 of SCA No.15599 of 2008).

However the Respondent management in complete breach of the order dated 6.12.2005 and the interim orders dated 20.02.2006 and 20.04.2006 Page 305 of 674 C/SCA/15599/2008 JUDGMENT passed a board resolution on 23.06.2006 (Ref p.

165 of SCA No. 15599 of 2008) where a decision

was taken to sell the surplus land of the company in the teeth of the restraint order dated 06.12.2005 of the Industrial Tribunal and the interim orders passed by this Hon'ble Court dated 20.02.2006 and 20.04.2006 which were operating and are still in operation. Shri Hemant Dhirubhai Patel, and employee of the Company, was appointed as a Power of Attorney to execute the necessary documents for the sale of surplus land. Thereafter the said Power of attorney holder executed four purported sale deeds on behalf of the Company on 10.10.2006 (pp.236-256 of SCA No.15599 of 2008), 08.11.2006 (pp.165-183) 13.11.2006 (pp.

214-234) 14.11.2006 (pp. 184-202) respectively whereby the property in question was illegally and purportedly sold to the transferee in utter contempt of this Hon'ble Court as well as the contempt of the Hon'ble Industrial Tribunal.

5. The Company has claimed before this Hon'ble Court to have sold the surplus land of the Company as per the section 2(p) settlement, the BIFR scheme as well as the corporate Debt Page 306 of 674 C/SCA/15599/2008 JUDGMENT Restructuring scheme (hereinafter referred to as the CDR scheme). It is submitted that the Company has committed gross violations of the terms and conditions of the said 3 documents namely - section 2(p) Settlement, the BIFR Scheme and the CDR scheme.

(i) The dues of the workmen including the statutory dues were more than Rs. 51 crores in the year 2003. The Company represented to the workers that a new financier by the name Benson Overseas Holdings Ltd., London had agreed to inject fresh finance to make the Company economically viable subject to the condition inter alia that all secured, unsecured creditors as well as the employees agree to sacrifice their substantial interest to see that the working of the Company was revived. The employees agreed to forgo a large part of their dues and entered into a Settlement with the Company and the new financier namely Benson Overseas Holdings Ltd., London. It may be noted that under such Section 2(p) settlement dated 27.10.2003 (pp. 21-33 of SCA No.15599 of 2009), the Company was authorized to sell only the surplus land excluding the area where the staff and Page 307 of 674 C/SCA/15599/2008 JUDGMENT workers residential quarters, school, factory premises and utilities are located. The relevant part of para 12 (ix) of the settlement is set out below for ready reference:

"(ix) The Company has decided to dispose of its surplus land so as to see that the dues of employees, bankers and financial institutions who are the secured creditors are paid of their dues as per the proposed settlement......It is agreed by the Company that the land on which the workers and staff residential quarters, school, entire factory premises and utilities are located will not be disposed of as surplus land as shown in plan and all proceeds out of sale of the surplus lands will be utilized for the payment of dues of Financial Institutions. Surat Municipal Corporation....."

(p.28) Further, as per the aforesaid clause the sale proceeds were to be utilized towards inter alia the discharge of the workers dues including their statutory dues. But the Company in the guise of selling the surplus land has purportedly sold the property in question which includes the workers residential quarters, school, temple, a part of the plant and the area over which various pipe lines, both over head and underneath, have been installed. At the time of arguments the learned Advocate Page 308 of 674 C/SCA/15599/2008 JUDGMENT General appearing for the Company admitted that the land admeasuring 22,000 sq. Yards over which the workers quarters are located had been sold. Further not even a rupee has been paid to workers out of the sale proceeds.

(ii) The Company claims to have sold the assets of the Company under the CDR scheme. The Corporate Debt Restructuring Scheme was a scheme proposed by the Company for restructuring its debts which proposal was forwarded by the Banks and financial institutions who were term lenders to the Corporate Debt Restructuring Cell. The CDR cell approved the scheme on 19.03.2004. The workers were not parties to the said scheme and the said scheme is also not a statutory scheme. The said scheme aimed at rationalizing of Company's liabilities through settlement with secured lenders. The said CDR scheme specifically envisaged the creation of a Corporate entity namely a Special Purpose Vehicle (SPV), settlement of secured debts against the transfer of the surplus assets of the Company to such an SPV and the sale of the assets of SPV, and the making of an application by the Company under Section 391 of Page 309 of 674 C/SCA/15599/2008 JUDGMENT the Companies Act so as to obtain the approval of all other creditors to the proposed CDR scheme. Following are the relevant clauses of the CDR scheme:

(a) Para 5.3 - Safeguards provided in the present scheme (p. 421 of the SCA No.15599 of 2008) "5.3 Safeguards provided in the present scheme, The scheme envisages transfer of non-

manufacturing assets to a special purpose vehicle and settlement of secured debts of institutions and Banks against the sale of assets of SPV. The SPVs will be independent corporate entities to be carved out for the purpose of realization of developed property and utilization of the same of repayment of restructured dues of lenders, VRS and other workers dues, other land related statutory dues.

To ensure timely implementation of the Scheme and ensure all the other creditors also approve the proposed CDR Scheme, the company would be making an application under Sec 391 of the Companies Act at the Gujarat High Court."


 (b)     Para VII - Restructuring scheme (p.423 of
 SCA No.15599 of 2008)


 "CORPORATE           RESTRUCTURING AND
 SETTLEMENT          OF SECURED LENDERS


                     Page 310 of 674
 C/SCA/15599/2008                           JUDGMENT



 LIABILITIES

It is proposed to de-merge/hive-off the surplus assets to separate corporate entity namely Special Purpose Vehicle (SPV) and repayment of settled liabilities of secured lenders against sale of the SPV assets. As explained, the company would be filing an application under Sec.391 of the Companies Act to effectuate the same. It should be noted that there are various order of injunction against the company from alienating its assets passed by High Court of Gujarat in pending winding up applications. The company would take appropriate steps for modification of this order to enable transfer of the stipulated assets to SPV.

Settlement of past/current dues As against the past outstanding and current outstanding of Rs.569.9 million (other than PF/ESIC and Gratuity deducted and not paid to authorities) and the contingent due of Rs. 300 million thus aggregating to Rs. 869.9 million, the settlement will be made at only Rs. 180.0 million Page 311 of 674 C/SCA/15599/2008 JUDGMENT i.e. at about 20% of the dues and such settled amount will be paid by way of Ex-Gratis payment over a period of 5 years during rehabilitation period of the scheme.

Reduction of Future Wages As a part of total settlement, the Workers have agreed to reduce the future wages by 40% of the current level.

The details of the settlement are given in Annexure enclosed.

The dues of PF/ESIC deducted but not paid to authorities The dues will be paid as 20% up-front and balance in 36 monthly installments from sanction of the scheme.

The gratuity Dues The gratuity dues of Rs. 61.7 million will be paid in 6 yearly installments commencing from 6 months from start of commercial production of all the plants."

(d) Other terms and conditions (pp. 428-429 of SCA No.15599 of 2008) "Other terms and conditions

1. The company would agree to implement the CDR scheme as per schedule after obtaining various approvals/permissions including permission of Page 312 of 674 C/SCA/15599/2008 JUDGMENT High Court under Sec.391 of Companies Act for transfer of the surplus assets as envisaged in the Scheme to SPV.

2. The lenders would have right to appoint any number of nominee directors on the Board of SPV during the currency of the assistance.

3. The Company would transfer the assets as envisages in the Scheme to an SPV and the charge is created on the assets of SPV as envisaged in the scheme within 12 months from the sanction of CDR Scheme.

...........................................

6. The lenders shall take appropriate steps to modify orders passed in various suits/application including winding up petition to enable the company to effectuate the scheme including restarting of plants."

The details of cases filed against the Company including the petition for winding up the Company are annexed to the CDR scheme (pp. 432-434 of SCA No.15599 of 2008).

It is submitted that without creating the SPV and transferring the surplus land to the said SPV and without moving any application under Section 391 of the Companies Act, the Company has purported to have sold the property in question in October/November, 2006. Further the CDR Page 313 of 674 C/SCA/15599/2008 JUDGMENT scheme itself was a fraud devised to defeat and defraud the workers and the statutory authorities of their dues as well as the shareholders. A perusal of the CDR scheme reveals that the same had been devised and designed to protect the assets of the Company from the workers' dues and the dues of the statutory authorities. The relevant clause of the CDR scheme reads as under:

 CORPORATE             RESTRUCTURING  AND
 SETTLEMENT            OF SECURED LENDERS
 LIABILITIES

(iii) Furthermore the BIFR scheme dated 1.06.2006 (pp. 95-153 of SCA No.15599 of 2008) vide para VII (ix) inter alia clearly mentions that:

"Any sale of assets of the company would be effected through Asset Sale Committee(s) as per the guidelines issued by BIFR. The entire sale proceeds would be used as per the scheme sanctioned or as per the directions of BIFR". (p

109) Page 314 of 674 C/SCA/15599/2008 JUDGMENT None of these conditions have been complied with by the Company while selling the property in question. Sale was not done by the Asset Sale Committee. Instead the Company directly sold the property in question. No guidelines of the BIFR were followed. Further as per the above clause the sale proceeds were to be used as per the scheme sanctioned or as per the directions of BIFR. Instead the Company fraudulently used the entire sale proceeds to pay the dues of secured creditors only.

It may be noted that the Section 2(p) settlement has been made a part of the BIFR scheme. The BIFR scheme in para (VII) (A) (iii) has specifically referred to the substantial waiver of the past unpaid wages of the workmen under the Section 2(p) settlement as under:

"To become long term competitive the company has entered into a comprehensive settlement agreement wherein the workers/employees of the company have agreed to waive substantial portion of the past unpaid dues of the workers during the period of closure/the company was running into losses and has agreed for a new wage structure which has resulted into competitive with its competitors. A copy of the settlement agreement dated 27.10.2003 is enclosed herewith and marked as Annexure No.IV." (p.101) Page 315 of 674 C/SCA/15599/2008 JUDGMENT One of the reliefs sought in the BIFR scheme was:

"RELIEFS AND CONCESSIONS ...........................................

A. WORKERS AND STAFF MEMBERS OF BARODA RAYON CORPORATION LTD.

a. To implement the settlement agreement reached by the Company with the union on 27th October, 2003 (Annexure No.IV)" (p. 105) Thus since the section 2(p) settlement was made part of the BIFR scheme and was sought to be implemented, violation of the settlement was violation of the BIFR scheme as well.

6. It is submitted that the Respondent management has admitted that the four purported sale deeds were executed in October and November 2006 i.e. after the aforementioned interim orders. Notwithstanding the said admission, the Respondent management seek to justify their action on a specious plea that

(i) the sale has taken place under a concluded contract dated 09.12.2003 entered with Uma Page 316 of 674 C/SCA/15599/2008 JUDGMENT Developers and that the payment for the said transaction were made between December 2003 and October 2005 and

(ii) that no injunction order was passed by this Hon'ble Court vide orders dated 20.02.2006 and 20.04.2006.

It is submitted that the MOU dated 09.12.2003 entered by the Company with Uma Developers can at best be called an agreement to sell. Further even assuming that sale consideration was received between December 2003 to October 2005, still admittedly the purported sale deeds were executed only in October and November 2006 i.e. after the injunction order. It is submitted that no sale/transfer of an interest in immovable property of the value of Rs.100/- or more can take place unless the sale/transfer is reduced into writing and is registered in accordance with law (Please see section 54 of the Transfer of Property Act).

It is submitted that the contention that no injunction order was passed by this Hon'ble Court is unsustainable in as much as the Respondent Page 317 of 674 C/SCA/15599/2008 JUDGMENT management themselves had understood the order dated 20.02.2006 as requiring them to seek the permission of this Hon'ble Court before the sale of the Company's property; and upon that understanding the Respondent management themselves had moved an application being C.A. No.11914 of 2007 (pp. 84-89 of C.A. No.754 of 2011) seeking modification of the order dated 20.02.2006 of this Hon'ble Court to sell some other asset of the Company (the prayers were though very cleverly drafted to mislead this Hon'ble Court without disclosing the sale of the property in question). This Hon'ble Court passed an order on 16.05.2008 (pp. 154-161 of SCA No. 15599 of 2008) in Civil Application No.11914 of 2007 modifying the earlier order dated 20.02.2006 and permitting the Company to sell the Plat, Machinery and Equipments of POY Plant at Surat on as is where is basis as per Clause (VII) (ix) of the BIFR sanctioned scheme which required sale to be effected through Asset Sale Committee as per the guidelines issued by the BIFR and the entire sale proceeds would be used as per the scheme sanctioned or as per the directions of BIFR. It was further directed that the sale price should be Page 318 of 674 C/SCA/15599/2008 JUDGMENT deposited in the Court with a copy of Sale Deed and the amount would not be utilized by the Company for any other purpose.

In any case, the Industrial Tribunal had passed an injunction order on 06.12.2005 which was operating when the purported sale deeds were executed. For breach of the tribunal's order, this Hon'ble Court has jurisdiction to entertain contempt petition under Article 215 of the Constitution as well as under section 10 of Contempt of Courts Act. The Hon'ble Supreme Court in Delhi Judicial Service Association Vs. State of Gujarat (1991)4 SCC 406 held in para 31 as follows:

"31. We have already discussed a number of decisions holding that the High Court being a court of record has inherent power in respect of contempt of itself as well as of its subordinate courts even in the absence of any express provision in any Act...............Absence of administrative power of superintendence over the High Courts and subordinate courts does not affect this Court's wide power of judicial superintendence of all courts in India. Once there is power of judicial superintendence, all the courts whose orders are amenable to correction by this Court would be subordinate courts and therefore this Court also possesses similar inherent power as the High Court has under Article 215 with regard to the contempt Page 319 of 674 C/SCA/15599/2008 JUDGMENT of subordinate courts. The jurisdiction and power of a superior Court of Record to punish contempt of subordinate courts was not founded on the Court's administrative power of superintendence, instead the inherent jurisdiction was conceded to superior Court of Record on the premise of its judicial power to correct the errors of subordinate courts.

7. Further this Hon'ble Court by virtue of being a superior Court of Record has power to determine its own jurisdiction under Article 215 of the Constitution. This Hon'ble Court by virtue of its inherent jurisdiction, the jurisdiction under Article 215, Section 94(c) and Section 151 of CPC and also under Order 39 Rule 2A of CPC to order status quo ante and direct the restoration of the properties which were purportedly sold in the teeth of injunction/restrained orders passed by the Industrial Tribunal as well as this Hon'ble Court. For ready reference, the extracts from the relevant judgments are set out below:-

UNDER ARTICLE 215

(i) The Hon'ble Supreme Court in Delhi Judicial Service Association Vs. State of Gujarat (1991) 4 SCC 406 held in para 38 as follows:-

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C/SCA/15599/2008 JUDGMENT

38. It is true that courts constituted under a law enacted by the Parliament or the State legislature have limited jurisdiction and they cannot assume jurisdiction in a matter, not expressly assigned to them but that is not so in the case of a superior court of recored constituted by the Constitution.

Such a court does not have a limited jurisdiction instead it has power to determine its own jurisdiction. No matter is beyond the jurisdiction of a superior court of record unless it is expressly shown to be so, under the provisions of the Constitution. In the absence of any express provision in the Constitution the Apex Court being a court of record has jurisdiction in every matter and if there be any determination is made by High Court, the same would be subject to appeal to this Court, but if the jurisdiction is determined by this Court it would be final. Halsbury's Laws of England, 4th Edn., Vol. 10, para 713 states:

'Prima facie, no matter is deemed to be beyond the jurisdiction of a superior court unless it is expressly shown to be so, while nothing is within the jurisdiction of an inferior court unless it is expressly shown on the face of the proceedings that the particular matter is within the cognizance of the particular court.' In so holding, the Hon'ble Supreme Court followed its two earlier Constitution Bench Judgment namely

(a) Naresh Shridhar Mirajkar v. State of Page 321 of 674 C/SCA/15599/2008 JUDGMENT Maharashtra, reported in [1966]3SCR744 (9 Judges)

(b) In the matter of: Under Article 143 of the Constitution of India Special Reference No. 1 of 1964 reported in AIR 1965 SC 745 (7 Judges).

(ii) High Court of Judicature at Allahabad through its Registrar Vs. Raj Kishore Yadav and Ors.

Reported in (1997) 3 SCC 11. The Hon'ble Supreme Court in para 10 held as follows:

"10. However the learned Judges were persuaded to declare the impugned Rule as ultra vires on the ground that it conflicted with Article 215 of the Constitution of India. It is difficult to appreciate the said line of reasoning which appealed to the learned Judges. All that Article 215 states is that every High Court shall be a court of record meaning thereby all the original record of the court will be preserved by the said court and it shall have all the powers of such a superior court of record including the power to punish for contempt of itself. It has to be kept in view that as a superior court of record the High Court is entitled to preserve its original record in perpetuity. It is also now well settled that even apart from the aforesaid attribute of a superior court of record the High Court as such has twofold powers. Being a court of record the High Court (I) has power to determine the question about its own jurisdiction; and (ii) has inherent power to punish for its contempt summarily. The aforesaid twin incidents of a court of record are well established by a catena of Page 322 of 674 C/SCA/15599/2008 JUDGMENT decisions of this Court. We may usefully refer to one of them. A majority of the Constitution Bench of nine learned Judges of this Court in the case of Naresh Shridhar Mirajkar v. State of Maharashtra speaking through Gajendragadkar, C.J., has made the following pertinent observations in para60 of the Report.

"There is yet another aspect of this matter to which it is necessary to refer. The High Court is a superior court of record and under Article 215 shall have all powers of such a court of record including the power to punish contempt of itself. One distinguishing characteristic of such superior courts is that they are entitled to consider questions of their jurisdiction raised before them. This question fell to be considered by this Court in Special Reference No.1 of 1964, SCR at p. 499. In that case, it was urged before this Court that in granting bail to Keshav Singh, the High Court had exceeded its jurisdiction and as such, the order was a nullity. Rejection this argument this Court observed that in the case of a superior court of record, it is for the court to consider whether any matter falls within its jurisdiction or not. Unlike a court of limited jurisdiction, the superior court is entitled to determine for itself questions about its own jurisdiction. That is why this Court did not accede to the proposition that in passing the order for interim bail, the High Court can be said to have exceeded its jurisdiction with the result that the order in question was null and void. In support of this view, this Court cited a passage from Halsbury's Laws of England where it is observed that 'prima facie, no matter is deemed to be beyond the jurisdiction of a superior court unless it is expressly shown to be so, while nothing is within Page 323 of 674 C/SCA/15599/2008 JUDGMENT the jurisdiction of an inferior court unless it is expressly shown on the face of the proceedings that the particular matter is within the cognizance of the particular court.' If the decision of a superior court on a question of its jurisdiction is erroneous, it can, of course, be corrected by appeal or revision as may be permissible under the law: but until the adjudication by a superior court on such a point is set aside by adopting the appropriate course, it would not be open to be corrected by the exercise of the writ jurisdiction of this Court.

INHERENT POWER UNDER SECTION 151 OF CPC

8. The Respondents by executing the aforementioned four purported sale deeds in the face of the aforementioned injunction orders have clearly committed breach of the orders of this Hon'ble Court and Industrial Tribunal, Surat which has been noted by this Hon'ble Court in its order dated 06.03.2009 passed in SCA No.15599 of 2008. It is submitted that the aforesaid four purported sale deeds having been executed in violation of the injunction order of this Hon'ble Court and the Industrial Tribunal are a nullity, null and void and inoperative in law. A Full Bench of the Hon'ble Madras High Court (quorum: K. Veeraswami CJ., Natarajan and Mohan JJ.) in the Page 324 of 674 C/SCA/15599/2008 JUDGMENT case of Century Flour Mills Ltd. Vs. S.Suppiah & Ors. Reported in AIR 1975 Madras 270 held that the resolutions passed in a meeting which was held in violation of the stay order would have no effect whatsoever and declared that the parties be put back in the same position as they stood immediately prior to the service of stay order of the Court. In so holding the Full Bench followed an earlier Division Bench judgment of that very High Court wherein it was held that "most certainly the proceedings of the meeting were void, the meeting itself having been conducted in disobedience of the interim injunction and that will equally apply to the resolution or resolutions passed therein. We make a record to that effect." The Full Bench further held:-

"9. In our opinion, the inherent powers of this court under Section 151 C.P.C. are wide and are not subject to any limitation. Where in violation of a stay order or injunction against a party, something has been done in disobedience, it will be the duty of the Court as a policy to set the wrong right and not allow the perpetuation of the wrong doing. In our view, the inherent power will not only be available in such a case, but is is bound to be exercised in that manner in the interests of justice. Even apart from Section 151, we should observe that Page 325 of 674 C/SCA/15599/2008 JUDGMENT as a matter of judicial policy, the court should guard against itself being stultified in circumstances like this by holding that it is powerless to undo a wrong done in disobedience of the court's orders. But in this case it is not necessary to so to that extent as we hold that the power is available under Section 151 C.P.C."

The aforementioned Full Bench judgment was approved and indeed followed by the Hon'ble Supreme Court in the case of DDA Vs. Skipper Construction Pvt. Ltd. reported in (1996) 4 SCC 622 para 19 at page 636. In the said case the Hon'ble Supreme Court has also held that the principle that the contemnor ought not to be permitted to enjoy and or keep the fruits of his contempt is well settled and discussed the principle in para 17 to 21 at pages 635 to 636 which are extracted below "The contemnor should not be allowed to enjoy or retain the fruits of his contempt" :

17. The principle that a contemnor ought not to be permitted to enjoy and/or keep the fruits of his contempt is well-settled. In Mohd. Idris v. R. J. Babuji, (1985) 1 SCR 598 : (AIR 1984 SC 1826), this Court held clearly that undergoing the punishment for contempt does not mean that Page 326 of 674 C/SCA/15599/2008 JUDGMENT the Court is not entitled to give appropriate directions for remedying and rectifying the things done in violation of its Orders. The petitioners therein had given an undertaking to the Bombay High Court. They acted in breach of it. A learned Single Judge held them guilty of contempt and imposed a sentence of one months' imprisonment. In addition thereto, the learned Single Judge made appropriate directions to remedy the breach of undertaking.

It was contended before this Court that the learned Judge was not justified in giving the aforesaid directions in addition to punishing the petitioners for contempt of Court. The argument was rejected holding that "the Single Judge was quite right in giving appropriate directions to close the breach (of undertaking)".

18. The above principle has been applied even in the case of violation of orders of injunction issued by Civil Courts. In Clarke v. Chadburn, (1985) 1 All ER 211, Sir, Robert Megarry V-C observed :

"I need not cite authority for the proposition that it is of high importance that orders of the Court should be obeyed. Willful disobedience to an order of the Court is punishable as a contempt of Court, and I feel no doubt that such disobedience may properly be described as being illegal. If by such disobedience the persons enjoined claim that they have validly effected some charge in the rights and liabilities of others, I cannot see why it should be said that although they are liable to penalties for contempt of Court for doing what they did, nevertheless those acts were validly done. Of Page 327 of 674 C/SCA/15599/2008 JUDGMENT course, if an act is done, it is not undone merely by pointing out that it was done in breach in law. If a meeting is held in breach of an injunction, it cannot be said that the meeting has not been held. But the legal consequence of what has been done in breach of the law may plainly be very much affected by the illegality. It seems to be on principle that those who defy a prohibition ought not to be able to claim that the fruits of their defiance are good, and not trained by the illegality that produced them."

19. To the same effect are the decisions of the Madras and Calcutta High Courts in Century Flour Mills Limited v. S. Suppiah, AIR 1975 Madras 270 (FB) and Sujit Pal v. Prabir Kumar Sun, AIR 1986 Calcutta 220. In Century Flour Mills Limited, it was held by a Full Bench of the Madras High Court that where an act is done in violation of an order of stay or injunction, it is the duty of the Court, as a policy, to set the wrong right and not allow the perpetuation of the wrong-doing. The inherent power of the Court, it was held, is not only available in such a case, but it is bound to be exercise it to undo the wrong in the interest of justice. That was a case where a meeting was held contrary to an order of injunction. The Court refused to recognize that the holding of the meeting is a legal one. It put back the parties in the same position as they stood immediately prior to the service of the interim order.

41. In Sujit Pal (AIR 1986 Cal 220), a Division Bench of the Calcutta High Court has taken then same view. There, the defendant forcibly dispossessed the plaintiff in violation of Page 328 of 674 C/SCA/15599/2008 JUDGMENT the order of injunction and took possession of the property. The Court directed the restoration of possession to the plaintiff with the aid of police. The Court observed that no technicality can prevent the Court from doing justice in exercise of its inherent powers. It held that the object of Rule 2-A of Order 39 will be fulfilled only where such mandatory direction is given for restoration of possession to the aggrieved party. This was necessary, it observed, to prevent the abuse of process of law.

42. There is no doubt that this salutary rule has to be applied and given effect to by this Court, if necessary, bu overruling any procedural or other technical objections. Article 129 is a constitutional power and when exercised in tandem with Article 142, all such objection should give way. The court must ensure full justice between the parties before it."

The Hon'ble Court after lifting the corporate cell of the Company issued various directions (para 35 at pages 644 and 645) including directions for attachment and sale of the properties of the directors as well as their close relatives in order to recover the fruits of willful disobedience and to compensate the persons who had been defrauded by the Company i.e. Skipper Constructions Pvt. Ltd.

The Skipper judgment has been followed in the Page 329 of 674 C/SCA/15599/2008 JUDGMENT case of All Bengal Excise Licensee's Association Vs. Raghabendra Singh & Ors. reported in (2007) 11 SCC 374. In this case the High passed an interim order permitting the respondents to process the applications for grant of licenses for excise shops but restrained them from making any final selection in respect of such shops or holding any lottery for that purpose without obtaining specific leave of the Court. But inspite of the injunction order the respondent held a lottery for the purpose of final selection of excise shops. In the contempt petition filed by the appellant before the High Court the contemnors pleaded that although there was a violation of the interim order but the said violation was not willful as the contemnors had wrongly understood the implication of the order of the High Court. Accepting the said plea the High Court dismissed the contempt petition. Allowing the appeal against the said order, the Hon'ble Supreme Court cancelled the auctions and directed the respondents not to allow the successful bidders to continue the business and to stop them forthwith. The relevant extracts from the said judgment are set out as below:

Page 330 of 674

C/SCA/15599/2008 JUDGMENT "27. Even assuming that there was any scope for bona fide misunderstanding on the part of the respondents, once it was found that the respondent had disobeyed the specific order passed earlier by the Court, the High Court should have directed the contemnors to undo the wrong committed by them which was done in clear breach of the order of the Court by restoring the status quo ante by cancelling the lottery held by them.........."

28.In our opinion, a party to the litigation cannot be allowed to take an unfair advantage by committing breach of an interim order and escape the consequences thereof. By pleading misunderstanding and thereafter retaining the said advantage gained in breach of the order of the Court and the wrong perpetrated by the respondent-contemnors in contumacious disregard of the order of the High Court should not be permitted to hold good. In our opinion, the impugned order passed by the High Court is not sustainable in law and should not be allowed to operate as a precedent and the wrong perpetrated by the respondent-contemnors in utter disregard of the order of the High Court should not be permitted to hold good."

9. It is submitted that if contempt petition is barred by time then no penal action may be taken. But once it is brought to the notice of court that there is a violation of the order of High Court then status quo ante should be restored. It an alienation/ transfer/assignment is made in defiance of the restraint order, the Court has duty as well as right to Page 331 of 674 C/SCA/15599/2008 JUDGMENT treat the alienation/assignment as having not taken place at all for its purposes. In this regard the applicant union relied on the following judgments:

(i) Surjit Singh & Ors. Vs. Harbans Singh & Ors.

Reported in (1995) 6 SCC 50. In Para 4 the Hon'ble Supreme Court held as follows:

4. As said before, the assignment is by means of a registered deed. The assignment had taken place after the passing of the preliminary decree in which Pritam Singh has been allotted 1/3rd share. His right to property to that extent stood established. A decree relating to immovable property worth more than hundred rupees, if being assigned, was required to be registered. That has instantly been done. It is per se property, for it relates to the immovable property involved in the suit. It clearly and squarely fell within the ambit of the restraint order. In sum, it did not make any appreciable difference whether property per se had been alienated or a decree pertaining to that property.

In defiance of the restraint order, the alienation/assignment was made. If we were to let it go as such, it would defeat the ends of justice and the prevalent public policy. When the Court intends a particular state of affairs to exist while it is in seizin of a lis, that state of affairs is not only required to be maintained, but it is presumed to exist till the Court orders otherwise. The Court, in these circumstances has the duty, as also the right, to treat the alienation/ assignment as having not taken place at all for its purposes. Once that is so, Pritam Singh and his assignees, respondents Page 332 of 674 C/SCA/15599/2008 JUDGMENT herein, cannot claim to be impleaded as parties on the basis of assignment. Therefore, the assignees respondents could not have been impleaded by the trial Court as parties to the suit in disobedience of its orders. The principles of lis pendens are altogether on a different footing. We do not propose to examine their involvement presently. All what is emphasized is that assignees in the present facts and circumstances had no cause to be impleaded as parties to the suit. On that basis, there was no cause for going into the question of interpretation of paragraphs 13 and 14 of the settlement deed. The path treaded by the Courts below was, in our view, out of their bounds. Unhesitatingly, we upset all the three orders of the Courts below and reject the application of the assignees for impleadment under Order 22 Rule 10 C. P. C." (Emphasis Supplied)

(ii) DDA Vs. Skipper Construction Ltd., reported in (1996) 4 SCC 622 paras 17 to 21.

UNDER ORDER 39 RULE 2A AND SECTION 151 OF CPC:

(iii) Arjan Singh Vs. Puneet Ahluwalia & Ors.

Reported in (2008) 8 SCC 348. In this case although the Supreme Court held that by the time alienation was done the injunction order had already come to an end, it agreed with the holding of the High Court that any transaction carried out in violation of the order of the Court is void and Page 333 of 674 C/SCA/15599/2008 JUDGMENT would be a nullity. In paras 17 to 19 the Hon'ble Supreme Court held as follows:

"17. Was the order of injunction operative so as to attract the provisions of Rule 2A of Order 39 of the Code of Civil Procedure or invoking the inherent jurisdiction of the court under Section 151 thereof? The learned Trial Judge opined that it was so because it was for the court to pass an appropriate order thereunder. The High Court, however, differed with the aforementioned finding of the learned Trial Judge to hold that no order of injunction was operative. It, furthermore, held that any transaction carried out in violation of the order of the court is void; it would be a nullity. The decision of the High Court is based on the decisions of different High Courts including Pranakrushna and others v. Umakanta Panda and Others, Phani Bhushan Dey v. Sudhamoyee Roy & Anr. and Harbalas and others v. The State of Haryana and Others. We agree with the High Court on this issue. If the order of injunction was operative upto a particular date, technically the order of injunction shall not remain operative thereafter. The owner of the land Dr. Bawa and the defendant No. 2 Sanjeev Sharma, thus, could have entered into the compromise. The effect thereof would be that the said deed of sale was not binding on the appellant. It would be hit by the doctrine of lis pendens, as adumbrated under Section 52 of the Transfer of Property Act. The said deed of sale would not come in the Court's way in passing a decree in favour of the appellant. Its validity or otherwise would not be necessary to be considered as the appellant is not bound thereby. Sanjeev Sharma and consequently Puneet Ahluwalia would Page 334 of 674 C/SCA/15599/2008 JUDGMENT be deemed to be aware of the pendency of the suit. Even Section 19 of the Specific Relief Act will be attracted.

18.Reliance has been placed by Mr. Gupta on Surjit Singh v. Harbans Singh, wherein this Court opined (SCC p.52 para4):

"4...In defiance of the restraint order, the alienation/assignment was made. If we were to let it go as such, it would defeat the ends of justice and the prevalent public policy. When the Court intends a particular state of affairs to exist while it is in seizin of a lis, that state of affairs is not only required to be maintained, but it is presumed to exist till the Court orders otherwise. The Court, in these circumstances has the duty, as also the right, to treat the alienation/assignment as having not taken place at all for its purposes..."

There cannot be any dispute with regard to the aforementioned proposition of law. This decision answers the questions raised by Mr. Mehta that the consequences of violating the order of injunction must be kept confined only to Rule 2A of Order 39 of the Code of Civil Procedure.

19. We must also take notice of the fact that even a court in exercise of its inherent jurisdiction under Section 151 of the Code of Civil Procedure, in the event of coming to the conclusion that a breach to an order of restraint had taken place, may bring back the parties to the same position as if the order of injunction has not been violated. [Gurunath Manohar Pavaskar and Ors. v. Nagesh Siddappa Page 335 of 674 C/SCA/15599/2008 JUDGMENT Navalgund and Ors."

SECTION 94(c) AND UNDER ORDER 39 RULE 2A OF CPC:

(iv) Patel Rajnikant Dhulabhai & Ors. Vs. Patel Chandrakant Dhulabhai & Ors., reported in AIR 2008 SC 3016 the Hon'ble Supreme Court held as follows:

"39. We are, therefore, fully convinced that during the pendency of the proceedings and in spite of interim orders passed by this Court, agreements have been entered into by the contemnors, cheques had been accepted and consideration had been received at least in part. So far as the first order passed by this Court on April 26, 2004 is concerned, there was total prohibition from creating any interest in favour of third party either by sale, mortgage, transfer, assignment, gift or 'in any other manner whatsoever'. Hence, entering into an agreement or acceptance of full or even part consideration would be hit by the said order. In our considered view, it would amount to 'creation of interest' prohibited by this Court."

"46. The next question is whether for disobedience of the order passed by this Court, the respondents/ contemnors are liable to punishment? In this connection, we may refer to some of the legal provisions. Article 129 of the Constitution declares this Court (Supreme Court) to be "a Court of Page 336 of 674 C/SCA/15599/2008 JUDGMENT Record having all the powers of such a Court including the power to punish for the contempt of itself". Clause (c) of Section 94 of the Code of Civil Procedure, 1908 enacts that in order to prevent the ends of justice from being defeated, the Court may, commit the person guilty of disobedience of an order of interim injunction to civil prison and direct his property be attached and sold."

" 62. We must frankly admit our inability to agree with the learned counsel. In the light of what is stated above, we are convinced that the contemnors have intentionally and deliberately violated the orders of the Court. We are also convinced that the orders were clear, unambiguous and unequivocal having one and only one meaning. Willful and deliberate disobedience of the orders passed by the apex Court of the country can never be said to be bona fide, honest or in good faith. If it is so, the action calls for serious view to ensure proper administration of justice."

"69. Considering the facts and circumstances in their entirety, in our opinion, ends of justice would be served if we hold the respondents/contemnors guilty under Section 12 of the Contempt of Courts Act, 1971, read with Section 94(c) and Rule 2-A of Order XXXIX of the Code of Civil Procedure, 1908 as amended by the Code of Civil Procedure (Amendment) Act, 1976 and Article 129 of the Constitution and order the respondents contemnors to undergo simple imprisonment for a term of two weeks i.e. fourteen days."

3rd PARTY RIGHT CREATED IN VIOLATION Page 337 of 674 C/SCA/15599/2008 JUDGMENT OF THE INTERIM ORDER HELD TO BE OF NO CONSEQUENCE AND WAS SET ASIDE:

(v) C. Elumalai & Ors. Vs. AGL Irudayaraj & Anr. Reported in (2009) 4 SCC 213. In this case in violation of the Supreme Court's order not to create third part rights till disposal of the suit, the respondent created third party rights. The Supreme Court in exercise of power under Article 129 and after tracing the case law on contempt held:

"7. On consideration of various aspects, we are satisfied that there has been a willful and deliberate violation of this Court's order. We, therefore, in exercise of the court's jurisdiction under Article 129 of the Constitution of India impose exemplary cost of Rs.2,00,000/- on each of the contemnors to be deposited to the registry of the High Court within a period of eight weeks. On deposit being made, the amount shall be transferred to the National Legal Services Authority. In case of non payment, the contemnors shall undergo simple imprisonment for three months each. Any third party right created after order dated 19.3.2007 in SLP No. 19924 of 2006 is of no consequence and stands set aside."

(emphasis supplied) II. CONDUCT OF THE RESPONDENT MANAGEMENT:

10. The conduct of the respondent Page 338 of 674 C/SCA/15599/2008 JUDGMENT Management all throughout, has been with the intention of misleading the Court, to defraud the workers and statutory authorities of their dues as well as the shareholders in order to misappropriate the assets of the Company.

11. The Company suspended its manufacturing operations on 6.12.1999 and stopped paying wages to the workmen. Thereafter pursuant to a settlement arrived at in June 2000 with workmen under Section 2(p) of the Industrial Disputes Act, the Company restarted its operations on 25.06.2000 but did not pay the wages for the period the operations were closed. On 18.02.2002 the Company again stopped operations and also stopped paying wages. On 23.03.2002 the Company restarted operations but did not pay the wages for the period the operations were closed.

When all the attempts of the workmen failed, they filed a recovery application under section 33C of the Industrial Disputes Act, 1947 being Recovery Application No. 113/2003 before the Labour Court, Surat, for unpaid wages, which were more than Rs.51 crores at that time. The Company even did not pay the amount of gratuity, Provident Fund Page 339 of 674 C/SCA/15599/2008 JUDGMENT including the workers' contribution and ESI dues etc.

12. The Company represented to the workers that a new financier by the name Benson Overseas Holding Ltd., London had agreed to inject fresh finance to make the Company economically viable subject to the condition inter alia that all secured, unsecured creditors as well as the employees agrees to sacrifice their substantial interest to see that the working of the company was revived. The employees agreed to forgo a large part of their dues and entered into a Settlement dated 27.10.2003 with the Company and the new financier namely Benson Overseas Holdings Ltd., London. The breaches committed by the respondent management of the terms and conditions of settlement are as follows:

(i) As per clause 3 (p.25) of the settlement it was agreed that the Company would regularly deposit both employer's and employees PF and ESI dues. However, PF and ESI dues were not deposited by the Company. The ESI facilities were Page 340 of 674 C/SCA/15599/2008 JUDGMENT denied to the employees though they were sick as the dues were not paid by the Company.

(ii) As per clause 4 (p.25) the company agreed to pay Rs.18 crores as lump sum amount in full satisfaction of the wage dues of the employees payable prior to December 2003. However, even as per the Company only Rs.10.34 crores were paid out of Rs.18 crores.

(iii) As per clause 6 (p.26) the company agreed to pay Rs.6.16 crores being the amount payable towards gratuity. However, the gratuity amount was not paid. The company before the Industrial Tribunal admitted that a sum of Rs.14.79 crores is due as on 31.03.2007 towards gratuity.

(iv) As per clause 8 (p.26) it was agreed that Rs.1,000 per month would be paid by the Company to employees over and above the regular wages. However, the Company did not make payment of Rs.1000 for initial 16 months and thereafter paid Rs.1000 for some months and that too irregularly. Rs.7.66 crores is due towards this.

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 (v)          As per clause 10 (p.27) the company was

to start working the factory gradually effective November 2003 and was to make all the 4 plants operational before 30th June 2004. However, the Company started only two plants.

(vi) As per clause 11 (p.27) the Company accepted liability to pay Rs.6.61 crores towards PF dues, Rs.1.73 crores towards ESI dues as well as Rs.48 lakhs payable as LIC premium to the employees. The Company also accepted that it would pay the DRF, HDFC and Gruh Finance Loan installments if deducted but not paid. However PF and ESI dues were not paid by the Company. Even the LIC premium, DRF, HDFC and Gruh Finance loan though deducted from the salary of the workmen were not paid to the concerned authorities.

(vii) As per clause 12(1) (p.27) the company was required to pay bonus as per the provisions of the Bonus Act but no bonus was paid by the Company since 2003.

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 (viii)       As per clause 12(ix) (p.28) the land on

which the workers quarters, school etc were located were not to be disposed of. However, the Company demolished the school and purportedly sold the land illegally. Children were forced to take school leaving certificate. Further the land on which workers quarters is located was also disposed of.

13. Not only this, no finance was brought in by the London party and the Company without disclosing anything to the application union and without the knowledge of the applicant union entered into an MoU dated 9.12.2003 (pp. 488-500 of SCA No. 15599 of 2008) with a developer namely M/s. Uma Developers whose sole proprietor is Sanjay Premjibhai Patel who is the son of Shri Premjibhai Patel who is the real brother of Damodar Bhai Patel, a director of the Company. In this MoU the Company agreed to sell to Uma Developers surplus land admeasuring about 5,84,820 Sq. Yds. At Village Udhana and Village Bhedwad in District Surat for a consideration of Rs.33.92 crores. The Company did not call for any offers to fetch the best price for the surplus land. Further no valuation was done of the land before Page 343 of 674 C/SCA/15599/2008 JUDGMENT fixing the consideration amount. Clause 7 of the MOU provided as follows (p.493):

"It is expressly agreed and the transferor and the transferee do hereby authorize the said M/s. Matubhai Jamietram and Associates, Advocates for the transferor to make payments of the amounts so deposited with them in accordance with the repayment schedule proposed by the transferor viz

(a) Baroda Rayon Employees' Credit Society dues of Rs.118 Lakhs, (b) Upfront payment of PF/ESIC and Gratuity dues of Rs.317 Lakhs, (c) Settlement dues of term lenders of Rs.3083 Lakhs, (d) Settlement dues of working capital banks of Rs.1007 Lakhs and Equity of Rs.5 Lakhs aggregating Rs.4530 Lakhs out of the total outstanding dues of the transferor."

Clause 15 of the MOU (p.496) clearly stated that the area of temple, school, workers' colonies and administrative building did not constitute the subject matter of sale.

14. Thereafter since the secured creditors had filed winding up petitions against the Company before this Hon'ble Court and also proceedings before the DRT, the respondent management behind the back of the workers entered into a Page 344 of 674 C/SCA/15599/2008 JUDGMENT Corporate Debt Restructuring Scheme dated 19.03.2004 with the secured creditors whereby the dues of secured creditors were sought to be protected against the dues of the workmen and the dues of the statutory authorities. An arrangement was also made in the said scheme whereby the assets of the Company were to be sold only to pay the dues of the secured creditors contrary to the section 2(p) settlement. All this was done only to ensure that the transferee (relative of the director of the Company) gets an unencumbered property as the secured creditors had first charge over the fixed assets of the Company. The relevant clause of the said CDR Scheme reads as under :

 "CORPORATE                RESTRUCTURING AND
 SETTLEMENT               OF SECURED LENDERS
 LIABILITIES

15. Thereafter Uma Developers promoted a Co-operative Society namely Shri Laxmi Narayan Page 345 of 674 C/SCA/15599/2008 JUDGMENT Industrial Co-operative Service Society Limited and requested the Company on 28.09.2004 (pp. 501-502 of SCA No.15599 of 2008) to transfer the specific performance of the MOU in favour of the said Industrial Society. This request was accepted by the Company by a letter dated 30.09.2004 (p. 505 of SCA No.15599 of 2008). Shri Laxminarayan Industrial Co-operative Service Society Limited is headed by one Mr. Liladhar B. Patel whose brother Mr.Damodar B. Patel is a director of the respondent company. Thus it is clear that the property in question was sought to be surreptitiously sold to the family members of the director. The collusion is also apparent from the fact that the said society though no sale deed was executed in its favour made an application on 9.04.2005 to the concerned Ministry for setting up Industrial Park wherein even the date of commencement of Industrial Park was mentioned as 15.11.2005 (pp. 170-172 at p. 171 of SCA No.15599 of 2008).

16. Since the company did not adhere to the terms and conditions of the settlement dated 27.10.2003 and committed several breaches Page 346 of 674 C/SCA/15599/2008 JUDGMENT thereof, the applicant union on 11.4.2005 raised eighteen demands with the company which pertained to the violation of terms and conditions of the Settlement dated 27.10.2003. On 1.08.2005 an order was passed by the Conciliation Officer under Section 33A of the Industrial Disputes Act (pp. 78- 79 of SCA No.134 of 2006) directing the Company not to do the changes which were threatened to be done by the Company namely the workers and staff quarters and the land on which they are situated and school facility should not be snatched from the workers and teachers of school and staff workers should not be intimidated and their service conditions should not be altered and status quo should be maintained. The demands of the workers were referred for adjudication on 28.09.2005 to the Industrial Tribunal, Surat under section 10 of the Industrial Disputes Act, 1947 being Ref. (IT) No.15 of 2005 the Chief Labour Commissioner (pp. 83-92 of SCA No.134 of 2006). The applicant union filed an interim application in Ref (IT) No.15 of 2005 on 5.10.2005 (pp. 112-113 of SCA No.134 of 2006). On 5.10.2005 the Industrial Tribunal in Ref (IT) No.15 of 2005 passed an ad-interim order (pp. 124 of SCA No.134 of 2006) in terms of para 13(1) of Page 347 of 674 C/SCA/15599/2008 JUDGMENT the application meaning thereby that till the final disposal of original demand IT No.15 of 2005 and the application made under section 33A before the conciliation officer and the order passed by the conciliation officer there would be no change or alteration without the prior permission or approval and without following the provisions of law.

17. The Company filed a reply on 14.10.2005 (pp. 125-156 of SCA No.134 of 2006) to the application for interim relief filed by the applicant union in Ref (IT) No.15 of 2005. The relevant extracts from the application of applicant union and reply of the Company are as under.

(i) In para 4 of the application the union stated that the surplus land was costlier than gold and it was agreed to be sold on certain conditions. It was further stated that the company in collusion with the builder wanted to divide the land into plots and start sale of the land but the workers had not been paid their benefits and amounts according to the contract. The company by sale of the surplus land by obtaining advance consideration were Page 348 of 674 C/SCA/15599/2008 JUDGMENT directly transferring this money and they wanted to demolish the constructions and sell the land which was not surplus according to the agreement. It was further stated that the school where children of the employees were studying had been demolished and the children were being forcibly given leaving certificate and the teachers were being shifted as administration staff and then remove them from service.

In reply at para 37 at pp. 142 of SCA No.134 of 2006 the company had denied that was stated in para 4. It was mentioned that by the sale of land dues of PF, ESI had been paid and the amount was also used to start the establishment and to meet this unwillingly the step of sale of land was taken. It was further stated that the land was not sold by the company but it was sold by the Hon'ble Gujarat Debt (wrongly mentioned as deputy) Recovery Tribunal, Ahmedabad and that's why allegation of collusion with builders lobby and not paying the dues and about advance amount were made to keep the Court in dark and to get sympathy and to get illegal injunction. Company further stated that on account of financial difficulties there was no Page 349 of 674 C/SCA/15599/2008 JUDGMENT alternative but to close the activity and that's why it had to close the school and that had been grossly exaggerated.

(ii) In para 7 of the application (pp.116- 117 of SCA No.134 of 2006) it was averred by the workmen that the company in breach of the settlement was trying to evict the employees from their residential quarters and was threatening to demolish the quarters and was trying to sell the land. Further it was stated that the management was threatening the office bearers of the union and was attempting to sell the land which was not surplus and was attempting to sell the land which was not surplus and was refusing to pay the money payable to the employees. It was further stated that the Company was making complaints against the employees and was taking illegal proceedings against the workers. It was further stated that the management had held a meeting with Sangramsing Garkwad at Mumbai and they were informed about the improper activities and attempts to break the trade union so that they stop them from taking proper role and he was requested to ensure that employees were allowed to do their job. But the Page 350 of 674 C/SCA/15599/2008 JUDGMENT local management was more angry and was giving more harassment to the workmen.

In para 40 of the reply of the Company to para7 of the application P. 145 it was mentioned inter alia that the allegation of demolishing the quarters and sale of land was the imagination of the fertile brain and to mislead the tribunal. The complaint about the sale of land and the story about harassment and Unfair Labour Practice was false and because personal favour was not given to the employees they were making this false application. It was further stated that the alleged conversation in the meeting was false, imaginary and contrary to truth.

(iii) In para 9 of the application it was stated that some of the employees were bed-ridden in hospital, some were suffering from paralysis, heart attack, blood pressure and the families of those workmen were paralyzed but the management were not giving the amount agreed to in the settlement. It was stated that the management was interested in finishing the union activities and they wanted to achieve their secret objects by selling the property and to destroy the rights of the employees.

Page 351 of 674

C/SCA/15599/2008 JUDGMENT The management was not permitting the workmen to work, their conditions of service were not followed and the maintaining of the number of employees as per settlement was not being followed. It was further stated that the management did not listen to anyone and was taking the law in their hands and that's why the present application was being filed.

In reply in para 45 at pp. 149-151 the Company stated that the Company was before the BIFR and the whole world would know under these circumstances the land could not be sold and despite this asking for stay showed bad intention. It was further stated that the allegation about selling the land was made because the management had not accepted to give illegal benefits. It was stated that the question of selling any land and asset did not arise at all. It was further stated that the High Court had no authority to snatch away the right of the management to run the Company.

(iv) In para 10 of the application the Union averred at pp. 118-119 pointing out that the Conciliation Officer had passed an ad interim order Page 352 of 674 C/SCA/15599/2008 JUDGMENT under section 33 A o 1.08.2005 directing the company not to make any alterations and to maintain the status quo. It was stated that although the management had not challenged that order and the order was in force, they were not complying with the said order.

In reply to the said para, the management in para 43 mentioned that when section 33 did not apply no order could be passed. Despite this if any illegal order was passed that was a nullity and the question of complying such order did not arise and wrong order were not necessary to be challenged but they were to be kept aside.

The above extracts show that not only was the respondent management hiding the transaction w.r.t. the property in question but is also shows the scant regard which the respondent management has for the orders passed by Courts.

18. After the injunction order dated 06.12.2005 was passed by the Industrial Tribunal the Respondent management by a letter dated 16.02.2006 to BIFR requested for sanction of the Page 353 of 674 C/SCA/15599/2008 JUDGMENT Scheme under section 17(2) of SICA. In the said Scheme the Respondent gave a list of assets as already sold and to be sold which was marked as Annexure III. Part of the property in question being surplus land admeasuring 5,84,820 sq. yards was shown as already sold though admittedly no sale deed was executed. Further if according to the Respondent the surplus land was already sold then there was no need to show that in Annexure III before the BIFR as it was no longer an asset of the Company. It is submitted that the same was done in order to get a stamp of approval of the BIFR on the purported sale of the surplus land. Further in the third column of Annexure III Misc. Assets was mentioned as already sold but no description of assets or area of the land was shown. It is submitted that if the asset was sold then there was no reason why the name of the assets and its description cannot be disclosed. The same was purposely done by the Company only to fill up the lacunae as and when the need arises to suit the case of the Company. Further Annexure III shows that various other assets namely office and residential premises in Mumbai were already sold but no accounts were submitted by the Company in respect of sale Page 354 of 674 C/SCA/15599/2008 JUDGMENT consideration received from the sale of those assets. Further the sale of all the aforesaid assets is contrary to the injunction order and the interim orders of this Court. After the scheme was sanctioned by the BIFR on 01.06.2006, the Respondent Management executed power of Attorney dated 23.06.2006 in favour of Hemant Dhirubhai Laxminarayan Society were executed in breach of the injunction order dated 06.12.2005 and the interim orders dated 20.02.2006 and 20.04.2006, in breach of the settlement dated 27.10.2003, BIFR scheme as well as CDR Scheme also as already explained above.

19. It is submitted that when the workers union filed an application for appointment of Court Commissioner before the Industrial Tribunal on 12.04.2007 the Company filed a reply on 26.07.2007 (pp. 58-59 of C.A. No.754 of 2011) to the said application inter alia stating that the Company had only been carrying on construction or addition in the factory premises. The fact that the Company had already executed sale deeds was not disclosed in the said affidavit. Thereafter the Company knowing that the sale deeds were Page 355 of 674 C/SCA/15599/2008 JUDGMENT executed in breach of the injunction orders filed a Civil Application No.11914 of 2007 in Special Civil Application No. No.134 of 2006 on 13.08.2007 wherein the Company malafidely sought to get the order dated 06.12.2005 modified by deletion of the part of the order restraining the Company from selling, transferring and alienating the properties of the Company relying on the BIFR Scheme and Annexure III of the BIFR Scheme. The Company again did not disclose that the property in question was already sold by executing the sale deeds but tried to fraudulently get the restraint order modified so that the illegal sale effected by the Company does not get hit by the restraint order. The prayers sought in the said application were inter alia as follows:

"9. That in the premises aforesaid the applicants most humbly pray that:

(A) Your Lordship may be pleased to admit and allow the present application.

(B) Your Lordship may be pleased to modify the order dated 20.04.2006 directing deletion of the condition imposed in the order dated 06.12.2005 by the opponent No.2 in Reference (IT) No.15/2005 to the extent it restrains the applicant Company from selling, transferring and alienating the Page 356 of 674 C/SCA/15599/2008 JUDGMENT properties of the applicant company identified under the scheme sanctioned by the Board for Industrial and Financial Reconstruction for the applicant company.

Or Alternatively Your Lordship may be pleased to modify the order dated 20.04.2006 staying the operation, implementation and execution of the order dated 06.12.2005 passed by the opponent No.2 in Reference (IT) No.15/2005 to the extent it restrains the applicant company from selling, transferring and alienating the properties of the applicant company identified under the scheme sanctioned by the Board for Industrial and Financial Reconstruction for the applicant company.

(C) Your Lordship may be pleased to permit the applicant company to sell, dispose of and transfer the properties of the applicant company in accordance with the scheme sanctioned by the Board for Industrial and Financial Reconstruction.

(D) Your Lordship may be pleased to grant interim relief permitting the applicant company to sell, dispose of and transfer the properties of the applicant company during the pendency of the present application in accordance with the scheme sanctioned by the Board for Industrial and Financial Reconstruction subject to the final adjudication of the present application."

20. As soon as the applicant union came to know about the purported sale deeds executed by Page 357 of 674 C/SCA/15599/2008 JUDGMENT the Company the applicant union filed a Civil Application No.4772 of 2008 in Special Civil Application No. No.134 of 2008 on 15.04.2008 (pp. 467-471 of Special Civil Application No. No.15599 of 2008) praying for punishing the shareholder and Manager of the Company for the deliberate and willful contempt of orders of this Court dated 20.02.2006 and 20.04.2006. The Company had filed an affidavit in reply to the Civil Application No.4772 of 2008 in May 2008 (pp.472-582 of Special Civil Application No. No.15599 of 2008) for the first time admitting that they had sold the property in question by executing sale deeds. The Company denied that they had committed any contempt of the orders of this Court. It was inter alia stated in the affidavit as follows:

"I humbly state and submit that all the properties of which the registered sale deeds have been annexed as Annexure B collectively tot he present application form part of the assets identified as surplus/non manufacturing assets under the said Scheme. I humbly state and submit that sale of such properties has been approved by BIFR which took place before the order came to be passed by this Court on 20.02.2006. It would be relevant and important to note that the registered sale deeds reflect the debts of payment of consideration which has taken place in the year 2003 to 2005 and such Page 358 of 674 C/SCA/15599/2008 JUDGMENT consideration received by the answering opponent has been utilized in payment of its debts towards secured creditors." (at p.475)

21. By this time the Industrial Tribunal had passed Part 1 award on 20.10.2007 (pp.257-329 of Special Civil Application No. No.15599 of 2008) directing the Company to pay Gratuity to the retired/resigned/dead employees. Before the Industrial Court the Company admitted that as on 31st March, 2007 the gratuity dues of the workers and staffs/officers works out to Rs.14.79 crores (p.334). When the applicant union demanded the payment of at least gratuity to the retired or dead employees and made representations to various authorities, the Company in complete retaliation issued a Circular dated 27.08.2008 (p. 353 of Special Civil Application No.15599 of 2008) inter alia stating that due to acute shortage of funds to manage the working of the Company, the Company had decided to temporarily suspend all the operational activities of the Company. It was further stated in the Circular that the employees (except engaged in essential services) were not required to report for work in their regular shifts. However, they all would be report for work in their Page 359 of 674 C/SCA/15599/2008 JUDGMENT regular shifts. However, they all would be treated as present on all working days during which the operational activities remained suspended. After this Circular from August 2008 till date employees have not been paid any salary though as per the Circular all the employees were to be treated as in service. Further no payment of whatsoever nature has been made by the Company to the employees. The closure was in complete violation of Section 25-O of the Industrial Disputes Act.

22. In the Special Civil Application No. No.15599 of 2008 filed by the applicant union, this Court after noticing that the properties had been sold inspite of the injunction order directed the Chairman of the Company to remain present in the Court on 09.03.2009 vide order dated 06.03.2009. The relevant part of the said order is set out below:

"The Chairman of the Board of Directors of respondent No.1, The Baroda Rayon Corporation Limited, is directed to remain personally present before this Court on 09.03.2009 at 10:30 A.M. It will be in the fitness of things if the Chairman is informed to come with a definite proposal and the amount to be paid to the employees who are not paid since August 2008 or else the Court will have no other alternative but to take necessary coercive Page 360 of 674 C/SCA/15599/2008 JUDGMENT steps for having sols the property - the land, which was otherwise injuncted by the Court."( Emphasis Supplied) On 09.03.2009, the Chairman of the Company was not present on the ground that he had suffered fracture on a wrist. The Senior Counsel appearing for the Company sought time to file an application setting out the circumstances which led to execution of Sale Deed despite there being Tribunal's order in the month of December, 2005 which is neither vacated nor altered by this Hon'ble Court in February, 2006. The Company filed a further affidavit on 23.03.2009 in SCA No. 15599 of 2008 (pp.458-466 of SCA No. 15599 of 2008) pursuant to the order of this Hon'ble Court dated 9.3.2009 wherein the Company inter alia stated as follows:

"It is submitted that it is clear from the bare perusal of the BIFR scheme that the property in dispute has already been sold prior to the stay order granted by Industrial Tribunal vide its order dated 6.12.2005. However sale agreement could not be executed as No Due Certificate had to be obtained from the lenders before the execution of the Sale Deeds and the said No Due Certificate could have been obtained after the lenders were paid, fully and as per the MoU the lenders were to Page 361 of 674 C/SCA/15599/2008 JUDGMENT receive money directly from the buyer through Advocate and hence, a delay occurred in executing the Sale Deeds. Thus, there is no contempt of the Court as alleged by the petitioner in its memo of petition." (p.465) Further the respondent company filed an affidavit on 18.02.2010 in C.A. No. 1440 of 2010 in SCA No. 15599 of 2008 (pp 11-18 of C.A. No. 1440 of 2010) again making a false statement that part of the assets were sold in the year 2003-04 to deny the claim made by the applicant in C.A. No. 1440 of 2010 that more area than 155 acres is available for sale. It was inter alia stated in the affidavit as follows:

"I humbly state that the sale of the part of the assets of the company took place in the year 2003- 2004 under the corporate debt restructuring scheme, pursuant to which the company had cleared its liabilities to a considerable extent...... the land available to the company is not 325 acres but is only around 155 acres." (p.13) Thus, the respondent management had been filing false affidavits before this Hon'ble Court wherein they have taken a stand that the property in question was sold before the the injunction order dated 6.12.2005 was passed.

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23. That this Hon'ble Court during the hearing of Civil Application Nos. 752-755 of 2011 had directed the Company to disclose the names and addresses of the present Directors of the company. Pursuant to which on 24.04.2011 the the company has filed an affidavit before this Hon'ble Court in Civil Application No. 752 in Special Civil Application No. 15599 of 2008 wherein it is inter alia stated that the Chairman of the Company Shri Sangramsinh Gaikwad had resigned w.e.f. 03.12.2008 and the Managing Director of the Company namely Shri Pratapsinh Gaikwad had resigned from the company w.e.f. 03.12.2008 and the Mr. Damodar B. Patel has been managing and looking after the affairs of the company since then. Damodar B. Patel is brother of Liladhar Patel who heads the Laxminarayan Industrial Cooperative Service Society the transferee. Thus it is clear that the Respondents have illegally sold the entire Company to Shri Damodarbhai Patel. By filing this affidavit again the Respondent management has tried to mislead this Court, as on 09.03.2009 when this Court has directed the Chairman to remain present, the respondent management sought Page 363 of 674 C/SCA/15599/2008 JUDGMENT indulgence of this Hon'ble Court to excuse the absence of Shri Sangramsinh Gaekwad - the Chairman. Thus, as on 9.3.2009, Mr. Sangramsinh Gaekwaswas the Chairman of the Company and therefore the said affidavit dated 24.02.2011 is again a false affidavit filed by the Company.

III. BUYER NOT A BONAFIDE PURCHASER INSTEAD HAS CONSPIRED AND COLLUDED WITH THE COMPANY AND ABETTED THE COMMISSION OF CONTEMPT:

24. Shri Laxminarayan Industrial Co-operative Service Society Limited is not a bonafide purchaser for value and without notice. It is submitted that the Chairman, Managing Director and the directors of the Company as well as the transferees had conspired and colluded with each other in committing breach of the orders passed by the Industrial Tribunal and this Hon'ble Court. It is submitted that after the Industrial Tribunal, Surat passed the injunction order on 6.12.2005 the applicant union got a public notice issued in the newspaper "Divya Bhaskar" on 9.12.2005. (pp. 368 of SCA No. 15599 of 2008) bringing to the notice of the general public that the company had been Page 364 of 674 C/SCA/15599/2008 JUDGMENT restrained by the Industrial Tribunal from selling the land and properties to any person or to transfer or to otherwise alienate such property and land to any other person. Further it is submitted that the said society is headed by Shri Liladhar Patel, who is the real brother of Damodarbhai Patel, who is a director of the company and is at present managing the affairs of the Company as per the affidavit of Damodarbhai Patel dated 24.2.2011 filed in C.A. No. 752 of 2011. Further the purported Sale Deeds were executed by Liladhar Patel and Shri Pravinbhai Jayantibhai Patel who is also related to Liladhar Patel and Damodarbhai Patel. Thus, the transferees were also aware of the order dated 06.12.2005 passed by the Industrial Tribunal as well as the interim orders dated 20.02.2006 and 20.04.2006 passed by this Hon'ble Court.

25. Further the property in question was surreptitiously and purportedly sold to the transferees at a price much lower than the jantri price as well as the market price. The consideration shown to have been paid under the purported Sale deeds, even if the sale deeds are assumed to be valid for the sake of argument, is far below the Page 365 of 674 C/SCA/15599/2008 JUDGMENT market value prevalent at that time and was grossly undervalued. Copies of government document namely Stamp Duty Mulyankan Tantra patrak from the government website are annexed as Annexure -

B and C at pages 90-91 of the rejoinder affidavit filed by the applicant union to the counter affidavit of opponent nos. 14, 15 and 16 in C.A. No. 754 of 2011. From 1999 to 2006, the jantri price was increased by 30% and the same was enforced. In the year 2006 jantri price was increased by more than double which was enforced from the year 2008. Copies of the relevant documents in this regard are annexed as Annexure D at page-92 of the said rejoinder affidavit. It is submitted that it is a common knowledge that the actual market value of the land is invariably more than the jantri price.

26. Further the claim of the transferee that due to the consideration paid by them for sale of property in question, the company was able to restart functioning is wrong as the sale proceeds were used to pay only the secured creditors so that the transferee gets title over the property in question free from any charge or encumbrance. The transferee claims to have further sold the property Page 366 of 674 C/SCA/15599/2008 JUDGMENT in question to various individual buyers but has not produced any document in support of that and has not disclosed what price the transferee realised from the further sale of the property in question. Any further sale by the transferee will not affect the power of this Hon'ble Court to restore the status quo ante and the transferee would be liable to refund the money to the subsequent buyers from the transferee. The purported sale of the property in question to the transferee - Laxmi Narayan Industrial Cooperative Service Society which itself being null and void and inoperative in law, no title could be passed by the said society to others in respect of the property in question.

27. The applicant union seeks impleadment of transferees as they are not only not bonafide transferees but have also participated in the commission of the contempt of this Hon'ble Court as they were fully aware of the restrain orders. Further they are being impleaded to avoid multiplicity of proceedings. Although in law the transferees of the property which has been transferred in defiance of the restrain order are not entitled to be impleaded by virtue of being a Page 367 of 674 C/SCA/15599/2008 JUDGMENT subsequent transferees, the same does not dis- entitle the applicant union at whose instance the injunction order was passed from impleading the transferee if the transferee having knowledge of injunction aids and abets the respondents in committing its breach and relied on the following judgments:

(i) Savatri Devi Vs. District Judge, Gorakhpur (1999) 2 SCC 577

(ii) Narappa Reddy Vs. J. Chandramaili reported in AIR 1967 AP 219 where the Division Bench of Andhra Pradesh High Court held that :

(33) Now, where a person is restrained by an injunction from doing a particular act, that person commits a breach of the injunction and is liable in contempt if he, in fact, does the act, and it is no answer to say that the act was not contumacious in the sense that, in doing it, there was no direct intention to disobey the order. But as pointed out by a Special Bench of the Patna High Court in Pratap Udai Nath Shahi Deo Vs. Sara Lal Durga Prasad, AIR 1949 Pat 39(S.B.):

"Equity acts in persona, and an injunction is a personal matter. The ordinary rule is that it can only be disobeyed in contempt by persons named in the writ."

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C/SCA/15599/2008 JUDGMENT Persons who were defendants in the suit in which injunction was granted nor were named in the order cannot be proceeded against in contempt for disobeying the injunction.

But it is maintained that the doing by any one of an act which is forbidden, is itself an offence. It has been held by their Lordships of the Privy Councils in Seawrd V. Paterson (1897) 1 Ch. 545 that there is a clear distinction between a motion to commit a man for breach of an injunction, and a motion to and abetted the defendant in the breach of an injunction; that in the first case the order is made to enable the plaintiff to get his rights; and in the second, because it is not for the public benefit that the course of justice should be obstructed. It is now well settled that the Court has undoubted jurisdiction to commit for contempt a person not included in an injunction and/or not a party to the action who, knowing of the injunction, aids and abets a defendant in committing a breach of it."

The decision of the Privy Councils in S.N. Bannerjee Vs. Kuchwar Lime and Stone Co. Ltd. AIR 1938 SC 295 is conclusive on this point. In that case, their Lordships observed:

"The respondents, however, contended that even if the Secretary of State was not himself guilty of direct disobedience to the injunction which had been granted, yet the other two appellants were guilty of contempt upon the principles set out in Avery V. Andrews, (1882) 51 LJ Ch. 414: 46 LT 279, and (1897) 1 Ch. 545 : 66 LJ Ch. 267. In terms, however, those cases limit the offence of Page 369 of 674 C/SCA/15599/2008 JUDGMENT contempt by a person not a party to the injunction to cases where they aid and abet the party enjoined in its breach. Where, as here, that party has not broken the injunction, it is impossible to hold that any one has aided or abetted them in breaking it."

IV. NOTHING HAS BEEN PAID TO THE WORKERS:

28. It is submitted that apart from the fact that the conduct of the Company and its directors has been highly contumacious, they have further cheated the workmen and have deprived them of their lawful dues. The dues of the workers were more than Rs.55 crores when Section 2(p) settlement was arrived at on 27.10.2003. In the said settlement the workers gave up a substantial part of their dues so that the Company could restart its operations. In the said settlement it was agreed that the Company would pay Rs.18 crores towards unpaid wages, Rs.6.61 crores towards PF dues, Rs.1.73 crores towards ESI dues and 8.33% as bonus every year. To pay these dues the Company in the said settlement agreed in clause 12(ix) to dispose of the surplus assets of the Company and to pay the dues of the workers out of the sale Page 370 of 674 C/SCA/15599/2008 JUDGMENT proceeds. The said settlement dated 27.10.2003 was made a part of the BIFR sanctioning Scheme dated 1.06.2006 as well. It is further submitted that under the CDR scheme dated March 19, 2004 there are specific references to the dues of workmen as well as the aforementioned settlement the Company had entered into with the workmen, some of which are set out below for immediate reference:-

"4.3 STATUTORY AND WORKERS DUES:

WORKERS DUES:

The workers dues have accumulated to over Rs.710 million. In view of the current restructuring by the Company as the new wage settlement signed between the management and the Workers Union, the liabilities have been reduced to Rs.180 million which will be paid over a period of 5-6 years"

(page-420 of SCA No. 15599 of 2008 internal page

-9) "PROPOSED SETTLEMENT WITH WORKERS Settlement of past/current dues:

As against the past outstanding and current outstanding of Rs.569.9 million (other than PF/ESIC and gratuity deducted and not paid to authorities) and the contingent due of Rs.300 million, thus, aggregating to Rs.869.9 million, the Page 371 of 674 C/SCA/15599/2008 JUDGMENT settlement will be made at only Rs.180.0 million i.e. at about 20% of the dues and such settled amount will be paid by way of ex-gratia payment over a period of 5 years during rehabilitation period of the scheme.

REDUCTION OF FUTURE WAGES:

As a part of the total settlement the workers are agreed to reduce the future wages by 40% of the current level.

The details of the settlement are given in Annexure enclosed.

THE DUES OF PF/ESIC DEDUCTED BUT NOT PAID TO THE AUTHORITY The dues will be paid as 20% upfront and balance 36 monthly installments from the date of sanctioning of the scheme.

The Gratuity Dues The gratuity dues of Rs.617 millions will be paid in 6 yearly installment commencing from 6 months from start of commercial production." (At page 425 of SCA No. 15599 of 2008)."

(page 425 of the SCA No. 15599 of 2008 internal page-14) Page 372 of 674 C/SCA/15599/2008 JUDGMENT

29. However, in flagrant breach of the said settlement as well as the BIFR sanctioned scheme and also in violation of the injunction order dated 6.12.2005 passed by the Industrial Tribunal and the injunction order dated 6.12.2005 passed by the Industrial Tribunal and the interim orders dated 20.02.2006 and 20.04.2006 passed by this Hon'ble Court, the management not only illegally and purportedly sold more land (including the land where workers colony is situated) than what was surplus at a ridiculously low price but also not a penny has been paid to the workmen towards their dues and the sale proceeds were used to settle only the secured creditors.

30. It is further submitted that various concessions were given by the applicant union under the said settlement upon a specific understanding that the management would not close down the business or part of its business and that in case of the closure of the business, the concession would be treated as if none of such concessions were given and the employees would be entitled for full wages and benefits as if the concessions were not given. (please see para-14 of the Settlement Page 373 of 674 C/SCA/15599/2008 JUDGMENT dated 27.10.2003 reads as follows):

"14. These concessions are given with the specific understanding that the new management will not close down the business or a part of the business with the purpose of retrenching large mass of the employees but has been arrived at with a view to protect the employment of the employees presently employed in the company. In case new management either close down the business or part of the business and retrench/terminate the employees on the ground of close down of the business or part of the business, these concessions given will be treated as if none of these concessions are given and the employees will be entitled for full wages and benefits as if concessions are not given." (p.30 of SCA No. 15599 of 2008)

31. The Respondent Management apart from breaching the terms and conditions of the settlement dated 27.10.2003 and apart from not paying a penny out of the sale proceeds to the workers also closed down the operations of the Company since August 2008 in violation of the provisions of Section 25-O of the Industrial Disputes Act, and the workers have not been paid their wages and other statutory entitlements since August 2008 though as per the circular of suspending the operations of the Company the workers were to be treated as in service.

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32. It is submitted that at present the worker's dues run into more than Rs.350 crores plus interest. The applicant Union filed a statement of claim on 15.11.2010 (pp. 187-204 of C.A. No.1440 of 2010) before the learned Sole Arbitrator Justice C.K.Thakker (Retd.) as directed by the Hon'ble Arbitrator in the meeting dated 23.10.2010 giving a break up of the dues of the workmen. The workmen have claimed more than Rs.350 Crores as outstanding dues with interest @15%. The Respondent-Management was to file their written statement on or before 13.12.2010. However, no such written statement was filed by them. Even an application was moved seeking extension of three weeks and inspite of the expiry of the said three weeks, no written statement was filed by the Respondent. The workers union moved an application for closing the stage of filing written statement by the Management. It was only when the applicant union raised this issue before this Court that the Company filed its written statement. However the Company is not co-operating in the Arbitration as they are not giving consent for fixing dates in arbitration. It is submitted that the intention Page 375 of 674 C/SCA/15599/2008 JUDGMENT of the Respondent-Management is not to pay anything to the workers and therefore at every stage delay is being caused by the Respondent.

33. Under section 529A of the Companies Act, the workers' dues rank pari passu with those of the secured creditors and have to be met from the assets of the Company, thus, this Court in exercise of its inherent powers to ensure that workers dues are fully met may set aside the purported sale made of the assets of the Company in violation of the injunction orders and may restore the status quo ante.

34. It is further submitted that it has been contended by the Company that out of the sale proceeds some amount was paid to the workers as well. For this the Respondents have relied upon some payment made to the BRC Credit society. It is submitted that the said contention is false as not even a penny has been paid to the workers out of the sale proceeds. The employees working in the Company were registered with a society called Baroda Rayon Employees Cooperative Credit Page 376 of 674 C/SCA/15599/2008 JUDGMENT Society. One of the functions and activities of the said society was to lend money as loan to its members who were employees of the Company. As per Section 50 of the Gujarat Co-operative Societies Act the employer is obliged to deduct the amount of loan installments from the salary of the employees and to pay the same to the said society. Accordingly the Company deducted a huge amount from the salaries of the workers-members till 21.10.1997 but did not pay the said amount to the said BRC credit Society. Hence the BRC credit society approached the District Registrar under Section 50(3) of the Gujarat Co-operative Societies Act for a recovery certificate claiming that an amount of Rs.1,18,68,581.61 is recoverable as on 08.06.1999. The District Registrar issued a certificate under Section 50(3) for recovery of Rs.1,14,41,551/- with 18% interest. However the said amount was not paid by the Company to BRC credit society and later on the Recovery Officer and Administrator of the society colluded with the Company and the dues of the BRC Credit Society were settled only at Rs. 1,18,84,500/- thereby foregoing the entire interest amount. The aforesaid amount of Rs.1,18,84,500/- is claimed to have been Page 377 of 674 C/SCA/15599/2008 JUDGMENT paid sometime in 2004 to the Society. Against this action of the recovery officer and administrator, few members and office bearers of the BRC credit Society filed a SCA No.7007 of 2005 before this Court which is still pending. Thus it is clear that alleged payment made to the BRC credit society was not towards the dues of the workers but it was towards the dues of the society for which the Company had already made deductions from the salaries of the workers way back in 1997 but the same was not paid to the society.

35. It is submitted that the workmen have been deprived of salary and other statutory dues since August 2008 as is also noted by this Court in order dated 06.02.2009 passed in SCA No.15599 of 2008 and are living in abject poverty. More than 10 workers have committed suicide due to the deplorable condition in which they have been forced to live by the management of the Company. Many more workmen and their dependents have died for lack of medical treatment due to non payment of wages. It is submitted that due to various acts and omissions on the part of the management, the workers have no faith in the Page 378 of 674 C/SCA/15599/2008 JUDGMENT management of the Company and seek appropriate directions including a direction that the assets/properties of the Company purportedly sold under the aforementioned four sale deeds dated 11.10.2006, 08.11.2006, 13.11.2006 and 14.11.2006 be recovered.

v. VIOLATIONS UNDER THE COMPANIES ACT AND INDUSTRIAL DISPUTES ACT

36. The Company, its Chairman, Managing Director and other directors of the Company are guilty of several acts of omission and commission. That this Court during the hearing of Civil Application Nos.752-755 of 2011 had directed the Company to disclose the names and addresses of the present directors of the Company. Pursuant to which on 24.02.2011 the Company has filed an affidavit (pp.366-371 of C.A. No.752 of 2011) before this Court in Civil Application No.752 in Special Civil Application No. 15599 of 2008 wherein it is inter alia stated that the Chairman of the Company Shri Sangramsinh Gaikwad had resigned w.e.f. 03.12.2008 and the Managing Director of the Company namely Shri Pratapsinh Page 379 of 674 C/SCA/15599/2008 JUDGMENT Gaikewad had resigned from the Company w.e.f. 03.12.2008, and that Mr. Damodar B.Patel has been managing and looking after the affairs of the Company since then. It is submitted that as per Section 269 (1) every public Company having paid up share capital of such sum as may be prescribed shall have a managing or a whole time director. For the purpose of Section 269 (1) as per Rule 10A of the Companies (Central Government) General Rules and Forms, 1956 w.e.f. 18.09.1990 the sum prescribed is Rs. 5 crores or more. The paid up share capital of the Company in December 2008 was approximately Rs.22 crores. It is submitted that the Respondent Company wherein the Managing Director has resigned is clearly being run and managed contrary to the provisions of the Companies Act.

37. The Respondent Management has closed down the operations of the Company since August 2008 in violation of the provisions of Section 25-O of the Industrial Disputes Act, and the workers have not been paid their wages and other statutory entitlements since August 2008. The closure is clearly illegal and the management is Page 380 of 674 C/SCA/15599/2008 JUDGMENT liable to be prosecuted for the alleged closure under Section 25-O of the Industrial Disputes Act. The Assistant Labour Commissioner has filed an affidavit on 19.01.2009 before this Court in SCA No.15599 of 2008 wherein it was inter alia stated that the office of Assistant Labour Commissioner has taken all the necessary steps against the Company for suspending all the operational activities including show cause notice for breach of Section 25-O (1) of the Industrial Disputes Act and also Rule 3(3) of the Payment of Gratuity Act as well as criminal proceedings. Para 5 of the affidavit reads as under:

"5. It is respectfully submitted that, respondents office has taken all necessary steps against the respondent no.1 for suspending the all operational activities with effect from 27.08.2008. Respondents office has also taken actions for not paying salary to the employees since the suspension of the operational activities. The details are as under:-

(a) Notice of suspension of the operation of the respondent no.1 from 27.08.2008 was a sham arrangement. It was a closure of undertaking hence a show cause notice was issued for breach of Section 25 O (1) of Industrial Dispute Act, 1947 and prosecution proposal is send to the Labour Commissioner, Gujarat State, Gandhinagar for sanction on 15.11.2008 and the same is sanctioned vide office order dated 13.01.2009 by the Page 381 of 674 C/SCA/15599/2008 JUDGMENT Commissioner of Labour. A copy of the same is annexed herewith and marked as Annexure R-I in this reply. Thereafter a Criminal Case No.20 of 2009 is filed in the JMFC Court Surat on 16.01.2009.

(b)Treating suspension of operation as illegal closure a show cause notice was issued to the respondent Company for breach of Rule 3(3) of payment of Gratuity Act, 1972 and Gujarat Rules 1973. A prosecution proposal is sent to the Labour Commissioner Gandhinagar for sanction on 25.11.2008.

(c) For non implementation of an award of Industrial Tribunal Reference (IT) No. 15 of 2005, prosecution proposal for sanction is sent to the Labour Commissioner Gandhinagar on 20.10.2008 and the same is sanctioned by the Labour Commissioner Gandhinagar vide office order dated 13.01.2009. A copy of the same is annexed herewith and marked as Annexure R-II in this reply. Thereafter a Criminal Case No. 19 of 2009 is filed in the JMFC Court Surat on 16.01.2009.

(d) For the breach of settlement respondent no. 1 company is prosecuted under the Industrial Dispute Act, 1947 and a Criminal Case No. 2043 of 2008 is filed in the Court of First Class Judicial Magistrate, Surat on 11.08.2008.

(e) Since the suspension of the operation respondent no. 1 company has not paid regular wages to its employees. For this every month Criminal Case is filed under the Minimum Wages Page 382 of 674 C/SCA/15599/2008 JUDGMENT Act, 1948. The Criminal Cases Nos. 2569 of 2008 to 2572 of 2008. These cases are pending since 11.11.2008 in the Court of First Class Judicial Magistrate Surat.

(f) Petitioner union has raised a dispute against the respondent company regarding illegal lock out, the same dispute is admitted in conciliation proceedings in Conciliation Case No. 67 of 2008.

(g) The retired workers had filed Gratuity Application before the controlling Authority, Surat under the Payment of Gratuity Act and all the cases are disposed off by giving appropriate orders and in case of non payment of Gratuity amount, 197 recovery certificates are issued to recover the Gratuity amount as arrears of land revenue to the Revenue Authorities. A copy of the same is annexed hereto and marked as Annexure R-III in this reply."

It may be mentioned that for non compliance with Section 25-O of the Act the management is liable to be prosecuted under Section 25R and the penalty contemplated there under is imprisonment for a term which may extend to six months. More than 2½ years have elapsed since the date of the illegal closure and the management is merrily taking advantage of the delay in the prosecution proceedings while the workmen have been Page 383 of 674 C/SCA/15599/2008 JUDGMENT languishing in poverty.

VI. FRAUD COMMITTED BY THE RESPONDENT MANAGEMENT AND THE TRANSFEREE:

38. A huge fraud of a mammoth scale has been perpetrated on the shareholders of the company, the workman, the statutory authorities, the BIFR and the Industrial Tribunal and also on this Hon'ble Court. It is submitted that the entire purported sale is vitiated by fraud. The workers under section 2(p) settlement were promised that a financier from London will bring in funds and the Company will be revived. On these assurances workmen gave up a substantial part of their dues towards wages and other statutory entitlements.

The workers were further promised that out of the sale of surplus land their dues would be paid. However, the company sold more land than what was identified as surplus including the workers quarters and the school as well. Further not even a rupee was paid to workers out of the sale proceeds.

39. Further the company, suppressed the order Page 384 of 674 C/SCA/15599/2008 JUDGMENT dated 6.12.2005 passed by the Industrial Tribunal and the orders passed by this Hon'ble Court dated 20.02.2006 and 20.04.2006 from the BIFR and falsely stated before the BIFR that the land admeasuring 5,84,820 sq. yards had been already sold by the company. The said land was shown in Annexure - III to the BIFR scheme submitted by respondent no. 1 as an already sold asset. On the basis of this false statement, made deliberately and willfully, the company got the scheme sanctioned from the BIFR on 1.06.2006 and thereafter passed resolution dated 23.06.2006 to execute sale deed and thereafter executed the aforementioned four registered sale deeds on 11.10.2006, 8.11.2006, 13.11.2006 and 14.11.2006 respectively. Thus, the company played a fraud on the BIFR and got the scheme sanctioned and is now placing reliance on the said order of BIFR to state that the sale had taken place prior to the orders of this Hon'ble Court and the said sale of the land has been approved by BIFR. The respondent management has not complied with even the CDR Scheme thereby playing fraud on the workmen, the statutory authorities, the shareholders of the Company and unsecured creditors. The valuable land of the Page 385 of 674 C/SCA/15599/2008 JUDGMENT Company including a part of the plant and machinery has been purportedly sold by the Company under the guise of surplus land at a ridiculously low price and thereby committing a fraud on the shareholders of the company.

40. It further appears that the respondents have illegally and purportedly sold the entire Company to Shri Damodarbhai Patel, whose brother Shri Liladhar Patel. The purported four sale deeds are void, nullity and non-est in law. This Hon'ble Court has inherent power, which has been recognized under Article 215 to restore the status quo ante by restoring the property in question which have been purportedly sold in the teeth of the interim orders of the Industrial Tribunal dated 6.12.2005 and the interim orders of this Hon'ble Court dated 20.02.2006 and 20.04.2006. (Please see DDA Vs. Skipper Construction Co.(P) Ltd. & Anr. Reported in (1996) 4 SCC 622.). Further as the company has played a fraud on this Hon'ble Court, the Industrial Tribunal, the BIFR, the workmen, the shareholders, the secured and unsecured lenders and others, on this ground also the property in question should be restored as fraud unravels everything. It is Page 386 of 674 C/SCA/15599/2008 JUDGMENT submitted that fraud, as repeatedly held by the Hon'ble Supreme Court, unravels everything, and the perpetrators of fraud must be severely dealt with as well as the status quo ante with regard to the properties transferred must be restored and the perpetrators of fraud must be directed to return the illegal gains obtained by them by the practice of fraud as well as by the violation of the orders of this Hon'ble Court and the Industrial Tribunal, Surat as demonstrated in the foregoing paras. In S.P. Chengalavaraya Naidu Vs. Jagannath reported in (1994) 1 SCC 1, the Hon'ble Supreme Court held as follows:

"1. "Fraud avoids all judicial acts,ecclesiastical or temporal" observed Chief Justice Edward Coke of England about three centuries ago. It is the settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of law. Such a judgment/decree by the first court or by the highest court has to be treated as a nullity by every court, whether superior or inferior. It can be challenged in any court even in collateral proceedings.

5.The High Court, in our view, fell into patent error. The short question before the High Court was whether in the facts and circumstances of this case, Jagannath obtained the preliminary decree by playing fraud on the court. The High Court, Page 387 of 674 C/SCA/15599/2008 JUDGMENT however, went haywire and made observations which are wholly perverse. We do not agree with the High Court that "there is no legal duty cast upon the plaintiff to come to court with a true case and prove it by true evidence". The principle of "finality of litigation" cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. The courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. We are constrained to say that more often than not, process of the court is being abused. Property-grabbers, tax-evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life find the court-process a convenient lever to retain the illegal-gains indefinitely. We have no hesitation to say that a person, who's case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation."

In Hamza Haji Vs. State of Kerala and Anr. reported in (2006) 7 SCC 416, the Hon'ble Supreme Court held as follows:

"para-25.........Therefore, the appellant played a fraud on the Court by holding out that he was the title holder of the application schedule property and he intended to cultivate the same, while procuring the order for exclusion of the application schedule lands. It was not a case of mere perjured evidence. It was suppression of the most vital fact and the founding of a claim on a non-existent fact. It was done knowingly and deliberately, with the intention to deceive. Therefore, the finding of the Page 388 of 674 C/SCA/15599/2008 JUDGMENT High Court in the judgment under appeal that the appellant had procured the earlier order from the Forest Tribunal by playing a fraud on it, stands clearly established. It was not a case of the appellant merely putting forward a false claim or obtaining a judgment based on perjured evidence. This was a case where on a fundamental fact of entitlement to relief, he had deliberately misled the Court by suppressing vital information and putting forward a false claim, false to his knowledge, and a claim which he knew had no basis either in fact or on law. It is therefore clear that the order of the Forest Tribunal was procured by the appellant by playing a fraud and the said order is vitiated by fraud. The fact that the High Court on the earlier occasion declined to interfere either on the ground of delay in approaching it or on the ground that a Second Review was not maintainable, cannot deter a Court moved in that behalf from declaring the earlier order as vitiated by fraud.

26.The High Court, as a court of record, has exercised its jurisdiction to set at naught the order of the Forest Tribunal thus procured by the appellant by finding that the same is vitiated by fraud. There cannot be any doubt that the court in exercise of its jurisdiction under Article 215 of the Constitution of India has the power to undo a decision that has been obtained by playing a fraud on the court. The appellant has invoked our jurisdiction under Article 136 of the Constitution of India. When we find in agreement with the High Court that the order secured by him is vitiated by fraud, it is obvious that this Court should decline to come to his aid by refusing the exercise of its discretionary jurisdiction under Article 136 of the Constitution of India. We do not think that it is Page 389 of 674 C/SCA/15599/2008 JUDGMENT necessary to refer to any authority in support of this position except to notice the decision in Ashok Nagar Welfare Association and another vs. R.K. Sharma.

28. In Hip Foong Hong vs. H. Neotia and Company the Privy Council held that if a judgment is affected by fraudulent conduct it must be set aside. In R.V. Recorder of Leicester, it was held that a certiorari would lie to quash a judgment on the ground that it has been obtained by fraud. The basic principle obviously is that a party who had secured a judgment by fraud should not be enabled to enjoy the fruits thereof. In this situation, the High Court in this case, could have clearly either quashed the decision of the Forest Tribunal in OA No.247 of 1979 or could have set aside its own judgment in MFA No.328 of 1981 dismissing the appeal from the decision of the Forest Tribunal at the stage of admission and vacated the order of the Forest Tribunal by allowing that appeal or could have exercised its jurisdiction as a court of record by invoking Article 215 of the Constitution to set at naught the decision obtained by the appellant by playing a fraud on the Forest Tribunal. The High Court has chosen to exercise its power as a court of record to nullify a decision procured by the appellant by playing a fraud on the court. We see no objection to the course adopted by the High Court even assuming that we are inclined to exercise our jurisdiction under Article 136 of the Constitution of India at the behest of the appellant."

VII. PROCEEDINGS UNDER SECTION 44A OF THE LAND ACQUISITION ACT:

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C/SCA/15599/2008 JUDGMENT

41. It is submitted that the SCA No. 4094 of 2010 filed by the applicant union before this Hon'ble Court and the order passed therein has no bearing on the issue involved in the present proceedings. It is submitted that since the sale transactions with respect to the property in question are void and non-est in law, no later permission given by the State Government under Section 44A of the Land Acquisition Act would make such transactions legal and void. Further no rejection of the challenge made against such permission granted by the State Government would have the effect of making the void transaction valid and legal. Without prejudice to the above submission, it is submitted that SCA No. 4094 of 2010 involved different issue and same has no bearing on the present proceedings. The facts which led to the filing of SCA No. 4094 of 2010 are as follows:

(i) In the year 1958 the State Government issued a notification under Section 4 of the Land Acquisition Act, 1894 for acquisition of the land Page 391 of 674 C/SCA/15599/2008 JUDGMENT belonging to Shantilal Jagubhai Patel and Rameshchandra Jagubhai Patel in village Udhna in District Surat for the purpose of establishment of plant by Baroda Rayon Corporation Limited.

(ii) The notification under Section 6 was issued on 25.08.1959. After following the procedure under the Act, the lands were acquired and the possession of the land was given to Baroda Rayon Limited and an Award was made on 29.04.1960.

(iii) Thereafter, the company was declared sick by BIFR and by order dated 01.06.2006 BIFR sanctioned a scheme requiring the company to dispose of some of its properties. The State Government was a party to the proceedings before the BIFR as the dues of the State Government were also involved.

(iv) By the purported sale deeds executed in October and November, 2006 the Company purported to have sold some of the lands belonging to the company.

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 (v)          Thereafter the said original owners of the

land challenged the purported transfer of lands by filing SCA No. 12226 of 2008 and 12227 of 2008 contending that the properties which were acquired by the State Government for the company could not have been sold without the previous permission of the State Government. These SCAs were disposed of by a common order dated 06.02.2009 wherein it was also observed that the company had applied for permission to sell the land but no decision was taken by the Government and therefore, the SCAs were disposed of with a direction that the State Government shall take appropriate decision in the matter within one month. It may be noted that in the said proceedings no issue of the property in question being sold in violation of the injunction order passed by the Industrial Tribunal and the interim orders passed by this Hon'ble Court was involved.

(vi) The Revenue Department of the State Government passed an order on 02.07.2009 granting permission to the Collector, Surat to sell the aforesaid lands subject to certain conditions. This order was challenged by the said original Page 393 of 674 C/SCA/15599/2008 JUDGMENT owners by filing SCA Nos. 10394 and 10395 of 2009 before this Hon'ble Court contending that the lands were sold by the company in October and November, 2006 but the permission under Section 44A of the Land Acquisition Act was given by the State Government ex-post facto on 02.07.2009 and therefore, the sanction cannot be considered to be in accordance with law. It was also contended that the order dated 02.07.2009 was in violation of Rule 8 of the Land Acquisition (Companies) Rules, 1963 which permits the State Government to grant sanction for transfer of acquired lands only in certain circumstances.

(vii) This Hon'ble Court dismissed the said SCA Nos. 10394 and 10395 of 2009 on 30.09.2009 holding that the State Government was very much a party to the BIFR proceedings in which the scheme was sanctioned requiring the company to dispose of the lands and therefore, it cannot be said that the company had transferred the property in October-November, 2006 without previous sanction of the State Government. This Hon'ble Court found that there was no violation of the provision of Section 44-A of the Land Acquisition Act or Rule 8 of the Rules. It may be Page 394 of 674 C/SCA/15599/2008 JUDGMENT noted that the issue as to whether the sale was in violation of the injunction order of the Industrial Tribunal and the interim orders of this Hon'ble Court was not in consideration before this Hon'ble Court in the said SCAs.

(viii) Pursuant to the order dated 02.07.2009 the State Government on 13.10.2009 passed a further order whereby 50% of the amount of the sale proceeds which were required to be deposited by the company with the registry of this Hon'ble Court was directed to be shown as dues against the company and therefore, by virtue of this order on 50% of the sale proceeds, a charge was shifted to the remaining land belonging to the company. Thus, virtually the said 50% amount was made a liability of the company along with the workers' dues.

(ix) The applicant union challenged the orders dated 02.07.2009 and 13.10.2009 vide SCA No. 4094 of 2010 before this Hon'ble Court praying for quashing and setting aside of the orders dated 02.07.2009 and 13.10.2009 passed by the Under Secretary, Revenue Department, State of Gujarat. This SCA was dismissed by a Division Bench of this Hon'ble Court on 13.05.2010 only on Page 395 of 674 C/SCA/15599/2008 JUDGMENT the ground that the earlier SCA Nos. 10394 and 10395 of 2009 were dismissed where the same order was under challenge.

Thus, it is clear that in none of the above proceedings the purported sale of the property in question being violative of the injunction order passed by the Industrial Tribunal and the interim orders passed by this Hon'ble Court was an issue or was even argued and considered by this Hon'ble Court.

42. As demonstrated in the foregoing paragraphs, the respondent management has, under the guise of the surplus land, sold the land over which the residential quarters of workers and staff, guest houses, school as well as part of plant and machinery including the land where the pipelines are laid overhead as well as underground. Further the land has been purportedly sold for a very low price as compared to the jantri price and the market price. The sale deeds are void, a nullity and non-est in the eye of law. The sale deeds have bee executed in the teeth of the orders of the Hon'ble Industrial Tribunal and the interim orders of this Hon'ble Page 396 of 674 C/SCA/15599/2008 JUDGMENT Court. The management as well as the transferees are guilty of the abuse of the process of law. The management and the transferees have colluded together and deprived the company of its valuable property under the guise of paying the dues of the secured creditor the properties have been sold for a very low amount which is far below the jantri as well as the market price. The transactions were done in a non transparent and opaque manner with a view to defraud the Company, its shareholders as well as the workmen and the statutory authorities. No bids were invited and no valuation of the property was done before entering into a MoU with M/s. Uma Developers.

43. Considering several acts of omission and commission of the respondent management the applicant has no faith in the respondent management who have forfeited their right to be in the management of Company's assets. There is a grave and imminent threat to the assets of the Company, warranting the immediate appointment of a Court receiver with a direction to take over the entire assets of the Company including the assets purported to have been sold under the four sale Page 397 of 674 C/SCA/15599/2008 JUDGMENT deeds dated 10.10.2006, 8.11.2006, 13.11.2006 and 14.11.2006. Further the workmen are ready and willing to run the Company. Pursuant to the agreement between the workmen and the Company before the mediator as recorded in the report of the mediator dated 30.12.2009 (pp. 332-347 of CA No. 752 of 2011), the workmen union looked for purchasers to purchase the assets of the Company. Thereupon in pursuance of the agreement arrived at before the mediator the workers' union found a purchaser namely Gayatri Trading & Co., who was ready to buy the assets of the company. However, later on it was found that Gayatri Trading, had some financial difficulties of fetching a new buyer with a better offer. Thereafter the workers union approached Rahujraj Estates Pvt. Ltd. and accordingly, Rahulraj Estates Pvt. Ltd. Filed a Civil Application No. 14154 of 2010 dated 24.11.2010 before this Hon'ble Court expressing its readiness and willingness to purchase the assets of the company. Further on 21.12.2010 Rahulraj Estates filed an affidavit in Civil Application No. 14154 of 2010 inter alia stating it was ready to deposit Rs.25 crores within 15 days from the date of acceptance of his offer which money can be released to the Page 398 of 674 C/SCA/15599/2008 JUDGMENT workmen. On 23.12.2010 applicant Union filed an application in SCA No. 15599 of 2008 inter alia praying that the offer of Rahulraj Estates be accepted and they be directed to deposit Rs.25 crore within 15 days of acceptance of the offer. It is submitted that Rahulraj Estates is not only technically qualified but also has financial capacity to run the company and the workers want him to join them in running the factory."

12. It is submitted that Shri Pravin H. Parekh, learned Senior Advocate appearing on behalf of Baroda Rayon Employees Ekta Union has submitted Supplementary written submissions, which read as under:-

(1) The Baroda Rayon Employees Ekta Union (hereinafter referred to as the workers union) filed their written submissions in the above matters on 25.03.2011 before this Hon'ble Court. The workers union in the said submissions has highlighted how the sale of the Land admeasuring 7,54,361.54 sq. yards belonging to the Baroda Rayon Corporation Ltd. (hereinafter referred to as the Company) situated at village Udhana and Bhedwad, District Surat is in violation of the Page 399 of 674 C/SCA/15599/2008 JUDGMENT injunction order dated 6.12.2005 passed by the industrial tribunal and the interim orders dated 20.02.2006 and 20.04.2006 passed by this Hon'ble Court and also in breach of the section 2(p) settlement, BIFR scheme and Corporate Debt Restructuring Scheme and therefore is void, nullity, and non-est in law and liable to be set aside. The bonafide purchaser and instead has conspired together and colluded with the company and also abetted the commission of the contempt of this Hon'ble Court.

(2) The present submissions are being filed to supplement the aforesaid previous written submission dated 25.03.2011.

(3) Brief facts relating to the pending winding up proceedings against the Company are as follows:

(i) Following winding up petitions were filed between 1998 and 2001 against the Company on various grounds including inability to repay its debts by secured and unsecured creditors and financial institutions :

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  (a)     Company Petition No. 6 of 1998 filed by

PNB Asset Management Co. Ltd. A debenture holder on 18.01.1998.

(b) Company Petition No. 30 of 1998 filed by M/s. Kinetics Technology India Ltd.

(c) Company petition No. 226 of 1998 filed by Manish Engineers Pvt. Ltd.

(d) Company Petition No. 272 of 1998 filed by Gannon Dunkerley & Co. Ltd.

(e) Company Petition No. 91 of 2000 filed by the Union Bank of India on 11.04.2000

(f) Company Petition No. 254 of 2000 filed by Finornic Chemicals (India) Pvt. Ltd.

(g) Company Petition No. 307 of 2000 filed by R. Mody & Co.

(h) Company Petition No. 162 of 2001 filed by Goel Roadways.

Note: The Workers Union was not a party in any of the above winding up petitions.

(ii) In the Company Petition No. 91 of 2000 this Hon'ble Court on 17th April 2000 passed the following order:

Page 401 of 674

C/SCA/15599/2008 JUDGMENT "1. I have gone through the petition and averments made in the petition. I have also heard the learned advocate Mr. Panesar for the petitioner. I have also gone through the profit and loss account ended up to 31st March, 1999 which has been produced on the record and also contents of para 11 which has been produced on page six of the petition.

2. I am prima facie satisfied to issue an interim injunction to the Baroda Rayon Corporation Limited (hereinafter shall be referred to as 'the company') restraining the company its agents, servants etc. from alienating, encumbering, transferring, dealing with or creating any third party rights in any manner whatsoever in respect of all the immovable asset of the company. As regards rest of the prayer of para 19(D) of the petition, notice returnable on 26th April, 2000.

D. S. Permitted."

(iii) On 4.05.2000 this Hon'ble Court passed the following order in Company Petition No. 91 of 2000:

"In this matter I have already passed order, dated 17.04.2000. Today when the matter has come on board Mr. Soparkar, learned advocate for the petitioner has pressed for hearing of the matter and Mr. Kalpesh Zaveri, ld. Advocate for respondent has filed his affidavit along with balance sheet for the year 1998-99 and also the order of the Bombay High Court. After hearing Page 402 of 674 C/SCA/15599/2008 JUDGMENT the learned advocate for petitioner and after going through the paras 2.1, 2.2 and 2.8 on page 26 it appears that the company is trying to start new plants, i.e. Nylon Plant and Polyester Plant in the middle of May, 2000. The company is an ongoing concern with a turnover of more than Rs. 282 crores during 1998-99. The valuation of gross block of fixed assets of the respondent-company at cost as on 31.03.1999 including freehold land, internal roads, buildings, plant and machinery, railways sidings, power plant, water treatment plant, housing colony, school building, recreation clubs etc in more than 300 acres of freehold land known as Fatehnagar is Rs. 10830.51 lacs. Liberty is granted to him to take appropriate judges summons."

(iv) Thereafter, all the winding up petitions were listed together before this Hon'ble Court on 03.04.2002 when this Hon'ble Court admitted all the winding up petitions and passed the following order:

"1. It is common ground between the parties that all the petitioning creditors, secured and unsecured, in the present group of petitions sent statutory notices to the respondent Company for the outstanding dues but the respondent Company failed to make payment or respond. The matters have been adjourned from time to time and the oldest matter is Company Petition No. 6 of 1998 wherein notice was issued as far back as 03.02.1998 and was made returnable on Page 403 of 674 C/SCA/15599/2008 JUDGMENT 24.02.1998.

1.Mr. A.H. Mehta, Mr. Darshan M. Parikh, Mr. H.H. Panesar, Mr. T.V. Shah were heard on behalf of various petitioning creditors. Mr. K.S. Jhaveri, appearing on behalf of the respondent Company has read extensively from the affidavit- in-reply filed in Company Petition No. 91 of 2000. Mr Jhaveri also placed reliance upon two decisions of this Court:

[i] 1997(1) G.L.H. 59 (M/s.) Ashok Fashions Ltd. vs. M/s. Meghdoot Acid & Chemicals.

[ii] 2002(2) G.L.R. 1594 Tata Iron & Steel Company Ltd. vs. Micro Forge (India) Ltd.

3. It was submitted by Mr. Jhaveri that in the light of the aforesaid two decisions it would not be necessary for the Court to order winding up merely because the petitioning creditors come forward with applications. Mr. Jhaveri also submitted that out of the four units of the respondent Company atleast two units are functioning and in case winding up order is passed it would render the workmen who are employed, jobless.

4. Bearing in mind the principles laid down in various decisions including the aforesaid two decisions relied upon by Mr. Jhaveri it is settled position that winding-up proceedings should not be resorted to as means of recovery nor should they be a recourse by way of pressurizing tactics. However, it is not possible to state in the set of Page 404 of 674 C/SCA/15599/2008 JUDGMENT present facts and circumstances that the petitioning creditors have come to the Court by way of the present petitions to seek recovery or use these proceedings to pressurize the respondent Company. In view of the fact that the respondent Company has not been able to fulfill its obligations and discharge its liabilities towards various creditors, on overall consideration of the facts and circumstances of the case these petitions are required to be admitted.

5. Admitted.

6. Publication of the Advertisement to be deferred.

S. O. to 03/05/2002."

(4) It may be noted that the Workers union was not a party to the aforementioned winding up petitions and they were not aware of the aforementioned orders passed in the Company Petition No. 91 of 2000.

(5) That during the course of hearing of the above SCA No. 15599 of 2008 and SCA 134 of 2006 on 25.03.2011 the counsel for the Union referred to the several winding up petitions pending against the Company in this Hon'ble Page 405 of 674 C/SCA/15599/2008 JUDGMENT Court which were mentioned in the CDR scheme by the Company.

(6) To find out the status of those winding up petitions the counsel for the workers union made a search on the Gujarat High Court website of the various orders which have been passed in the winding up petitions filed against the Company. It was only then that the workers union came to know about the order of injunction dated 17th April 2000 and the other two orders dated 04.05.2000 and 03.04.2002 passed by this Hon'ble Court in Company Petition No. 91 of 2000.

(7) The above matters were listed on 30.03.2011 on which date this Hon'ble Court passed the following order:

"The statement of learned counsel for the applicant workmen are over. Written submissions have been filed, same have been taken on record. The proceedings in Company Petition No. 91 of 2000 were also perused. They are ordered to be sent back to the office, and office is directed to make it available if it is required on subsequent date of hearing. At the request of learned counsel for the company, adjourned to 06/04/2011."

Page 406 of 674

C/SCA/15599/2008 JUDGMENT The workers union through his advocates has now ascertained that the said injunction order is still operating.

(8) It is submitted that in the light of the aforesaid injunction order dated 17.04.2000 passed in C.P. No. 91 of 2000, it is now clear that the Respondent Company, in utter violation of the said order of injunction, has sold their several properties including the properties covered by the four sale deeds dated 10.10.2006, 08.11.2006, 13.11.2006 and 14.11.2006 executed by the Company in favour of Shri Laxmi Narayan Industrial Co-operative Service Society Limited whereby an area of 7,54,361.54 Sq. Yds. Of factory land belonging to the Company was purportedly sold. It has now become clear that not only the sale transactions but even the very execution of Memorandum of Understanding dated 09.12.2003 with M/s Uma Developers as well as payment of any consideration under the said MoU were in the teeth of the Injunction Order dated 17th April, 2000 as the said order inter alia injuncted the Company from creating any Page 407 of 674 C/SCA/15599/2008 JUDGMENT third party rights in any manner whatsoever. The land at Pandesara was also sold after the aforesaid order dated 17.04.2000. the workers union also came to know from the BIFR scheme which was produced by the Company in this Hon'ble Court that several flats in Mumbai have been sold by the Company. The date of sale of these flats is not known to the Union. In case those sales are after the injunction order dated 17.04.2000 passed in C.P. No. 91 of 2000 then they are also in contempt and willful disregard of the said order.

Even otherwise since the first winding up petition was filed in 1998 in view of Section 536(2) of the Companies Act, the sale of the aforesaid property is void. By virtue of Section 441(2) of the Companies Act, the winding up of the Company by the Court shall be deemed to commence at the time of presentation of petition for winding up.

(9) In this regard, the workers union seeks to place reliance on the judgment of the Hon'ble Supreme Court in the case of Patel Rajnikant Dhulabhai & Ors. Vs. Patel Chandrakant Dhulabhai & Ors. reported in AIR 2008 SC 3016 the Hon'ble Supreme Court held as Page 408 of 674 C/SCA/15599/2008 JUDGMENT follows:

"39. We are, therefore, fully convinced that during the pendency of the proceedings and in spite of interim orders passed by this Court, agreements have been entered into by the contemnors, cheques had been accepted and consideration had been received at least in part. So far as the first order passed by this Court on 26-04-2004 is concerned, there was total prohibition from creating any interest in favour of third party either by sale, mortgage, transfer, assignment, gift or in any other manner whatsoever. Hence, entering into an agreement or acceptance of full or even part consideration would be hit by the said order. In our considered view, it would amount to "creation of interest"

prohibited by this Court."

(10) That in addition to the aforementioned property covered by the aforesaid four sale deeds the Respondent Company has sold various other immovable properties belonging to the Company in violation of the injunction order dated 17.04.2000. In Annexure - III to the BIFR sanctioned Scheme dated 1.06.2006 the Company has shown it s following immovable properties "as already sold" by the company.

(i) Land admeasuring 2,08,000 sq. Yds situated at Page 409 of 674 C/SCA/15599/2008 JUDGMENT Village Pandesara at Udhna Navsari Road, District Surat;

(ii) Certain Miscellaneous assets mentioned in Annexure III ;

(iii) The office premises at Jolly Maker Chamber No.2, 1st Floor, Nariman Point, Mumbai - 40021;

(iv) Residential premises being Flat No.702, Samudra setu, Bhulabhai Desai Road, Mumbai - 400 026;

(v) Residential premises being Flat No.301 Malva Rosa Co-operative Society, Bulls Royce Colon, Santacruz (East), Mumbai; &

(vi) Residential premises being 402, B-Wing Kamlakunj, Veer Savarkar Marg, Mumbai - 40028.

(11) Thus, it is clear from the above that the Respondents have willfully and deliberately violated the order dated 17th April, 2000 passed in Company Petition No.91 of 2000 by selling the Page 410 of 674 C/SCA/15599/2008 JUDGMENT immovable properties of the Company including the immovable property sold by aforesaid 4 (four) purported Sale Deeds.

(12) A shareholder of the Company namely Shri Kantilal Shah filed an application before this Hon'ble Court inter alia for initiation of contempt proceedings against the Company and its past and present directors and also the transferee being C.A. No.238 of 2011 in C.P. No.91 of 2000 for selling the properties of the Company in violation of the order of injunction dated 17.04.2000. Various other reliefs are also prayed for.

(13) It is submitted that the Respondents are guilty of suppressing the said order of Injunction dated 17th April, 2000 in the proceedings before this Hon'ble Court in SCA No.134 of 2006 and SCA No.15599 of 2008 and in the proceedings before Industrial Tribunal, Surat in reference (IT) No.15 of 2005. It is submitted that after the Industrial Tribunal, Surat passed order of injunction dated 6.12.2005 restraining the Company from transferring or Page 411 of 674 C/SCA/15599/2008 JUDGMENT alienating the land and property, the Company filed the aforementioned writ petition being SCA No.134 of 2006 in this Hon'ble Court praying for setting aside the said order. However, in the said Writ Petition the Company did not disclose that there was already an injunction order operating against the Company dated 17th April, 2000. It may be relevant to point out that in SCA No.134 of 2006 the Company filed a Civil Application No.11914 of 2007 praying for modification of the Order dated 06.12.2005 to enable it to alienate/transfer immovable properties of the Company. In the said Application also the Company did not disclose that apart from the Injunction Order dated 06.12.2005 there is a prior injunction order dated 17th April, 2000 restraining the Company from alienating, encumbering, transferring, dealing with or creating any third party rights in respect of the immovable assets of the Company. Thus the Company played a fraud on this Hon'ble Court by seeking an order in C.A. No.11914 of 2007 to nullify the earlier injunction order dated 17.04.2000 without even disclosing that such an order dated 17.04.2000 was passed.

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  (14)             The MoU executed in 2003 and the

sale deeds executed in 2006 suppress the order passed on 17.04.2000 in C.P. No.91 of 2000. In fact averments contained therein contain incorrect and misleading statements that there was no injunction order by stating that the Company was competent to sell the said properties.

(15) When the workers union filed Contempt Petition being C.A. No.4772 of 2007 bringing to the notice of this Hon'ble Court the violation of the restraint order dated 06.12.2005 of the Industrial Tribunal and the interim order dated 20th February, 2006 and 20th April, 2006, the Company filed an Affidavit in reply in May, 2008 justifying the said 4 (four) Sale Deeds on the ground that the consideration was received in the year 2003 to 2005 i.e. prior to the injunction order dated 06.12.2005. The relevant part of the said Affidavit is extracted below :-

"I humbly state and submit that all the properties of which the registered sale deeds have been annexed as Annexure B collectively to the present application form part of the assets identified as surplus/non manufacturing assets under the said Scheme. I humbly state and submit that sale of Page 413 of 674 C/SCA/15599/2008 JUDGMENT such properties has been approved by BIFR which took place before the orders came to be passed by this Hon'ble Court on 20.2.2006. It would be relevant and important to note that the registered sale deeds reflect the debts of payment of such consideration received by the answering opponent has been utilized in payment of its debts towards secured creditors."

It was further stated in the affidavit that :

"As stated above the properties have been sold way back in the year 2003...."

Therefore, even if it is assumed that the sale took place in 2003 it was in willful disregard of the aforesaid order dated 17.04.2000. Thereafter, the Company has filed various Affidavits before this Hon'ble Court contending that no contempt has been committed by it and in none of the affidavits it was disclosed that this Hon'ble Court had already passed an injunction order on 17.04.2000 in Company Petition No.91 of 2000 after hearing the learned counsel for the Company. The relevant parts from the said affidavits are set out below:

In the affidavit dated 02.02.2009 it was inter alia Page 414 of 674 C/SCA/15599/2008 JUDGMENT stated as follows :

"As stated in our earlier affidavit, whatever asset/property sold by the respondent Company was as per the scheme sanctioned by the CDRC (Corporate Debt Restructuring Cell) and the BIFR and no assets/property has been sold by the respondent company subsequent to the order dated 16.05.2008 passed by this Hon'ble Court."

The Company further filed an affidavit dated 23.03.2009 inter- alia stating as follows :

"11. It is submitted that it is clear from the bare perusal of the BIFR scheme that the property in dispute has already been sold prior to the stay order granted by the industrial tribunal vide its order dated 6.12.2005. However, sale agreement could not be executed as No Due Certificate had to be obtained from the lenders before the execution of the sale deeds...."

The Company also filed an Affidavit on 18th February, 2010 inter alia stating as follows :-

"I humbly state that the sale of the part of the assets of the company took place in the year 2003-2004 under the corporate debt restructuring scheme, pursuant to which the company had cleared its liabilities to a considerable extent......... the land available to the company is not 325 acres but is only around 155 acres."

Page 415 of 674

C/SCA/15599/2008 JUDGMENT Thus it is submitted that the Respondent Company, while stating that the sale of the part of the assets of the company had taken place in the year 2003-2004, has deliberately and willfully suppressed in the aforementioned affidavits the injunction order dated 17.04.2000 passed in Company Petition No.91 of 2000 and misled as well as played a fraud on this Hon'ble Court. The said conduct of the Respondents has scandalized or at any rate tends to scandalize or has lowered or at any rate tends to lower the authority of this Hon'ble Court and also prejudiced and interfered with or at any rate tends to interfere with the due course of judicial proceedings pending before this Hon'ble Court and also interferes or at any rate tends to interfere with and obstructs or at any rate tends to obstruct the administration of justice.

(16) It may be relevant to point out that soon after the Industrial Tribunal, Surat passed the interim order of restraint dated 6.12.2005, which has been challenged by the Company in SCA No.134 of 2006, the workers union caused a notice published in the local newspaper "Dainik Bhaskar" on 9.12.2005 informing the public about Page 416 of 674 C/SCA/15599/2008 JUDGMENT the order dated 6.12.2005. Despite the same, the Company, its directors (past and present) as well as the transferees by conspiring together and colluding with each other had executed the sale deeds in total violation of all the four interim orders namely the order dated 17.04.2000 (passed by the Industrial Tribunal in Ref (IT) No.15 of 2005) and the orders dated 20.02.2006 and 20.04.2006 (passed by this Hon'ble Court in SCA No.134 of 2006).

(17) The conduct of the Respondents has not only interfered with an obstructed the course of justice, but also offended the Majesty of Law and gravely undermined the dignity of Court. The Respondents have made a mockery of this Hon'ble Court by selling the various properties of the company in total disregard of the aforementioned interim orders of this Hon'ble Court.

It is submitted this Hon'ble Court being a Superior Court of record has jurisdiction, recognized by Art.215 of the Constitution of India, to pass appropriate orders to undo the Page 417 of 674 C/SCA/15599/2008 JUDGMENT transactions carried out in defiance of the orders of this Hon'ble Court and recover the properties purportedly sold in breach of this Hon'ble Court's orders. It is well settled that in addition to punishing the contemnor, the Court has the right as also the duty to ensure that the contemptnor is denied the fruits of his contempt. Apart from the jurisdiction under Art.215, this Hon'ble Court has inherent jurisdiction under Section 151 of CPC as well as the jurisdiction under section 94(c) and Order 39 Rule 2A of CPC to pass appropriate orders for violation of the orders of this Court. In support of this submission, the following judgments are relied upon:

UNDER ARTICLE 215

(i) Delhi Judicial Service Association V/s.

State of Gujarat (1991) 4 SCC 406 para 38.

(ii) High Court of Judicature at Allahabad through its Registrar V/s. Raj Kishore Yadav and Ors. reported in (1997) 3 SCC 11 para 10.

INHERENT POWER RECOGNISED BY SECTION 151 OF CPC

(iii) Century Flour Mills Ltd., V/s. S. Suppiah Page 418 of 674 C/SCA/15599/2008 JUDGMENT & Ors. reported in AIR 1975 Madras 270 para 9.

(iv) DDA V/s. Skipper Construction Pvt. Ltd., reported in (1996) 4 SCC 622 paras 17 to 21.

(v) All Bengal Excise Licensee's Association V/s. Raghabendra Singh & Ors. reported in (2007) 11 SCC 374 paras 27 and 28.

(vi) Surjit Singh & Ors. V/s. Harbans singh & Ors. reported in (1995) 6 SCC 50 Para 4.

UNDER ORDER 39 RULE 2A AND SECTION 151 OF CPC

(vii) Arjan Singh V/s. Puneet Ahluwalia & Ors. reported in (2008) 8 SCC 348. Paras 17 to 19.

UNDER SECTION 94 (c) AND ORDER 39 RULE 2A OF CPC

(viii) Patel Rajnikant Dhulabhai & Ors. V/s. Patel Chandrakant Dhulabhai & Ors. reported in AIR 2008 SC 3016 paras 39, 46, 62 and 69.

(18) It is submitted that the Respondent Company has invoked the discretionary jurisdiction of this Hon'ble Court under Article 226 of the Constitution against an interim order of the Industrial Tribunal and has been granted a limited stay in respect of the direction of the Tribunal to reinstate the illegality dismissed Page 419 of 674 C/SCA/15599/2008 JUDGMENT workmen. From the facts narrated above it is clear that the Respondent Company did not come to this Court with clean hands and has in fact clearly abused the process of law. The Company is guilty of suppressing the order dated 17.04.2000 in the proceedings in SCA No.134 of 2006. Further the Respondent Company has committed gross violation of the Industrial Disputes Act, the PF Act, the ESI Act and the Payment of Gratuity Act. Although prosecution proceedings against the Company for the violation of the said Acts have been launched, the same are pending and the Respondent Company is taking advantage of the delay in the disposal of the said proceedings. As seen from the affidavit dated 24.02.2011 filed by Shri Damodar B. Patel in C.A.No.752 of 2011 in SCA No.15599 of 2008 pursuant to the order of this Hon'ble Court dated 23.02.2011, the Respondent Company itself has been in substance illegally transferred to Mr.B.H.Patel and to Mr.Damodar B. Patel in the teeth of the aforementioned interim orders. It may be noted that Mr. Damodar B. Patel is a brother of Mr. Liladhar Patel who is the head of the Laxminarayan Industrial Cooperative Service Page 420 of 674 C/SCA/15599/2008 JUDGMENT Society to whom an extent of 7,54,361.54 sq. yards has been sold in the teeth of the aforementioned four injunction orders.

(19) It is submitted that in the light of the aforesaid facts and circumstances the prayer of the workmen for permission to run the factory of the Company is a just and proper prayer, which deserves to be granted, especially because the management of the respondent company has conducted the affairs of the Company in a manner which is detrimental to the interests of the workers, the shareholders, the debenture holders, the creditors and the statutory authorities. The facts mentioned in the foregoing paragraphs clearly demonstrate that the management has at every stage hoodwinked everybody and has committed willful breach of the orders of this Hon'ble Court. Under such circumstances it is just and necessary that the illegally alienated properties of the company are restored, and the workmen are given an opportunity to run the factory of the Company as the Company owes more than Rs.350 crores to the workmen as on date and Rs.39 crores to the statutory authorities Page 421 of 674 C/SCA/15599/2008 JUDGMENT as on 31.03.2003 as admitted in the CDR scheme. It is submitted that this Hon'ble Court being a Constitutional Court as also a superior Court of record has the requisite jurisdiction under Article 226 as well as Article 215 to pass the necessary orders in the interest of the workmen, shareholders, debenture holders as well as creditors including the statutory authorities. One of the applicants, M/s. Rahul Raj Estates Pvt. Ltd., has given an affidavit dated 18.04.2011 to the workers union expressing their readiness and willingness to run the factory of the Company. The said affidavit has been annexed to the additional affidavit of the workers union dated 18.04.2011 filed in this Hon'ble Court. In their affidavit RahulRaj Estates have elaborately set out their plan of action. They have also mentioned that they have the financial capacity as well as the expertise in running the factory in question. It may be noted that in the plan of action set out by RahulRaj, the operations of the factory will be started initially on job work basis; and after a complete feasibility report is prepared, gradually full operations would be started. The said plan of action ensures salary to the workers and also Page 422 of 674 C/SCA/15599/2008 JUDGMENT payment of past dues finalized by the learned Arbitrator. It also ensures employment to the family of the deceased workmen apart from compensation of Rs. 1 lakh each. It is submitted that such a scheme is beneficial to the workers and in the interest of the Company. It is therefore, submitted that this Hon'ble Court may appoint RahulRaj Estates alongwith workers union as agent of the Court receiver and this Hon'ble Court may supervise the running of the factory as per the plan of action set out in the affidavit of RahulRaj dated 18.04.2011 till the factory gets fully functional and past dues of the workers are paid. The workers union and RahulRaj Estates are also ready to comply with and fulfill all other terms and conditions which this Hon'ble Court may impose in this regard."

13. This Court has heard learned advocates for the parties and perused the petitions, applications and annexures. The arguments have been advanced by all the concerned at great length, which continued for number of days and therefore, in order to appreciate and narrow down the entire controversy as the back ground facts and chronology of events during proceedings of these matters were important to be enlisted Page 423 of 674 C/SCA/15599/2008 JUDGMENT hereinabove for comprehending the approach and conduct of parties in light of their stand or change in stand.

14. The SICA was enacted for carrying out the avowed principles envisaged under Article 39 (B & C) of the Constitution of India. The complete reading of Article 39 would indicate that the said article is in respect of benevolent and moral code and law to be followed and implemented by the State for brining about welfare of the section in the society or segment in the society mentioned thereunder.

15. This could be fortified by the reference to Section 2 of the SICA, which is in form of declaration.

16. That Act enact to policy, to secure principles specified in Clause (B&C) of Article 39 of the Constitution.

17. The record indicates that the Company filed Reference before the BIFR in the month of December, 2003 invoking provisions of Section 15(1) of the SICA, which came to be registered as Case No. 67 of 2004 on 23.1.2004.

18. Section 3(o) define sick industrial company and Section 3(2)(a) provides for words and expression shall have the same meaning as it is attributed in the Company's Act and Page 424 of 674 C/SCA/15599/2008 JUDGMENT Section 3(b) further provides that the words and expression not being found in the Company's Act shall have same meaning as it is attributed in the Industrial (Development and Regulation) Act, 1951.

19. Section 15 is required to be invoked for making a Reference on the conditions mentioned thereunder subject to the rider provided into the proviso mentioned thereunder namely that when the Reference is made after the commencement of the SARFAESI Act, 2002, where, financial assets have been acquired by any secularization company or reconstruction company under Sub-section (1) of Section 5 of the Act, further providing that the Reference would abate if the secured creditors, representing not less than three -forth in value of the amount outstanding against financial assistance disbursed to the borrower of such secured creditors, have taken any measures to recover their secured debt under sub-section (4) of Section 13 of the SARFAESI Act.

20. At page 542, the respondent no. 9 has filed an affidavit-in-reply indicating that IFCI Ltd is the only one secured creditor so far as the Company was concerned.

21. At page-1004, further affidavit is there on the record on behalf of respondent No. 9 - IFCI Ltd., wherein, it has been Page 425 of 674 C/SCA/15599/2008 JUDGMENT declared that the ACRE is now the secured creditor as said secured creditor have assigned their rights to the said Agency, whose address is also given.

22. In the compilation of Special Civil Application No. 15599 of 2008 at page-752, communication from informant BIFR on 20.12.2003 is produced.

23. At page-777, letter dated 14.2.2006 addressed by Baroda Rayon is placed on record.

24. The BIFR has been informed qua workmen as under:

"The workers of the company have also entered into a comprehensive Settlement Agreement on 27.10.2003, whereby, all the issues pertaining to the workers have been fully adjudicated and agreed between the parties".

25. By the time, when this letters is being placed on record before the Bench of BIFR by the Company on 14.2.2006, the development in form of industrial dispute i.e. ITR No. 15 of 2005 and interim order passed thereon dated 6.12.2005 had already been available and in knowledge of everyone. This letter was for seeking indulgence of BIFR under Section 17(2) of SICA for sanctioning Rehabilitation Scheme.

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26. It page-788 at Clause (ii) & (iii), it is mentioned that all secured creditors are paid.

27. The workmens' factum is narrated indicating that labourers were persuaded to work at 60% of wages.

28. At page-825, 2(p) settlement is produced.

29. In the compilation of Special Civil Application No. 15599 of 2008 page 844 and 845, the summary record of the proceedings of the hearing held on 23.2.2006 before the Bench of BIFR is reproduced.

30. That order makes interesting reading. It emerges therefrom that the audited balance sheet of 31.3.2003 was made basis for filing Reference under Section 15(1) of SICA.

31. The BIFR received Form-A on 29.11.2003.

32. The decision to file Reference was taken in the Company's Board of Directors' meeting on 29.11.2003.

33. The audited accounts for the said year were approved and adopted at the AGM held on 30.12.2003. The Board further mentions "the reference was taken up for consideration today so Page 427 of 674 C/SCA/15599/2008 JUDGMENT as to determine the status of company's sickness". The Company's net worth was shown to be Rs.9276.03 lacs consisting entirely paid up share capital of Rs.4076.60 lacs and free reserves Rs.5199.43 lacs. The accumulated losses were shown to be Rs.26153.73 lacs. The Company's investment in plant and machinery was Rs.25418.37 lacs.

34. The Bench has further noted that as could be seen from page-846, the secured creditors namely PNB, BOB and UBI submitted that Company settled their dues and representative of the company also stated that the Company has settled the dues of all the secured creditors and 'No Due Certificate' were enclosed to the company's letter dated 14.2.2006. The Company had started production since last 1½ years in right earnest. The promoters would meet any shortfall arising out of non-granting of reliefs/concessions, if any, by the Central or State Government.

35. Page-847: The UTI decree holder interested for its enforcement under Section 22(1) of SICA and letter dated 19.10.2005 was shown as agreed for ORS.

36. The proceedings of 23.2.2006, as could be seen from para-3 of page-847, culminated into issuance of direction and therefore, it cannot be termed to be sanctioning of rehabilitation Page 428 of 674 C/SCA/15599/2008 JUDGMENT scheme under Section 17(2) of SICA. Those directions are to be reproduced as under:

(i) The company would discuss the rehabilitation package with all concerned and reach an agreement on the reliefs and concessions envisages from them.

(ii) The company/promoters would hold discussions with the workers' unions and enter into a long term agreement with them covering, inter alia, VRS, retrenchment, sacrifices to be made by the workers and ensuring their wholehearted cooperation in the rehabilitation of the company. A copy of the agreement would be enclosed with the company's rehabilitation package.

(iii) The company would hold a joint meeting of all the involved parties to discuss the company's rehabilitation package u/s. 17(2) of the Act.

(iv) The company/promoters were directed u/s. 22A of the Act not to dispose of any fixed or current assets of the company without the consent of the secured creditor and the BIFR. In case the company was running, the current assets could be drawn down to the extent required for day-to-day operations, proper accounts of which would be maintained.

Page 429 of 674

C/SCA/15599/2008 JUDGMENT The draft scheme was circulated and ordered to be published in local daily and hearing was fixed on 22.5.2006.

37. The record shows that the secured creditors namely PNB, BOB and UBI were exempted from attending the proceedings.

38. Very important portion of the scheme at page-867 is in terms of Clause (VII) - other terms and conditions and it contained that (i) the Company shall keep the Board informed of the progress in implementing the package as per the time schedule and terms and conditions etc. and (ii) the following would be construed as default in the implementation of the agreed package:- (a) non-payment of dues for more than one quarter without the consent in writing of the concerned party, (b) failure of any agency which a party to the agreed package in providing the needful/agreed, concessions/reliefs within three months; and (c) failure of the promoters/company in bringing the needful funds within three months of due date, as per the agreed package.

39. The draft scheme was permitted to be circulated to all concerned with gist thereof in two local dailies, as could be seen from the record at page-848 at Para-3.1. It is categorically mentioned that the objections / suggestions Page 430 of 674 C/SCA/15599/2008 JUDGMENT from all the concerned are invited and same will be heard at the time of hearing on 2.5.2006.

40. On 22.5.2006, it appears that draft scheme, which was circulated, finally sanctioned by the Board under Section 17(2) of SICA. The conditions, which were mentioned, as could be seen from pages 108 and 109 of the compilation, they are reproduced herebelow at the cost of repetition:

(i) The Company shall keep the Board informed of the progress in implementing the package as per the time schedule and terms and conditions etc.

(ii) The following would be construed as default in the implementation of the agreed package:- (a) non-payment of dues for more than one quarter without the consent in writing of the concerned party, (b) failure of any agency which a party to the agreed package in providing the needful/agreed concessions/reliefs within three months; and (c) failure of the promoters/company in bringing the needful funds within three months of due date as per the agreed package.

(iii) In case the above mentioned defaults occur, the promoters/company shall inform the Board immediately thereafter and furnish copies to all concerned so that the Board could consider Page 431 of 674 C/SCA/15599/2008 JUDGMENT further course of action for adopting alternate measures for the rehabilitation of the company including appointment of an OA under Section 17(3) of SICA and taking all other measures contemplated under section 18 of the Act.

(iv) Any financial shortfall arising out of the delayed implementation of the schedule or for any other reason shall be met by the company's promoters without any recourse to FIs/Banks or seeking any further reliefs/concessions from them than what had already been provided for in the scheme.

(v) The Company shall not undertake any new project or expansion or make any investment or obtain any asset on lease/hire without the prior approval of BIFR during the currency of the scheme.

(vi) The company shall submit to the BIFR, on behalf of yearly basis, Progress Reports regarding the implementation of the scheme along with the audited/provisional results duly signed by the managing director of the Company.

(vii) The company is required to comply with all the terms and conditions applicable to them independent of compliance by other agencies.

(viii) All the liabilities not disclosed in the Page 432 of 674 C/SCA/15599/2008 JUDGMENT Rehabilitation Scheme would be the personal responsibility of the promoters.

(ix) Any sale of assets of the company would be effected through Asset Sale Committee(s) as per the guidelines issued by BIFR. The entire sales proceeds would be used as per the scheme sanctioned or as per the directions of BIFR.

(x) The promoters shall guarantee the projections of profitability, cash flow etc. any shortfall in resources for meeting the capital expenditure or in future cash flows shall be made good by promoters on year to year basis from sources outside the company.

(xi) The company/promoters shall enter into suitable agreements with the workers' union regarding the reliefs envisaged from the workers.

41. The very interesting thing noticeable in the proceedings before the BIFR that all alone, the Company has projected its own earlier attempt to sale by way of MOU as a proceedings under the auspicious of BIFR, which it could not have been projected.

42. The agreement and sale are at Page Nos. 164, 184, 214 and 236 of the compilation.

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43. Page Nos. 169, 189, 219 and 240 indicate receipts of sale proceedings.

44. At page-506 of the compilation indicates statement of details of amount received and payment made.

45. In the proceedings before the BIFR dated 12.8.2008, which have been produced at page-871, at page- 873, the Bench has recorded that during December, 2007, when the Board noted that the company/promoters failed to fulfill their part of obligations in terms of SS-06 and a show cause notice dated 18.12.2007 came to be issued to the Chief Executive of the Company M/s. TBRCL to explain as to why Board should not declare the scheme as 'failed'.

46. Apropos that, as could be seen from para-3.1 at page-874 of the compilation, the Board recorded as under:

"The company M/s. TBRCL submitted the reply in r/o Board's above SCB dt. 18.12.2007, vide its letter dated 16.1.2008, making the following submissions:

(a) except sale of the company's POY plant, Page 434 of 674 C/SCA/15599/2008 JUDGMENT the company sold all other assets before sanction of the SS-06 by the Board and, thereby, the company raised the fund of Rs.44.77 crs., which has been taken into consideration by the company in the 'means of finance' in the SS-06.

(b) after sanction of the SS-06 by the Board, the company has not sold any of its assets and the company would like to approach the Board for constitution of 'Asset Sale Committee' (ASC) for the sale of the company's POY plant.

(c) the management is adhering to the agreement dt. 27.10.03 entered into by the company with the workers, but the workers/ union(s) have not been extending their cooperation for increase in production / productivity."

47. At this stage, it is required to be noted that the BIFR was required to be informed in unequivocal terms that there was already a case in terms of Reference No. 15/2005 going on and there were prohibitory orders. The company had put up its reply vide 16.1.2008.

48. The Board further records in para-3.2, as could be seen from page-874 as under:

"The Board after giving due consideration Page 435 of 674 C/SCA/15599/2008 JUDGMENT to the company's reply dated 16.1.08, in r/o Board's SCN dt. 18.12.07, direction the company vide Board's letter dt. 16.5.08 to furnish the progress report, company's ABS/PBS for the FY 2006-07 and 2007-08, details of utilization of funds received from the sale of the company's assets and details of terms and conditions of the agreement entered into with the workers etc., which have not been complied with, within a period of 21 days."

49. The Board further noted at para-4 at page-874 that the Board received an order dt 16.5.08 from the Hon'ble High Court of Gujarat (HCG), passed in r/o CA No. 11914/07, in SCA No. 134/06 from which the Board noted that this order was passed in partial modification of HCG's earlier order dt. 20.4.06 in r/o SCA No. 134/06, and HCG granted permission to the company M/s. TBRCL to dispose of the assets of the company's POY plant, as envisaged in the SS-06, through ASC. The Board further noted that HCG also directed the company to deposit the sale proceeds to be received from the sale of the company's said surplus assets with the Registry of HCG along with the copy of the sale deed, and the sale proceeds so received would not be utilized by the company for any other purpose. The Board also noted that HCG adjourned the matter for hearing on 23.6.08 for issuance of further orders. The Board has, however, not Page 436 of 674 C/SCA/15599/2008 JUDGMENT received any further order from HCG so far.

Para-5:

The representative of M/s. The Baroda Rayon Corp. Ltd stated that as per the provisional balance sheet as on 31.3.2008, the company achieved a sale turnover of Rs.189 crores and incurred a loss of RS.37 crores (before depreciation and taxation). The losses were due to high cost of raw material and obsolete technology. He further stated that company's plant is 40 years old and the technology used by the company is out of date. He stated that the workers' are not co-operating with the company and are not complying with the terms of MOU entered with the company, and the workers have not withdrawn the Court cases filed by them before various forum. To a query from the Bench regarding compliance on the part of the company to the terms of MOU, the representative of the company stated that the company has not been able to make payment of the dues of the workers due to losses being incurred by the company and non achieving of the projections made in the SS-06. The representative of the company stated that dues of Govt. of Gujarat (GOG) could not be paid by the company as GOG insisted for payment of their outstanding OTS dues upfront instead of in installments in terms of GR-94 of GOG. He requested the Bench Page 437 of 674 C/SCA/15599/2008 JUDGMENT to re-iterate to GOG to accept payment of GOG dues in installments in terms of GR-94. To a query from the Bench regarding status of hearing scheduled before Hon'ble Gujarat High Court (GHC) on 23.6.08, the representative of the company furnished a copy of the GHC order dated 16.5.2008. The representative of the company stated that next hearing before GHC is scheduled on 27.9.08. He requested the Bench to allow the company to carryout TEV study of the company and to submit a Modified Draft Rehabilitation Scheme (MDRS). To a query from the Bench as to the sale of POY plant, the representative of the company of the company stated that the company has not been able to sell the said POY plant. He requested the Bench to constitute an Asset Sale Committee (ASC). He said that the company has received Rs.15 crore as advance from a buyer for the POY plant and the company is willing to return this amount to the said buyer.

Para-6:

The ld. Advocate representing State Bank of India (SBI) stated that the company settled their outstanding dues and SBI may be exempted from attending future BIFR hearing.

Para-7: The representative of IDBI submitted that the company has settled their outstanding dues and IDBI may be exempted from attending future Page 438 of 674 C/SCA/15599/2008 JUDGMENT BIFR hearing.

Para-8: The representative of ESI Corp. stated that an amount of Rs. 3.57 crore in outstanding against the company. Intervening, the representative of the company stated that the company already paid Rs.1.92 crores to ESI and only a balance stated that the the amount of Rs.3.57 crores as stated by rep. of ESI includes penal interest and damages which are required to be paid in terms of provisions of SS-06, by ESIC.

Para-9 The ld. Advocate representing Commissioner, Surat Municipal Corporation (SMC) stated that up-to -date dues of SMC have been paid by the company. He requested the Bench to exempt SMC from attending future hearing in the company's case.

Para-10: Having heard the submissions and material on record, the Bench issues the following directions:

(i) The Board reiterates that Government of Gujarat should consider the reliefs as stipulated under para VLF (page-17) of the Sanctioned Scheme (SS-06).

(ii) As sale of assets is involved, SS-06 has not taken off as scheduled TEV study is to be undertaken and modified scheme is to be Page 439 of 674 C/SCA/15599/2008 JUDGMENT submitted. State Bank of India (SBI) is appointed as Operating Agency (OA). The Company should pay an OA fee of Rs.2.5 lakhs plus out of pocket expenses to the OA.

(iii) As submitted by the representative of the company in the hearing, the company should get a TEV study done by a competent agency selected with the approval of the OA (SBI) and submit a Modified Draft Rehabilitation Scheme, with the means of finance duly tied up within a period of two (2) months to SBI (OA) who shall convene a Joint meeting of all concerned and submit a fully tied up and viable DRS/status report to BIFR within another one month.

(iv) The company would sell its POY plant as envisaged in SS-06 through ASC, by following the prescribed ASC guidelines of BIFR, a copy of which is enclosed along with this summary record of proceedings (SOP). The ASC will comprise of CMD of the company, representative of State Bank of India at the level of General Manager or above, representative of Govt of Gujarat and the Special Director of BIFR. The sale proceeds should be deposited with the Registry of the Hon'ble Gujarat High Court (GHC) in terms of their order dated 16.5.2008. The company may approach GHC for a clarification order in respect of the utilization of the sale proceeds with the permission of BIFR. The Bench directs that Page 440 of 674 C/SCA/15599/2008 JUDGMENT earlier agreement, if any, entered into for sale of the POY plant is null and void and the company should return the sum of Rs.15 crore stated to have been received by them to the buyer as agreed to by the company's representative in the hearing.

(v) IDBI as well as Surat Municipal Corporation (SMC) are exempted from attending future hearings in the company's case.

(vi) The company should report the outcome of the hearing in the Hon'ble Gujarat High Court on 27.9.2008."

50. The proceedings dated 20.01.2010 at page-880 reads as under:

"Para-5: MA(SBI) stated that the company has neither submitted audited balance sheets nor submitted progress report till date, besides giving specific direction of the Hon'ble Bench.

Para-6: The representative of the ESIC has submitted that Rs.3.26 crore were due against the company. The Bench required whether these dues are only principal or contain interest and penalty. The representative of the ESIC could not comment on it. The Bench observed that as per sanctioned scheme ESIC was "To consider to agree to waive penalty and damages". Further the Bench Page 441 of 674 C/SCA/15599/2008 JUDGMENT observed that ESIC should immediately upon sanction of scheme should issue order clearly stating what all the relief and concessions are being sanctioned to the company by ESIC.

Para-11: The ld advocate representing the company submitted that the Scheme was sanctioned in 2006 under Section 17(2). In the sanctioned scheme the major part was about sale of POY plant, and the proceeds generated would be used for settling the dues of workers and secured creditors. The ld advocate added that in the hearing before the Hon'ble High Court of Gujarat, the workers had claimed an amount of Rs.280 crore, which is very huge in respect of the sick company and the company is ready to pay Rs.58 crore towards workers settlement and another Rs.25 crore towards workers retrenchment dues. On a query from the Bench about non-submission of progress report, the ld advocate stated that he has no information regarding this, and he would ask the company to adhere to this procedure of the Board. The ld advocate also stated that sale of assets was to be done through ASC and Hon'ble AAIFR has ordered stay to the proceedings of 12.08.2008. He also added that the final hearing is scheduled to be held on 15.03.2010 and the records of BIFR have been called up for reference by Hon'ble AAIFR. The Bench observed that the Board has not received the copies of order of Hon'ble Page 442 of 674 C/SCA/15599/2008 JUDGMENT AAIFR. The ld advocate further added that the company wants to pay dues of Clearwater Partner (secured creditor) but it can be done only by sale of assets. The ld advocate also appraised the Bench that in the hearing held on vide para 2.4 the order referred as 10.10.2009 instead of 10.10.2008.

para-12: Having considered the submission made in the hearing and materials on the record, the Bench issued the following direction:-

a. The Bench reiterates its direction that the company should submit Progress Report to SBI (MA) and to the Board within 15 days. Thereafter MA (SBI) should send its report to the Board within a further period of two weeks.

b. The Bench reiterates its direction given vide para 2.8(iv) of SOP dated 05.10.2009, to the company to file their rejoinder on the application filed by M/s. Anshul Impex (P) Ltd., M/s. Mahakali Coal, Minerals Ltd and of M/s. Khukhria Plastics & M/s. Copex Care Centre.

c. The Bench reiterates its direction that the Clearwater Partners Pvt. Ltd. should submit a copy of the application filed by them before Hon'ble AAIFR and the connecting order passed by Hon'ble AAIFR till date within one week.

Page 443 of 674

C/SCA/15599/2008 JUDGMENT d. The Bench directs the ESIC to submit a written submission giving details of the dues outstanding against the company year wise, segregating the principal amount and interest and penalty.

e. Bank of Baroda (BOB) is exempted from attending future hearing in this matter.

f. The next date of hearing in the matter is fixed on 06.04.2010."

51. In the proceedings of BIFR held on 14.9.2011, after recording history, the Board went on recording as could be seen from page-893 that the representative of SBI informed the Board that Company has not submitted progress report or balance sheet despite various reminders since 2008.

Para-7: Ld. Advocate representing the company informed that the company could not submit progress reports to the Bench because of workers' agitation in the factory and records have been lying locked in the factory. He submitted that case relating to wages of workers in under litigation before the Hon'ble High Court, Gujarat and currently the dispute is under Arbitration process and likely to be resolved soon. On being asked about the total amount of workers dues and the settlements as well as payments to them,he submitted that the company has paid around Page 444 of 674 C/SCA/15599/2008 JUDGMENT Rs.12 crores to the workers as against Rs.34 crores provided for in the Sanctioned Scheme. However, workers are demanding Rs.300 crores and the company had offered about 60 crores. Finally ld. Advocate submitted that there is no electricity connection in the company and the company is closed since 2008. He assured the Bench that company would place all details / records and audited balance sheets before the Bench after 2007-2008 and requested to allow an opportunity to the company to submit report on implementation of the SS-06.

Para-8: The Bench observed that the company has not been submitting progress reports and audited balance sheets either to the Board or to SBI (MA). There is no electricity connection in the company and obviously, there is no production since 2008. The company had even failed to pay workers dues amounting to Rs.34 crore as provided in the sanctioned scheme, and had been able to pay only Rs.12 crores till date. Keeping in view the above facts, the revival of the company seems difficult. Having considered the submissions made, materials on records and based on facts, the Bench issued the following directions:

(a) The company to submit progress reports in the prescribed performa along with the audited balance sheets from 2007-08 onward to Page 445 of 674 C/SCA/15599/2008 JUDGMENT the Board with a copy to SBI (MA) within 4 weeks.

(b) SBI (MA) along with the representative of the company to obtain photocopies of all necessary records from the registered office/factory as per law.

(c) SBI (MA) to examine all records, progress reports, documents etc. and to submit a comprehensive status report on implementation (implemented and un-implemented portions) of Sanctioned Scheme to the Board within six weeks.

(d) The company to explain through written submissions as to why the Sanctioned Scheme should not be declared as failed considering the observations of the Bench at para-

8 above and submissions made in today's hearing. The company to file the above said written submissions to the Board with a copy to the SBI (MA) within six weeks for further examination and report to the Board by SBI (MA) with three weeks thereafter.

(e) Next date of hearing is fixed on 19.01.2012."

52. In the proceedings of BIFR held on 19.01.2012, after recording history, in para-7 the Board has observed as under:

Page 446 of 674

C/SCA/15599/2008 JUDGMENT "Para-7: In today's (19.01.2012) hearing, Ld. Advocate representative of SBI (MA) submitted that the company has not submitted progress report and balance sheets.

Para-8: The representative of IFCI submitted that an amount of Rs.82.91 crores is recoverable from the company which IFCI acquired through assignment. In reply to this, ld advocate of the company submitted that the amount was brought in the company by an investor and can not be considered as dues.

Para-9: The representative of ESIC submitted that their dues are amounting to Rs.3.25 crores.

Para-10: Ld. Advocates representing Fossil Logistics Pvt. Ltd. & Coastal Energy Pvt. Ltd. And Anshul Impex Pvt. Ltd. & Mahakali Coal & Minerals requested the Bench to implead their client as a necessary party in the matter. The Bench advised them to file proper Misc. application for the same.

Para-11: Ld. Advocate representing the company submitted that the Company is closed since 2008 due to workers problem. The POI plant of company's unit is not viable. He submitted that the compliance of Hon'ble Page 447 of 674 C/SCA/15599/2008 JUDGMENT Gujarat High Court order to pay Rs.35 crores to workers, the company paid Rs.60 crores, even then the workers are demanding Rs.300 crores. He continued that subsequently, Hon'ble Supreme Court of India has appointed one of their retired judge named Shri C.K. Thakkar as Arbitrator, and the matter is expected to be finalized within next 3-4 months. Ld. Advocate finally requested the Bench to adjourn the matter till finalization of case before Arbitrator.

Para-12: The Bench observed that no one present in the hearing objected to the request of the company to adjourn the matter till the receipt of order from arbitrator appointed by Hon'ble Supreme Court of India. The Bench adjourn the matter to sine a die with the direction to the company to keep inform about the further development in the matter pending before Arbitrator."

53. Shri Gandhi, learned advocate appearing for sole secured creditor (assignee) submitted that as per his instructions, the payment is received periodically, which could be seen from the statement and in view of that, ACRE is not proceeded further under SARFAESI Act.

54. There appears to have been proceedings in Case No. 67 of 2004 before the BIFR and the hearing and the proceedings Page 448 of 674 C/SCA/15599/2008 JUDGMENT of 2.2.2012 needs to be adverted to. After recording the entire history and chronology upto the hearing dated 19.1.2012, the Board proceeded further in recording that two parties mentioned thereunder have approached the Board for realising their dues as the applicants and their counsels have remained absent, the applications were dismissed.

55. The attention of the Court is also drawn to one more proceedings dated 2.3.2012. This was one application filed by M/s. A.S. Shah praying inter-alia that he be joined as party respondent in BIFR Case No. 67 of 2004. The Bench passed the following order.

"para-10: Having considered the submissions made during the hearing and the materials on record, the Bench observed that applicant of MA-043 M/s. A.S. Shah is not present in the hearing, who is only an unsecured creditor and has claimed that certain dues are outstanding against the sick company against supply of labour. The Bench clarified that BIFR is not an appropriate forum to decide such petty disputes of small unsecured suppliers. Hence the Bench dismissed the MA-043 filed by A.S. Shah both on merits and for non-prosecution."

56. Thus, the elaborate advertence to the BIFR proceeding along with the orders made by BIFR time and Page 449 of 674 C/SCA/15599/2008 JUDGMENT again are facts which vouched themselves so far as nature of the proceedings are concerned, the fact which is required to be noted is that the SICA Repeal Act 2003 though is on the statute book, but on account of non- publication of date of its enforcement, the BIFR proceedings are at large time and again resorted to for the purpose absolutely alien to the proceedings themselves and the object of the SICA Act 1985. At times, the proceedings are utilized as merely an umbrella for warding off the impetus onslaughts on account of the other legal provisions under which the created claimants and all could exerts their right over the company. This umbrella of SICA thus has time and again been used by many and the case on hand if one takes into consideration then one will have no other resort but to conclude that this is a case where the object and purpose of SICA namely rehabilitation and/or revival and/or continuing of the company is misused so as to avoid a dire result emerging from the closure requiring immediate payment to workmen of their dues and hence under the guise of BIFR proceedings the Company has rendering the employee, staff, creditors and others helpless. In other words, for sustaining the Industry the SICA is available and one of the avowed object is to be achieved to help the industry in surviving and helping it recapture its health in continuing, Page 450 of 674 C/SCA/15599/2008 JUDGMENT providing its service that include its all staff and employees. In the instance case, as could be seen from the SICA proceedings, reproduced hereinabove, they would indicate that it was in fact an attempt to unfortunately thwart the legitimate rights of many including workmen and staff members of the company as the secured creditors did not object or rather they got their dues and as on date the scenario indicate that only one secured creditors respondent no.9, whose counsel has very candidly submitted that so far SARFAESI provisions are not invoked as the debt is being serviced regularly. The only affected segment or the part of the scheme is that of workmen and staff members of the Company for whom unfortunately there is no, even ostensible, attempt to provide any relief whatsoever and then attempt to bring about the settlement appears to have been used as a tool for compelling them to agree for lesser than what is admissible to them. The attempts made earlier, recorded hereinabove would clearly be an indication of these facts.

57. The proceedings in the form of Arbitration and requirement thereunder are heavily pressed into service for persuading this Court not to pass any order. At this stage, it is required to be noted that the plea of proceedings of arbitration is raised in respect of the proceedings which were not explained of Page 451 of 674 C/SCA/15599/2008 JUDGMENT being governed by or covered under the said proceedings.

58. Before adverting to various observations and holding by learned Arbitrator, the Court hastened to add here that it does not propose to venture upon examining those aspect as if it is either sitting in the appeal or is, in any manner, taking them into consideration for determining the same, but those proceedings being collateral proceedings, can surely be looked into to arrive at just and proper conclusion qua the stand of the parties taken before the BIRF, which is now being pressed into service for thwarting the order that may be passed in this case. Therefore, in the aforesaid premises, this Court proposes to emphatically refer to observations and purposes and purviews of the proceedings, which have been sought to be raised as impediment bringing about final outcome of these proceedings. The learned Arbitrator framed as many as 19 issues based upon the statement of claim and written statement of the parties, they are enlisted hereinbelow for ready reference and conclusion thereon is also narrated hereinbelow.

"ISSUES:

(1) Whether the claimant establishes that demands made by the claimant are maintainable in law?

(2) Whether claims and demands raised by the claimant in the statement of claim are beyond the terms of the reference and are beyond the scope of present Page 452 of 674 C/SCA/15599/2008 JUDGMENT Arbitration Proceedings?

(3) Whether the claimant is entitled to the amounts claimed in the statement of claim in view of the settlement dated 27.10.2003?

(4) Whether the claimant proves that they are representing all the employees in the present proceedings? If not, whether the claim is tenable in the eyes of law? And if yes, to what extent?

(5) Whether the claimant is entitled to claim the dues after 27.8.2008? If yes, till what date?

(6) Whether the claimant is entitled to claim no.1 for the amount under Recovery Application No. 113 of 2003? If yes, to what extent?

(7) Whether the claimant is entitled to claim No.2 for the amount under the part award dated 20.10.2007 in Reference (IT) No. 15/2007 towards gratuity along with 10% interest? and if Yes, to what extent?

(8) Whether the claimant is entitled to claim No.3 for the amount of salary from August 2008 upto December, 2010? If yes to what extent?

(9) Whether the claimant is entitled to claim No.4 for the amount of 40% salary from January 2004 to 31st July 2008? If yes, to what extent?

(10) Whether the claimant is entitled to claim No.5 for the amount of salary for the month of August, 2008? If yes, to what extent?

(11) Whether the claimant is entitled to claim no.6 for the amount of Bonus from the year 2004 to 2009? If yes, to what Page 453 of 674 C/SCA/15599/2008 JUDGMENT extent?

(12) Whether the claimant is entitled to claim no.7 for the amount of Bonus for the employees who have retired, expired or resigned? If yes, to what extent?

(13) Whether the claimant is entitled to claim no.8 for the amount of leave wages for the employees? If yes, to what extent?

(14) Whether the claimant is entitled to claim no.9 for the amount of Closure Compensation and notice pay under Section 25-N of the Industrial Disputes Act, 1947? If yes, to what extent?

(15) Whether the claimant is entitled to claim no.10 for the amount of Provident Fund and ESI? If yes, to what extent?

(16) Whether the claimant is entitled to claim no. 11 for the amount of LIC policies, loan from Gruh Finance and HDFC? If yes, to what extent?

(17) Whether the claimant is entitled to interest? If yes, at what rate?

(18) Whether the claimant is entitled to costs of the proceedings?

(19) What order?

Findings on above issues are as under:

(1)    In the affirmative.
(2)    In the negative.
(3)    In the affirmative.


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        C/SCA/15599/2008                               JUDGMENT



(4)   In the affirmative.

(5) In the affirmative. As per final order. (6) In the affirmative. As per final order. (7) In the affirmative. As per final order. (8) In the affirmative. As per final order. (9) In the affirmative. As per final order. (10) In the affirmative. As per final order. (11) In the affirmative. As per final order. (12) In the affirmative. As per final order. (13) In the affirmative. As per final order. (14) In the affirmative. As per final order. (15) In the affirmative. As per final order. (16) In the affirmative. As per final order. (17) In the affirmative. As per final order. (18) In the affirmative. As per final order. (19) As per final order."

59. It would not be out of place to refer to the decision in respect of change in the circumstances of the company and the learned Arbitrator has held that there is no question of fixing 'cut-off date' and it is open to the employees to invoke provisions of Section 25-N and 25-O of the Industrial Disputes Act, 1947. The Arbitrator in its judgment at page-62 and 63 observed as under:

Page 455 of 674

C/SCA/15599/2008 JUDGMENT "I must frankly admit that I am unable to accept the prayer made by the learned counsel. In Apollo Tyres, the Hon'ble Supreme Court held that there are many powers which Labour Court or Industrial Tribunal enjoy which a Civil Court does not have, I am not sure whether this Tribunal possesses all those powers exercised by a Labour Court or Industrial Tribunal. This Tribunal is exercising power under the Arbitration and Conciliation Act, 1996. Clause (1)(a) of Section 28 of the Act enjoins this Tribunal to decide the dispute in accordance with the substantive law for the time being in force in force in India, Industrial Disputes Act, 1947 is the substantive law dealing with "investigation and settlement of industrial disputes" between the management and workmen. The provisions of Section 25-N and 25-O thereof have been enacted by Parliament to ensure legitimate benefits to workmen/ employees by laying down conditions and prescribing procedure for taking actions of retrenchment of employees or closing down undertaking. Such conditions and restrictions have been held to be legal, lawful and reasonable by the Hon'ble Apex Court. It would, therefore, not be proper to accept the prayer of the respondent company to decide 'cut-off' date even if this Tribunal possesses such power (which is very much doubtful). But even on facts, the submission or prayer does not deserve to be granted. As already observed earlier, the case of the company itself was neither of closure of undertaking (Section 25-O) nor of retrenchment of workmen (Section 25-N). The Circular dated 27 August 2008 is absolutely clear and leaves no ambiguity. It expressly states that what was done by the company was temporary suspension of Page 456 of 674 C/SCA/15599/2008 JUDGMENT operational activities. The employees were though not required to report for work, were to be treated as present. The company thus never relied upon or put forward its case (a) either of closure of undertaking; or (b) of retrenchment of workmen.

I, therefore, hold that there is no question of fixing "cut-off" date as prayed by the respondent. Resultantly, it is open to the employees to invoke provisions of Section 25-N and 25-O of the Industrial Disputes Act, 1947. Issue No. 14 is decided accordingly."

60. The workmen and the staff members had to resort to the remedy of filing writ petition and prior thereto the remedy of raising industrial dispute, on account of Company successful dodging of its liability in discharging its basic duties, the workmen were compel to take out any and every remedy available under law for seeking relief and respite of plight of uncertainty. In this context, it would not be out of place to make a reference to the remedy under the Company Act, 1956 as strictly construed the workmen also could be classified to be a creditors of company, in case the company has taken services from them, for the earned wages, which has remained unpaid, workmen could be classified to be creditor though on account of further stringent provision, the right to bringing in winding up petition and working being not expressly mentioned therein, the controversy, had arisen where the Supreme Court in case of Page 457 of 674 C/SCA/15599/2008 JUDGMENT National Textile Workers' Union etc. Vs. Ramakrishnan and others, reported in AIR 1983 SC 75, had to say that the workmen cannot be expected to bring an action in form of winding up petition and workmen cannot be expected to bringing about to an end of employment, this concept has been enunciated by the Supreme Court in above decision, was considered in detail.

61. The fact remains to be noted that in the instant case, there are two orders which are required to be taken note of being order dated 17.4.2000 passed by this Court (Coram:K.M. Mehta, J.) in Company Petition No. 91 of 2000, which was at the behest of Union Bank of India against the Company, wherein orders were passed in the interregnum period. In view of the order dated 17.4.2000, no alienation in any manner was permissible for its immovable property. The group of petitions came under order dated 3.4.2002, in the matter of winding up petition of the company, consisting of as many as 8 petitions were also in respect of this very company, which contained its debts to the creditor and detailed order came to be passed admitting the petition being order dated 3.4.2002 (Coram: D.A. Mehta, J.) (as he then was).

62. Now, Rule 24 of the Companies (Court) Rules,1959 clearly indicates that the proceedings are to be advertised and Page 458 of 674 C/SCA/15599/2008 JUDGMENT they are in rem. It goes without saying that the Company (Court) Rules, are all alone being treated as part and parcel of this statute i.e. Company Act and therefore, they partake characteristic of statutory provisions. By operation of statutory provision in form of order and order of admission, coupled with the provisions of Sections 441 and 447 of the Company Act, this is envisaging in respect of all the creditors and in light of the observations of the Delhi High Court, when the workmen are clearly equated with and not treated as mere spectators they are attached with greater weightage like treating them as creditors, as per the provisions of Section 529-A of the Company Act.

63. A question arises as to whether can their claim to be thwarted or frustrated only on account of provisions which have been sought to be relied upon.

64. One more aspect which needs to be invited the Court's attention is that the provisions of Company Act and status of workmen arrived at thereunder and the winding up petition and its aftermath, especially to the order of admission, the situation may have been different than to what and it can be said that the provisions of Arbitration Act or SICA Act for that matter can act specifically when there is no specific declaration obtained under SICA in form of any declaration under Section 22 of the Act.

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C/SCA/15599/2008 JUDGMENT

65. Assuming for the sake of examining without holding that there exists the provisions of Sections 22, 22(1), 22(2) and 22(3) of the SICA Act have to be read in juxtaposition with the provisions of the Company Act and other collateral proceedings taken or pending. In the instant case, the dichotomy of the plea is apparent from the fact that there are number of proceedings which are pending, initiated or proceeded with and at no point of time, the shelter of those statutory provisions are invoked for ousting jurisdiction on earlier occasions. When the statutory umbrella is invoked, so as to safe and safeguard against order, that may affect the running of the scheme, then, it may assume different colour and may require a different provision. However, at the same time, one need not lose sight of the fact that Company Court is different than the Court under Article 226 of the Constitution of India, in which, there are rights available for enforcement of the fundamental rights qua it talks about violation of fundamental rights. All plea of violation of fundamental rights are pressed into service. The question, as to whether, can these all provisions including Section 22 of the SICA, Section 5 of the Arbitration and Conciliation Act and provisions made hereunder, be treated as rendering Article 226 nullity? the Court hastened to add here that the controversy in question, at this stage, cannot be cloak entirely, as if, it is touching upon the provisions of these acts so as to simply Page 460 of 674 C/SCA/15599/2008 JUDGMENT compel the Court to sit silent and watch the proceedings. It is one thing to argue and submit that there are statutory bar enuring against the proceedings and other thing to say that the proceedings are required to be stayed on account of question involved.

66. At the first blush the submission qua statutory bar based upon the provisions of two Acts may look attractive but it is not as simplisitor as it is made out for invocation of those principles inasmuch as, the observation made hereinabove, especially the development of events, which have been mentioned, still have to be borne in mind while examining whether the proceedings are intersperse to each other so as to ward off the submission qua statutory bar. The proceedings in the nature of settlement or for that matter, the matter of proceedings of winding up petitions, the orders made in the winding up proceedings and the order of admission in the winding up petitions, in fact was appreciated, so far as information is available on record in the year 2000; and first prohibitory order and action so far, was in the form of order dated 17.4.2000. This date is required to be borne in mind so as to understand the prognosis proclamation at the relevant time.

67. The 2(P) settlement dated 27.10.2003 do not indicate any adverse approach on the part of either side, rather it was in Page 461 of 674 C/SCA/15599/2008 JUDGMENT the spirit of cooperation extended by the workmen for the institution to run it smoothly or else it would have brought about an end of the institution, which nobody envisaged as could be seen from the efforts.

68. One more incident in the list of events and development happened to be the agreement to sale. The Court hastened to add here that said agreement to sale cannot be said to be a 'sale' in itself. This agreement is dubbed as Memorandum of Understanding executed by the Company with one Uma Developers, a sole Proprietary Firm on 9.12.2003. Now, admittedly on that day, neither SICA nor any other statutory provisions or permission , or protection were available and Company was already under restraint order passed by this Court in Company Petition No. 91 of 2000 as it is mentioned hereinabove. (Coram: K.M. Mehta, J.) (as he then was).

69. The entire conduct of the Company is required to be viewed in light of this chain of events, which will lead to a conclusion, which cannot be avoided by anyone namely the lack of regard to the established norms and rule of law and its principles.

70. The Delhi High Court had an occasion to deal with the claim of the workmen in light of proceedings and provisions Page 462 of 674 C/SCA/15599/2008 JUDGMENT under Company Law in case of Argha Sen Vs. Interra Information reported in 2007 75 SCL, 150 Delhi = 2006 Vol.133 Company Cases 49, the Court explained the decision of the Supreme Court in case of National Textiles. Following paragraphs would make a relevant reading "para-20 : Learned Counsel for the respondent, then, argued that in any case an employee cannot file a petition for winding up as he is not a person covered by Section 439 of the Act. In support of this proposition, Learned Counsel for the respondent relied upon the judgment of the Apex Court in the case of National Textile Workers' Union (supra) as well as judgment of the Bombay High Court in the case of Indo French Times Industries Ltd. (supra). The specific portion of the judgment in the case of National Textiles Workers' Union (supra), on which great thrust was laid by the learned Counsel for the respondent, is contained in para-7 and reads as under:

"7........ The first provision relied upon by respondent nos. 6 to 9 was Section 439 which, inter alia, provides as to who shall be entitled to make an application for winding up of a company. It is no doubt true that this section confers the right to present a winding- up petition only on certain specifically enumerated persons and the workers are not included in that enumeration and, therefore, obviously, the workers have no right to prefer a petition for winding-up of a company. The right to apply for winding-up a company Page 463 of 674 C/SCA/15599/2008 JUDGMENT being a creature of status, none other than those on whom the right to present a winding up petition is conferred by the statute can make an application for winding up a company and no such right having been conferred on the workers, they cannot prefer a winding up petition against a company....."

para-21 and 22 reads as under:

"21. In first blush, when the aforesaid observations are, read in isolation the impression which would be gathered is that workers have no right to file the winding-up petition as they do not come within the scope of Section 439 of the Act. However, when these observations are, read in totality and the context in which they were made in the said judgment of the Hon'ble Supreme Court, their import would be clearly discernible. Therefore, we shall have to first understand the issue involved in this case which the Apex Court was called upon to decide and the circumstances which led the court to make those observations. At the outset it may be noted that workers had not filed the winding-up petition. Winding-up petition was filed against the company by one group of shareholders as serious disputes had arisen between two groups of shareholders, who were equally represented on the Board of Trustees and these disputes could not be settled. The petition was filed under Sections 433(e) and (f). Thus, one ground was that the company was unable to pay its debts and 'just and equitable' clause was also pressed. In the said company petition workers union sought to intervene and wanted to oppose the prayer for winding-up. The question that Page 464 of 674 C/SCA/15599/2008 JUDGMENT arose was as to whether workers can be allowed to intervene in the petition. The Court framed this question which arose for determination in para 3 in the following manner:

3...The question, briefly stated, is : when a petition for winding-up of a company is filed in Court are the workmen of the company entitled to ask the Court to implead them as parties in the winding-

up petition or to allow them to appear and contest the winding-up petition or they have no locus standi at all so far as winding-up petition is concerned and they must helplessly watch the proceedings as outsiders though the result of the winding-up petition may be to bring about termination of their services and thus affect them vitally by depriving them of their means of livelihood ?....

It is this question which the Hon'ble Court thereafter proceeded to determine and held that workers shall have right to be heard in such a petition. This conclusion was based on number of reasons. Notable among those are, well- established principles of Administrative Law warrant that no order entailing adverse consequences be made and as winding-up order may put an end the services of the workmen, they had right to be heard; the concept of a company had undergone radical transformation in the last few decades and the earlier view that the shareholders were the owners of the company had significantly eroded inasmuch as workers were Page 465 of 674 C/SCA/15599/2008 JUDGMENT also an important part of the enterprise as labour contributed a major share of the product; their role in a corporate entity had undergone a change after the doctrine of laissez fairs has given way to the social welfare economy keeping in view the provisions of the Constitution, including Directive Principles of State Policy.

21.1 After this discussion the Court proceeded to consider the argument of the petitioners against the right of the workers to be heard contending that only creditors and contributories had right to maintain a winding-up petition and, therefore, workers had no right to intervene in a winding-up petition when no such right was spelt out in their favor in the Companies Act. Opening portion of para 7 takes note of this argument and immediately thereafter the Court has made the observation quoted above stating that Section 439 does not describe 'workers' as a category which can file a winding-up petition. After making these observations the Court answered that "but for this exclusion of the workers from the right to present a winding-up petition, it does not follow as a necessary consequence that the workers have not right to appear and be heard in a winding-up petition filed by one or more of the persons specified in Section 439 of the Act.

22. Once we take note of this background fact situation, it is not difficult to spell out the true intention behind the afore-quoted observation. Workers in the said case wanted to oppose the winding-up petition. The petitioners, who had filed the winding-up petition, disputed the workers' right to participate in these proceedings.

Page 466 of 674

C/SCA/15599/2008 JUDGMENT In support of their contention the petitioner relied upon Section 439 of the Act to contend that when the workers had no right to file the petition they could not intervene also. The Supreme Court held that the workers had a right to participate in such proceedings even if they could not file the winding-up petition. While making the observation that the workers may not have right to file winding-up petition under Section 43 of the Act, the Supreme Court treated them as 'workers alone' and it was held that Section 439 does not mention the category of the workers. It may be mentioned that Section 439 stipulates various categories of persons who are competent to file a petition for winding-up. The persons specified are company itself, creditor, contributory, Registrar and in some cases Central or State Governments. In this context the Supreme Court stated that workers are not included in Section 439. However, the position of workers was 'creditor' as neither in issue nor dealt with by the Supreme Court. A worker per se may not have right to file the winding-up petition. But when he becomes a 'creditor' he will have right to file the petition as a 'creditor' which category is stipulated in Section 439(1)(b) of the Act. The judgment the Bombay High Court in the case of Indo French Times Industries Ltd. (supra) has not examined the issue from this angle. That was a case where labour union had filed the winding-up petition and it was held that a labour union cannot be called a 'creditor' to enable it to file a winding-up. While I may agree that on the facts of that case the Bombay High Court was justified in not entertaining the petition filed by the labour union, I am not able to persuade myself in the manner in which judgment of the Supreme Court in National Page 467 of 674 C/SCA/15599/2008 JUDGMENT Textile Workers' Union's case (supra) has been interpreted by the Bombay High Court. I do not agree with the extreme conclusion drawn by the Bombay High Court in para 7, which gives an impression that under no circumstances the workers can have right to prefer a petition for winding-up of a company even if they are the creditors."

71. The entire reading of the judgment indicates that the workmen as such were not said to be competent to bring an action as held by Bombay High Court and Supreme Court but they were on the basis of the principle that "the employee cannot bring about an end of the company, which will amount into bring to an end of company. Thus in a given case, where ongoing company on account of some genuine financial crunch and crisis is for time being unable to discharge its liability to workmen qua even the wages and in an event workmen bring- forth the petition for winding up, then, as it is said by Delhi High Court, caveat is entered by saying that Company Court has complete discretion not to wind up the company and in that context the entire proceedings are to be viewed. In other words, where it is consistently established over the period of years and by efforts, when the company has stopped its functioning in any manner and is only functioning on the record of ROC and for purporting the name and holding over the properties which may turned out to be a dead horse in a good hope make it to be dead elephant so as to wriggle more money from the inflationary Page 468 of 674 C/SCA/15599/2008 JUDGMENT scenario of its assets. This being a case, where in even the Court would have to take into consideration the entire scenario and come to the conclusion qua employees' entitlement for maintaining action. The observation of the Delhi High Court referred hereinabove would indicate that in a given case, where the action on the part of employees against the company did not affect the running of the company on account of company's utmost de-functious status. The outstanding dues of workmen cannot be ignored by any Court of law much less the Company Court and on that basis, it would be rather duty of the Court to provide succor to the employees, who have been not paid their wages for all these period. In the instant case, the Court, therefore, will have to take this aspect into consideration.

72. The decision of the Apex Court in respect of winding up proceedings therefore, at the behest of the workmen whose dues are outstanding and remained unpaid, being not one of the parties enumerated in the provisions of Section 439 of the Company's Act, the petition for winding up cannot be maintained and the same is distinguishable on the ground of Section 439 and its interpretation reading with and in juxtaposition of decision of Delhi High Court as mentioned, would indicate that the legitimate dues required to be recovered from the company at the behest of workmen and workmen would also entitle to file winding up petition. The Supreme Page 469 of 674 C/SCA/15599/2008 JUDGMENT Court cannot be said to have shutdown the doors, once and for all as Delhi High Court observed.

73. Against the aforesaid backdrop of the facts, chronological developments and rival contentions of the parties in respect of these matters, it would be most appropriate to advert to the main matters individually also in order to take care of the contentions specifically if it is touching upon the aspect, which is required to be dealt with appropriately in accordance with law.

74. The first matter in point of time in this group of matters being Special Civil Application No. 134 of 2006, as it is stated hereinabove, this petition contained challenge to the order dated 6.12.2005 passed by the Tribunal in the proceedings of I.T. Reference No. 15 of 2005.

75. The aforesaid order had in fact been passed on two aspects, namely the Company was restrained from alienating its assets in any manner and on account of holding that there was a breach of condition, 7 workmen named thereunder were ordered to be reinstated. The petition was filed interalia contending that those persons indulged into notorious activities and therefore, they were required to be restrained and only way out was to terminate their services, so far as financial aspect is concerned. It was contended that the company was in fact facing Page 470 of 674 C/SCA/15599/2008 JUDGMENT tremendous hardship in continuing its manufacturing activities and therefore, the settlement had arrived at between the parties. Part of the land was sold under order of DRT and at that time when the company was before the BIFR and was under process of having its scheme sanctioned for rehabilitation itself, the Court also not to have passed restraint orders. The development after filing of the petition have been in fact discussed hereinabove at length and this Court while considering the prayers, will have to take the entire development into consideration and hence, suffice it to say at this stage that this petition now would require to be only considered from the angle of subsequent development and the proceedings between the parties. The petitioner Company has in the entire memo of petition, not disclosed as to which were the DRT proceedings and under which order, what portion of properties were sold. The affidavit in reply was filed interalia contending that the order passed by the Tribunal assailed in this petition was just and proper and company's attempt to sale out as property only for meeting with its statutory liabilities qua secured creditors, dealing the workmen hie and dry was appreciated by the Tribunal and Tribunal, therefore, restrained the company and this order being an order taking care of the situation, which would ultimate unfortunate the workmen to receive the legitimate dues, cannot be said to be in any manner illegal or perverse to say the least in this petition. It has also emerged that Page 471 of 674 C/SCA/15599/2008 JUDGMENT the conciliation proceedings had started somewhere in the month of August 2005 itself.

76. This Court has also discussed at length hereinabove various orders in these matters, however, the development as reflected in the orders, need reiteration at the cost of repetition, which is bound to occur looking to volume of documents, the rival submissions and development in the matter. The order dated 6.12.2005 was the order passed by the Tribunal as it is stated hereinabove in respect of reinstatement of workmen and restraining the company from alienating the assets. This order had not been stayed by the Court, as could be seen from the order dated 20.2.2006 passed by this Court (Coram: K.A. Puj, J.) (as he then was), however, liberty was reserved to company in case there is some proceedings from order of BIFR. At this stage, it is required to be noted that the factum of BIFR and arguments based thereupon, was very much available on the proceedings i.e. the proceedings of Reference as well as of those petitions, however, at no point of time, the Court ever felt restricted qua passing appropriate orders, as the strong thread passing through out the needle was that of original claim of the workmen for receiving their legitimate dues, wages and company's attempts of warding off coercive steps and whittling down those claims leaving the workmen high and dry in the ultimate. This Court (Coram: H. K. Rathod, J)(as he then was) Page 472 of 674 C/SCA/15599/2008 JUDGMENT on 20.4.2006 also confirmed the order dated 20.2.2006 and rather ordered that pendency of this petition may not in any manner be treated as impediment in way of the Tribunal to proceed further expeditiously with the reference. The application being Civil Application No. 11914 of 2007 appeared to have been filed in these proceedings which came to be moved on 13.8.2007 for seeking appropriate relief, inspite of the order, which was passed on 20.2.2006 and 20.4.2006. This Court (Coram: H.K. Rathod, J.) (as he then was) on 16.5.2008 modified the order whereunder, as could be seen from the operative part, which has been stated hereinabove, the modification could not have been said to be unconditional or unrestricted, rather, the leave was granted to sale the properties in question i.e. POY plant and that sale was to be effected through Sale Committee under the auspice of BIFR and sale proceeds were specifically ordered to be deposited in this Court.

77. The contention in respect of orders and developments, as it is stated hereinabove, needs to be kept in view, while deciding the entire controversy and rival contentions which have been also based upon the subsequent development of events that have been adverted hereinabove.

78. It is important to note that as the workmen were not receiving the dues and workmen who had died or who had Page 473 of 674 C/SCA/15599/2008 JUDGMENT attained the superannuation and were awaiting their retiral dues to be paid, the Tribunal was allowed to pass an order qua those dues and hence, the order came to be passed by the Tribunal on 20.10.2007, which is now termed to be Part-I Award, gratuity and other retiral dues admissible to those workmen or heirs, which were required to be given as immediate relief, as those dues were outstanding since long.

79. This Part-I Award, as it is stated hereinabove, is assailed in the proceedings of Special Civil Application No. 3916 of 2008. Hence, it is also required to be adverted to the contentions of the parties in this petition, so as to see to it that nothing is left out, though ultimate outcome will have to be taken upon the final adjudication upon the entire controversy on which, as it is stated hereinabove, submissions have been canvassed taken into consideration, the development between the parties and Company, that had taken place. This petition, essentially contained the prayers in respect of the Part-I of the Award rendered on 20.10.2007 on the ground that said being without jurisdiction, inequitable, discriminatory and was required to be quashed and set aside

80. The main and fundamental contentions raised, so far as Award dated 20.10.2007 concerned was lack of jurisdiction in Tribunal to award money under the head of Gratuity, as there Page 474 of 674 C/SCA/15599/2008 JUDGMENT is a separate forum statutorily created and available, the Tribunal could not have been passed this order under the pretext of adjudicating claim arising from the settlement. This petition was resisted by the Union, interalia contending that the unfortunate attempt on the part of the company in taking out technical stand for defeating the rights of the workmen has resulted into denial of the legitimate claims of the money, which were overdue to them. The Award was in respect of the demand, which had flown from the settlement, breach whereof was challenged before the Tribunal in Reference No. I.T. No. 15 of 2005 and therefore, the specious plea qua existence of separate remedy in form of Gratuity Act and proceedings thereunder shall be of no avail to the Company.

81. At this stage, it is required to be noted that even these matters and proceedings have been adverted hereinabove, therefore, the rival contentions and submissions will be viewed from the development and events and proceedings in the entire group.

82. The workmen had to file a proceedings in form of Special Civil Application No. 15599 of 2008 as there all attempts did not yield any result, nor did it bring any succor to those, who were languishing for realizing their legitimate dues for years together. This petition was brought about on the plea Page 475 of 674 C/SCA/15599/2008 JUDGMENT that despite there being alternative remedy available, the dire situation warranted interference by this Court in exercise of an extra ordinary jurisdiction under Article 226 of the Constitution of India. The petitioners have prayed various reliefs against the company and also against the statutory State Authorities calling upon them to discharge their duties, which may help the workmen in realizing their dues which have been outstanding since years and prosecute the guilty for blatant violations of labour laws. It was contended that all along by the workmen since August, 2008, there was absolutely non-payment on the part of the company and company had gone ahead in alienating the assets one after the others, leaving behind the workmen high and dry, which may ultimately resulted into situation where the workmen would get nothing and company would be successful in siphoning money by selling the assets.

83. It is essential to mention here at this stage that the employees, in whose favour Part-I Award came to be passed on 20.10.2007, was in respect of the part of employees numbering about 1000 and odd in whose case, there was a clear admission of the company to accept their liability and which was specifically challenged by way of petition being SCA No. 3916 of 2008, whereas, in the case of other employees, who were entitled to receive gratuity and were not paid gratuity had to fend for themselves by way of resorting to the Forum which Page 476 of 674 C/SCA/15599/2008 JUDGMENT have been available under Gratuity Act and in that matters, Gratuity Awards were made in group of matters and when there was non-payment received, certificate for enforcing the claim was issued and same was challenged by way of petition being SCA No. 9045 of 2009 with 9298 of 2009 to 9381 of 2009, wherein this Court passed the following order:

1. Heard learned advocate for the petitioners and learned AGP Ms. V.S. Pathak for respondent no.1 and Mr. Kunan Naik for respondent no.2. Rule.

Learned AGP as well as learned advocate Mr. Naik waives service of notice of rule for respondent no.1 & 2 respectively. With the consent of learned advocates for the parties, this group of matters are taken up for final disposal.

2. This group of matters though forms part of the group which is listed, which contains specific grievance qua blatant non-compliance with provisions of law, where the gratuity amount under the certificates are wrongfully withheld by the employer concerned. The facts in these matters indicate that the petitioners-workmen in whose favour the valid recovery certificates have been issued by the controlling authority.

3. In this group of petitions the first respondent, i.e Collector, Surat, has filed affidavit through the Mamlatdar Page 477 of 674 C/SCA/15599/2008 JUDGMENT indicating that on account of company's representation qua it being sick the recovery proceedings are not undertaken. The company has relied upon the opinion of Justice Y.V. Chandrachud and, therefore, they do not propose to proceed with these matters. Time and again it was agreed by counsel for the company that the payment would be made as the gratuity amount cannot be delayed in any circumstances. However the stark reality is that the payment is not made despite the fact that certificates are arising in the year 2008 and today we are at the end of year 2012.

Respondent no.2, i.e. the company has not filed any affidavit whatsoever resisting the prayers made in these petitions. At one point of time the advocate for the company requested for adjournment of the matters as he was hopeful that the mediation proceeding will yield result which would be beneficial to the workmen covered by this group of petitions also and hence their advocate late Shri Dipak Raval who was representing the workmen at that time did not object for adjournment. Thereafter till date the development of the instances indicate that somehow or the other the dues are not paid and it would not be out of place to mention here that the pleadings are canvassed in other matters to agitate that the mediation and agreement in mediation would not Page 478 of 674 C/SCA/15599/2008 JUDGMENT ipso facto be binding upon the company and that on account of the BIFR proceedings under SICA and the arbitration proceedings the property could not be sold and the company thereafter, off late agreed through their counsel that they would be paying statutory dues like gratuity as soon as possible. But till date their exists no genuine effort towards the direction and hence this Court is of the considered view that this group of petitions are required to be allowed.

4. Shri Naik, learned advocate for the company submitted that the respondent no.2 company cannot dispute its statutory liability to pay gratuity amount but the only question is that of computation and therefore he is requesting for passing appropriate order so that the gratuity amount becomes payable as per the submission of 2003.

5. This Court is unable to accept such a contention as in these petitions there appears to be no reply filed by the company taking up any such contention nor has such contention been raised against the certificates and therefore this contention, to say the least, is of no avail to the respondent company. In fact these petitions contain essential direction to the authorities and in light of catena of decisions cited, viz. In case of Ranjan Bhagwant Kedar And Another Vs. HMP Engineers Ltd. And others, Page 479 of 674 C/SCA/15599/2008 JUDGMENT reported in 2004-III-LLJ, Bom.; in case of Uptron India Ltd Vs. Presiding Officer, Labour Court, Dehradun And Another, reported in 2004-II-LLJ; and in case of New Phaltan Sugar Works Ltd, Satara and others, Vs. State of Maharasthra and others, reported in 2004-III-LLJ;, it can be said that the dues covered by the certificates cannot be permitted to be withheld in such a fashion. Therefore the Court is of the considered view that respondent no.1, i.e. Collector, Surat, is to take prompt action and realise the amount mentioned in the certificates at Annexure-A to be paid to the workmen in accordance with law. The reply coming forward from the respondent no.1 is to say the least wholly contrary to the provisions of law and the Court is of the considered view this could not have been the stand taken by the authority as nothing prevented the Collector to obtain appropriate advice or instruction from Legal Referencer in this behalf. The certificate executing authority is not the adjudicating authority at all and therefore looking to the provision of Gratuity Act the certificate once issued it is to be respected and executed by the Collector as if the certificate amount is land revenue and if the land revenue does not brook any interference in its recovery the same should not have been permitted to be delayed on spacious plea raised by the company, Page 480 of 674 C/SCA/15599/2008 JUDGMENT which in my view did not justify delay on the part of respondent no.1.

Therefore as could be seen from the reply the notice is already issued to the company under section 152 of Bombay Land Revenue Code from 8/4/2008 to 16/4/2008.

6. The Collector, Surat, is therefore hereby directed to undertake the proceedings of recovery. In view of this, these petitions are disposed of. The entire proceedings of recovery shall be over in accordance with law and the amount be paid to the petitioners within three months from the date of receipt of writ of this order.

7. The fact remains to be noted that the respondent no.1 has not indicated anywhere that there was any justification for any proceeding against respondent no.2 company. The respondent no.2 company has not pointed out anything by filing any reply in this proceedings to even remotely suggest that there was any justification for not putting the property under sale or realizing the amount to be paid to 86 workmen who have valid certificates in their favour. The entire attempt appears to be merely stalling of the proceedings and therefore when it has come out on record by way of affidavit that the notice under section 152 have already been issued even to respondent no.1, he could not have held himself helpless without any valid reason as the Page 481 of 674 C/SCA/15599/2008 JUDGMENT provision of law is very clear.

Therefore, the Respondent No.1 Collector, Surat, is hereby directed to take appropriate & immediate steps under the provisions of Land Revenue Code from section 150 and other provisions, including section 155 and see to it that the amount is paid to the petitioners.

8. The entire proceedings should be over within a reasonable period and the periodical report be placed before this Court by way of affidavit to be filed by the Collector, Surat, thorough learned AGP on record. Liberty is reserved to the petitioners / workmen to approach this Court in case if the order is not complied with. The entire exercise be over within a period of 90 days from the date of receipt of writ of this order.

9. This group of petitions are disposed of as allowed. Rule made absolute in all the petitions. However, there shall be no order as to costs."

84. The said order dated 3.11.2012 is challenged by way of Letters Patent Appeal No. 1064 of 2013 with Civil Application No. 9688 of 2013 and allied matters and this Court on 20.11.2013, passed the following order:

"This Appeal under Clause 15 of the Letters Page 482 of 674 C/SCA/15599/2008 JUDGMENT Patent is at the instance of the employer, the respondent no.2 in a Special Civil Application, and is directed against an order dated 3rd November 2012 passed by a learned Single Judge, by which His Lordship allowed the Special Civil Application filed by the employees.

The former employees of the present appellant filed various Special Civil Applications being dissatisfied with the unjustified action on the part of the appellant in not paying the amount of gratuity already determined by the appropriate authority. The writ-petitioners were employees of the present appellant, and according to them, the appellant Company has not paid the amount of gratuity of the petitioners. Consequently, the petitioners approached the controlling authority for payment of gratuity by filing Gratuity Applications, and the controlling authority issued recovery certificates for the amount of gratuity determined by it along with interest at the rate of 10%.

In view of the fact that almost one year had elapsed since the recovery certificates were issued by the controlling authority, the employees prayed for a direction upon the Company to pay the said amount.

The learned Single Judge of this Court allowed the said Applications, against which the present Appeal has been preferred.

Since Mr.Upadhyay has already entered Page 483 of 674 C/SCA/15599/2008 JUDGMENT appearance on behalf of the employees, we have decided to hear out the Appeal itself by treating as on today's list.

After hearing the learned counsel for the parties and after going through the materials on record, we find that there is no dispute that the order of the controlling authority in the Gratuity Application filed by the respondent before us has not been challenged by preferring any appeal at the instance of the appellant before us.

Such being the position, in our opinion, the petitioner was justified in approaching the learned Single Judge for enforcement of such order. Once we find that the order of the controlling authority has attained finality, we do not find any reason to interfere with the order passed by the learned Single Judge.

It may not be out of place to mention here that this Appeal was filed along with the application for condonation of delay, and at the time of allowing such application, as a condition precedent, we directed the appellant to deposit the admitted amount by them before the controlling authority and such amount has been deposited and we also permitted the respondent to withdraw the amount without prejudice to its rights and contentions in this Appeal.

Now that we find that there is no illegality in the order, we direct the appellant to pay the balance amount to the respondent.

Page 484 of 674

C/SCA/15599/2008 JUDGMENT As prayed for by Mr.Mihir Joshi, learned senior counsel appearing on behalf of the appellant, to enable his client to move appropriate authority for challenging the order of the controlling authority, we stay the operation of our direction for a period of fortnight from today.

The Appeal is, thus, dismissed with the above observation.

It is needless to mention that even after the execution of the order if, ultimately, the order of the controlling authority is set- aside or modified by any lawful authority, the amount realized by the respondent will abide by the said decision.

In view of dismissal of the Appeal itself, the connected application for stay has become infructuous and is disposed of accordingly.

It appears that in Item No.90 of today's list, 9 similar applications are listed for condonation of delay in preferring such appeals. Since the selfsame order, which is the subject matter of those appeals, has been affirmed by this order, no purpose will be served by keeping those applications for condonation of delay pending.

As we have already affirmed the order impugned in those appeals by this order, consequently all those 9 applications for condonation of delay as well as the appeals are disposed of as dismissed."

Page 485 of 674

C/SCA/15599/2008 JUDGMENT

85. It is also required to be noted that group of Special Civil Applications being Special Civil Application Nos. 4667 of 2008 to 4700 of 2008 are filed by the Company in respect of their contentions that Appellate Authority ought to have appreciated the fact that gratuity amount was to be calculated in two parts, in which, the workmen given their consent for receiving reduced amount of wages and part for which, the complete wages were reckoned for calculation of gratuity and this will be adverted at appropriate stage, as it is only in respect of the subject matter, which has arisen out of the order passed by the Competent Authority under the Gratuity Act and these are the matters under Articles 227 of the Constitution of India.

86. There are Civil Applications, Misc. Civil Applications for more reliefs, injunction and contempt proceedings, which may be adverted and which will have bearing upon the final outcome of these matters and rival submissions are based upon the development in interregnum period.

87. Thus, looking to the aforesaid discussion and depicting of development of events, one can classified these proceedings broadly into the following categories namely:-

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(i) the proceedings in the form of SCA being Special Civil Application No. 134 of 2006, Special Civil Application No. 3916 of 2008, the group of petitions filed by the Company being Special Civil Application Nos. 4667 of 2008 to SCA No. 4700 of 2008 and Civil Applications resisting the workmens' claim for their entitlement to immediate relief in terms of payment of dues irrespective of the proceedings, company's plight and legal grounds available for residing the claim of workmen;

(ii) the second category of petitions being Special Civil Application No. 15599 of 2008 and Civil Application made thereunder and Special Civil Application No. 4812 of 2010, by and large, claiming immediate reliefs to assuage their plight even if the properties of the company are required to be sold;

(ii-A) the applications for seeking appropriate relief on the basis of contentions of company flouting the orders of the Court warranting immediate steps and dis-entitling the company to hold of the properties and contempt of Court.

All these broad categories, rival contentions and submissions have been canvassed and they are to be decided in light of the development in the matters.

Page 487 of 674

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88. The employer company has contended that the Tribunal could not have ordered restraining the employer company from alienating assets for meeting its liabilities, especially when the company was before the BIFR awaiting sanction of its scheme for rehabilitation and workmen are not entitled to seek any order compelling the company to sale its assets so as to receive their dues from the Company, the company's selling of land in the interregnum period is only in accordance with scheme sanctioned by the BIFR and therefore, the workmen were not entitled to agitate that lands, so far sold, was contrary to and disregard to the prohibitory orders granted by the Tribunal dated 6.12.2005 and confirmed by this Court on 20.2.2006 and subsequent orders dated 20.4.2006 and thereafter.

89. The employer company's resistance of the proceedings initiated by the workmen is based upon some spacious grounds, which are available to them but in ignorance of its own conduct so far, which would point towards hollowness of the Company claim for resisting the workmens' dues. The settlement arrived at between the parties being 2(p) settlement under the Industrial Dispute Act, 1947 read with Rule 62, contents, facts, discussion and promises to be fulfilled by the parties. Therefore at the cost of repetition, it is required to be set out as under the settlement dated 27.10.2003, in which, in its Page 488 of 674 C/SCA/15599/2008 JUDGMENT preamble, it is stated that despite the fact the Memorandum of Understanding was arrived at dated 27th June, 2002 under the provisions of Section 2(p) read with Section [18(1)] of the Industrial Disputes Act, 1947, between the Company on the one hand and Baroda Rayon Employees Ekta Union on the other hand. Thereafter, one more settlement being settlement dated 5.5.2002 was arrived and at that time, it was a talk of about 3112 employees which were in employment of the company. In that settlement, it is discussed that in the balance-sheet / Profit and Loss Account as on 31st March, 2003 carried forward losses of the Company exceed Rs.500 crores, which was held out to the employees for seeking fresh concessions so as to save their employment and have the Company keeping in its afloat. The settlement is produced at Page No.100 in Special Civil Application No 134 of 2006 and at Page-21 in Special Civil Application No. 15599 of 2008. The following important aspect of said settlement are required to be extracted and set-out herebelow :

"Settlement under Section 2(p) read with Rule 62 under the provisions of the Industrial Disputes Act, 1947.

"xxx xxx xxx The Company would be able to get out of its financial crisis that it was facing Page 489 of 674 C/SCA/15599/2008 JUDGMENT and that the employment of around 3112 employees may continue . The financial position of the Company further worsened.

xxx xxx xxx The Result is that out of 3112 employees those of the employees, who were being provided work by paying them wages @ 60% and those being not provided with work and paid @ 35% of wages are also now being not provided work by the Company ever since April 2003.

The Company even did not pay the amount of gratuity payable to the workmen concerned, the PF and ESI dues etc. xxx xxx xxx The Company has, therefore, decided to dispose of its surplus lands lying outside the factory so as to see that dues of the bankers and Financial Institutions who are the secured creditors are paid of their dues as per the proposed settlement with the result that interest and other burdens which the Company is facing would be no longer payable which factor may enable the Company to work as economically viable unit.

It is possible that the Company may start working gradually effective November 2003 like starting Page 490 of 674 C/SCA/15599/2008 JUDGMENT maintenance work of the plants leading to working all the four plants employing around 3112 employees who are on the muster-rolls of the Company by around May / June 2004.

xxx xxx xxx TERMS OF UNDERSTANDING (1) MANAGEMENT The company will be professionally managed at the instance of new financier..

(2) WAGE STRUCTURE 2.1 The wages payable to the employees at the rate of 60% as per the present practice as on 1.1.2004 will be treated as basic wage structure applicable hereafter, which will comprise of basic wages / salaries, VDA, personal pay, special pay, conveyance allowance, HRA, Education Allowance etc. However, after 1.1.2004 the employees will be entitled to get additional VDA as per the present formula. Employees shall continue to earn their annual increments as they got in the last two years.

2.2 Effective 1-1-2007 all the employees will be given an ad hoc allowance equivalent to 5% of the total emoluments drawn as on 30.6.2006 per month. without attracting any fringe benefits like Page 491 of 674 C/SCA/15599/2008 JUDGMENT provident fund, ESI etc. 2.3 Effective 1-1-2008 all the employees will be given a further adhoc allowance equivalent to 5% of the total emoluments drawn as on 30.6.2007 per month. Without attracting any fringe benefits like provident fund, ESI, etc. 2.4 The aforesaid wage structure will remain in operation for a period up to 3l-12-2008 during which period the Union/employees concerned agree not to raise any demand against the Company involving any further financial burden except bonus.

3. The Company will regularly deposit both employer's and employees P.F. and ESI dues

4. So far as the wage dues of the employees payable prior to December 2003 is concerned, the Company agrees to pay total of Rs.l8 crores lump sum amount in full and final satisfaction of all their wage dues / wage claims against the Company.

The amount of gratuity payable to the eligible employees who have already resigned, retired, died, etc. will be paid as mentioned hereunder :

5. Out of Rs.18 crores payable by the Company as per Para Page 492 of 674 C/SCA/15599/2008 JUDGMENT 4 above the Company will disburse Rs.6,000/- to each one of the eligible employee on or before 30th October 2003.

6. As aforesaid the Company accepts the past liability of Rs. 6.16 crores being the amount payable towards gratuity to the employees who have already resigned, retired, died. The said amount will be paid in spread over a period of three years as may be mutually agreed.

7. With effect from 1.1.2004 those of the employees. who would not be taken but on job will be paid an amount equivalent to 35% of wages etc. payable per month as per present practise till the tile such employees are taken back on job and provided work. However, with effect from 1.7.2004, even if job is not provided, such employee will the paid along with other employees.

8. The balance amount out of Rs.18 crores after disbursing the amount as per clause (4) above payable to the eligible employees concerned will be paid in consultation with the Union as under.

Effective 1.7.2004 each eligible employee will be paid Rs.1000/- per month over and above regular wages being payable in terms of this Page 493 of 674 C/SCA/15599/2008 JUDGMENT settlement to all who would have offered for employment and employed.

9. Since the new management taking over the Management of the Company has agreed to give continuity of service to all the employees to be employed by the Company in terms of this settlement, gratuity payable to the employees henceforth will be computed in two parts viz. (a) period of service of the employee concerned in the Company till December 2003; and (b) Period of service of the employee concerned for the period after 1.1.2004. The Company will pay gratuity to the employee concerned based on existing practice and based on salary @ 100% instead of 60% being the salary computed as at present for the period of service upto December 2003, while for the period of service after 1-1- 2004 the gratuity will be computed as per the provisions of Payment of Gratuity Act on the basis of wages then payable to the employees concerned. For this purpose, the eligibility of 5 years service will not be operative.

xxx xxx xxx

11. The company will also accept the liability of paying Rs. 6.61 crores towards PF dues, Rs..1.73 crores payable towards ESI dues as Page 494 of 674 C/SCA/15599/2008 JUDGMENT well as 48 lakhs payable as LIC premium to the employees. The Company will also pay the DRF, HDFC and Gruh Finance Loan installments, if deducted but not paid.

12. With a view to see that the Company remains working as economically viable in future it is agreed that:

(i) No demand of Bonus for more than 8.33% of wages will be raised for a period of 5 years. However, bonus will be paid to the employees as per the provisions of the Bonus Act.

xxx xxx xxx xxx xxx xxx xxx xxx xxx

(ix) The company has decided to dispose of its surplus land so as to see that dues of the employees, bankers, and financial institutions who are the secured creditors are paid of their dues as per the proposed settlement with the result that the interest and other burdens which the company is facing would be no longer payable which factor may enable the company to work as economically viable unit. It is agreed by the company that the land on which the workers and staffs residential quarters, school entire factory premises and utilities are located will not be disposed of as surplus land and Page 495 of 674 C/SCA/15599/2008 JUDGMENT as shown in plan and all proceeds out of-sale of surplus lands will be utilized for the payment of dues of financial institutions, Surat Municipal Corporation, Bankers, BRC, Cooperative credit society etc., capital expenditure and working capital.

However in case the company decides to sale any accommodation occupied by staff, they will be provided alternate accommodation to the existing occupants on the same terms and conditions as existing accommodation is provided. Staff will not be shifted to workers quarters. It is also agreed by the company that passage will be provided to employees to reach their work place in plants and residential quarters. However, company can shift administrative building to another place near the factory premises.

14. These concessions are given with the specific understand that the new management will not close down the business or a pert of the business with the purpose of retrenching large mass of the employees but has been arrived at with a view to protect the employment of the employees presently employed in the company. In case of new management either close down the business or part of the business and retrench / terminate the employees on the ground of close down of the Page 496 of 674 C/SCA/15599/2008 JUDGMENT business or part of the business, these concessions given will be treated as if none of these concessions are given and employees will be entitled for full wages and benefits as if concessions are not given. Subject. however that:

(i) the company is not in a position to continue to work any four plants because of violation of the terms of this settlement on the part of the union / employees.

(ii) It would also be open to the company to work or not work any one or more of the plants as long as the Company protects the employment of the employees that would have reported for employment on terms of this settlements.

xxx xxx xxx xxx xxx xxx

17. The Company proposes to get the Scheme of rearrangement / compromise restructuring, etc. sanctioned by the Hon'ble High Court immediately so as to restart the working of the plants in full swing in terms of this settlement.

xxx xxx xxx xxx xxx xxx Dt: 27.10.2003 "

Page 497 of 674

C/SCA/15599/2008 JUDGMENT

90. The settlement, thus clearly indicate the intention of the parties and there is a clear admission on the part of the Company qua its inability to pay the dues, requiring the workmens' consent for selling part of the surplus property so as to meet with the requirement of payment of workmens' dues and liabilities, statutory liabilities and secured creditor payment. In view thereof, the consent and agreements between the parties are required to be viewed, which would clearly indicate that workmen agreed for sale of surplus land of the Company and also agreed for temporary reduction in the wages on the solemn hope that employment of about 3112 workmen would be sustained. The employment on the paper can never be said to be a simple employment as the workmen and family members thus who were on role were aspiring to receive at least their living wages and helping the company to overcome from the crisis so that it can keep a float. The relevant portion of the settlement wherein, it is unequivocally laid down by the workmen that if the company was not fulfilled their promises, than the concession of the workmen was to be treated not being available, meaning thereby, the Company was to consider the wages without any deductions for bringing about an end to the services of employment in accordance with law i.e. in compliance with provisions of I.D. Act, 1947 namely Sections 25-F and 25-O. This settlement is executed on 27.10.2003 when the Company had only contemplation of moving the BIFR Page 498 of 674 C/SCA/15599/2008 JUDGMENT under SICA. It is also important to note at this stage that there were Company Petitions filed before the Court, as the company had failed in discharging its liabilities towards them. This petitions were pending before the Court and in some of the petitions, there were prohibitory orders restraining the company from dealing with its assets or alienating the properties. Few of the orders passed in Company matters, which were extensively relied upon by the parties during the course of submissions, need to be mentioned hereinbelow. These orders were reproduced in the List of Events, forming part of submission of Shri P.H.Parekh at Item Nos. 4 to 11. Thus, even prior to company's contemplation about moving the machinery under SICA, the Company Petitions were pending in the Court, wherein, prohibitory orders were passed and no one has disputed this aspect that these petitions have ever been disposed of or have resulted into any other proceedings as those orders are enuring.

91. As could be seen from the narration of events, at item No.14 and written submission mentioned hereinabove, despite their being an injunction in Company Petition No. 91 of 2000 dated 17.4.2000, the Company entered into MoU with developer namely M/s. Uma Developers, wherein, the Company agreed to sale the surplus land to said Uma Developers i.e. land admeasuring 5,84,820 sq. yards at village: Udhna and village:

Page 499 of 674

C/SCA/15599/2008 JUDGMENT Bhedwad in District Surat against the consideration of Rs.33.92 crore.

92. The written submission submitted on behalf of workmen contained apparent anomaly in Clause-7, which, if reads in its true sprite and letter, which indicate that the amount outstanding was Rs. 4530 lacs, which was sought to be made out of sale consideration of Rs.33.42 cr only.

93. Clause - 15 of the MoU with Uma Developers excluded area of temple, school, colleges, administrative building etc.

94. As it is gathered from the records and proceedings, the Company after entering into MoU, has as stated hereinabove, moved the machinery under SICA in the month of December, 2003 invoking Section 15 of the Act, which came to be registered as Case No. 67 of 2004 on 23.1.2004.

95. Even in those proceedings before the SICA agency, the Company appears to have not disclosed correctly the various orders passed by this Court in Company Petition i.e. winding up proceedings, nor, is there any mention about the prohibitory orders passed by this Court in the proceedings of winding up petitions.

96. In the proceedings of SCA No. 15599 of 2008, at page-393, an affidavit is filed on behalf of the respondent Page 500 of 674 C/SCA/15599/2008 JUDGMENT Company. The deponent has styled herself to be Assistant Manager (Legal) and in that affidavit, it has come on record that under the auspice of Corporate Debt Restructuring Cell (CDRC for short), Mumbai, reconstructing proposals were approved by the CDRC on 19th March, 2004. A question arises therefore, whether this CDRC could be said to be having any statutory force or legal sanction behind it. The existence of CDRC jurisdiction is required to be examined in order to appreciate the contentions raised on behalf of the Company that the assets were sold under the auspice of either CDRC or BIFR. An attempt is made to make a project as if on this count, the action of selling of properties which would have otherwise been hit by illegality was not rendered illegal on account of them being approved by the CDRC. This is an attempt to come out from the averment made in affidavit, which is filed on 2.2.2009 in the proceedings of SCA No. 15599 of 2008. This affidavit contained annexures, which have been termed to be basis for dealing in the property in the teeth of orders of this Court, may be in Company proceedings, prior to MoU with Uma Developers.

97. The counsel for the workmen has also invited this Court's attention to CDRC Scheme formulated under the auspice of BIFR. It did not record the say of workmen in any manner though the scheme did refer to and rely upon 2(p) settlement entered into by the management with workmen. The scheme Page 501 of 674 C/SCA/15599/2008 JUDGMENT envisaged creation of a Corporate entity namely a Special Purpose Vehicle (SPV), the settlement of secured debts against the transfer of the surplus assets of the Company to such an SPV and the sale of the assets of SPV, and the making of an application by the Company under Section 391 of the Companies Act so as to obtain the approval of all other creditors to the proposed CDR scheme.

98. It was emphasized by the counsel for the workmen union that at Page Nos. 421, 423-425, 425-426, 428-431 of Special Civil Application No. 15599 of 2008. It was contended that the company violated all the sanctity and did not create SPV for transferring the surplus land and did not move any application under Section 391 of the Companies Act and it was projected as if the property was sold in the month of October/November, 2006 to Laxmi Narayan Co-operative Industrial Service Society.

99. The counsel for the union has also invited this Court's attention to Page-423 of SCA No. 15599 of 2008 to indicate that how and in what manner the workmen's dues were to be settled. It is also pointed out that no statutory dues were ever paid like PF, ESI, Gratuity etc. It was further urged that in view of Clause 14 of the settlement, when there was non- continuation of the workmen, without following due process of Page 502 of 674 C/SCA/15599/2008 JUDGMENT law, specially mandatory provisions of I.D. Act for closure etc., the workmen were to be paid as if they had not given any concession and based thereupon, the dues were required to be worked out.

100. The record indicates that on 17.9.2004, Laxmi Narayan Industrial Cooperative Services Society Limited was registered under the provisions of Gujarat Cooperative Societies Act, 1961. This society is said to have ultimately been beneficiaries of the purported transfer of land as on 28.9.2004. M/s. Uma Developers Ltd. wrote to the Company stating that they had promoted a cooperative society as required under the Gujarat Ownership Flats Act, 1974 under the name of Shri Laxmi Narayan Industrial Cooperative Service Society Limited for the purpose of development of the land under the MoU and requested the Company to transfer the specific performance of the MoU in favour of the conveyance of the land is to be executed in favour of the said Society. The request appears to have been accepted by the Company as could be seen from page-505 of the workmens' petition. It was emphatically urged on behalf of workmen that although the MoU entered into by the Company with M/s. Uma Developers was to sell land admeasuring 5,84,820 sq. yards at Village: Udhna and Village:

Bhedwad, what is purported to be sold is the land admeasuring 7.52.361.54 sq. yards at a consideration of Rs.38,13 crores.

Page 503 of 674

C/SCA/15599/2008 JUDGMENT Nothing has been offered to the workmen out of that, as submitted by the workmen. The counsel for workmen emphatically contended that this was nothing but a fraud upon the entire statutory scheme, workmen and 2(p) settlement.

101. As it is emerging from the record, on 28.9.2004, said society also sent a letter to the Company seeking the Company's response to the execution of specific performance of the MoU in their favour and also stated that the society shall arrange for preparing Draft Agreements to be entered into between the company on the one hand the society on the other hand and Uma Developers as the confirming party. The counsel for the workmen has also invited this court's attention to Industrial Park Scheme, 2002 notified by the Department of Industrial Policy and promotion, Ministry of Commerce and Industry. The counsel appearing for the workmen also laid emphasis upon the submission that the employees working in the Company were registered with Baroda Rayon Employees Cooperative Credit Society, which used to lend money as loan to its members who were employees of the Company. As per Section 50 of the Gujarat Cooperative Societies Act, the employer is obliged to deduct the amount of loan installments from the salary of the employees and to pay the same to the said society. Accordingly, the company deducted a huge amount from the salaries of the workers-members till 21.10.1997 but did not pay the said Page 504 of 674 C/SCA/15599/2008 JUDGMENT amount to the said BRC credit society. Hence BRC credit society approached the District Registrar under Section 50(3) of the Gujarat Cooperative Societies Act for a recovery certificate claiming that an amount of Rs.1,18,68,581=61ps was recoverable as on 8.6.1999. The District Registrar issued certificate under Section 50(3) for recovery of Rs.1,14,41,551/- with 18% interest. However the same amount was not paid by the Company to BRC credit society and later on the Recovery Officer and the Administrator of the society colluded with the company and dues of the BRC credit society were settled only at Rs.1,18,84,500/- thereby foregoing interest amount. Against this action of the Recovery Officer and Administrator, office bearers of the BRC credit society filed Special Civil Application No. 7007 of 2005 before this Court, which is still pending.

102. The workmen, as it is already stated hereinabove, on account of breach of terms of settlement were constrained to raise a dispute, which was referred to the Court and it was numbered as Reference (IT) No. 15 of 2005. An interim application was filed by the Union in Reference as the pendency of reference, the office bearers of the union were terminated from service of the company and Tribunal passed an ad-interim relief order in terms of para 13(1) of the application. The Company filed Special Civil Application No. 134 of 2006 before this Court challenging the award passed by the Tribunal.

Page 505 of 674

C/SCA/15599/2008 JUDGMENT Suffice it to say that the development of events, filing of petition by the company, obtaining orders, clearly indicate that the Company's inability to pay dues to the workmen and Company's attempt to guard its land for its benefit, thwarting the workmens' dues is very evident and need no further emphasis. It would not be out of place to refer to the facts and exchanging between the parties in Reference (IT) No. 15 of 2005, which will have serious bearing upon the issue raised in this petition. The workmen in Reference before the Tribunal contended that the surplus land which was there, was attempted to be sold by sub- plotting but not a single farthing was paid to the workmen and it was contended by the Company that by the sale of land, dues of PF, ESI had been paid. It was stated by the Company that land was not sold by the company but it was sold by the Gujarat Debt Recovery Tribunal, Ahmedabad, which was palpably wrong and misleading statement.

103. In para-7 of the application reproduced at page-116- 177 of SCA No. 134 of 2006, the workmen averred that the Company in breach of the settlement was trying to evict the employees from their residential quarters and was threatening to demolish the quarters and was trying to sell the land. The workmen has narrated plight of the workmen, as some of the employees were bed-ridden in hospital, some were suffering from paralysis, heart attack, blood pressure and the families of Page 506 of 674 C/SCA/15599/2008 JUDGMENT those workmen were paralyzed but management was not having any respite to in the settlement. It was stated that the company was before the BIFR, yet the land was sold surreptitiously. On para-10 of the application, the Union had averred that interim order was passed under Section 33A on 1.8.2005 directing the company not to make any alterations and to maintain the status quo. It was clarified by the counsel that in fact in the said subject matter of Special Civil Application No. 7007 of 2007, the order dated 30.10.1999 passed by the DRT, was part of the record. The order pertains to land only at Pandesara and therefore, it was clear that under misleading statement, the Company was attempting to pass on their illegal acts and omission in selling of the property so as to deprive the workmen.

104. Against the backdrop of this scenario, the Tribunal was constrained to pass prohibitory order when there was on record the exchange of communication between the company and ESI Corporation. It is stated that vide letter from the Director (Recovery) of ESI, New Delhi, to the Regional Provident Fund Commissioner, Vadodara informing that pursuant to letter of the company dated 25.10.2005, the competent authority had agreed to grant 60 equal installments for PF dues of Rs.746.18 lac against the Company. These facts, persuade the Tribunal in passing the order prohibiting the Page 507 of 674 C/SCA/15599/2008 JUDGMENT Company, which came to be passed on 6.12.2005 and the Company did not disclose that apart from the injunction dtd 6.12.2005, there was an injunction order dated 17.4.2000 passed by this Court in Company Petition No. 91 of 2000, which was in operation at the time of filing Special Civil Application No. 134 of 2000. In other words, the prohibitory orders came to be granted by the Tribunal and confirmed by this Court only envisaged some lee way to the company to fulfill the scheme on the condition that the scheme may be sanctioned by the BIFR and it was an obligation upon the Company to sale the property strictly in accordance with law. The company by letter dated 16.2.2006 requested the BIFR to sanction the scheme under section 17(2) of the SICA. BIFR sanctioned the scheme for rehabilitation of the Company under Section 17(2) of the SICA. The said scheme provided that the company had concluded a comprehensive One Time Settlement (OTS) plan with secured creditors before the CDR forum. In the said scheme, one of the assets mentioned by the company was 5,84,820 sq.yds of land at village: Udhana and village: Bhedwad in District: Surat, which was falsely mentioned already sold, but in fact this parcel of lands cannot be said to be sold nor is there any clarification qua referring the land in scheme, had the land has been sold as stated above. The entire settlement arrived at between the Company and workmen under Section 2(p) of the I.D. Act read with Rule 62 of the Industrial Disputes (Central) Rules, 1957 on Page 508 of 674 C/SCA/15599/2008 JUDGMENT 27.10.2003, was also forming part of scheme at Annexure - IV and one of the relevant relief envisaged under the scheme was to implement the said settlement dtd 27.10.2003. In para-VII(A)

(iii) of the scheme at page-101, the company has acknowledged that the workers of the company had agreed to waive substantial portion of the past unpaid dues under a comprehensive settlement and had agreed for a new wage structure which has resulted into substantial cost savings to the company.

105. It would be most appropriate to mention herebelow the immovable properties 'as already sold' by the Company :

"(i) Land admeasuring 2,08,000 sq. yrd.

Situated at village: Pandesara at Udhna Navasari Road, District; Surat.

(ii) Certain Misc. assets mentioned in Annexure - III;

(iii) The office premises at Jolly Maker Chamber No. 2, 1st Floor, Nariman Point, Mumbai- 40021;

(iv) Residential premises being Flat No. 702, Samudra Setu, Bhulabhai Desai Road, Mumbai - 400 026;

(v)Residential premises being Flat No. 301, Malva Rosa Cooperative Society, Bulls Royce Colony, Santacruz (East), Mumbai;

             &


                            Page 509 of 674
        C/SCA/15599/2008                            JUDGMENT

(vi) Residential premises being 402, B-Wing Kamlakunj, Veer Savarkar Marg, Mumbai - 40028."

106. It is indeed matter of concerned that such a scheme under which the Company was attempting to hold out protective umbrella to the workers at large and secured creditors by saying that the company was having enough assets to fulfill its promises. The Company's property could not have been shown to be company's property, as they were sold. In fact, same were sold in breach of injunction order dated 17.04.2000 passed in Company Petition for winding up No. 91 of 2000. Clause (ix) of the Scheme clearly stipulated that 'any sale of assets of the Company would be effected through Asset Sale Committee as per the guidelines issued by the BIFR'. The entire sale proceeds would be used as per the scheme sanctioned or as per the directions of BIFR. Even land admeasuring 5,84,820 sq. yards had already been sold as falsely claimed in the Annexure, it could not have formed part of the Rehabilitation Scheme. In light of the aforesaid development and background, question arises as to how far the company could have passed resolution dated 23.6.2006, referred to by the counsel and its submission at item no.45, resolving to sale the surplus land of the company ignoring Court's order dtd 17.4.2000 passed in Company Page 510 of 674 C/SCA/15599/2008 JUDGMENT Petition No. 91 of 2000 and order dtd 6.12.2005 passed by the Industrial Court and order passed by this Court on 28.2.2006 and 20.4.2006. One Hemant Dhirubhai Patel was appointed as a Power of Attorney to execute the necessary documents for the sale of surplus land. Thus, there is also some discrepancy in the resolution regarding date of sale deeds. A reference was made at page-165 and 215, pointing out this anomaly. The Company therefore made absolutely incorrect statement before the Bench of BIFR only with a view to seek and continue the protective umbrella to evade the legitimate claim of workmen. The company under the guise of so called sanction of BIFR scheme, went ahead with impunity and executed 4 sale deeds, as could be seen from page-236- sale deed dated 10.10.2006, page-165 - sale deed dtd 8.11.2006, page-214 - sale deed dated 13.11.2006, page-184 - sale deed dated 14.11.2006. These four sale deeds were executed by the Company in favour of Laxmi Narayan Industrial Cooperative Service Society Limited for an area of 7,54,361.54 sq. yds., of factory land and the company claims to have received ridiculously low price of Rs.38.13 crore of such a huge area, which was subject matter of sale document executed in the year 2006, which was also not as per the Jantri rate, which if one refers to, would indicate that same would not come nearer to the said. There is no answer to the contention raised on behalf of workmen by the Company that company did not made any attempt or file any proceedings whatsoever, for seeking Page 511 of 674 C/SCA/15599/2008 JUDGMENT appropriate rate of the land in question. Not only that, the company did not bother to fetch appropriate price of the land but company sold them by executing sale deeds from October, 2006 to November, 2006 without any permission from the Court, inspite of the fact when prohibitory orders were enuring against the Company restraining the Company to deal with any of the property in question. These facts have very serious impact upon the specious submission canvassed on behalf of the company and purchaser of the land that Company's attempt to sale the land and Company's sale of land, cannot be found upon illegal as it was part of BIFR scheme. The company has not even answered the contention raised on behalf of the workmen that even such purported sale did not conferred to the scheme sanctioned by BIFR as one looks at the scheme, one would know that the company was to sale only the surplus land admeasuring 584820 sq. yr but purported sale indicate that total area admeasuring 75436.52 sq. yrd were sold. Not only that said sale was not in conformity with the BIFR but it was also in violation of injunction order dtd 17.4.2000 passed by this Court in Company Petition No. 91 of 2000, interim order passed by the Tribunal dated 6.12.2005, and orders passed by this Court dated 20.2.2006 and 20.4.2006. Not only that, the Company sold this property contrary to the orders passed by this Court and without confirming to the terms and conditions of sale laid down under the Scheme but same was conducted by the Assets Sale Page 512 of 674 C/SCA/15599/2008 JUDGMENT Committee as envisaged by the BIFR sanctioned scheme. The said sale was also contrary to the settlement dated 27.10.2003, which was a settlement under Section 2 (p) of the ID Act. The settlement was forming part of the scheme of rehabilitation and therefore, breach thereof would amount to show that it was also a breach of scheme on that count.

107. The Company has not explained the contentions raised against it by the workmen as could be seen from the document dated 7.11.2006, reference has been made at page-203 to 212 of SCA. The company purportedly sold more land than what was permitted by the BIFR and to hoodwink the Court and the workmen, a rectification deed, which is popularly known as 'Sudhara no Dastavej' in vernacular was purportedly executed, whereby, an area of 63,863.89 sq. yrd of land was given for internal and external roads to the purchasers and the company claimed that it was not sold although rights were created in favour of the purchaser on the said area. It is submitted that this rectification deed was an eye wash to show that the Company and its directors had not violated the limit of land which it was permitted to sell by BIFR. The alleged purchasers were given all the rights over the property, which in substance was nothing less than the sale to them. Even creating 3rd party interest, as was created by this document, was injuncted by the order of the Industrial Tribunal dated 6th December, 2005 and the orders of Page 513 of 674 C/SCA/15599/2008 JUDGMENT this Hon'ble Court dated 20th February, 2006 and 20th April, 2006. The workmen's contention that even if assuming that area was explained, then also, the remaining land admeasuring 105677.65 sq. yrd is said to have been still sold in excess of what was permitted by BIFR. Note: It is important to note that even by this rectification deed what has been excluded is only 63863.89 sq. yards of land and therefore, even after excluding this land still 1,05,677.65 sq. yards of land was purportedly sold in excess of what was permitted by the BIFR. The company has not explained or answered the contentions raised by the workmen. That one Civil Application No 11914 of 2007 was filed by Company and in SCA No. 134 of 2006 seeking to modify the order dated 20.4.2006 directing deletion of the condition imposed in the order dated 6.12.2005 by the opponent no. 2 in Reference (IT) No. 15/2005 to the extent it restrains the Company from selling, transferring and alienating the properties of the company identified under the scheme sanctioned by the Board for industrial and Financial Reconstruction for the applicant company. In the said C.A. No. 11914 of 2007 the Company did not disclose that apart from the Injunction Order dated 06.12.2005, there is a prior injunction order dated 17th April, 2000 restraining the Company from alienating, encumbering, transferring, dealing with or creating any third party rights in respect of the immovable assets of the Company. Thus the Company played a fraud on this Court by seeking an Page 514 of 674 C/SCA/15599/2008 JUDGMENT order in C.A. No. 11914 of 2007 to nullify the earlier injunction order dated 17.04.2000 without even disclosing that such an order dated 17.04.2000 was passed and was in operation. Therefore, this direction was not palatable to company and it was not thereafter carried further.

108. At this stage, after the discussion of development and events so far, it would be most appropriate to refer to interse exchanges of the company and workmen in respect of the temporary suspension of work/workmen etc as could be seen from the narration of events in the submission from item nos. 52 to 64. This indicates that how and in what manner the workmen were continuously deprived of their legitimate dues by the company. At one hand, company was not ready and willing to follow the procedure of law i.e. I.D. Act and its provisions, which would have required the company to make good the payment, which due and admissible to the workmen which numbering for more than 3112.

109. At this stage, it would be most appropriate or rather to advert to the proceedings before the BIFR and its preceding events, though, which have been already at length discussed hereinabove. In fact, the proceedings before the BIFR Bench and orders passed thereon, which have been narrated or reproduced in paras-22 to 52 would clearly indicate as to how Page 515 of 674 C/SCA/15599/2008 JUDGMENT and in what manner there was designed efforts on the part of the company in systematically dodging the final outcome and an attempt to compel the huge work force in accepting their own promises for avoiding payment of admissible dues to the workmen. The plain and simple reading of those proceedings, couple with the development preceding thereto, would indicate that following will emerged which cannot be disputed by any one.

(a) This court is not to dwell upon the efficacy of SICA as legislature in its wisdom realized way back in the year 2003 and enacted the SICA (Repeal) Act, 2003, however, unfortunately the date of ins enforcement not being notified it offering an opportunity to many unscrupulous company and its management to take mis-advantage of those provisions to ward off the legitimate dues beyond coercive action that would have been otherwise, applicable to the creditors and those, who have aspiring, realisation dues of the company. The original aim or object enacted SICA in the year 1985 has been discussed hereinabove but it is required to be reiterated at the cost of repetition that it was for furthering the principles enshrined under Article 39 (b) (c) of the Constitution of India. This object has been completely lost sight of and veered development and misuse of the act, resulted into enforcement of SICA (Repeal) Act, 2003, which unfortunately has yet not been enforced on Page 516 of 674 C/SCA/15599/2008 JUDGMENT account of enigmatic inertia on the part of the concerned. The Company appears to have moved the BIFR machinery invoking Section 15 of the SICA, based upon its balancesheet prior to the year 2003. The record indicate that in December, 2003, Section 15(1) of SICA was invoked and case was registered as Case No. 64 of 2004 and under that restructuring scheme, an attempt was made to seek respite from the liabilities that included company's liabilities towards workmen, which never show the light of order at all nor did the company approached this court under Section 391 as envisaged therein with the scheme of rehabilitation as it was in light of the fact that winding up proceedings were pending before the Court and as it is stated hereinabove, there was prohibitory orders issued by this Court on 17.4.2000 in Company Petition No. 91 of 2000. Nothing has come on record to indicate that there was ever any such move by way of application under Section 391 of the Act for seeking appropriate approval from the company court, though the CDR scheme and relevant enjoyment by the company thereunder, were enuring the obligation casted upon the company, which not fulfilled by the Company in any manner.

(b) The Court has already narrated the developments and event indicating MoU with the developers who in turn, goaded the Company to one more agreement with Laxminarayan Industrial Co-operative Service Society Limited. This MoU were in teeth Page 517 of 674 C/SCA/15599/2008 JUDGMENT of orders passed by this Court, wherein, the Company was not to deal with its property in any manner and hence, it seems that there is an attempt for bringing clock over the entire transactions of CDRS and BIFR, as the Company has rushed to SICA machinery at least in December, 2003 and therefore, a question arises as to whether Company was justified in invoking the provisions when the Company itself did not scrupulously followed the provisions and requirement of SICA in its true sprite and letter. Section 15 of the SICA indicate as to how and in what manner 'Reference' is required to be made. Thereafter, under Section 16, 'inquiry' is to be held for. Thereafter, for arriving conclusion, as to whether the industry has really become sick. The proceedings so far brought on record, unfortunately are conspicuously silent in respect of any inquiry contemplated under Section 16 of the SICA qua present company. The jurisdictional fact required for the board under SICA to make suitable order of completion of inquiry. There did not exist. However, legal fiction in respect of pronouncement of Reference, with the inquiry made, came to the rescue of the Company and that it is not sufficient and ultimate outcome of the board qua passing any appropriate order in form of Section 17 of the SICA. It would be most appropriate to set out Section 17 of SICA here, which reads as under:

"17. Powers of Board to make suitable order on the completion of inquiry.--

Page 518 of 674

C/SCA/15599/2008 JUDGMENT (1) If after making an inquiry under section 16, the Board is satisfied that a company has become a sick industrial company, the Board shall, after considering all the relevant facts and circumstances of the case, decide, as soon as may be by order in writing, whether it is practicable for the 13 company to [make its net worth exceed the accumulated losses] within a reasonable time.

(2) If the Board decides under sub-section (1) that it is practicable for a sick industrial 13 company to [make its net worth exceed the accumulated losses] within a reasonable time, the Board, shall, by order in writing and subject to such restrictions or conditions as may be specified in the order, 13 give such company as it may deem fit to [make its net worth exceed the accumulated losses.] (3) If the Board decides under sub-section (1) that it is not practicable for a sick 13 industrial company to [make its net worth exceed the accumulated losses] within a reasonable time and that it is necessary or expedient in the public interest to adopt all or any of the measures specified in section 18 in relation to the said company it may, as soon as may be, by order in writing, direct any operating agency specified in the order to prepare, having regard to such guidelines as may be specified in the order, a scheme providing for such measures in relation to Page 519 of 674 C/SCA/15599/2008 JUDGMENT such company.

(4) The Board may,--

(a) if any of the restrictions or conditions specified in an order made under sub-

section (2) are not complied with by the 14 company concerned, [or if the company fails to revive in pursuance of the said order,] review such order on a reference in that behalf from any agency referred to in sub-section (2) of section 15 or on its own motion and pass a fresh order in respect of such company under sub-section (3);

(b)if the operating agency specified in an order made under sub-section (3) makes submission in that behalf, review such order and modify the order in such manner as it may deem appropriate. "

Thus, the duty is cast upon the board to record its satisfaction that the company has become sick industrial company and decide in writing whether it is practicable for the company to make its net worth exceed the accumulated losses within a reasonable time. The board may give company time to make it net worth exceeds the accumulated losses. In the instant case, it seems that the scheme or proposal came to be placed before the Board by the Company as if it was a scheme under the auspice of SICA. At this stage, it is required to be noted that there exits no overt order brought on record by BIFR, which Page 520 of 674 C/SCA/15599/2008 JUDGMENT could be passed under Section 17(3) of the Act. There ought to have been detail considerations by the Board with its application of mind and passing of clear order for justifying the company's existence before the SICA and operative embargo against the legitimate creditors, who have been otherwise entitled to enforce their dues against the Company. The provisions and auspice of BIFR at various stages hugged with specific provisions of passing order, which is to be viewed only from the angle in the given case. All those, who are with the company in question, which are enjoying the umbrella of protection under SICA is not taking any undue advantage of the provisions and options are mentioned in Section 18 and time limit is also prescribed thereunder and Section 18(2) indicates that Board is to periodically implement the scheme. The Court hastened to add here that this Court is not sitting in appeal over the decision making process rendered by BIFR in the proceedings of Case No. 67 of 2004 but when SICA umbrella was pressed into service for denial to workmen of their legitimate dues in blatant violation of ID Act and other provisions like Gratuity Act and others, this Court will have to examine as to whether the Company's attempt to revive itself was to say the least genuine or not, under the protective umbrella of SICA, to ward of legitimate dues of the workmen. Section 19 of SICA provides for rehabilitation by giving financial assistance within the period prescribed. Sections 20 and 21 of the SICA assume greater Page 521 of 674 C/SCA/15599/2008 JUDGMENT importance.

At this stage, provisions of Section 22 of SICA need to be set out as under:

"Section 22 in The Sick Industrial Companies (Special Provisions) Act, 1985:

22. Suspension of legal proceedings, contracts, etc.--

(1)Where in respect of an industrial company, an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof [and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company] shall lie or be proceeded with further, except Page 522 of 674 C/SCA/15599/2008 JUDGMENT with the consent of the Board or, as the case may be, the Appellate Authority.

(2)Where the management of the sick industrial company is taken over or changed [in pursuance of any scheme sanctioned under section 18], notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other law or in the memorandum and articles of association of such company or any instrument having effect under the said Act or other law--

(a)it shall not be lawful for the shareholders of such company or any other person to nominate or appoint any person to be a director of the company;

(b)no resolution passed at any meeting of the shareholders of such company shall be given effect to unless approved by the Board.

(3) [Where an inquiry under section 16 is pending or any scheme referred to in section 17 is under preparation or during the period] of consideration of any scheme under section 18 or where any such scheme is sanctioned thereunder, for due implementation of the scheme, the Board may by order declare with respect to the sick industrial company concerned that the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force, to which such sick industrial company is a party or which may Page 523 of 674 C/SCA/15599/2008 JUDGMENT be applicable to such sick industrial company immediately before the date of such order, shall remain suspended or that all or any of the rights, privileges, obligations and liabilities accruing or arising thereunder before the said date, shall remain suspended or shall be enforceable with such adoptions and in such manner as may be specified by the Board: Provided that such declaration shall not be made for a period exceeding two years which may be extended by one year at a time so, however, that the total period shall not exceed seven years in the aggregate.

(4)Any declaration made under sub-section (3) with respect to a sick industrial company shall have effect notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other law, the memorandum and articles of association of the company or any instrument having effect under the said Act or other law or any agreement or any decree or order of a court, tribunal, officer or other authority or of any submission, settlement or standing order and accordingly,--

(a)any remedy for the enforcement of any right, privilege, obligation and liability suspended or modified by such declaration, and all proceedings relating thereto pending before any court, tribunal, officer or other authority shall remain stayed or be continued subject to such declaration; and Page 524 of 674 C/SCA/15599/2008 JUDGMENT

(b) on the declaration ceasing to have effect

--

any right, privilege, obligation or liability

(i) so remaining suspended or modified, shall become revived and enforceable as if the declaration had never been made; and any proceeding so remaining stayed shall

(ii) be proceeded with, subject to the provisions of any law which may then be in force, from the stage which had been reached when the proceedings became stayed.

(5)In computing the period of limitation for the enforcement of any right, privilege, obligation or liability, the period during which it or the remedy for the enforcement thereof remains suspended under this section shall be excluded."

It is very important to note that by operation of provisions of Section 22(1), the coercive steps are not permitted unless and until there is clear consent of the Board or Appellate Authority. Section 22(2) envisaged that during the period of scheme undertaken in the auspice of Section 18, certain provisions of Company law stands eclipsed and board is empowered to issue declaratory orders, suspending or making it enforceable with such adoptions and in such manner as may be specified by the Board. However, in proviso, it is provided that such declarations shall not be made for a period exceeding two Page 525 of 674 C/SCA/15599/2008 JUDGMENT years which may be extended by one year at a time so, however, that the total period shall not exceed seven years in the aggregate. In the instant case, it appears that no such mandatory directions issued by BIFR and even, no one has brought on record, even if assuming that the they were there than also its life cannot be for more than 7 years, and hence the same is required to be viewed as if there exist none. Thus, from any angle the protective umbrella cannot be stretched beyond the period of 7 years as envisaged by Section 22(2).

Now, at this stage, Section 20 of the SICA reads as under:

Section 20 -WINDING-UP OF SICK INDUSTRIAL COMPANY.

(1) Where the Board, after making inquiry under section 16 and after consideration of all the relevant facts and circumstances and after giving an opportunity of being heard to all concerned parties, is of opinion that the sick industrial company is not likely to make its net worth exceed the accumulated losses within a reasonable time while meeting all its financial obligations and that the company as a result thereof is not likely to become viable in future and that it is just and equitable that the company should be wound up, it may record and forward its opinion to the concerned High Court.

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C/SCA/15599/2008 JUDGMENT (2) The High Court shall, on the basis of the opinion of the Board, order winding-up of the sick industrial company and may proceed and cause to proceed with the winding-up of the sick industrial company in accordance with the provisions of the Companies Act, 1956 (1 of 1956).

(3) For the purpose of winding-up of the sick industrial company, the High Court may appoint any officer of the operating agency, if the operating agency gives its consent, as the liquidator of the sick industrial company and the officer so appointed shall for the purpose of the winding-up of the sick industrial company be deemed to be, and have all the powers of, the official liquidator under the Companies Act, 1956 (1 of 1956).

(4) Notwithstanding anything contained in sub-section (2) or sub-section (3), the Board may cause to be sold the assets of the sick industrial company in such manner as it may deem fit and forward the sale proceeds to the High Court for orders for distribution in accordance with the provisions of section 529A, and other provisions of the Companies Act, 1956 (1 of 1956)."

The entire approach of the Company as could be seen from the proceedings before the BIFR mentioned hereinabove, did not disclose any genuine interest to rehabilitate the company. It was merely an attempt to avoid Section 20 Page 527 of 674 C/SCA/15599/2008 JUDGMENT exercise on the part of BIFR, as even Board was not even correctly informed about the development. The casual approach before the BIFR on the part of Company would consequently indicate towards one and sole intention to avoid final outcome as it envisaged under Section 20 of the SICA.

Learned advocate for workmen has cited the decision of Mumbai High Court in case of Ranjan Bhagwant Kedar and another Vs. HMP Engineers Ltd. And others, reported in 2004- III-LLJ 939 and contended that pendency of the proceedings before the BIFR cannot be a ground for thwarting the recovery proceedings of dues and wages for workmen. The counsel has made emphasis on paras, 6, 7, 8 and 9, which reproduced hereunder :

"Para-6:- In our view, the stand of respondent No.1 that proceedings before BIFR are pending and, therefore, liability of workers dues cannot be fastened on to it, is wholly untenable. This Court has consistently taken a view that Parliament could never have intended that industrial unit under the grab of sickness or for any like difficulty, may be allowed to shirk its liability to pay the wages to its workers for the work they have done. It is observed that if such a position is allowed to prevail, a Sick Company could defeat legitimate claims of workmen for wages and other dues by not paying them in the first Page 528 of 674 C/SCA/15599/2008 JUDGMENT instance, then forcing the workers to resort to remedies and thereafter pleading bar under Section 22(1) of SICA. Section 22(1) of SICA has been interpreted to mean that the bar thereunder should apply only to such proceedings which are not required for day to day running of the sick industrial company. The decision of the Apex Court in Tata Davy Ltd. Vs. State of Orissa & Ors. Reported in AIR 1998 SC 2928 : 1997 (6) SCC 669 : 1997-II-LLJ-989 was also distinguished. In our view, therefore, Section 22(1) can have no application to the instant recovery. Similarly, the contention that respondent No.3 has resigned way back on May 3, 1997, and therefore, no recovery can be made from him, also need not detain us. This plea can very well be raised by respondent No.3, if so advised, before respondent Nos.4 and 5 during the course of recovery proceedings.

Para-7:- Isofar as the contention of respondent Nos.4 and 5 that a Recovery Certificate to the Collector/Appropriate Authority at Kolkata (West Bengal) is necessary, in our view, a direction to that effect is not required to be issued by us presently. There is substance in the complaint of Ms. Singh that factory premises of respondent No.1 are situate at LBS Marg, Mulund, Mumbai. It is also clear from affidavit that an encumbrance on the said property appears to have been created already by making an endorsement in the Property Card. Therefore, it is not necessary at this stage to issue a direction Page 529 of 674 C/SCA/15599/2008 JUDGMENT to the authorities for forwarding a Revenue Recovery Certificate in the name of Collector/Appropriate Authority at Kolkata. The ends of justice would be met, if we direct the Industrial Court, Mumbai to furnish to the office of Collector, Mumbai Suburban District particulars of movable and immovable property of the company so that further steps can be taken to attach and/or sell the same to recover the dues under the Recovery Certificate in question.

Para-8:- We also deem it fit to grant liberty to the petitioner and respondent Nos.4 and 5 to pursue the application for issuance of Revenue Recovery Certificate in the name of Collector, Kolkata as and when they deem fit at a later stage.

Para-9:- In the light of above, we pass following order:

(A) Respondent No.4 is directed to initiate proceedings against respondent No.1 for recovery of amounts mentioned in the Recovery Certificate dated June 26, 1998 within a period of four weeks from today.

(B) We also direct Industrial Court, Mumbai to comply with the requisitions contained in the letter dated July 11, 2002 addressed by respondent No.4 and furnish particulars of movable and immovable properties of respondent No.1 within a period of two weeks from the date of receipt of a copy of this order by it from the office of Collector, Mumbai Suburban District.

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C/SCA/15599/2008 JUDGMENT The Collector, Mumbai Suburban District (respondent No.4) is directed to furnish a copy of this order to the Registrar, Industrial Court, Mumbai for necessary compliance.

(C) Liberty to petitioner and respondent No.4 to initiate steps even against respondent No.3 for recovery of dues mentioned in the Recovery Certificate in accordance with law. Needless to state that petitioners and respondent No.4 would be at liberty to pursue the application for issuance of Revenue Recovery Certificate in the name of Collector/ Appropriate Authority at Kolkata to enable him/ it to initiate appropriate steps to recover the dues mentioned in the Recovery Certificate dated June 26, 1998."

[emphasis supplied] These observations of the Bombay High Court have been relied upon by the counsel for the workmen to indicate that specious plea of pendency of BIFR reference was not available to respondent Company. Learned counsel has also relied on the decision reported in 1998(2) GLH 15 in case of Rajnagar Textiles Mills Vs. Textile Labour Association in support of aforesaid submission.

Learned counsel for the workmen has also relied upon the decision in case of Uptron India Ltd. Vs. Presiding Page 531 of 674 C/SCA/15599/2008 JUDGMENT Officer, Labour Court, Dehradun and another, reported in 2004-II-LLJ-378 and laid emphasis upon para-6, 7 and 8, which reproduced hereunder:

"Para-6:- The respondent No.2 has referred the judgment of 2000 (84) FLR 561 (All), where it has been held that recovery of gratuity cannot be prohibited under Section 22 of Sick Industrial Companies (Special Provisions) Act, 1985. The relevant paragraphs are quoted below:

"In this connection, learned Counsel for the respondents submitted that this bar was not applicable in cases of payment of gratuity. Learned counsel for the Union of India relied on a decision of the Bombay High Court in support of her contention. The judgment was delivered in relation to a case between the NTC (South Maharashtra) and B.N. Jalgaonkar. It was a case of recovery of wages and a question came up for consideration whether the recovery of the wages due to workmen was also barred by the provisions of Section 22 of the SICA, 1985. The Hon'ble single Judge of the Bombay High Court had before him the decisions of the Apex Court in the case of Sri Chamundi Mopeds, and Dy. Commercial Tax Officer V. Coramandal Pharmaceuticals and other and also some other decisions. The question was that if at all Section 22 of the SICA, 1985 was thought applicable to bar recovery of wages of workmen, the workmen would have to approach the BIFR and if such a position was allowed to prevail that would defeat the legitimate claim of the workmen for wages and Page 532 of 674 C/SCA/15599/2008 JUDGMENT other dues by non-payment in the first instance and also forcing them to resort to other remedies. The contention of the NTC was dismissed by the learned single Judge.

Reliance was also placed by the respondent on a decision of the Allahabad High Court in the case of Poysha Industries V. Collector of Ghaziabad. A recovery proceeding was initiated against an industry covered by the SICA, 1985 and the claim related to wages payable to the workmen. The relationship of master and servant between the industrial company and the workman was continuing, the Court held that the employer was bound to pay wages even though no work was (sic) taken from them and proceedings for recovery of such wages were not covered by Section 22 of the SICA, 1985.

As observed above, the SICA, 1985, is a legislation made in public interest for securing timely detection of sick companies owning (sic) industrial undertakings and it was thus a legislation for the benefit of the industries in public interest. The public interest cannot be looked bereft of the interests of the workmen.

The policy behind the labour legislations is aimed at securing justice to the workmen and to avoid exploitation by employers, either by non- payment of wages or be wrongful retrenchment or by withholding payment of wages or the like. Thus, a protection of the interest of an industrial company may not be given an upper hand to the protection of th labourers working therein and as observed by the Bombay High Page 533 of 674 C/SCA/15599/2008 JUDGMENT Court in the case of NTC V. B.L. Jalgaonkar (supra), Section 22 of the SICA, 1985, must not be allowed to defeat the legitimate claim of the workmen for wages. In fact, this decision was based on the finding of the Apex Court in the case of Dy. Commercial Tax Officer (supra), wherein it had been held that recovery of commercial tax could not be barred under Section 22 of the SICA, 1985. Gratuity, as observed above, is related not only to the period of employment but also to wages and the payment of gratuity is one of the beneficial measures introduced by labour legislation. To extend the provisions of Section 22 of the SICA, 1985 to prohibit recovery of gratuity, which is related to wages, would be a negation of a legally accepted right of the workmen. Section 22 must be interpreted not to cover a bar of recovery of payment of wages or gratuity to workmen. Seen in this light, the objection of the petitioners against the impugned recoveries is not tenable."

Para-7:- Similar view has been taken in the judgment of Bombay High Court, N.T.C (South Maharashtra) Ltd. v. B.N. Jalgaonkar and others 1999 (81)FLR

234. The same is quoted below:

"Apart from that, language of Section 22 in no way would stand in the way of workers making recovery of wages much in the same way as recovery of tax by the Government as has been laid down by the Apex Court in the case of Deputy Commercial Tax Officer and others Page 534 of 674 C/SCA/15599/2008 JUDGMENT (supra). As further pointed out by the learned Counsel for the respondents, the petitioners have been paying wages of other workers in all such similar cases. It has been clearly conceded by the learned Counsel for the petitioners that in those cases payment was made as the present issue was not raised and this issue has been raised for the first time in this matter. As the contention of the applicability of Section 22 has been rejected, there is no substance in the arguments advanced on behalf of the petitioners."

Para-8 :- Similar view has been taken in poysha Inds. Co. Ltd. v. Collector, Ghaziabad (Alld. H.C.) 1988 (79) FLR 167. The relevant paragraphs are quoted below:

"In the present case the recovery related to claim for wages by the workmen. Admittedly, the petitioner-

company has not terminated the relationship of master and servant between the company and its workmen. No case has been made out of lay-off or lock-out or retrenchment or closure. Therefore, so long relationship of master and servant between the company and its workmen continues, the employer is bound to pay wages to the workmen even if the employer for some reason Page 535 of 674 C/SCA/15599/2008 JUDGMENT does not feel inclined to get actually the work done by the workmen. In respect of such payment the employer cannot dispute its liability because of the sickness of the Unit or pendency of the scheme for rehabilitation. Therefore, I am of the opinion that the proceeding for recovery of such wages is not covered by Section 22 of the said Act of 1985. Relying on the principle laid down in the case of Shri Chamundi Mopeds Limited (supra), I find that in case of such proceeding no consent from the B.I.F.R. is required. Contrary interpretation of law will result in compelling the present workmen to continue to discharge duties without any payment of wages and this also cannot be the intention of the legislature. If the purpose of said Act of 1985 is to rehabilitate the company itself, the same cannot mean that the workmen are o be compelled to continue without payment of wages as workmen are important constituent of the industrial unit. The said Act cannot be interpreted to mean that it saves only the employer and not the employees. Such an interpretation will not only leave the workmen to starve but also will lead to slavery. In the aforesaid circumstances, I hold that the recovery certificate, auction and removal of goods on the Page 536 of 674 C/SCA/15599/2008 JUDGMENT aforesaid ground do not became illegal. With respect to the contention regarding 1978 Act, I hold that the present claim of workmen in respect of wages is not a disputed claim in view of the findings, herein arrived, as regards such wages. True, when there is a dispute regarding adjudication of disputed facts relating to some claim of wages, a reference under Section 4 of the U.P. Industrial Disputes Act is required. But, this does not mean that in every case whenever employer refuses to pay, claim has to be described as disputed claim.

In the present facts, admittedly, the relationship of master and servant continues between the petitioner- company could not show any reason for withholding payment of wages of workmen so long such relationship continues. Therefore, I am of the opinion that the law as decided in the case of Modi Industries Ltd. v. Addl. Labour Commissioner and others (supra) is applicable herein. Following the said law, I am of the view that the recovery certificate, auction and removal of goods in pursuance thereof are not illegal."

[emphasis supplied] On the aforesaid submission, learned advocate for Page 537 of 674 C/SCA/15599/2008 JUDGMENT workmen has also relied upon the decision in case of Indian Maize and Chemicals Vs. State of Uttar Pradesh, reported in 1997(9) SCC 462 : 1997(1) SCA 408 and decision in case of New Phaltan Sugar Works Ltd., Satara and others, Vs. State of Maharashtra, reported in 2004-III-LLJ-79.

Learned counsel for the workmen thereafter relied upon the decision in case of State of West Bengal and others Vs. Committee for Protection of Democratic Rights, West Bengal and others, reported in (2010) 3 SCC 571 and relied on para-52, 53, 54, 55 and 57, which are reproduced as under:

"52. It is manifest from the language of Article 245 of the Constitution that all legislative powers of the Parliament or the State Legislatures are expressly made subject to other provisions of the Constitution, which obviously would include the rights conferred in Part III of the Constitution. Whether there is a contravention of any of the rights so conferred, is to be decided only by the Constitutional Courts, which are empowered not only to declare a law as unconstitutional but also to enforce fundamental rights by issuing directions or orders or writs of or "in the nature of" mandamus, certiorari, habeas corpus, prohibition and quo warranto for this purpose.

53. It is pertinent to note that Article 32 of the Constitution is also contained in Part III of the Constitution, which enumerates the fundamental rights and not alongside other Articles of the Page 538 of 674 C/SCA/15599/2008 JUDGMENT Constitution which define the general jurisdiction of the Supreme Court. Thus, being a fundamental right itself, it is the duty of this Court to ensure that no fundamental right is contravened or abridged by any statutory or constitutional provision. Moreover, it is also plain from the expression "in the nature of"

employed in clause (2) of Article 32 that the power conferred by the said clause is in the widest terms and is not confined to issuing the high prerogative writs specified in the said clause but includes within its ambit the power to issue any directions or orders or writs which may be appropriate for enforcement of the fundamental rights. Therefore, even when the conditions for issue of any of these writs are not fulfilled, this Court would not be constrained to fold its hands in despair and plead its inability to help the citizen who has come before it for judicial redress. (per P.N. Bhagwati, J. in Bandhua Mukti Morcha Vs. Union of India & Ors.).

54. In this context, it would be profitable to make a reference to the decision of this Court in Nilabati Behera (supra). The Court concurred with the view expressed by this Court in Khatri & Ors. (II) Vs. State of Bihar & Ors.24 and Khatri & Ors. (IV) Vs. State of Bihar & Ors.25, wherein it was said that the Court is not helpless to grant relief in a case of violation of the right to life and personal liberty, and it should be prepared "to forge new tools and devise new remedies" for the purpose of vindicating these precious fundamental rights. It was also indicated that the procedure suitable in the facts of the case must be adopted for conducting the enquiry, needed to ascertain the necessary facts, for granting the relief, as may be available mode of redress, for enforcement of the guaranteed fundamental rights.

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C/SCA/15599/2008 JUDGMENT

55. In his concurring judgment, Dr. A.S. Anand, J. (as His Lordship then was), observed as under:

(Nilabati Behera Case, SCC p.769, para35) "35. This Court and the High Courts, being the protectors of the civil liberties of the citizen, have not only the power and jurisdiction but also an obligation to grant relief in exercise of its jurisdiction under Articles 32 and 226 of the Constitution to the victim or the heir of the victim whose fundamental rights under Article 21 of the Constitution of India are established to have been flagrantly infringed by calling upon the State to repair the damage done by its officers to the fundamental rights of the citizen, notwithstanding the right of the citizen to the remedy by way of a civil suit or criminal proceedings. The State, of course has the right to be indemnified by and take such action as may be available to it against the wrongdoer in accordance with law - through appropriate proceedings."

56. It may not be out of place to mention that in so far as this Court is concerned, apart from Articles 32 and 142 which empower this Court to issue such directions, as may be necessary for doing complete justice in any cause or matter, Article 144 of the Constitution also mandates all authorities, civil or judicial in the territory of India, to act in aid of the orders passed by this Court.

57. As regards the power of judicial review conferred on the High Court, undoubtedly they are, in a way, wider in scope. The High Courts are Page 540 of 674 C/SCA/15599/2008 JUDGMENT authorised under Article 226 of the Constitution, to issue directions, orders or writs to any person or authority, including any government to enforce fundamental rights and, "for any other purpose". It is manifest from the difference in the phraseology of Articles 32 and 226 of the Constitution that there is a marked difference in the nature and purpose of the right conferred by these two Articles. Whereas the right guaranteed by Article 32 can be exercised only for the enforcement of fundamental rights conferred by Part III of the Constitution, the right conferred by Article 226 can be exercised not only for the enforcement of fundamental rights, but "for any other purpose" as well, i.e. for enforcement of any legal right conferred by a Statute etc."

[emphasis supplied] Thus, this Court is constrained to observe that from any angle if the matter is being examined, there will be a clear conclusion that the company is not justified in avoiding its liability towards workmen under the guise of pendency of Reference before the BIFR and as could be seen from the proceedings, will hardly require any further comments thereupon. The pendency of the proceedings to say the least, cannot be said to be for the purpose for which the SICA was enacted and subsequent developments with BIFR adjourning the matter sine-e-die. As could be seen from the order dated 19.01.2012, it can well be said that the Company was attempting to dodge the final outcome, which has been arisen on account of provisions of Section 20 of the SICA.

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        C/SCA/15599/2008                                  JUDGMENT




(c)          The      second   submission        canvassed   on     behalf

company employer and parties, who have purchased the land that in view of the provisions of Section 5 of the Arbitration Act, this Court will have no jurisdiction to now entertain the petition being SCA No. 15599 of 2008, as during the pendency thereof, the parties have chosen to invoke provisions of Arbitration Act, for seeking adjudication upon the dispute. It is required to be noted at this stage that this plea was raised only when the Court finally call upon the parties to make submission as there was no settlement in offing. The narration of development of events right from the settlement under Section 2(p) dated 27.10.2003, till the parties chosen to have part of dispute being adjudicated by the Arbitrator, would clearly indicate that this contention is baseless and required to be rejected outright, as it is made with a view to take one more attempt to dodge the final outcome and exert pressure upon the workmen for succumbing to their terms and conditions, which otherwise, liable to be paid by the company to the workmen as per established provisions of law.

The proceedings of various matters and development and passing of orders by the Court is already reproduced hereinabove. It is required to be noted that right from day when settlement dated 27.10.2003 under Section 2(p) of the ID Act was executed, the company had no other go but to sale its Page 542 of 674 C/SCA/15599/2008 JUDGMENT surplus land to meet with its liabilities towards workmen, secured creditors and statutory agencies. The company had therefore, all alone consistently attempted to buy time from all the claimants by assuring them that payment will be made out of its properties and assets, by indicating that the properties and its worth is sufficient enough to meet with the claim of all the concerned. Unfortunately, the workmen were in the solemn hope of sustaining their employment and therefore, they came forward in accepting the 2(p) settlement dated 27.10.2003. The Company in case if was not capable of fulfilling its promises mentioned thereunder, then, in that eventuality, workmen were not required to be treated as having shown their willingness to receive reduced wages, which would entitled them in turn receive all the benefits as if there was no agreement to such wages, meaning thereby, workmen were required to be paid all the wages and all the benefits in the eventuality of they being retrenched by the company or closure as if there was no concession and wages which were admissible i.e. 100% wages admissible at relevant period, has to be conferred for this entire period. The company unfortunately succeeded in its design to keep thwarting the final payment of dues to the workmen and not only the wages were not paid, the gratuity amount, PF amount and ESI wages were not paid, as it is come on record and as mentioned hereinabove. The Company was successful in buying of time and avoiding payment to the workmen and others Page 543 of 674 C/SCA/15599/2008 JUDGMENT concerned. Accordingly, from the record, it is clear that the company chose to make payment to statutory agencies. In other words, some statutory dues were given un-holly precedence for avoiding other statutory dues like P F Dues Payment of Wages Dues Payment of gratuity dues etc as the workmen had no effective urgent remedy to compel the Company to make payment there under. The lack of effective coercion in favour of workmen appears to be the Company's success in avoiding its liabilities to them. The workmen were compelled to agree to forgo part of their wages, also on the promise of sustaining their employment and the workmen were persuaded to agree to company's proposal of selling surplus land. All these attempts were made with a view to avoid the final eventuality which would have resulted into coercive steps to be taken by the concerned creditors. Therefore, it would not be permitted to company to contend that sale was never an issue, in fact, the entire controversy has arisen on account of company's unscrupulous attempt to over step its restrictions, which was self imposed under the agreement with workmen, which can rise to the proceedings in form of Reference (IT) No. 15 of 2005. In this proceedings also, the very first interim order is restraining the company from alienating its properties. It would not be out of place to mention here that during conciliation proceedings, the Conciliating Authority has also issued an order to the company for maintaining the status-quo as there was agitation Page 544 of 674 C/SCA/15599/2008 JUDGMENT with regard to breach of service condition of the workmen and an attempt to alienate the property. The order passed by the Tribunal dated 6.12.2005 also would be a pointer to the effect that the property of the company which were held to be sufficient to meet with the dues and dues of statutory authorities and an attempt was made to keep the workmen high and dry and deprive them of their legitimate wages, which otherwise, would have been enforced against the property of the company. This order was subject matter of challenge before this Court as it is stated hereinabove by company in form of SCA No. 134 of 2006. In this proceedings also, the company could not succeed in obtaining any specific permission to alienate the property in any manner as the company appear to bring in BIFR proceedings also and it was ordered that BIFR scheme should be adhered to and Sale Assets Committee shall sell the property and sale proceeds be deposited in the Court. Even during pendency of this proceedings also, BIFR proceedings were going on and this Court did not think fit to stay the proceedings on the ground of pendency of BIFR proceedings. On the contrary, an order came to be passed by this Court (Coram:

H.K.Rathod, J.)(as he then was) on 20.4.2006, wherein, the Court did not disturb in any manner the restraint order passed by the Tribunal on 6.12.2005 and Tribunal was specially directed to hear and complete the Reference, which was essentially on the aspect of dues, which were pending against the company, to be Page 545 of 674 C/SCA/15599/2008 JUDGMENT realised by the workmen if there is need be, for selling the property also. Thus, nowhere, in the entire proceedings one can say that there was ever any averment made by the Company for staying the proceedings, which legitimately could not have been made. The workmen came to know that company has contrary to settlement and prohibitory order passed by the Tribunal and by this Court, entered into agreement to sale numbering 4 (four), were compelled to approach this Court, as nothing came to their share and their dues were mounting day by day and company was not bothered to meet with said liabilities qua workmen and therefore, the workmen were compelled to approach this Court by way of filing Special Civil Application No. 15599 of 2008. The prayers made in said SCA have been set out hereinabove and the Court passed initial order, which is also known to all and the Court on 6.3.2009 passed an order directing the Chairman of the Board of Directors of respondent No.1, The Baroda Rayon Corporation Limited, to remain personally present before the Court on 9.3.2009 with a definite proposal and the amount to be paid to the employees who are not paid since August 2008. The subsequent development shows that continuous insistence of the Court upon the company to produce its statement of liabilities and assets and company's successfully dodging of its compliance, need not be repeated here, but suffice it to say that all alone, the company was agreed to accept and make an attempt for paying the dues to the workmen.

Page 546 of 674

C/SCA/15599/2008 JUDGMENT The order dated 22.6.2009, reproduced hereinabove clearly records that there was consensus among learned counsels appearing for the respective parties to refer their matter to mediation and accordingly, two reports from the mediation i.e. interim report dated 11.9.2009 and final report dated 30.12.2009, which are reproduced hereinabove, which clearly indicate that both the parties agreed to settle the entire matter and some orders will have to be passed by the Hon'ble Court and therefore, it is necessary to place the matter before the Hon'ble Court so that, parties can file necessary application for completing the formalities. Pursuant to agreement arrived at between the parties in mediation proceedings, looking to dues of workmen and secured credits, the workmen were to fetch better price by selling the property to buyer from open market so as to put an end to entire controversy. Accordingly, workmen filed Civil Application indicating that they have received instructions that one M/s. Gayatri Trading Corporation Limited was interested in purchasing the property, which would meet with all the liabilities and dues of the company. In this Civil Application being Civil Application No. 599 of 2010 in SCA No. 15599 of 2008 with other cognate matters, there is an order passed on 4.3.2010, which is reproduced hereinabove, part thereof is required to be reproduced here again to indicate as to how and in Page 547 of 674 C/SCA/15599/2008 JUDGMENT what manner the Company has acted:

"Therefore, it is directed to Baroda Rayon Corporation Limited - Opponent No.1 Company to calculate the due amount of each employee including those who have retired, died and existing employees till the date on which they become entitled, meaning thereby that total dues of each workman must have to be calculated according to law by Baroda Rayon Corporation Limited - Opponent No.1 Company and to be placed by affidavit on record before this Court on 9 t h March 2010.

For calculating due amount by Baroda Rayon Corporation Limited, if any help or material is required from Union, that will have to be supplied by learned advocate Mr. Dipak Dave to Company.

Learned advocate Mr. Nayak made a clear statement before this Court on behalf of Company that there is no objection on behalf of Company for selling entire properties mentioned in Affidavit-in- Reply dated 18th February 2010 belongs to Baroda Rayon Corporation Limited - Opponent No.1 Company."

[emphasis supplied] Thus, there was unequivocal statement put forward from the company that apropos their consent and agreement before the mediation, Company did not have any objection in Page 548 of 674 C/SCA/15599/2008 JUDGMENT selling its property for paying dues of the workmen. Accordingly, in pursuance of said order, the affidavit came to be filed on behalf of Company, which has been reproduced in para- 16 of this judgment and affidavit filed by workmen indicating dues for more larger and greater than the one, which was shown by the company. There is difference between two figures. It would be also required to be mentioned at this stage that in the proceedings on 3.9.2010, this Court passed an order in Civil Application No. 1440 of 2010 in Special Civil Application No. 15599 of 2008 with Civil Application No. 6220 of 2010 in Special Civil Application No. 15599 of 2008, interalia recording as under:

"2. Shri Kunan Naik, learned counsel submits that the company is bound by the commitment made during mediation proceeding and shall not back out. However on account of sizable difference between the amount as originally agreed and the amount being quoted today, the company would require some time. He submits that if three weeks time is granted, company would not need any further time to arrive at an appropriate decision in this regard as to whether the offer is acceptable to them or not. In the meantime by 8th September 2010 mutually agreed arbitrator's name would be conveyed to the workmen's representative / advocate and company representative and workmen's representative would sit together for drafting joint terms of reference with regard to workmen's dues which is Page 549 of 674 C/SCA/15599/2008 JUDGMENT admittedly not included the dues which have been otherwise crystallized in respect of workmen in Special Civil Application No. 9045 of 2009 with Special Civil Application No. 9298 of 2009 to 9381 of 2009, 1619 of 2010, 1620 of 2010 and Special Civil Application No. 4667 of 2008.

[emphasis supplied]

(d) Thus, it could be seen from the aforesaid extracted portion of the orders that there was at no stage any reconsideration on the part of the company qua its obligation to the workmen, which was to be discharged by selling the properties of the Company. It is also required to be noted that if one looks at even the earlier orders, as stated hereinabove, one would know that in principle and even on facts, there was no scope of any further contention qua company's readiness and willingness to sale the property for discharging its liabilities.

This development and statement recorded in the order dtd 3.9.2010 preceded by the facts that by this, there were at least two concrete offers for buying the properties of the company so that the company's liabilities towards workmen as well as secured creditors could be discharged completely. Therefore, even on earlier occasions also, the request of the Company for seeking time for producing on record the statement of liabilities and assets were not appreciated and were rather frowned upon by the Court and in this way, the company's producing its statement of assets and liabilities so that the proposed buyers Page 550 of 674 C/SCA/15599/2008 JUDGMENT and bidders may have clear picture about the property which they were ready and willing to make offer. In fact on 13.8.2010, the Court recorded that the parties though who were seriously before the Court were ready and willing to deposit sizable amount ranging from Rs.1 crore to 2 crore for projecting their bonafide and /or interest in the property. The schedule of payment was also indicated as per the order recorded hereinabove. The Court, therefore, ordered that the amount of Rs.1 crore be deposited on or before 20.8.2010 by each of the offerers with the Registry of this Court. The amount will be paid by demand draft/pay order, drawn in the name of Registrar, High Court of Gujarat and Registrar of this Court is directed to deposit the said amount with the nationalized bank in a separate account, which may be governed by further orders that may be passed in the matter. Pursuant thereto, as could be seen from the record, the applicant of Civil Application i.e. first bidder did deposit Rs.1 crore with the registry of this Court without prejudice to their rights and contentions. It is further required to be noted that in the very order dated 13.8.2010, there is also a reference with regard to their attempt to finally in the name of bidder for listed purpose of calculating the actual dues payable to the workmen. This could not have been therefore ever converted into full-fledge arbitration proceedings, so as to take out the petition being SCA No. 15599 of 2008 and in said petition, as many issues were at large, arbitration proceedings Page 551 of 674 C/SCA/15599/2008 JUDGMENT were agreed by parties be only in respect of calculating all amount admissible to the workmen at relevant point of time. The conduct for the parties and their counsel is reflected from the orders passed in those proceedings would unequivocally go to show that at that point of time, such a plea of ousting the jurisdiction of Court on account of Section 5 of the Arbitration Act, has not been even contemplated or thought of. Had it been so, then, no one prevented the company from putting forward this aspect in unequivocal terms and with appropriate articulation so that other side also may react and reflect thereupon but as it is stated hereinabove, the parties were clear qua the scope of arbitration and therefore, the order was passed by this Court in proceedings would rather go to show that company's stand is taken at a stage, where, it become obvious that the company wanted to dodge the final outcome and eventuality of making payment to the workmen so as to exert pressure upon the workmen to accept the terms and condition imposed by the Company and agreed to reduction in wages, which was imposed by the company so as to forgo sizable claim of amount from the Company. In this light of facts, relevant portion of order dated 24.9.2010 reproduced hereinabove, needs to be once again reproduced for sake of articulation "1. Shri Marshall and Shri Kunan Naik have filed respective affidavits as envisaged in the earlier order. Shri Marshall has Page 552 of 674 C/SCA/15599/2008 JUDGMENT submitted that the map annexed to the affidavit contains a parcel of land which had in fact been sold by the company long back. Therefore, there was requirement of clarification as to the exact area, precincts and vicinity of the land in question along with its measurement containing 155 acres of land offered for sale. The matter is therefore required to be adjourned.

2. At this stage Shri Singhi submits that the company or its executives may work upon from map which is annexed to the affidavit filed by Shri Marshall's client, and crystallize the exact area as envisaged herein above.

3. In the meantime, today itself Shri Naik and Shri Subhash Chaudhari for the workmen have agreed that during course of the day they will place on record of this matter the agreed terms of the reference, as the arbitrator has been agreed upon by both of their clients and there be a joint reference with regard to the dues of the workmen, which is admittedly not included the dues which have been otherwise crystallized in respect of workmen in Special Civil Application No. 9045 of 2009 with Special Civil Application No. 9298 of 2009 to 9381 of 2009, 1619 of 2010, 1620 of 2010 and Special Civil Application No. 4667 of 2008."


                                        [emphasis supplied]



                      Page 553 of 674
        C/SCA/15599/2008                                JUDGMENT

There is one more order dtd 4.1.2010, which needs reproduction as under:

"1. Learned Senior Advocate Shri Marshall, under instructions of the applicant, submits that in light of the two more offers in respect of the subject land and in light of the serious discrepancy in the exact land in question, the applicant is ready and willing to bear the expenses that may be incurred or charged by the Land Record Inspector or the Land Record Officer of the area for ascertaining the exact land, its ownership with title documents etc. In case if there is requirement , the applicant is ready and willing to bear the expenses of having the land surveyed by the approved Surveyor or Land Surveying Agency also. The matter may, therefore, be adjourned to 6.10.2010 so that the Court may pass appropriate order.

2. Learned advocate Shri Naik for the respondent No.2, when called upon to answer as to what is the position of the land and its title, submitted that the Company may produce the title deed, as desired, latest by 6.10.2010. Orders accordingly. The matter may come up on 6.10.2010. On. 6.10.2010 a responsible officer of the company shall make an affidavit indicating the exact Survey numbers, which are non- encumbered in any manner and available for sale with copies of title or documents as Annexure to this affidavit and explain that in Page 554 of 674 C/SCA/15599/2008 JUDGMENT case if this Survey numbers are falling less than the declared 155 acres than in what manner company is going to make up this figure of 155 acres. S.O to 6.10.2010."

[emphasis supplied] On 6.10.2010, the Court has passed another order, relevant portion therefrom needs to be reproduce hereunder:

"1. .... .... ...

2. On account of difference between the parties and their counsel with respect to actual measurement of the land, available for sale, the learned advocates for the parties have made joint request for assigning the measurement work of the aforesaid parcel of lands to District Inspector of Land Records, Surat.

3. Learned Assistant Government Pleader Ms.Mathur has submitted that she has inquired with the concerned officer and ascertained the approximate expenses likely to be incurred in undertaking the measurement of the aforesaid parcel of lands.

4. Shri Marshall, learned Senior Advocate for the applicant M/s. Gayatri Trading & Co., under instructions of the applicant, has submitted that the applicant is ready and willing to bear the expenses for Page 555 of 674 C/SCA/15599/2008 JUDGMENT measurement, which would not be creating any right in favour of the said applicant i.e. M/s.Gayatri Trading & Co. The amount of Rs.20,000/- would be deposited with the District Inspector of Land Records, Surat within a week from today.

5. The District Inspector of Land Records, Surat is directed to undertake the measurement of the parcel of lands belonging to the respondent Company M/s. Baroda Rayon Corporation Limited, Post Fatehnagar, Udhna, District:Surat and especially those parcel of lands, which have been mentioned in the affidavit dated 6.10.2010. The District Inspector of Land Records,Surat is expected to complete the measurement work within 10 days from the date of the receipt of this order, which shall accompany the copy of the affidavit filed by the Company on 6.10.2010 so as to give clear picture to the DILR of the land to be measured by him. The DILR is expected to give description of the property and other appurtenant if any to the land, for which the measurement exercises are undertaken by him. The DILR may also submit appropriate sketch/map of the land parcels, measurement whereof is undertaken by him. The entire exercise is expected to be completed within 10 days of the receipt of the order."

[emphasis supplied] Page 556 of 674 C/SCA/15599/2008 JUDGMENT On 22.10.2010, the Court passed an order, extract whereof is required to be reproduced hereunder:

"1. The District Inspector of Land Records Shri Dokia is present before the Court today and he is submitted that the extract of 7/12 forms received so far reveal that the total land of the Company is to the tune of 318 acres and he submitted that it would be possible for his office to undertake the measurement of the entire land and submit the report with appropriate details with respect to the construction on the land, if any, and the ownership of the land as on date could be reflected from the document that may be submitted to him and which could be crosschecked with the government record. He submitted that the Settlement Commissioner and Director of Land Records has framed charges vide order dated 31.12.2002 for undertaking the measurement, which would come to Rs.60,400/.

2. .... .... ...

3. Shri Dokia, District Inspector of Land Records, submitted that the measurement work will be commenced from tomorrow i.e. 23.10.2010.

4. Shri Naik, learned advocate for the company submitted that the company, as per his instructions, does not own 318 acres of land and, therefore the measurement be confined to 155 acres of land only.

Page 557 of 674

C/SCA/15599/2008 JUDGMENT

5. At this stage, learned advocate Shri Dave as well as learned advocate Shri Subhash for the workman submitted that during the mediation proceedings, the company has committed and agreed for disbursing all its assets to fulfill its obligations towards workers dues and, therefore, the entire area belonging to the company be permitted to be measured.

6. I am of the view that of the area which the DILR suggested today i.e. 318 acres of land based upon the record, would not harm any party rather it would help in ascertaining the exact area which could be available for sale without any encumbrance and hence it is observed that the DILR, Surat who is present before the Court, shall undertake the measurement work from tomorrow itself. The requisite fee as agreed by the applicant would be deposited in the concerned Treasury Office on or before 26.10.2010. Shri Dokia submits that he is hopeful of completing the measurement within a period of 15 days.

7. Shri Naik submitted that the company's representative would cooperate with the DILR and submitted that the relevant record, as required by the DILR will be made available to him."

[emphasis supplied] Relevant extract of order dated 18.11.2010 is reproduced as under:

"Today, it is reported that the office has received Page 558 of 674 C/SCA/15599/2008 JUDGMENT report. As per the observations made in para no.8 of the order dated 22/10/2010, now, office is to make xerox copies of the report, retain the original report on the file of this matter, and the xerox copies be made available to learned advocates those who are appearing for the respective parties in this proceedings. The charges for supplying copies would be as if the certified copies are supplied, but only xerox copies are to be supplied.

Xerox copies be supplied to learned advocates as far as possible, latest by 22/11/2010. Adjourned to 26/11/2010."

[emphasis supplied] The relevant extract of order dtd 26.11.2010 is reproduced hereunder:

"1. There is consensus between learned counsels for the parties for adjourning the matter on 03.12.2010 as the new offers have also come by way of independent applications and all the interested shall have to place on record the respective offers on separate affidavit with their terms and conditions, payment schedule, their financial profile and back ground.

2. Ms. Nair, learned AGP has submitted that she would communicate the concerned District Inspector of Land Records, Surat to help the Company in shorting out and Page 559 of 674 C/SCA/15599/2008 JUDGMENT earmarking the exact portion of land for selling."

[emphasis supplied] The relevant extract of order dated 3.12.2010 is reproduced as under:

"Shri Naik, learned advocate has supplied the colour map, showing the exact parcel of land available for sell including plant and machinery. The same is taken on record. All the counsels have agreed that now their clients will be in a position to make offers as envisaged under last order dated 26.11.2010. The interested applicants, those who have already filed applications for participating in the process, are to submit their affidavits as per order dated 26.11.2010 as soon as possible latest by 7.12.2010."

The list of events as narrated hereinabove indicate that at this stage, applications came to be filed, prayers whereof, have been reproduced hereinabove, indicated that there is a contempt of order of this court, as the land is sold contrary to orders of this Court and contemptnor be joined and proceeded etc.. The narration hereinabove would unequivocally point towards the consensus between the parties so far as discharging of company's liabilities of wages and other employees dues from Page 560 of 674 C/SCA/15599/2008 JUDGMENT the sale proceeds of company's property and this proceedings were in existence as stated hereinabove. Even at one point of time, the bid document was formulated as per order dated 7.12.2011, wherein, almost all participated, yet the said order was subject matter of Letters Patent Appeal, which was said to have become infructuous on account of lack of bid pursuant to order and formulation of draft bid.

110. From the aforesaid discussion, it clearly emerges that at no point of time, any attempt was made to wriggle out of the promises of the company for selling of properties for workmen so as to fulfill their promises to pay wages and other dues to the workmen. Therefore, the submission qua company being not compelled to sale the property would amount to company seeking permission to go back of its wordings and promises of which the development had taken place and for which offerer were invited to make their offer and deposit money to indicate their bonafide. Can this be continence by any Court, the answer would be emphatic 'No'. The change of time and change of the perception and company adopted various pleas available for dodging the claim of workmen, is unfortunate and the employer company took a stand, which was not permissible under law by attempting to disown itself and disown from its own consistent stand before this Court, before the mediation and before all other authorities. Thus, participation of the Company through Page 561 of 674 C/SCA/15599/2008 JUDGMENT out in the proceeding without any demur except filing of LPA, could be said to be an admission on their part, from which, the Company, cannot be permitted to wriggle out only with a view to exert pressure upon the workmen to accept to their terms and conditions and to receive reduced wages. If the Court continence the same, then, it would amount to continence the illegality and fraudulent act of employer, which looking to established principles of law and fair play, in my view, is never be admissible and therefore, the Company's plea qua their right to retain the property and they be not compelled to sale would not be accepted and is required to be rejected outright.

111. This brings the Court to deal with aspect of complaining of ousting jurisdiction of this Court on account of Arbitration proceedings more elaborately. In fact, the Company's resistance qua selling this property and placing into service arbitration proceedings to deny any relief in SCA No.15599 of 2008 are inter-spliced and therefore, they have to be answered accordingly. The observations made hereinabove would help in understanding the conduct of the Company so far.

112. The observations made hereinabove would unequivocally point towards the fact that company had at no point of time even envision of pressing arbitration proceedings to handle for ousting the jurisdiction of this Court, on the Page 562 of 674 C/SCA/15599/2008 JUDGMENT contrary, the development of events narrated hereinabove and various orders passed by this Court did not indicate anywhere that there was ever any plea or whisper on the part of the Company indicating that there is no jurisdiction of this Court on account of pendency of the arbitration proceedings as not only company but all concerned had absolute clarity qua referring the matter to arbitration to ascertain the dues to the workmen, which figure could be arrived to be utilized for seeking the bids from the concerned by appropriate upset price for inviting bids. In that view of the matter, the abrupt contention qua ousting jurisdiction of the Court so far as writ petition No. 15599 of 2008 is concerned therefore, to say the least, an after though and twisting of the matter only with a view to thwart the final outcome in the matter so as to use one more lever to compel the workmen to accept the terms of the Company and accepting the less amount than what is admissible to them under law.

113. The relevant portion of Statement of claim, written statement and observations made by the Arbitrator are reproduced hereunder :

"As averred in the Award, the Statement of Claim indicates the issue of disposal of assets.

In the Written Statement, it is averred as under:

"..... In fact, during the mediation also, the company Page 563 of 674 C/SCA/15599/2008 JUDGMENT showed its bonafide to dispose of all its assets to clear all its liability including that of the workmen. However, the same being not within the scope of present proceedings, it is not dealt with at this stage......"

The relevant extract of observations are as under:

"I must frankly admit that I am unable to accept the prayer made by the learned counsel. In Apollo Tyres, the Hon'ble Supreme Court held that there are many powers which Labour Court or Industrial Tribunal enjoy which a Civil Court does not have, I am not sure whether this Tribunal possesses all those powers exercised by a Labour Court or Industrial Tribunal. This Tribunal is exercising power under the Arbitration and Conciliation Act, 1996. Clause (1)(a) of Section 28 of the Act enjoins this Tribunal to decide the dispute in accordance with the substantive law for the time being in force in force in India, Industrial Disputes Act, 1947 is the substantive law dealing with "investigation and settlement of industrial disputes"

between the management and workmen. The provisions of Section 25-N and 25-O thereof have been enacted by Parliament to ensure legitimate benefits to workmen/ employees by laying down conditions and prescribing procedure for taking actions of retrenchment of employees or closing down undertaking. Such conditions and restrictions have been held to be legal, lawful and reasonable by the Hon'ble Apex Court. It would, therefore, not be proper to Page 564 of 674 C/SCA/15599/2008 JUDGMENT accept the prayer of the respondent company to decide 'cut-off' date even if this Tribunal possesses such power (which is very much doubtful). But even on facts, the submission or prayer does not deserve to be granted. As already observed earlier, the case of the company itself was neither of closure of undertaking (Section 25-O) nor of retrenchment of workmen (Section 25-N). The Circular dated 27 August 2008 is absolutely clear and leaves no ambiguity. It expressly states that what was done by the company was temporary suspension of operational activities. The employees were though not required to report for work, were to be treated as present. The company thus never relied upon or put forward its case (a) either of closure of undertaking; or (b) of retrenchment of workmen.

114. Apart therefrom, this Court has already extracted hereinabove relevant portion from the arbitration Award, the issues framed, plain and simple reading thereof would also unequivocally indicate that there was scope to deliberate upon the issue with regard to mode of payment, resources for making payments to the workmen and sale of assets, as this issues were Page 565 of 674 C/SCA/15599/2008 JUDGMENT decided, can be out of purview of arbitration proceedings, and SCA No. 15599 of 2008 is in fact precisely the petition seeking immediate relief in respect of statutory dues payable to the workmen and selling of the assets including selling of the assets of the company nor shown its liabilities and responsibility to the workmen and seeking direction to all labour authorities for taking appropriate action as there was consistency in denying wages to the workmen and also denial to statutory dues like gratuity amount and other retiral dues in case of the workmen, who worked during the period and retired on achieving the age of superannuation and who are out in the interregnum period.

115. The present group of matters as has been narrated hereinabove consisting of matters filed by the Company, the workmen and group of workmen in whose favour there were orders from the Competent Authority like Controlling and Appellate Authority under Gratuity Act and therefore, there was no scope for even contending for a minute that proceedings were required to be dropped on account of arbitration proceedings. On the contrary, unequivocal stand of both the sides recorded in the orders passed by this Court and incorporated hereinabove, would indicate that so far other alternative issues are concerned, they are specifically kept out of the scope of arbitration.

116. The scope of arbitration proceedings is well defined Page 566 of 674 C/SCA/15599/2008 JUDGMENT and could be ascertained from the award itself. The award of the arbitration, the issues framed thereunder, the relevant contentions of the parties and parties agreement on account of scope of arbitration and the contemporaneous orders passed by this Court in the proceedings of this group and also orders passed in SCA No.15599 of 2008 would amply demonstrate that there exists no substance in the arguments canvassed on behalf of the company or purchasers that there exists no jurisdiction of this court to pass any order when parties were before the arbitrator and in light thereof on account of the provisions of Arbitration Act, the Court do not have any jurisdiction. This submission is required to be rejected on account of the discussion made hereinabove.

117. The aforesaid discussion would clearly indicate that plea in respect of ousting the jurisdiction of this Court on account of BIFR proceedings, Arbitration proceedings and statutory bar on account of writ petition being of general remedy, would be of no avail, as even if the proceedings of SCA No. 15599 of 2009 is concerned, it is most important to mention at this stage that the aforesaid bar could be pressed into service qua only the proceedings of SCA No. 15599 of 2008 and they cannot be pressed into service so far as other cognate matters are concerned namely SCA No. 134 of 2006 and others, as in absence of any plea indicative thereof, there cannot be even any Page 567 of 674 C/SCA/15599/2008 JUDGMENT remote suggestion that those proceedings were barred in any manner.

118. This Court is of the considered view that the proceedings of SCA No. 15599 of 2008 are proceedings arising from consistent failure on the part of company in responding its commitment, promises, obligations, statutory duty and mandatory provisions of I.D. Act, 1947 and the situation that had arisen on account of development thereafter and in aftermath of settlement under Section 2(p) of the I.D. Act. Therefore, the Company's approach and its stand time and again taken before the workmen themselves, the Tribunal, this Court, arbitrator and BIFR is very clear that the company has all alone sang a song of selling the property for discharging its liabilities, in other words, there was never any second thought qua disposing of the properties for discharging liabilities. There would have been a clear and unequivocal commitment before the BIFR itself. The entire scheme if one looked before BIFR, then, one would come to a conclusion that it was simply a road- map followed by the Company for overcoming from its crisis, in fact, strictly speaking, there was no crisis. The said stand of crisis is taken, to compel the company to seek shelter under SICA, however, in order to avoid its liabilities towards the segment, which can as per its say appears to have been taken or else, there was no justification by the company to incorporate Page 568 of 674 C/SCA/15599/2008 JUDGMENT the assets, which according to company were sold, if indicative of the company's assets before the BIFR or was there any road- map of selling other assets. The vary scheme itself also contained unequivocal acknowledgment of the company's liabilities to be discharged to the workmen i.e. ex-employees and the then existing employees and their heirs and dependents.

119. The court hastened to add here that this Court is not sitting in Appeal over the orders that have been made by any other agencies. Suffice it to say that the proceedings under SICA appear to have been used as commofledge for avoiding and dodging the liabilities and final eventuality that may come on account thereof. Therefore, this Court is of the considered view that the proceedings of SCA No. 15599 of 2008 also need not be said to be in any way barred on account of such a plea, which appears to have been raised only with a view to dodge final outcome and exert undue pressure upon the workmen for accepting the lesser amount than what is otherwise admissible to them.

120. The consistent approach on the part of company in avoiding and placing on record its liabilities in articulate report qua workmen also speaks volume about the conduct of company before the Court. The orders and extract therefrom are reproduced hereinabove, would indicate that time and again this Page 569 of 674 C/SCA/15599/2008 JUDGMENT Court directed the Company to place on record its own calculation about dues to the workmen but unfortunately, throughout, those directions have been avoided, either by not placing on record the required information or by placing on record the truncated form, which would not inspire any confidence whatsoever qua its contention in Court of law.

121. It was always open to the Company to place on record the audited balancesheet, if any, or if they were existing but nothing has been produced on record, though it is required under the Company's Act. Despite their being specific direction to this effect, will also go against the Company and compel the Court to hold that there exists none or else the Company could not come forward and placed on record the same. The Court is of the considered view that under Company Act, 1956, duty is cast upon the Company to have its balance sheet audited and file the same before the competent authority. The Company appears to have not complied with these provisions of Company Act also or else, it would have been opened to the Company to place it on record in these proceedings.

122. The orders of this Court, the Company's commitment in the mediation proceedings before the Mediator and report of Mediator and subsequent application made by company for seeking extension of time for compliance with the order, speaks Page 570 of 674 C/SCA/15599/2008 JUDGMENT volume about the Company's recalcitrant approach in its reluctance in producing the same for obvious reason. Can such a sharp practice can be continence by the Court of law, the answer could be emphatically 'No'. The Company was otherwise also required to be in compliance with statutory obligations, submits its annual return and nothing prevented the company to produce on record of these proceedings. The attempt on the part of Company in specifically avoiding these aspect and showing only ostensible compliance by producing figures in form of affidavit filed by a person, whose designation is not disclosed, would be required to be viewed in appropriate prospective, which will clearly indicate as to how and in what manner the Company's affairs have been conducted.

123. From the aforesaid observations, it would be most appropriate to summarize the Company's act, omissions and commissions, which would justify the claim of workmen in these proceedings especially that of SCA No. 15599 of 2008 namely:-

(1) The Company ensured the workmen that they would be paid their wages and for temporary period the workmen be prepared to accept the voluntary reduction in their wages to settle the matter under Section 2 (p) i.e. settlements of the year 2002 and 2003 would amply Page 571 of 674 C/SCA/15599/2008 JUDGMENT covered these aspects and close perusal thereof would clearly indicate that the Company did not attempt even to fulfill its commitment qua workmen. This omission on the part of Company in settling its commitment arising under the provisions of Section 25 of the ID Act and its failure in adhering to the statutory requirement and mandatory provisions like payment of gratuity, PF and other, compelled the workmen to raise dispute which was referred to competent forum i.e. Tribunal wherein, it was numbered as Reference (IT) No. 15 of 2005.

(2) Even in these proceedings also, the Company did not disclose its stand, qua the property in question, rather it resorted to usual defense available under such proceedings, which in turn compelled the concerned Tribunal in passing the order prohibiting Company in alienating any assets in form of order dated 6.12.2005.

This order was not the first order of its nature, as could be seen from the other proceedings which have been mentioned hereinabove, namely the company petition being Company Petition 91 of 2000 being winding up petitions, wherein also, in the year 2000, the prohibitory orders were made on 17.04.2000 at the time even the so called MoU was not in offing, as the date of MoU, which is dubbed to be an agreement to sale is only of dated Page 572 of 674 C/SCA/15599/2008 JUDGMENT 28.9.2004. The question arises as to whether be it open to the Company to make such arrangement or MoU when the company was clearly prohibited on account of filing of winding up petitions and where the prohibitory orders were issued, mandatory provisions of Sections 536, 531, 531A, 532, 533 etc. have been violated. This arrangement named it a MoU, Agreement to sale or simplicitor as it is passed on by the Company, could not have been legally affected at all, as the Company was under clear prohibitory orders of this Court.

(3) The Company's move before the SICA authorities by invoking Section 15 of the SICA also do not absolve the company of its primary responsibility and liability to seek appropriate exemption or permission from this Court and in fact, in the scheme, which is said to have been a major instrument for continuing the instrumentality of SICA did envisage and informed the SICA authority that company would seek appropriate orders from the Gujarat High Court in Winding Up petition proceedings and scheme of rehabilitation as contemplated under Sections 391 to 394 would be resorted to, the company did nothing of this and succeeded in dodging its liabilities only on account of protective umbrella available to it under the provisions of SICA. This omission on the part of the company was Page 573 of 674 C/SCA/15599/2008 JUDGMENT clearly with a view to perpetuate the umbrella or protection and warding of coercive steps that may be taken otherwise by the concerned that would include the workmen also. The Company committed itself to adhere to the scheme, which in fact, led nowhere as after entering the arena of SICA, the company executed sale document of the properties, for which, money had already been received as per the say of Company even before the proceedings of SICA had started. The Company's proceedings before SICA in Reference proceedings, would not absolve the company from its primary liabilities to seek appropriate orders from this Court as even as per the scheme, as it is stated hereinabove, clearly envisaged their obligation. Thus, after obtaining the protective umbrella from SICA provisions, virtually, the Company did nothing, which would indicate towards its attempt to rehabilitate itself so as to come out as going concerned.

(4) The Company's commitment under scheme clearly indicated that sale would be carried out under the auspice of Sale Committee and sale proceeds will be deposited in the Court. The application, which was filed for seeking permission of this Court was not thereafter persuaded as merely filing of application and citing the same before the BIFR was sufficient for prolonging and perpetuating the Page 574 of 674 C/SCA/15599/2008 JUDGMENT protective umbrella under the provisions of SICA. The Company's reference under SICA brought for obvious reason of keeping the proceedings of winding up petition in abeyance but that would not amount to keeping the prohibitory orders also in abeyance as even before SICA authorities also, the company asked Court's permission, and looking to the submissions as such, the Company never proposed any other property to be sold except the property which were already as per the say of company subject matter of MoU. One would fail in understanding as to how and in what manner the scheme could incorporate the properties which were subject matter of MoU. It would be most appropriate at this stage that to refer to company's contention and stand as reflected in the order passed by this Court in company proceedings being Company Petition No. 91 of 2000 dated 4.5.2000, which have been cited hereinabove, in which the company has claimed against winding up proceedings to be a going on concerned, capable of providing employment to larger workforce consisting of 3800 workmen and its freehold land assets, which would indicate company's conduct. Thus, approbating and reprobating by the Company before various authorities in various proceedings required to be viewed in a proper prospective. The proceedings before the SICA and sanctioning of the scheme are not Page 575 of 674 C/SCA/15599/2008 JUDGMENT proceeding by any formal inquiry into sickness of the Company or declaration to this effect, nor is the company coming out with any concrete offer for discharging its liabilities and sanctioning itself as going concerned. These all things would rather strongly indicate Company's successful attempt for dodging the final outcome of winding up proceedings, the claim of creditors and coercive steps on account of protective umbrella under SICA and therefore, these are commission and omissions, which would go to indicate that whether the company in these proceedings has made out a case, which would persuade this Court in accepting its stand, the answer would be emphatic 'No'.

(5) The series of orders passed by the BIFR, which have been referred hereinabove in extenso would indicate as to how and in what manner the company's sole interest of perpetuating the protective umbrella under SICA was successfully made and lack of any earnestness for resumption of its work or any attempt in this direction, would rather expose the company's intention or intention of those, who are in charge of the company.

124. At this stage, it would be most appropriate to refer to the development that company could successfully ward of Page 576 of 674 C/SCA/15599/2008 JUDGMENT SARFEISI proceedings as company regularly made payment of the interest of its outstanding to sole secured creditor namely ACRE and that fact would indicate that the company wanted to compel only the workmen for tiring them out so that they be compelled to accept terms of Company and the prohibitory orders may go and company may have free hand in dealing with the properties for profit making and workmen be compelled to accept whatever amount being offered to them as if the payment is not made to secured creditors, who has already invoked provisions of Section 13(2) of SARFESISI Act would immediately invoke powers and rights under Section 13 (4) of The SARFESI Act which would have ended the SICA proceedings leaving company to treat the workmen at par with secured creditor under the provision of SERFASI Act also, which in turn would have adversely affected Company's design to siphon the property illegally. The Secured Creditor's invocation of powers and rights under section 13 (4) would have effect of reviving Winding up Petitions which have been referred herein above.

125. The last order of SICA authorities which is already reproduced hereinabove indicated that the proceedings were adjourned sine-a-die, is required to be noted by this court as the company was merely interested in seeking appropriate extension with sole purpose of exerting pressure upon the workmen as the Page 577 of 674 C/SCA/15599/2008 JUDGMENT company did not choose to bring about an end to the relationship with workmen by resorting to Section 25 F 25N 25 O of ID Act for closure and retrenchment, which would have in tern, compelled the Company to shell out appropriate amount reckoning the services rather so offered by the employees and here at this stage, the judgment of Supreme Court would also come into consideration as the workmen whose services have not ended in accordance with law are legally deemed to have been in service as the company's attempt before the arbitration also failed on this account. These factors are required to be considered as an attempt on the part of company in perpetuating its efforts either in covering down workmen.

126. In view of the aforesaid discussions, the Court is inclined to issue appropriate directions and orders in this group of matters as it has been adverted to in the inception of judgment that all these matters have been listed together and heard together and are being disposed of by this common judgment and order. The main matters are 3 and there are of-suits and applications in form of Misc. Civil Application, Civil Applications etc. in these matters. Therefore, it would be most appropriate to advert to three main matters herebelow for rendering the decision.

Page 578 of 674

        C/SCA/15599/2008                              JUDGMENT



(1)          Special Civil Application No. 134 of 2006:

This petition and its contentions have been discussed hereinabove at length. If the same is adverted in its gist, would come to its essential challenge to the order passed by the Industrial Tribunal dated 6.12.2005 passed in Reference (IT) No. 15 of 2005. The peculiar facts and circumstances leading to arising of the Industrial Dispute and referring the matter to the concerned Court have been adverted hereinabove in extenso. The Court is of the view that the challenge to the order is required to be viewed as if it is essentially under Article 227 of the Constitution of India only. This challenge is to the order passed by the Tribunal in pending proceedings, which could be said to be an interlocutory order only. The petitioners have though termed this petition to be one filed under Article 226 of the Constitution of India and there is conspicuous absence of any reference to Article 227, this petition is in my view, required to be treated as the one filed under Article 227, as the petitioners have though attempted to show the lack of jurisdiction but said aspect is as it is apparent on record adverted only with a view to attract the provisions of Article 226 only. The petition is filed not only by the Company but it is also filed by Member and Share Holder-cum-Manager. From the order impugned and other proceedings, it appears that there were only two parties before the Tribunal, i.e. Company - first party Page 579 of 674 C/SCA/15599/2008 JUDGMENT through its Manager and Workmen's union - second party. The second petitioner does not seem to be party to the proceedings. May be is present on account of an attempt on the part of the company to attract the provisions of Article 226, otherwise, as such, there was no requirement of bringing in party without following due process of law namely seeking leave of this Court as the petitioner was not there in the record of original proceedings. Though this aspect has not been contended seriously by the workmen's advocate, this Court is of the view that same is required to be adverted to in view of the provisions with regard to Rule 51 of the High Court Rules. This aspect may not in fact be of any substantive purport but the Court has to take this factor into consideration in order to appreciate the conducting of the matters, as though, in the Reference itself, the parties are shown to be Baroda Rayon Company, through Manager but if one looks at the cause title of the application, then, in the cause title individual name i.e. petitioner no. 2 and he has been termed to be share holder and manager. The said fact is conspicuously absent in the Award, if he is the same person before the Tribunal. In other words, cause title of the petition indicates that the same person i.e. petitioner no. 2 was not before the Tribunal. In the narration and averments made in para-2 of the petition, the petitioner no.2 is shown to be share holder and Managing Director of the petitioner company, whereas, before the Tribunal, the petitioner no.2 does not seem Page 580 of 674 C/SCA/15599/2008 JUDGMENT to have been party. Therefore, in my view, the petitioner no.2 could not approach this Court straightway without taking leave of the Court as envisaged under Rule 51 of the Gujarat High Court Rules 1993, however, the same infirmity is required to be adverted to only with a view to indicate that at relevant time, there was no specific pleadings, which would have justify invocation of Article 226 alone, as in the cause title as well as the pleadings though, revolves around challenge, which could be maintained only under Article 227, the Article 227 does not find any reference anyway.

The challenge to the order, as it is observed hereinabove, is based upon the broad submission in respect of Tribunal overstepping its scope of Reference, the Tribunal's order affecting petitioner company's right to deal with its property, the way it is like, the order being passed without appreciating the facts and records, 7 employees termination was not successfully referred to for adjudication and yet the Tribunal took up this issue and passed appropriate order, the workmen's' termination was warranted on account of their indulging in unruly behavior at the work premises and/or to threaten the managerial personnel of the petitioner company for no reason, the grave misconduct was attributed as they were charge-sheeted for committing such misconduct and they were dismissed after the date of reference and hence approval application was made Page 581 of 674 C/SCA/15599/2008 JUDGMENT in respect of those three workmen, as four workmen were dismissed prior to date of reference i.e. 28.5.2005. All these aspects were required to be considered by the Tribunal. The Tribunal ought to have appreciated the fact of BIFR proceedings were in fact initiated and Tribunal could not appreciate the same before passing the prohibitory orders. The part of the property was sold pursuant to order of the DRT, which ought to have been appreciated by the Tribunal.

The Court is of the view that the prayers made in this petition and subsequent developments which have been mentioned hereinabove, are required to be considered in juxtaposition to each other for understanding and appreciating the efficacy thereof.

The facts remained to be noted that the order of Tribunal dated 6.12.2005 is passed in light of the pleadings and reference pending before the Tribunal. The Tribunal's order, in my view, cannot be said to be bereft of any merits as sought to be made out. The order is required to be viewed in the background of the matter. The employer company had failed in keeping its promises and commitments, so far as the workmen and staff members were concerned. The workmen had in fact agreed to scarify a part of their wages for limited period with a view to help the company in overcoming the crisis so as to Page 582 of 674 C/SCA/15599/2008 JUDGMENT sustain their employment, help their family. The series of settlement i.e. 2(p) settlement and the conduct of the company, would be required to be borne in mind for appreciating this aspect. The earlier settlement dated 5.5.2002 and the subsequent settlement dated 27.10.2003 and the conduct of the parties and omission and commission of the employer would indicate clearly the conduct and in what manner the dispute was required to be raised, which ultimately was subject matter of Reference being Reference No. 15 of 2005. The details of damages include the demand in respect of direction for restraining itself from perpetrating unfair labour practice and it was also quite noticed at the relevant time that the 7 office bearers were visited with disciplinary action and the company has conspicuously omitted to mention those facts even in this memo of petition though petitioners do refer to 'grave misconduct' without specifically pointing out the misconduct so as to permit the Court to appreciate the same. By referring the conduct to be a misconduct and making it subject matter of issuance of charge sheet, resulting into termination order, dismissal during pendency of the proceedings under I.D. Act without following due procedure of law or without ostensibly complying with the provisions of law, would ipso-facto create an environmental situation wherein the Court or Tribunal will have to address itself to the issue as to whether this act of the Company was on account of any attempt to scuttle the front put up by employees Page 583 of 674 C/SCA/15599/2008 JUDGMENT for realizing their dues or it was a genuine requirement. The fact remained to be noted that this part of the order namely the direction to reinstate the employees was stayed by the Court and therefore, the employer was under an obligation to at least comply with Section 17B of the I.D. Act, however, non- compliance and resultant dismissal of the petition qua challenged to the order and LPA proceedings and affairs of the company, 7 employees to be transferred to Mumbai and they be given accommodation, are also mentioned herein above in detail, therefore, at this stage, it is not required to be elaborately discussed. But suffice it to say that order was merely an interlocutory order, which could not have been viewed as such and therefore, when there was prima-facie finding with regard to lack of warrant for passing such an order of termination, the same, in my view, cannot be said to be such a perversity, call for any interference under Article 227 and even under Article 226 of the Constitution of India, though, the petition cannot be said to be one filed under Article 226 of the Constitution of India.

This brings the Court to consider other part of the order impugned in this petition, which is being assailed on account of fact that Tribunal did not consider the pendency of the proceedings under SICA nor did the Tribunal consider the aspect of freedom of company in dealing with its properties and it was to be shown to be outside the scope of Reference, as Page 584 of 674 C/SCA/15599/2008 JUDGMENT could be seen from the averments in the memo of petition. This Court is of the considered view that the 2(p) settlement is the settlements, which create right in the parties and parties are to be governed there under. The labor jurisprudence and provisions of ID Act, discussed and interpreted time and again by the Supreme Court, would unequivocally indicate that the Labour Court and machineries under I.D. Act enjoy greater power than even the civil courts, as the labor legislation are essentially for regulating the conduct of the affairs of company in such a way so as to minimize any plausibility of exploitation of the workmen, who did not have any bargaining capacity whatsoever, therefore, if one bears in mind the enshrined principles of I.D Act and its provisions, vis-a-vis, the directive principles of State enshrined under constitution read with Article 21, one would be left with no other choice but to hold that the Tribunal's power to even rewrite a contract is untrammeled and clearly acknowledged, if one looked at the impugned order, bearing in mind the aforesaid principles, then, one would have no hesitation in coming to the conclusion that order of Tribunal, so far imposing restriction upon the company is concerned, was not so perverse as to disturb it and it does not call for any interference in exercise of powers under Article 226 and/or even under Article 227 of the Constitution of India.

The Tribunal has held, considering the claim of Page 585 of 674 C/SCA/15599/2008 JUDGMENT workmen in light of the pleadings, the pleadings were supported by the factum of 2 settlements namely settlement under the provisions of 2(p) i.e. settlement dated 5.5.2002 and 27.10.2003 and fact that there was a clear agreement and commitment on the part of company qua workmen for making the payment to them of the dues, which were differed or which were not paid by the company on account its financial crisis. It is also required to be noted that this financial crisis claimed, workmen's wages or part of wages, to help the company in overcoming its inability and it could pay up the dues, the agreement and settlement, which contain threadbare commitment and obligation of the parties, would clearly indicate that there was no other way left to the workmen but to pass order, which is impugned in this petition or else there would be gradually siphoning away of the assets of the company, without their being sufficient protection for the workmen for realizing their dues, which were rather over due to be paid on account of non-payment on the part of company for years together. This aspect unfortunately was the aspect which would have rather compelled any adjudicatory authority to issue appropriate restrictive orders for safeguarding the interest of workforce, which was quite sizable and therefore, in my view, the order cannot be said to be so unreasonable or perverse as to call for any interference under Article 227 of the Constitution of India or in that matter, under Article 226 of the Constitution of India.

Page 586 of 674

C/SCA/15599/2008 JUDGMENT The Court is unable to accept the plea of company qua proceedings under SICA for assailing the order impugned in this petition as the clear and simple reading of the order cannot be said to be a coercive order so as to hamper or damage the company in its rehabilitation at all. The development of events as narrated herein above, would rather indicate that the plea of company was not justified at all, as the settlement dated 5.5.2002 and 27.10.2003 did envisage the sale of the property of the company with consultation of workmen and workmen were to be taken into confidence at all on that count, so that their dues are secured and for that matter, workmen did scarify part of their wages also, therefore, the order which imposed restriction upon the company from alienating its assets was required to be viewed only from the angle of its safeguarding workmen's interest, it therefore, in my view, cannot be said to be coercive order so as to effect any attempt for so called rehabilitation pending.

The Court is of the considered view that the company approached BIFR under SICA on 23.1.2004 and even at that time also, as could be seen from the proceedings; there was no concrete scheme as such. The scheme appears to have sanctioned on 1.6.2006. The order impugned therefore, is required to be viewed only from this aspect. The submission Page 587 of 674 C/SCA/15599/2008 JUDGMENT may appears to be more attractive but if it is viewed from the development of events, then, it appears to be of no avail to company, in fact, the Company before the BIFR also has ascertained the workmen's' cooperation on account of their dues being cleared, as could be seen from the submission enlisted on the part of learned counsel for the workmen, which would pointedly indicate that at relevant time, the company did hold out to the BIFR authority that workmen's dues are being taken care of which would indicate that there was one more obligation cast upon the company that workmen's dues are paid before the Tribunal in Reference proceedings. The Tribunal after considering this important aspect, thought it fit to issue such direction, which in my view cannot be said to be so perverse so as to call for any interference.

The fact remained to be noted that in the proceedings before this Court, the BIFR proceedings were cited, even this Court did not vacate the stay order and issued direction to the company that the sale, if is taking place, it would be taken place under the guise of Sale Committee and sale proceeds be deposited before this Court. This order, though, grant permission to the company to deal with its properties, so far as POY Plant etc., is concerned, did not find favor with the company as the company for the reasons best known to it, did not choose to proceed further, may be as this order contained Page 588 of 674 C/SCA/15599/2008 JUDGMENT clear direction to the Company for depositing the sale proceeds in this Court, that too only with a view to see to it that the workmen's dues are not jeopardized in any manner. Therefore, the development of proceedings and company's claim of order being not in conformity with law on account of BIFR proceedings is nothing but a hollow claim made with a view to deny the legitimate right of the workmen, without their being any proper material on record. Hence, this contention is required to be rejected outright.

(2) Special Civil Application No. 3916 of 2008:-

This brings the Court to consider the prayers made in the petition being SCA No. 3916 of 2008. As it is mentioned hereinabove, that has to be considered as one of the off-suit of the main controversy involved in and subject matter of Reference (IT) No. 15 of 2005, as during the pendency of said Reference, as it is already mentioned hereinabove, the application preferred by the Union on 30.3.2007 for early hearing qua demand no.9 for payment of gratuity, resulted into an award, which is known as Part-I award on 20.10.2007. That award or Part-I award is subject matter of challenge in this petition. That Part-1 award rendered on 20.10.2007 holding that the demand no. 9 was required to be considered in light of the submissions and development in the matter. The demand No. 9 Page 589 of 674 C/SCA/15599/2008 JUDGMENT could be reproduced as under:

"The payment of gratuity to the employees, who retired, passed away or had left the job, had became payable as per the settlement and in terms of settlement and as the same had not been paid, giving cause for raising demand, the same shall be ordered to be paid with 12% compound interest from the date it became due and payable."

(Translated from original Gujarati) This demand was forming part of the demands, which were referred by the Competent Authority on 28.9.2005, totaling 18 demands, were referred there under and demand no.9, as stated hereinabove pertains to payment of gratuity to those, who had been left out without payment thereof since years. This amount had remained unpaid for quite some long time and therefore, the company agreed in its settlement with workmen, which was executed in the year 2003, that amount of Rs.6,16,00,000/- became due and payable under its obligation of payment of gratuity to the concerned and thus, it had became part of the settlement brought whereof, was subject matter of consideration by the Tribunal in Reference being (IT) No. 15 of 2005. The period agreed was to be over by 27.10.2006.

The amount of gratuity claimed under the demand had a basis thus, in this 2(p) settlement of 1982, which provides Page 590 of 674 C/SCA/15599/2008 JUDGMENT methodology and quantification and 2(p) settlement of the year 2003 incorporated company's commitment to make good the payment within stipulated time. These are the factors to be borne in mind constantly while examining Part I award dated 20.12.2007. The demand appears to have been resisted on various grounds by the Company in light of company's attempt before the BIFR and the proceedings under SICA. The company's financial condition and company's attempt to continuously giving employment to the majority of workmen and its apprehension qua the compelling circumstances whereunder the amount is ordered to be paid within stipulated period, then, company running into serious financial crisis and ofcourse there was a ground with regard to demand available under Payment of Gratuity Act itself. The Tribunal while rendering its decision has discussed in detailed the testimony of the witnesses and affidavit filed on behalf of the concerned and after recording threadbare the various contention of both the sides, the Tribunal came to the conclusion that the demand was required to be accepted and granted in terms of direction issued in the order.

The Tribunal appears to have considered the case as per Standing Order 23 (8) and item no. 32 in the settlement of 1982. The time leg for payment was 30 days and no exemption could have been claimed in this respect by any one. The decisions of Page 591 of 674 C/SCA/15599/2008 JUDGMENT the courts were relied upon mentioned in the judgment to indicate that period of 30 days for payment of gratuity was a condition accepted, breach whereof was required to be viewed in appropriate manner. It appears that on employees side, following authorities were relied upon :

1. 1986 LLJ Vol.1 223 (SC)

2. 2007 LLJ Vol.1 1 (SC)

3. 1994 LLR 61 (SC)

4. 2003 LLJ Vol.1 1119 (SC)

5. 2007 LLJ Vol.1 844

6. 2004 GLH Vol.3 416 (SC)

7. 1994 GLR Vol.1 36 The apprehension was expressed on the part of workmen that company was likely to dispose of the properties by alienating the properties of the company though there was restrained order passed by the Court so as to deny the claim of workmen and to deprive the workmen of their legitimate dues.

As against this, it appears to have been urged on behalf of company before the Tribunal that on 27.10.2003 when the Company was declared to be sick industry, the amount of gratuity was payable on or before 27.10.2006, which would have been Rs.6,16,00,000/-, there was no mention about the interest and therefore, the demand of 12% interest cannot be awarded by the Tribunal. As per settlement of 27.10.2006, out of payment to be made of Rs.6,16,00,000/-, it was claimed that Page 592 of 674 C/SCA/15599/2008 JUDGMENT Rs.94 lacs have been paid and the proceedings before the BIFR were pending. It is also contended before the Tribunal by the Company that the interim order restraining the company from selling the surplus land has been confirmed by the High Court and therefore, it was contended that if the Tribunal ordered to pay the due amount, the company has to close the unit and in that event the workmen will lose their employment and bread. It was also contended before the Tribunal that the workmen be paid wages regularly lately. Therefore, the company is only surviving on account of the settlement with the workmen and there was no breach of any settlement or any terms of conditions. The company appears to have urged before the Tribunal that payment of Rs.6,16,00,000/- was required to be made by 27.10.2006, therefore, the amount of interest as demanded was not admissible. The company appears to have relied upon the following authorities in support of their contentions.

1. Judgment and order rendered in SCA No. 3414 of 2002

2. 1956(2) LLJ 319 (Bombay High Court, DB)

3. 1963(2) LLJ 153

4. 2007(113) FLR 790 The Tribunal has considered all aspects as it is stated Page 593 of 674 C/SCA/15599/2008 JUDGMENT hereinabove and appears to have perused Exh. 158/2 and after recording its reasoning, has also considered various provisions of Industrial Dispute Act and especially provisions of Section 10(1)(d), 10(4), Section 11, Section 2(k) to advert to the aspect of jurisdiction so far as demand No. 9 is concerned and has recorded its conscious conclusion that demands were still within their jurisdiction to pass appropriate order as it was found to be forming part of entire controversy at large before the Tribunal in the form of Reference to it by the Competent Authority.

The decision cited by learned counsel for the workmen in case of Management Hotel Imperial, New Delhi Vs. Hotel Workers Union, reported in AIR 1959 SC 1342 : 1960 (1) SCR 476, on this point has also bearing upon this aspect. Paragraph Nos. 12 and 13 of said decision reads as under:

para-12: This Court in Rohtas Industries Ltd V/s. Brijnandan Pandey, 1956, SCR 800: AIR 1957 SC 1) also recognized the correctness of the dictum laid down in the above Federal Court decision and observed that there was a distinction between commercial and industrial arbitration, and after referring to the same passage in "Labour Disputes and Collective Bargaining" by Ludwig Teller (vol.1, p.536), proceeded to lay down as follows:

"A court of law proceeds on the footing that no power exists in the courts Page 594 of 674 C/SCA/15599/2008 JUDGMENT to make contracts for people; and the parties must make their own contracts. The Courts reach their limit of power when they enforce contracts which the parties have made. An Industrial Tribunal is not so fettered and may create new obligations or modify contracts in the interests of industrial peace, to protect legitimate trade union activities and to prevent unfair practice or victimisation."

para-13: It is clear therefore that Industrial Tribunals have the power to go beyond the ordinary law of master and servant, if circumstances justify it. In these cases the decision of the Labour Appellate Tribunal has proceeded strictly on the basis of the ordinary law of master and servant without regard to the fundamental change introduced in that law by the enactment of sec. 33 of the Act. All the cases to which we have been referred with respect to the ordinary law of master and servant had no occasion to consider the impact of sec.33 of the Act on that law as to the power of the master to suspend. We have, therefore, to see whether it would be reasonable for an Industrial Tribunal where it is dealing with a case to which sec.33 of the Act applies, to imply a term in the contract giving power to the master to suspend a servant when the master has come to the conclusion after necessary enquiry that the servant has committed misconduct and ought to be dismissed, but cannot do so because of sec.33. It is urged on behalf of the respondent that there is nothing in the language of sec.33 to warrant the conclusion that when an employer has to apply Page 595 of 674 C/SCA/15599/2008 JUDGMENT under it for permission, he can suspend the workmen concerned. This argument, however, begs the question because if there were any such provision in sec.33, it would be an express provisions in the statute authorizing such suspension and no further question of an implied term would arise. What we have to see is whether in the absence of an express provision to that effect in sec.33, it will be reasonable for an Industrial Tribunal in these extraordinary circumstances, arising out of the effect of sec.33 to imply a term in the contract giving power to the employer to suspend the contract of employment, thus relieving himself of the obligation to pay wages and relieving the servant of the corresponding obligation to render service. We are of the opinion that in the peculiar circumstances which have arisen on account of the enactment of sec.33, it is but just and fair that Industrial Tribunals should imply such a term in the contract of employment."

At this stage, learned counsel for the workmen submitted that aforesaid judgment was subject matter of consideration in the judgment in case of D.C. Roy Vs. Presiding Officer, Madhya Pradesh Industrial Court, Indore, reported in 1976(3) SCC 693 : AIR 1976 SC 1760 and submitted that the aspect on which the reliance is placed have not been overruled.

In view of this, the Tribunal has passed the direction, which has been subject matter of challenge in this petition. This Page 596 of 674 C/SCA/15599/2008 JUDGMENT Court is of the considered view that at first blush, the submissions canvassed at bar on behalf of petitioner company appears to be attractive that when The Payment of Gratuity Act provides for the remedy, however, in what manner, the Tribunal could have assumed upon its jurisdiction to pass an order but close account of the entire developments and peculiar facts and circumstances of the case, which are interwoven with each other for bringing about and impasse, where under, workmen's' all attempt to bringing about responsibility to their family members fall on a deaf ear. The Court was urged to make appropriate orders in terms of demand no.9, which had never been objected to by the company right from the beginning as there is no challenge to said demand anywhere. The Court hastened to add here that it does not mean that the company was precluded from raising such plea at relevant time but suffice it to say that company at relevant time did no choose to pause any challenge on account of demand no. 9 in reference. The historic background right from the Reference, would clearly indicate that the demand had a nexus with workmen's' claim which had ripen and which had invited the workmen for settlement, as could be seen from the agreement of settlement and company while resisting the demand in its entirety, has an attempt to raise a plea that the time for making payment of gratuity was expired in the year 2006 and therefore, the demand of payment with interest was resisted. Thus, all these factors, if are looked Page 597 of 674 C/SCA/15599/2008 JUDGMENT collectively, they would clearly indicate that demand cannot be clearly qualified to be demand one, which could have been escaped from the purview of the consideration by the Tribunal, on the contrary, the demand was not simplicitor of gratuity qua individual employee of the workmen, the demand was in respect of company's own commitment to make good the payment for the sum of Rs.6,16,00,000/- which had become due and payable in respect of the workmen, which otherwise, entitled to receive along with interest. The period or differed payment was including interest in all earnestness warrant to survive, so that it may protect employment and bread. When the workmen realized that company was interested in not paying the workmen's dues, the workmen felt that they have to move the Court, which resulted into raising Industrial Dispute, wherein, this demand no. 9 also was forming part of demands, which issue was considered by the Tribunal. If one takes these facts into consideration in juxtaposition the order, reasoning and facts of parties, then, one will have to appreciate that the company's claim of lack of jurisdiction in the Tribunal, was of no avail to the company.

The Tribunal has threadbare discussed the law on point, the facts on point and has rightly arrived at the conclusion, which clearly indicate that the demand was forming part of the settlement i.e. 2(p) settlement and in light of the Page 598 of 674 C/SCA/15599/2008 JUDGMENT observations of Supreme Court in case of Management Hotel Imperial, New Delhi (supra), one can safely conclude that the demand cannot be said to be outside the purview of consideration of the Tribunal and on that ground, this Court will have to accept the submission canvassed on behalf of workmen that the award impugned does not call for any interference.

This brings the Court to consider the question of interest as well as pendency of proceedings before the BIFR. The Court is not impressed by the submissions, as the gratuity or payment of gratuity is a statutory liability, which cannot be thwarted on account of pendency of any proceedings including BIFR in view of the decision in case of Rajnagar Textile Mills no.1, Ahmedabad Vs. Textile Labour Association, Ahmedabad, reported in 1999 LLJ 522. The said decision was carried further in LPA and the Division Bench has also confirmed the order passed by learned Single Judge, the said decision has been reported in 2003-I-LLJ-38.

(3) Special Civil Application No.: 15599 of 2008:

Now let us consider the prayers made in the petition being SCA No. 15599 of 2008. The background and the development of events mentioned hereinabove would go to indicate that this petition was filed on 17.12.2008 when there was complete Page 599 of 674 C/SCA/15599/2008 JUDGMENT stalemate between the parties. The Company was already before the BIFR under the provisions of SICA. There were proceedings in respect of damages raised in the form of Reference No. 15 of 2005 and the off-suits there from in the form of Special Civil Application Nos. 134 of 2006 and 3916 of 2008 etc. In other words, it can well be said that as at all points, workmen could not receive the result, which would assuage and elucidate their plight and give them some respite in terms of wages so as to sustain themselves in the family, they were constrained to take out this petition and seek the prayers which have been stated hereinabove. The workmen through their Union prayed that the wages, which were not paid from August, 2008 be paid and respondents be directed to keep on paying the wages irrespective their contentions before the authorities. A declaration was sought to the effect that the action of respondent company in withholding the wages of the employees was illegal, unconstitutional and violating fundamental rights, seeking direction to the respondent nos. 2 and 3 i.e. Commissioner of Labour and Secretary Labour and Employment, Government of Gujarat for ensuring compliance with the provisions of I.D. Act, Minimum Wages Act and other Labour legislation, and further direction is sought in respect of payment of gratuity, PF and other dues payable to the workmen and employees as mentioned had retired, resigned or some of them had died. The development in this matter of making reference to the mediation Page 600 of 674 C/SCA/15599/2008 JUDGMENT and company's earnest willingness to discharge their liabilities by selling the assets are matter of records hereinabove. An attempt to deviate from their stand on account of pendency of the matter before the BIFR and proceedings in the form of arbitration has been discussed and narrated and negative hereinabove. Therefore, suffice it to say that Court was not impressed at all by those submissions for denying reliefs to the workmen - employees of the company. The elaborate discussion in respect of the pendency of the proceedings before the BIFR mentioned hereinabove would clearly indicate that there was no sincere attempt on the part of the company to take benefits of its reference to BIFR for getting up and making itself viable and working. Had there been so, the number of proceedings and orders in the BIFR proceedings would surely have indicated such an attempt. On the contrary, the references to the orders made by BIFR and lack of sincere approach and efforts by the company in seeking rehabilitation betrays its Directors ill designs to gain profit by selling company's property in land rather than reviving company. The last order of BIFR in which even no correct facts were being narrated to the BIFR authorities, which were led to hold or observe something, which was not correct on the record, reveals correct attitude and approach of company which never was interested in getting itself revived. The attempts to deviate from the earlier stand on account of the pendency of the BIFR proceedings canvassed by Page 601 of 674 C/SCA/15599/2008 JUDGMENT the company as well as by the purchasers of the property of the company in the interregnum period were therefore, not of any avail to the company. The provisions of SICA, as has been discussed hereinabove, could not have been used or rather misused in such a fashion as to defeat the rights of the workmen to receive their wages as it has been agitated in these cases on behalf of employer. The following authorities were cited on behalf of workmen to support their submission:

1. 2004-III-LLJ 79 in case of New Phaltan Sagar Works Ltd, Satara and others, Vs. State of Maharashtra and others;

2. 2004-III-LLJ 939 in case of Ranjan Bhagwant Kedar and Another Vs. HMP Engineers Ltd and others;

3. 2004-II-LLJ 378 in case of Uptron India Ltd Vs. Presiding Officer, Labour Court, Dehradun and another;

4. 1997 (9) SCC 462: 1997 (1) Scale-408 in case of Indian Maize and Chemicals Vs. State of Uttar Pradesh;

Above decisions clearly indicate that the company could not have attempted to make deviation from its stand which appears to have an afterthought only with a view to exert undue pressure upon the workmen for bringing them to their terms of offering and curtail admissible wages or dues which would have otherwise ordered to be paid to workmen. Therefore, the entire exercise of wriggling out of its responsibility under the pretext Page 602 of 674 C/SCA/15599/2008 JUDGMENT process of pendency of proceedings before the BIFR was required to be viewed from the proceedings, which is required to be reiterated at the cost of repetition was nothing but an excuse to keep off all the legitimate claims that may include workmen from bringing an action or coercive action upon the company for realizing the dues. It won't be out of way to record here that systematically the employer has avoided any proceedings to be initiated by the regular assignee or secured creditor by regularly making payment of interest to it, so that their plea to remain before the BIFR is not affected. The moment there was an action on the part of the assignee or secured creditor invoking section 13(4) of SARFAESI Act, of then, the proceedings before the BIFR would have abated in view of provisions of Section 15 of SICA as provided under proviso therein.

The counsel for the creditor did make a submission, which have been recorded hereinabove, would clearly indicate that the employer company did have money to pay interest but did not bother to make any payment towards workmen's' dues, which included company's statutory liabilities though unfortunately recovery thereof is not provided with any bar like those of strengthening the provisions.

One more unfortunate attempt on the part of the employer company for dogging the payment appears to be their Page 603 of 674 C/SCA/15599/2008 JUDGMENT submission in respect of arbitration proceedings, which aspect has also been elaborately dealt with hereinabove, which clearly indicated that the parties agreed for going before the Arbitrator only for the limited purpose of arriving at figure which would help the Court in narrowing down the prayers and pleas, upset price including the bid for the properties in question. The series of orders made by this court after the mediation proceedings or rather right from making the reference to the mediator, the report of Mediator qua company's unequivocal commitment to discharge its liabilities in making the payment to workmen by selling the properties. The presence of buyer, one of the proposed buyer deposited the money to the tune of Rs.1 crore to show its bonafide and all other observations mentioned hereinabove would go against the company that the company could not have asked that it was not open to this court to entertain this petition once there was an arbitration agreement. The decision of the Supreme Court in case of Sukanya Holdings (P) Ltd Vs. Jayesh H. Pandya and others, reported in (2003) 5 SCC 531 is squarely covered this point as the petition contains relief also against the State Authorities for initialing proceedings under the Labour Laws against the Directors for unfair labor practice and breach of provisions of Payment of Wages Act Payment of Gratuity Act Provident Funds dues etc. Page 604 of 674 C/SCA/15599/2008 JUDGMENT It could be seen from this group of matters that the Company could not have contended that the arbitration proceedings should work as a bar to decide this petition. As it is discussed hereinabove, the issue was inter-spliced in such a way as to make it almost impossible to try them separately and from that angle it can be said that the specious plea of arbitration proceedings for ousting the jurisdiction is required to be rejected and is hereby rejected.

The petition, in fact pertains to wages admissible to the workmen and company's approach in tiring them out on account of its delaying tactics only with a view to pressuring them for accepting lesser wages than what was admissible to them. Therefore, the plea of the company cannot be accepted as ousting of the jurisdiction of this court on account of arbitration proceedings.

It is also required to be noted that the prayers in this petition contain appropriate direction to the concerned authorities including the Secretary, Labour Department for initaiting action against the employer for not complying with the mandatory provisions of the Labour Legislature. One may argue that in fact it was a substantial question which was referred to the arbitrator but unfortunately if one looks at the prayer clause Page 605 of 674 C/SCA/15599/2008 JUDGMENT in the petition, one would come to know that prayers are substantive in nature and therefore, those prayers cannot have been forming part of the arbitration proceedings.

The action or omission on the part of employer make it liable to be prosecuted and/or proceeded against by the authorities, could never be a subject matter of any adjudication in the arbitration, as even the workmen's' concession on this aspect would not absolve the State Authorities from discharging their bare minimum duties as there cannot be any principle of waiver pressed into service so far as waiver.

The workmen have no right to absolve the employer from its statutory liability arising on account of default and facing prosecution or proceedings in this behalf at the end of labour laws enforcing agency. The Supreme Court has way back in the year 1974 clearly Ruled that fundamental rights cannot be waived as it formed part of the public policy. Similarly the compliance with the labour legislation at the end of labour laws enforced agency cannot be subject matter of any comment or inaction on the part of workmen, therefore, from this angle also, it can well be said that there cannot be any subject matter of arbitration so far as that aspect and prayers are concerned in the petition.

Page 606 of 674

C/SCA/15599/2008 JUDGMENT In other words, even if the petitioners were interested in having their dues settled, their prayers qua action against the company at the end of labour laws enforcing agency i.e. State would be required to be individually decided by the Court and when there is a dispute, which is not likely to bifurcated then, there cannot be any arbitration proceedings on the subject matter. In light thereof the court has to conclude that even the plea on the strength of proceedings of arbitration is not available.

This brings the court to consider the usual striking submission raised on behalf of the employer in respect of Payment of Gratuity Act and Minimum Wages Act, etc, the Court is of the view that while issuing notice in this petition in the first instance, the Court issued notice after recording the Court's satisfaction qua maintainability of the petition in view of the decision of Miscellaneous Mazdoor Sabha V. State of Gujarat & Ors. reported in GLR 1992 (2) and Apex Court's decision in the case of People's Union for Democratic Rights and Others Vs. Union of India and others reported in AIR 1982 1473., the Court is inclined to accept this petition and pass appropriate order in respect of prayers made thereunder.

It is further more required to be noted that employer company has in fact issued circular dated 27.8.2008 for treating Page 607 of 674 C/SCA/15599/2008 JUDGMENT the employees and workmen to be continuous in service date which reads as under:

" :CIRCULAR:

All the employees working in the company are hereby informed that on account of huge price hike in major raw materials like Wood, Pulp, Suphur, Suplhuric Acid, Caustic Soda, Caprolactam, Coal, etc, the Management is facing acute shortage of funds to manage the working of the Company.

Under the circumstances, which are beyond the control of the Management, the Company has decided to temporarily suspend all operational activities with immediate effect. The Management is trying its best to raise/manage funds so that all operational activities are restarted as soon as possible.

In the meanwhile the employees (except engaged in essential services) are not required to report for work in their regular shifts. However, they all will be treated as present on all working days during which the operational activities remain suspended.

The employees who are employed for essential services shall be informed by their Departmental Heads to report for work in shifts allotted them."

This circular would strengthen the claim of workmen to receive wages regularly and would also militating against the Page 608 of 674 C/SCA/15599/2008 JUDGMENT company's plea qua 'no work no pay' or company's inability to offer work on account of so called crunch or difficulties.

It is all the more important to mention at this stage, this circular is also an evidence of tactic attempted by the company so as to avoid the laying of procedure and the workmen were never informed rather they would be paid their wages. Therefore, in view of above, company cannot argue that there was no work and therefore the company cannot be permitted to plead that there was no liabilities to make payment. The clear purpose of circular dated 27.8.2008 would have an effect upon the workmen that they would not be in a position to do anything whatsoever except waiting for the wages. The Court hastened to add here that nothing prevented the company from following the procedure of law as it was bounden duty cast upon the company to strictly adhere to the provisions I. D. Act, Minimum Wages Act and Payment of Wages Act and other labour legislative for safeguarding the interest of workmen. The counsel for company could not explain the purpose of this circular except to accept that this circular had an effect of continuing the workmen and employees to be employees of the company, which would in turn amount to company accepting in unequivocal terms its liabilities to make payment of wages to them. It is therefore required to be noted at this stage that the learned Arbitrator also has already chosen not to accept the Page 609 of 674 C/SCA/15599/2008 JUDGMENT proposed attempt canvassed on behalf of company declaring cut off date so far workmen is concerned. The learned Arbitrator has rightly could not have been done so in view of the provisions of Arbitration Act and provisions of the ID Act read with observation of Supreme Court in case of Jaipur Zila Sahakari Bhoomi Vikas Bank Ltd. Vs. Ram Gopal Sharma and others, reported in (2002) 2 SCC 244. In view of this, this Court will not have to accept the petition in its totality and pass appropriate orders in respect of prayers made thereunder.

127 CIVIL APPLICATIONS FILED IN SPECIAL CIVIL APPLICATION NO. 15599 OF 2008:

(1) Civil Application No. 1134 of 2011 in Special Civil Application No. 15599 of 2008 is filed on 19.1.2011. The said Civil Application is filed by the proposed buyer of the properties for being impleaded as party as he has shown willingness to purchase the properties and given payment schedule. The same will be govern by the final outcome and direction, that may be issued in the main matter.

(2) Civil Application No. 599 of 2010 in Special Civil Application No. 15599 of 2008 is filed on 24.01.2010. The applicants are original petitioners in Special Civil Application Page 610 of 674 C/SCA/15599/2008 JUDGMENT No. 15599 of 2008. They took this application for joining Gayatri Trading & Com, through its Partner, Devendrasinh K. Desai as respondent no. 9. This is in a way seeking amendment in the main matter, wherein, this Court passed an order on 2.2.2010 recording statement of Shri Naik that he was aware about the order passed by this Court (Coram: R. R. Tripathi, J.) (As he then was) on 12.5.2009 and 15.5.2009, whereunder on account of an agreement between the parties, the Company was under an obligation to provide audited balance sheet upto March, 2009, which would include the details of assets of a company. Time was sought upto 8.2.2010 for producing the balance sheet upto March, 2009. In this Civil Application, on 8.2.2010, the court passed an order to the effect that Shri Joshi, learned Senior Counsel with Mr. Naik for respondent no.1 submitted that Civil Application has been taken out being Civil Application (ST) No. 1700 of 2010 for seeking extension of time to comply with the directions issued by this Court dated 2.2.2010. The same will be govern by the final outcome and direction, that may be issued in the main matter.

(3) Civil Application No. 1440 of 2010 in Special Civil Application No. 15599 of 2010 was filed on 9.2.2010 by proposed purchaser in whose behalf there was already an application filed by an employee for joining of Gayatri Trading & Co. as a respondent. This matter contains orders in which, it Page 611 of 674 C/SCA/15599/2008 JUDGMENT is recorded that there is discrepancy in the land to be made available for sale, the exact title of the land, admeasurement of land, therefore appointment of DILR, his report, etc. is made. The same will be govern by the final outcome and direction, that may be issued in the main matter.

(4) Civil Application No. 6212 of 2010 : The applicant has taken out this Civil Application on 22.6.2010 offering preparedness to purchase the property and shown its willingness to deposit Rs.30 crore by way of bank guarantee as refundable deposit and offered Rs.480 crores for the property. There are number of orders passed in this matter, which have been stated hereinabove, which would indicate the development in the matter and company's unequivocal understanding qua selling the property for discharging its liabilities. The same will be govern by the final outcome and direction, that may be issued in the main matter.

(5) Civil Application No. 10377 of 2010 is filed in Civil Application No. 6212 of 201 in Special Civil Application No. 15599 of 2008 for seeking extension of time which had already granted by the Court in depositing the earnest money which was originally of 28.8.2010 therefrom to 9.9.2010. The same will be govern by the final outcome and direction, that may be issued in the main matter.

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(6)     Civil Application No. 1436 of 2010 is filed in Civil

Application No. 599 of 2010 in Special Civil Application No. 15599 of 2008 is filed by the respondent seeking extension of time for production of balance sheet upto March, 2009 and quarterly balance sheet for a further period of 45 to 60 days. This Civil Application appears to have been filed on 8.2.2010 in the proceedings of Civil Application No. 599 of 2010 whereof, extension of time is made.

(7) Civil Application No. 11350 of 2010 is filed in Special Civil Application No. 15599 of 2008 by the proposed purchaser and the applicant has shown its willingness to deposit to 471.60 crores and also stated that Rs.10 crores shall be deposited as non-refundable deposit. The same will be govern by the final outcome and direction, that may be issued in the main matter.

(8) Civil Application No. 13135 of 2011 in Civil Application No. 11350 of 2010 in Special Civil Application No. 15599 of 2008 is filed on 14.11.2011 seeking extension of offer period for two weeks from 26.12.2011 instead of 16.12.2011. The result of this Civil Application will govern by the final outcome of the main matter.



(9)       Civil Application No. 14236 of 2010 is filed by the


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proposed purchaser in Special Civil Application No. 15599 of 2008 on 29.11.2010. The said Civil Application is filed by the proposed buyer of the properties for being impleaded as party as he has shown willingness to purchase the properties and given payment schedule. The result of this Civil Application will be govern by the final outcome and direction, that may be issued in the main matter.

(10) Civil Application No. 16672 of 2010 is filed in Special Civil Application No. 15599 of 2008. The union has taken out this Civil Application on 23.12.2010 interalia seeking direction that Rahulraj Estate Pvt. Ltd to deposit Rs.25 crore within a period of 15 days from the date of acceptance of their offer and balance amount within reasonable time and further be pleased to accept and confirm the order of Rahulraj Estates Pvt. Ltd for Rs.477 crore.

(11) Civil Application No. 5562 of 2010 is filed in Special Civil Application No. 15599 of 2008 by the security agency, who rendered the security services to the Company for realizing their outstanding amount to the tune of Rs. 45 lacs and it was claimed by applicant that properties sold by the company fetched Rs.45 crores and as it was before BIFR and there was prohibitory orders restraining the company from selling the properties or dealing with the properties, the applicant has Page 614 of 674 C/SCA/15599/2008 JUDGMENT approached this Court for joining it as party in Special Civil Application No. 15599 of 2008. This Civil Application appears to have been filed on 4.12.2009.

(12) Civil Application No. 14154 of 2010 is filed by the proposed purchaser in Special Civil Application No. 15599 of 2008 on 24.11.2010. The said Civil Application is filed by the proposed buyer of the properties for being impleaded as party as he has shown willingness to purchase the properties and given payment schedule. The result of this Civil Application will be govern by the final outcome and direction, that may be issued in the main matter.

(13) Civil Application No. 752 of 2011 is filed in Special Civil Application No.15599 of 2008 by the Union on 17.10.2011 for quashment of the resolution dated 23.6.2006 passed by the Board of Directors of respondent no.1 company authorizing Mr. Hemant Dhirubhai Desai to execute the sale deeds and also for the prayers that sale deeds dated 11.10.2006, 8.11.2006, 13.11.2006 and 14.11.2006 executed by the respondent no.1 Company in favour of Shri Laxmi Narayan Industrial Cooperative Service Society Limited are illegal, null and void, nonest in law and inoperative and to set aside the four sale deeds. The result of this Civil Application will be governed by the final outcome and directions, that may be passed in the Page 615 of 674 C/SCA/15599/2008 JUDGMENT main matter.

(14) Civil Application No. 753 of 2011 is filed in Special Civil Application No 15599 of 2008 by the petitioner - union on 19.1.2011 for impleading the persons named in para-5 as many as 9 and transferee of the land totally 3 in numbers, as mentioned in para-7. In this Civil Application, the Court issued notice on 20.1.2011 to all the concerned . The Court did observe that the joining party application is in fact being formal application, appropriate reply, if any at all, was ordered to be filed so as to curtain further time in hearing the main matter. The affidavit-in-reply been brought on record on behalf of the proposed respondent no.19, 20 and 21. This was filed on 21.2.2011. The affidavit-in-reply came to be filed by proposed respondent no. 16 on 22.2.2011. One affidavit-in-reply came to be filed by proposed respondent no. 17 on 22.2.2011. One Hemant D. Desai, an officer of the Company has filed an affidavit-in-reply on 21.2.2011. One Pratapsinh S. Gaekwad, the proposed respondent no. 10 has affidavit-in-reply on 22.2.2011. Therefore, the prayers and contentions of proposed parties are to be viewed and assessed in light of development of events and same would govern by the final order made in the main main matter.



(15)               Civil Application No. 10183 of 2011 in Civil


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Application No. 1134 of 2011 in Special Civil Application No. 15599 of 2008 is filed 26.9.2011. The said Civil Application is filed by the proposed buyer of the properties for being impleaded as party as he has shown willingness to purchase the properties and given payment schedule. The result of this Civil Application will be govern by the final outcome and direction, that may be issued in the main matter.

(16) Civil Application No. 3051 of 2011 in Special Civil Application NO. 15599 of 2008 is taken out by the petitioner union inter-alia praying that Court be pleased to appoint receiver of all properties and assets of the company including the assets covered by the four sale deeds dated 10.10.2006, 8.11.2006, 13.11.2006 and 14.11.2006 respectively and direct the Court receiver to immediately take over the possession of the assets of company both movable as well as immovable and the lands covered by the aforesaid four sale deeds and also appoint the applicant as agent of the Court Receiver for running the factory and calling upon the company to disclose names and addresses of the Chairman, Managing Director and all the Directors of Company and also seek direction to Labour Commissioner and the Secretary Labour and Employment Department to file action taking report and also prayed to direct the Company to pay the admitted dues of the employees of Rs.60 crores in its affidavit dated 18.2.2010 filed in CA No. 1440 of 2010 with interest at Page 617 of 674 C/SCA/15599/2008 JUDGMENT the rate of 12% p.a till the date of payment and also to pay gratuity dues of Rs.14.79 crore as admitted by the Company before the Industrial Tribunal in Part I award dated 20.10.2007. This application was filed on 7.3.2011. The contentions are based upon various orders passed by this Court in this proceedings which indicate only endavour of workmen to receive dues which were overdue when the application was filed. Suffice it to say at this stage that result of this application would also govern by final outcome of the matter and directions issued in the main matter.

(17) Civil Application NO. 9518 of 2011 is filed in Special Civil Application No. 15599 of 2008 is filed on 7.9.2011. The said Civil Application is filed by the proposed buyer of the properties for being impleaded as party as he has shown willingness to purchase the properties and given payment schedule. The result of this civil application will be govern by the final outcome and direction, that may be issued in the main matter.

(18) Civil Application No. 9650 of 2011 in Special Civil Application No. 15599 of 2008 is taken out by 11 applicants, styling themselves to be office bearers of the union, who had filed petition being Special Civil Application No. 15599 of 2008 and sought relief to join themselves as party respondents. The Page 618 of 674 C/SCA/15599/2008 JUDGMENT result of this Civil Application will be govern by the final outcome and direction, that may be issued in the main matter.

(19) Civil Application No. 2059 of 2013 in Civil Application No 9650 of 2011 in Special Civil Application NO. 15599 of 2008 is filed on 8.2.2013 seeking permission to the effect that the applicants with their advocates to appear before the Hon'ble Arbitral Tribunal and to participate in the Arbitral proceedings. As the Arbitration proceedings are over, present Civil Application is required to be dismissed as having infructuous and is disposed of accordingly.

(20) Civil Application No. 10154 of 2011 in Special Civil Application No. 15599 of 2008 is filed on 26.9.2011. The said Civil Application is filed by the proposed buyer of the properties for being impleaded as party as he has shown willingness to purchase the properties and given payment schedule. The result of this Civil Application will be govern by the final outcome and direction, that may be issued in the main matter.

(21) Civil Application No. 10802 of 2011 in Special Civil Application No. 15599 of 2008 is filed on 8.10.2011. The said Civil Application is filed by the proposed buyer of the properties for being impleaded as party as he has shown willingness to purchase the properties and given payment schedule. The result Page 619 of 674 C/SCA/15599/2008 JUDGMENT of this Civil Application will be govern by the final outcome and direction, that may be issued in the main matter.

(22) Civil Application No. 4364 of 2013 in Special Civil Application No. 15599 of 2008 is filed on 12.4.2013. The said Civil Application is filed by the proposed buyer of the properties for being impleaded as party as he has shown willingness to purchase the properties and given payment schedule. The result of this Civil Application will be govern by the final outcome and direction, that may be issued in the main matter.

(23) Civil Application No. 2367 of 2013 in Special Civil Application No. 15599 of 2008 is filed on 24.2.2013. This Civil Application is filed by the petitioner union seeking direction to opponent no.1 to 4 to accept and process the Forms of employees for getting advance from their respective PF Account and taking up immediate procedure to make available the PF amount of the employees lying in their respective accounts. The result of this Civil Application will be govern by the final outcome of the main matter.

(24) Civil Application NO. 8477 of 2012 in Special Civil Application NO. 15599 of 2008 is filed on 17.7.2012. The said Civil Application is filed by the proposed buyer of the properties for being impleaded as party as he has shown willingness to Page 620 of 674 C/SCA/15599/2008 JUDGMENT purchase the properties. The result of this Civil Application will be govern by the final outcome and direction, that may be issued in the main matter.

(25) Civil Application No. 8202 of 2012 in Special Civil Application No. 15599 of 2008 is filed on 20.7.2012. The said Civil Application is filed by the proposed buyer of the properties for being impleaded as party as he has shown willingness to purchase the properties. The result of this Civil Application will be govern by the final outcome and direction, that may be issued in the main matter.

(26) Civil Application No. 5931 of 2012 in Special Civil Application No. 15599 of 2008 is filed on 30.4.2012. The said Civil Application is filed by the proposed buyer of the properties for being impleaded as party as he has shown willingness to purchase the properties and given payment schedule. The result of this Civil Application will be govern by the final outcome and direction, that may be issued in the main matter.

(27) Civil Application No. 2185 of 2012 in Special Civil Application No. 15599 of 2008 is filed on 21.2.2012. The said Civil Application is filed by the proposed buyer of the properties for being impleaded as party as he has shown willingness to purchase the properties and given payment schedule. The result Page 621 of 674 C/SCA/15599/2008 JUDGMENT of this Civil Application will be govern by the final outcome and direction, that may be issued in the main matter.

(28) Civil Application No. 2187 of 2012 in Special Civil Application No. 15599 of 2008 is filed on 21.2.2012. The said Civil Application is filed by the proposed buyer of the properties for being impleaded as party as he has shown willingness to purchase the properties and given payment schedule. The result of this Civil Application will be govern by the final outcome and direction, that may be issued in the main matter.

(29) Civil Application No. 62 of 2012 in Special Civil Application No. 15599 of 2008 is filed on 19.12.2011. The said Civil Application is filed by the proposed buyer of the properties for being impleaded as party as he has shown willingness to purchase the properties and given payment schedule. The result of this Civil Application will be govern by the final outcome and direction, that may be issued in the main matter.

128 CIVIL APPLICATIONS IN SPECIAL CIVIL APPLICATION NO. 134 OF 2006:

(1) Civil Application No. 11914 of 2007 in Special Civil Application No. 134 of 2006 is taken out by the Company for seeking modification of the order dated 20.4.2006 directing deletion of the condition imposed in the order dated 6.12.2005 Page 622 of 674 C/SCA/15599/2008 JUDGMENT by the opponent no. 2 in Reference (IT) No. 15/2005 to the extent it restrains the applicant Company from selling, transferring and alienating the properties of the applicant company identified under the scheme sanctioned by the Board for industrial and Financial Reconstruction for the applicant company and also for modification of the order dated 20.4.2006 staying the operation, implementation and execution of the order dated 6.12.2005 passed by the opponent no. 2 in Reference (IT) No. 15/2005 to the extent it restrains the applicant company from selling transferring and alienating the properties of the applicant company identified under the scheme sanctioned by the Board for Industrial and Financial Reconstruction for the applicant company. This Civil Application appears to have been filed on 13.8.2007 and as discussed hereinabove in this judgment, however, at the cost of repetition, it is required to be reiterated that this Court on 16.5.2008 (Coram: H.K. Rathod, J.) (as he then was) passed an order, which contains following paragraphs, which would indicate that there was no further order in this application.

"5. The BIFR has granted the permission to the applicants to sell the assets of the applicants - original petitioners as per Annexure- III (Page-50 and 51) and last Item at Page-51 plant, machinery and equipments of POY plant of BRC on as is where is basis.

Page 623 of 674

 C/SCA/15599/2008                            JUDGMENT



      6.    Learned         Senior       Advocate

Mr.K.B.Trivedi has made it clear that present applicants seek permission from this Court by way of modification of earlier order to sell the property, plant and machinery and equipments of POY plan of BRC at Surat on as is where is basis only. Except that, no modification or permission is sought by original petitioners.

7. The order passed by BIFR dated 1.6.2006 where the respondent - present opponent Union was a party to the proceedings and in their presence, aforesaid order was passed by BIFR on 1.6.2006. This order is not challenged by present opponent to the higher forum till date and no stay is operating against the aforesaid order passed by BIFR dated 1.6.2006.

8. Considering the entire order passed by BIFR dated 1.6.2006 and condition incorporated in the order for selling the property in question (Page-50 and 51), the earlier order passed by this Court is modified to the effect granting permission to the original petitioners to sell the properties - plant and machinery and equipments of POY plan of BRC at Surat on as is where is basis as per Clause VII

(ix) of Annexure-III which provide "any sale of assets of the company would be effected through Asset Sale Committee(s) as per the guidelines issued by BIFR. The entire sales proceeds would be used as per the scheme sanctioned or as per the Page 624 of 674 C/SCA/15599/2008 JUDGMENT directions of BIFR.". Whatever the sale price is received by the petitioner, same shall be deposited before the Registry of this Court immediately with a copy of sale deed and that amount will not be utilized by the petitioner for any other purpose."

Thus, it becomes clear from the order that the Court modified the order earlier passed only account of the fact that there was an order passed by BIFR on 1.6.2006 and Company was under an obligation to effect the sale of assets to the company through "Assets Sale Committee" as per guidelines issued by the BIFR. The Court added clearly that whatever the sale proceed is received by the petitioner, same shall be deposited before the Registry of this Court immediately with a copy of sale deed and amount will not be utilized by the petitioner for any other purpose. The company has not taken any advantage of the modification granted by this court as despite there being a clear permission to the company for selling POY plaint at BRC Surat, nothing is done in their respect and it was submitted on behalf of counsel for the workmen that may be it was so because the company was under an obligation to deposit the sale proceed in the Registry of this Court, which may not have been found palatable to the Company, which speak volume about the intention by the Company. As on date, the said application is still pending its disposal and company had taken no action whatsoever pursuant to this application. This Page 625 of 674 C/SCA/15599/2008 JUDGMENT application would therefore be governed by the final outcome and direction, that may be passed in the main matter.

(2) Civil Application No. 6307 of 2008 in Civil Application No. 11914 of 2007 in Special Civil Application No. 134 of 2006 was filed by the original petitioner of Special Civil Application

- Company with a prayer to call for the papers of Civil Application No. 11914 of 2007. This Civil Application appears to have been filed on 13.5.2008. This appears to an attempt to segregate the matter with contempt petition. The result of this application would also govern by final outcome which will be passed in the main matter.

(3) Civil Application No. 4772 of 2008 in Special Civil Application No. 134 of 2006 is filed by the employee union, who happened to be respondents in Special Civil Application No. 134 of 2006. This application was moved on 15.4.2008 inter-alia praying that the opponents be purged for committing deliberate and willful contempt of court by not depositing the entire sale proceeds of the sales executed by virtue of the sale deeds produced collectively. Para-5 and 6 of said Civil Application reads as under:

"para-5 The present applicant would further Page 626 of 674 C/SCA/15599/2008 JUDGMENT submit that after the sales were made and documents executed and registered and moneys collected, with a view to impressing upon the Court, the present respondent no.1 has filed a Civil Application No. 11914 of 2008 praying for permission to sell the properties of the Company. The said application is pending. The applicant states that as per the directions of the BIFR, the properties were to be sold through the Sales Committee. A bare perusal of the sale deeds would indicate that no sale appears to have been executed through the Sales Committee.

para-6. The applicant says that the respondent no.1 with a view to ditching the workers, tough the properties were illegally sold in November, 2006, no information or intimation was given to this Hon'ble Court. Neither permission was prayed for nor any modification was prayed for. This action makes the conduct of the respondent no.1 company abundantly clear. Thereafter, with a view to impress upon the court about their sincerity, the moved an application being Civil Application No. 11914 of 2007. Thereafter, with a vie to impress upon the court about their sincerity, has moved an application being Civil Application No. 11914 of 2007. The present respondent is now locking the stable after the horses have fled. Though the matter was filed long back, the matter has not proceeded and is being adjourned on one pretext or the other. Thus the present respondent no.1 has flagrantly violated the orders of this Hon'ble Court in terms and spirit and hence have committed contempt of Court and therefore deserves to be punished. Hence Page 627 of 674 C/SCA/15599/2008 JUDGMENT this application."

In this Civil Application, one Ghanshyambhai Ratilal Joshi, who happened to be Dy. GM (IR & Legal) of BRC had filed reply on 9.5.2008, interalia contending that the application filed by one Shri Mohammedali Abdulbhai Kagzi, who has affirmed the affidavit in support of the present application on behalf of Baroda Rayon Employees Ekta Union, does not have any authority to file this application on behalf of BRC Union. The following averments need to be set out verbatim :

"para-4 : Before proceeding further, I state that the present application is not maintainable as Shri Mohammedali Abdulbhai Kagzi who has affirmed the affidavit in support of the present application does not have authority or locus standi to file the present application on behalf of Baroda Rayon Employees Ekta Union ('the union' for short). I state that in the affidavit in support of the present application, Shri Kagzi has stated that he is the applicant. However, no proof of authority has been produced by him to show that he has been authorized by the union to file the present application. I humbly submit that Shri Mohmed Ali Abdulbhai Kagzi has no right and/or authority to file the present application, as he has been dismissed from the service of the answering opponent. As regards his claim of being president of the union, I state that he has been suspended from the post of president of the union. Therefore, Shri Kagzi does not have any authority to represent the union and employees of the answering opponent. I humbly submit that Page 628 of 674 C/SCA/15599/2008 JUDGMENT Shri Kagzi is creating unnecessary, unreasonable and unwarranted situation to the company's normal working for his own vested interests in the union activity and thereby he is making it extremely difficult for the answering opponent to function smoothly which, in turn, has jeopardized the industrial peace between the answering opponent and its employees."

This is the company's resistance to the application. Incidentally, it is required to be mentioned herein that, this is the applicant, whose application is already discussed hereinabove for joining party in the proceedings. In para-8 of the reply, the deponent has stated as under:

"Para-8 With reference to the contents of paragraph 5, I do not admit the statements, averments submissions and allegations made therein. I deny that after the sales were made and documents executed and registered and moneys collected, the answering opponent has filed Civil Application No. 11914 of 2007 with a view to impress upon this Hon'ble Court praying for permission to sale the properties of the company, as alleged or otherwise. I humbly state and submit that said Civil Application has been filed with regard to the property of POY plant and none of the registered sale deeds produced with the present application refers to POY plaint. I humbly state and submit that such and other vague and baseless allegations are made in the present application only with a view to prejudice this Hon'ble Court and to create inroads and damage to smooth functioning of the answering Page 629 of 674 C/SCA/15599/2008 JUDGMENT opponent. Thus, the present application deserves to be rejected.

Para-9 : With reference to the contents of paragraph 6, I do not admit the statements, averments, submissions and allegations made therein. I deny that with a view to ditching the workers, though the properties were illegally sold in November, 2006, no information or intimation was given to the Hon'ble Court, as alleged or otherwise. As state above, the properties have been sold way back in the year 2003 and the consideration has been received which has ultimately been utilized in repayment of debts. Therefore, such and other allegations made in the present applicable are made only with a view to misdirect and mislead the issues. I humbly state and submit that there is no intention on the part of the answering opponent not to inform or intimate this Hon'ble Court, as alleged in the present application. I humbly state and submit that as per the orders dated 20.2.2006 and 20.4.2006, the Hon'ble Court directed that in future if BIFR issues any direction for disposal of assets, the petitioner (answering opponent) should approach this Hon'ble Court for suitable modification in the order dated 6.12.2005 whereby the answering opponent has been restrained from disposing of its assets. Thus, from the record of the present application, it transpires that the sale has taken place before the order dated 6.12.2005 came to be passed by the learned Industrial Tribunal and the orders dated 20.2.2006 and 20.4.2006 passed by this Hon'ble Court pursuant to which sale proceeds have been received by the answering opponent which are, in turn, utilized for repayment of its debts. I Page 630 of 674 C/SCA/15599/2008 JUDGMENT humbly state and submit that one of the properties identified by BIFR as surplus / non- manufacturing assets, i.e. POY plant, which is now required to be sold as per the said scheme framed by BIFR for repayment of debts of the answering opponent and the answering opponent has filed necessary application seeking permission of this Hon'ble Court to permit the answering opponent to sell the said property which shows that the answering opponent with all respect has abided to the orders passed by this Hon'ble Court. Thus, in view of such facts and circumstances, averments, allegations and submissions made in the present application are incorrect and unjustified. I deny that the answering opponent has violated the orders of this Hon'ble Court either in terms of spirit or letter or has committed contempt of court, as alleged or otherwise. Thus, the present application deserves to be rejected. "

The deponent has attempted to show as if the sale had taken place way back in the year 2003. The deponent has also talk about the CDR sanctioning of the Scheme and annexed the document at I, II and III, which indicate that CDR Scheme contained settlement with workmen as could be seen from page nos. 117 and 118 of the proceedings of Civil Application. As against this, if one looks at page no. 115, the CDR scheme envisaged the sale of surplus land to 'Special Purpose Vehicle' (SPV) and it was to follow the entire scheme mentioned thereunder i.e. page-115 to 120. Unfortunately as record indicates that there was never SPV nor was the sale had been Page 631 of 674 C/SCA/15599/2008 JUDGMENT completed as claimed in the year 2003. It appears, as it is reiterated hereinabove, an attempt to land credence to the dubious activities of the company in the properties in question. Even, the scheme, which has been placed on record, which is said to have been sanctioned by the BIFR in the year 2006, this very land have been shown to be part of the company, though in later portion, it was mentioned that this land itself under sale as it is stated hereinabove in this judgment, the incorporation of the property or assets which were taken to be sold in the scheme would be of no avail as it was only with an intention to even misled the concerned authority. Had it been not so, then, it would be no need to mention or indicate that lands in question had not been sold at all and money are received only with a view to effect the transactions in future. Had it not been so, there would have been no requirement of executing the sale deed, which has been done in the instant case. Therefore, the result of this application would also govern the result and direction, which will be passed in the main matter.

(4) Civil Application No. 754 of 2011 in Civil Application No. 4772 of 2008 in Special Civil Application No. 134 of 2006 is filed by the respondent union for seeking impleadment of persons mentioned in paras 5, 6 and 7 of Civil Application as respondent Nos. 4 to 16 in Civil Application No. 4772 of 2008. The said Civil Application is resisted by the proposed parties i.e. Page 632 of 674 C/SCA/15599/2008 JUDGMENT Shri Laxminarayan Industrial Co-operative Service Society Limited, on the ground that they cannot be prosecuted or proceeded against, as they were bonafide purchasers without notice, they were not joined in the original proceedings and they were belatedly joined in the proceedings of Civil Application No. 4772 of 2008. The detailed reply is filed. It was further submitted on behalf of the proposed opponent that as per Contempt of Court (Gujarat High Court) Rules, 1984, the contempt application is required to be heard by Division Bench and said Civil Application No. 4772 of 2008 is filed under Contempt of Courts Act, 1952. This reply is filed on 21.2.2011. One of the Director of The Baroda Rayon Corporation Ltd namely Bhavanbhai H. Patel appears to have filed reply in this proceedings of Civil Application No. 754 of 2011 in Civil Application No. 4772 of 2008 in Special Civil Application No. 134 of 2006 and indicated that contempt proceedings were time barred. He further submitted that he was not director when the sale of part of the assets of the company had taken place. He had denied his relationship with Shri Liladhar D. Patel. He has also denied any business relationship with Liladhar D. Patel. He had denied that transactions was completed before he entered as Director. It is further averred that on 29.11.2003, the Board of Directors in a meeting had resolved to sell the surplus land earmarked as non-productive assets as a price not less than Rs.30 crores, however, company had received Rs.38.13 crore Page 633 of 674 C/SCA/15599/2008 JUDGMENT towards consideration out of which Rs.38.12 crore have been utilized in making payment to the secured creditors. He has submitted that transfer of assets and receipt of the consideration had taken place before the order dated 6.12.2005 passed by the Tribunal. This affidavit is filed on 22.2.2011.

One Damodar B. Patel has also filed the affidavit-in-reply at page no 27 in this proceedings. Para-1 of said affidavit, reads as under:

"I state that I am the Director of The Baroda Rayon Corporation Ltd (hereinafter referred to as 'the Company') appointed on 10.3.2008. I am conversant with the facts of the present case and I have perused the record pertaining to present civil application. I am competent to make present affidavit. I am making present affidavit for the limited purpose of opposing the admission of the present civil application and/or grant of any relief prayed for in the civil application on the ground that the same is not maintainable. I reserve my right to file a detailed reply in case of necessity."

The very said gentleman has filed affidavit on behalf of respondent no. 1 in the proceedings of main petition being Special Civil Application No. 15599 of 2008. This affidavit, which was filed in SCA No. 15599 of 2008 has been affirmed on 2.7.2012 and in that, para-1 reads as under:

Page 634 of 674

C/SCA/15599/2008 JUDGMENT "I state and submit that I was appointed as the Director of The Baroda Rayon Corporation Ltd ('the respondent Company' for short) with effect from 10.3.2008 and I have been substantially managing the affairs of the company since then. I state that thereafter with effect from 12.12.2011, I have now been appointed as the Managing Director of the respondent Company. I have perused the record of the captioned writ petition. I am conversant with the record of the respondent Company........."

The rest of the averments are identical to whose which are mentioned earlier in the affidavit on record. This affidavit appears to have been filed on 22.2.2011.

One Hemant D. Desai has also filed an affidavit being opponent no.13 in the proceedings of Civil Application No. 754 of 2011 in Civil Application No. 4772 of 2011 in Special Civil Application No. 134 of 2006. The verbatim averments are made so far as averments made in earlier affidavits regarding Board of Director's resolution dated 29.11.2003, selling of surplus land earmarked as non-productive assets at a price not less than Rs.30 crore, the company received Rs.38.13 crore towards consideration out of which Rs.38.12 crore have been utilized in making payment to the secured creditors. It was also pointed out that Civil Application No. 4772 of 2008 was itself belatedly filed and therefore, present Page 635 of 674 C/SCA/15599/2008 JUDGMENT Civil Application could not have been maintained.

One more affidavit in reply is filed on behalf of Pratapsinh S. Gaekwad, in the proceedings of Civil Application No. 754 of 2011 in Civil Application No. 4772 of 2011 in Special Civil Application No. 134 of 2006. In para-1, it is stated as under:

"Para-1 : I was the Managing Director of Baroda Rayon Corporation Ltd (hereinafter referred to as 'the Company'). I am conversant with the facts of the present case and I have perused the record pertaining to the present civil application. I am competent to make the present affidavit. Accordingly, I am making present affidavit for the limited purpose of opposing the admission of the present Civil Application and/or grant of any relief prayed for in the civil application on the ground that the same is not maintainable. I reserve my right to file a detailed reply in case of necessity."

Similarly one more affidavit in reply is filed on behalf of Sangramsinh P. Gaekwad in the proceedings of Civil Application No. 754 of 2011 in Civil Application No. 4772 of 2011 in Special Civil Application No. 134 of 2006. In para-1, it is stated as under:

"Para-1 : I was the Chairman and Director of Baroda Rayon Corporation Ltd (hereinafter Page 636 of 674 C/SCA/15599/2008 JUDGMENT referred to as 'the Company'). I am conversant with the facts of the present case and I have perused the record pertaining to the present civil application. I am competent to make the present affidavit. Accordingly, I am making present affidavit for the limited purpose of opposing the admission of the present Civil Application and/or grant of any relief prayed for in the civil application on the ground that the same is not maintainable. I reserve my right to file a detailed reply in case of necessity."

At this stage, it is pertinent to note that in the proceedings of Civil Application No. 752 of 2011 in Special Civil Application No. 15599 of 2008, the affidavit came to be filed at page-366-367 appears to have been affirmed on 24.2.2011, which is filed and affirmed by one D.B. Patel, styling himself as Director of the Company, which reads as under:

"I, Damodar B. Patel, adult, presently residing at Surat, do hereby solemnly and state on oath as under:

1. I am presently holding the post of director with The Baroda Rayon Corporation Ltd ('the company' for short). I am making present affidavit pursuant to the directions given by this Hon'ble Court. Thus, in view of the limited purpose of the present affidavit I may not deal with the contents of the captioned civil application at this stage.

Page 637 of 674

C/SCA/15599/2008 JUDGMENT

2. I humbly state that as per the record of the company the former Chairman of the company Shri Sangramsinh Gaekwad had resigned w.e.f. 3.12.2008 and the former Managing Director of the company Shri Pratapsinh Gaekwad had resigned from the company w.e.f. 3.12.2008. I state that I have been managing and looking after the affairs of the company since then. A copy of Form -32 is annexed hereto and marked as ANNEXURE - I."

And the Annexure - I is form No. 32, as per Section 303(2), 264(2) or 266 (10)(a) and 266 (1)(b)(iii) of the Companies Act, 1956 indicating therein that till 31.12.2008, Pratapsinh S. Gaekwad was working as Managing Director and he resigned on 3.12.2008, whereas, Sangramsinh P. Gaekwad was working as Director.

Thus, it can well be concluded at this stage that when 4 sale deeds came to be executed, the said two gentlemen were in- charge of the affairs of the company and responsible of all the deeds, acts and omissions in this behalf. The result of this application would be governed by the final out come of the proceedings and directions, that may be issued hereafter in the main matter.




(5)    Civil Application for Amendment No. 755 of 20011 in


                             Page 638 of 674
        C/SCA/15599/2008                           JUDGMENT

Civil Application No. 4772 of 2011 in Special Civil Application No. 134 of 2006 is taken out by the union, who happened to be respondent in main proceedings of SCA No. 134 of 2006 for bringing appropriate amendment in the pleadings. The result of this application would be governed by the final out come of the proceedings and directions, that may be issued hereafter in the main matter.

(6) Civil Application No. 756 of 20011 in Civil Application No. 4772 of 2011 in Special Civil Application No. 134 of 2006 is taken out by Employees Union. The said Civil Application was filed on 17.1.2011 interalia prayed to convict the opponents for deliberate and willful contempt of order of this Court. The result of this application would be governed by the final out come of the proceedings and directions, that may be issued hereafter in the main matter.

(7) Civil Application No. 3052 of 20011 in Civil Application No. 4772 of 2011 in Special Civil Application No. 134 of 2006 is taken out by applicant- Employees Union - original respondent in SCA No. 134 of 2006 invoking inherent powers under Article 215 of the Constitution of India and under Section 151 of the Code of Civil Procedure. The said Civil Application was filed on 7.3.2011. The result of this application would be Page 639 of 674 C/SCA/15599/2008 JUDGMENT governed by the final out come of the proceedings and directions, that may be issued hereafter in the main matter..

(8) Civil Application No. 4443 of 2014 in Civil Application No. 5760 of 2010 in Special Civil Application appears to have been filed by some of the employees who had accepted to work at Mumbai pursuant to the proceedings in Letters Patent Appeal in which the Company had challenged the order of learned Single Judge dismissing the application. These 7 workmen who were not paid wages as per Section 17B nor were they reinstated. These workmen have voiced their grievances in respect of unfair labour practise perpetrated by the Company at Mumbai and pathetic plight has been narrated in this application and prayers are made for appropriate direction. This application appears to have been filed on 3.3.2014. No reply appears to have been filed in this proceeding. The result of this application would be governed by the final out come of the proceedings and directions, that may be issued hereafter in the main matter.

129: CONCLUSION AND FINAL DIRECTIONS:

1. Special Civil Application No. 134 of 2006: The Court is of the considered view that in light of the aforesaid extensive discussions on all the points, the prayers made in this petition do Page 640 of 674 C/SCA/15599/2008 JUDGMENT not deserve to be granted. The order impugned appears to be just and proper. The same is required to be confirmed. The Court is of the considered view that the company has not approached this court with clean hands. The company is in fact liable to be dubbed to have practice supprecio vary and suggetio falsy as the petitioner company did not specifically made any mention in the memo of petition in respect of its earlier attempts to alienate the property by way of the MoU purported to have been executed as agreement to sale, nor did the company describe its unequivocal stand if any, qua the property covered by MoU. The court hastened to add here that the said MoU also could not have been said to have conferred any right in the company to make subsequent ratification or rectification or modification or execution of sale deeds. These aspects persuade this court to hold that the company had not approached this Court with clean hands. It is also required to be noticed at this stage that there were as many as 8 company petitions seeking winding up of the company and in a company Petition being 91 of 2000 this court had issued prohibitory orders way back on 17.4.2000 under which the company was restrained from dealing with the property in any manner. This aspect is absolutely untouched in the memo of the petition, which in my view was required to be brought on record by the company itself when the company was seeking relief for vacating or assailing the tribunal's order restraining the company from alienating the assets. None Page 641 of 674 C/SCA/15599/2008 JUDGMENT mentioning this aspect in the memo of petition is suppression of facts by the company petitioner on which ground also the petitioner company is not entitled to seek any discretionary relief from this court. It appears that by executing the MoU way back in the year 2003, the company had already committed violation of this court's order in winding up proceedings, had the company not approached the BIFR perhaps the company would have been not successful in retaining its land till date as it appears from the discussion hereinabove, the company's attempt to seek protection under SICA was not in fact with a bonafide view of reviving itself but only with a view to lend legitimacy to the illegal act of executing MoU and transferring the land to the purchaser which company could not have done in light of the prohibitory restrained orders issued by this court in winding up proceedings which have been admitted by court, as it is mentioned hereinabove. This gets supported from the further development in the matter as the company did not pursue its application which it had filed for seeking modification of restrained order and obtain orders from this court for selling POY plaint,l which court did grant on a condition of depositing sale proceeds in the registry of this Court. Even in this application also, the company has suppressed the earlier facts of MoU or sale deeds which were executed by the Company, which indicates that application was not made bonafide and it was filed only with a view to cite this proceedings before BIFR Page 642 of 674 C/SCA/15599/2008 JUDGMENT for continuing the BIFR's protective umbrella. There is more than justification in showing that the apprehension expressed by the workmen came true, as subsequent event of execution of sale deed namely four sale deeds as discussed hereinabove, would also go to show that they were done in blatant non-

compliance and fragrant violation of prohibitory orders, which would lend justification for the observations that the order impugned do not call for any interference. The remaining order qua reinstatement was also not called for any interference as those employees have also voiced their grievance on account of pendency of the proceedings, as they were at relevant time office bearers of the union. The observations qua application filed by those employees after their posting at Mumbai also would support the contention of their termination could not have been brought about in contravention of provisions of law. The observations of decision in case of Jaipur Zila (supra) also support the case of workmen. Hence, order in its entirety is required to be confirmed without any further observation and petition is required to be dismissed. Suffice it to say that petition being bereft of merits, is required to be rejected and is rejected with cost. The order passed by the Tribunal is hereby confirmed. Rule is discharged. Interim relief, if any, stands vacated.

Civil Application No. 11914 of 2008: As it is discussed hereinabove, this Civil Application is taken out by the Company Page 643 of 674 C/SCA/15599/2008 JUDGMENT for seeking modification of the order or vacation of prohibitory order, as discussed hereinabove in this judgment, would indicate that though the modification was granted partially, was not taken to its logical conclusion and hence, this civil application in my view would also required to be rejected as having become infructuous by company's inaction as Company has not even bothered to take appropriate proceedings pursuant to modification order passed by this Court. Civil Application is disposed of accordingly. Notice, if any, stands discharged. No costs.

Civil Application No. 6307 of 2008 in Civil Application No. 11914 of 2008 in Special Civil Application No. 134 of 2006:

This Civil Application also would not survive in view of the order passed in Civil Application No. 11914 of 2008, which has been disposed of as having become infructuous as the Court has confirmed the order of Tribunal. This Civil Application is also disposed of accordingly. Notice, if any, stands discharged. No costs.

Civil Application No. 4772 of 2008 in Special Civil Application No. 134 of 2006, Civil Application No. 754 of 2011 in Civil Application No. 4772 of 2008 in Special Civil Application No. 134 of 2006, Civil Application No. 755 of 2011 in Civil Application No. 4772 of 2008 in Special Civil Application No. Page 644 of 674 C/SCA/15599/2008 JUDGMENT 134 of 2006, Civil Application No. 756 of 2011 in Civil Application No. 4772 of 2008 in Special Civil Application No. 134 of 2006 and Civil Application no. 3052 of 2011 in Civil Application No. 4772 of 2008 in Special Civil ApplicationNo. 134 of 2006:

Civil Application No. 4772 of 2008: In view of the observations made hereinabove in respect of the contentions and prayers made in these Civil Applications, this Court is of the considered view that Civil Application No. 4772 of 2008 is substantive application, under which, way back in the year 2008, when it was filed, Union of employees has voiced grievances qua surreptitiously and/or illegally transferring the assets, as it was contended that though the prohibitory orders were enuring and in light thereof there could not have been any transfer of assets. As against this, as it is discussed hereinabove, the say of company was that the transaction of sale had taken place in the year 2003, the sale proceeds have been received and it was merely an execution of sale deeds, which were pursuant to the orders and sanction of BIFR and therefore, same cannot be characterized as sale, as sought to be made out by the employee union. This Court has discussed this aspect elaborately under such captioned.

Civil Application No. 754 of 2011: This application is taken out as it is discussed hereinabove for impleading the persons named Page 645 of 674 C/SCA/15599/2008 JUDGMENT therein in paras 5, 6 and 7 of the application as respondent nos. 4 to 16 in Civil Application No. 4772 of 2008 and for any other and further orders. This Court has discussed hereinabove the various affidavits filed by the proposed opponents in this proceedings and stand taken by them and their counsel was also heard at length.

Civil Application No. 755 of 2011: This application is essentially filed for amendment i.e. amendment of the pleadings of Civil Application No. 4772 of 2008 so as to incorporate the material mentioned in para-4 of the application. There appears to be no reply in this proceeding. It is pertinent to note that pleadings which are made are essentially for indicating that despite their being prohibitory orders, the sale of assets were being effected with impunity which needed to be set right by the Court's order and appropriate direction be issued.

Civil Application No. 756 of 2011: As discussed hereinabove, this application is filed for initiation of proceedings under contempt of Courts Act for sale deeds executed on 11.10.2006, 8.11.2006, 13.11.2006 and 14.11.2006. The affidavit in reply is filed on page-351 by the opponent therein, as discussed hereinabove indicating and repeating the same thing, broadly could be stated that, assets were sold, sale deeds are executed Page 646 of 674 C/SCA/15599/2008 JUDGMENT later on and they were sold in pursuant to CDR and BIFR. At this stage, it is required to be noted that the contention is raised indicating that lands in question mentioned in MOU which is said to have been executed in the year 2003, is not adhered to as the sale deeds mentioned more parcel of lands. (page-488 of SCA No. 15599 of 2008) Thus, it can well be said that all these applications are pertaining to the grievances raised by the workmen and workmen not receiving their wages and company indulging in flouting of the orders passed by this Court and selling the properties. The prayers for amendment as mentioned in Civil Application No. 755 of 2011 is granted, as otherwise also, there is no reply resisting these prayers, which would be treated as part of pleadings of Civil Application No. 4772 of 2008. The Court hastened to add here that parties, who have been sought to be impleaded have been represented by advocate and their counsels were given extensive hearing and therefore, this Court is of the considered view that they be required to be governed by the final outcome of this proceedings and counsels were given opportunity to make submissions elaborately in respect of all the aspects and prayers made for cancelling the sale deeds etc. It is required to be noted at this stage that counsels elaborately submitted qua non-commission of contempt by their clients but nobody argued in respect of the position of land which has been Page 647 of 674 C/SCA/15599/2008 JUDGMENT subject matter of sale deeds namely 4 sale deeds mentioned in the proceedings. Therefore, the challenged to the sale deeds now which has became part of the proceedings on account of amendment sought and permitted in Civil Application No. 755 of 2011, become part of the main proceedings and accordingly Civil Application No. 755 of 2011 is allowed. The Court is of the considered view that development of events mentioned hereinabove, and execution of sale deeds dated 11.10.2006, 8.11.2006, 13.11.2006 and 14.11.2006, though is attempted to be explained on account of dealing of 2003 but the court is of the view that the same cannot be countenanced as the company and its directors could have approached this court for seeking specific permission as the sale deeds were in fact executed when the prohibitory orders are in force and therefore, the transactions at least so far as sale deeds are concerned, are required to be said to be illegal and contrary to provisions of law. The document of 2003 and sale deeds executed in the year 2006 do not contain identical property and therefore, on this count also, there could be a serious contention with regard to attempt on the part of the company in passing of sale deed properties, as if they were related to the transactions of 2003 but in fact, close perusal of the narration would indicate that the sale deeds were not in consonance with the law and therefore, they are required to be set at not. A question may arises as to whether in the present proceedings this court would be justified in questioning the sale Page 648 of 674 C/SCA/15599/2008 JUDGMENT deed and questioning them on account of they being executed in violation of the prohibitory order, the answer would be emphatic 'yes'. It is not denied by any one that the original orders of Tribunal granted on 6.12.2005 had not been modified at all till this court passed an order on 20.4.2006, therefore, this fact would indicate that the sale deeds cannot be said to be validly executed and therefore, the properties in question could not have been said to be validly transferred.

The proposition of law as could be gathered from the following decisions would unequivocally indicate that the sale deeds in question cannot be said to be validly executed so as to transferred the property mentioned thereunder to the transferee as they were executed in complete violation of the court's order. The following decisions would make it abundantly clear the situation.

(1) (1991) 4 Supreme Court Cases 406 in case of Delhi Judicial Service Assocation, Tis Hazari Court, Delhi Vs. State of Gujarat and others:

"38. Mr. Nariman contended that in our country there is no court of universal jurisdiction, as the jurisdiction of all courts including the Supreme Court is limited. Article 129 as well as the Contempt of Courts Act 1971 do not confer any express power on this Court with regard to contempt of the subordinate courts, this Court cannot by construing Article 129 assume jurisdiction in the matter which is not entrusted to it by law. He placed reliance on the observations of this Court in Naresh Shridhar Mirajkar & Ors. v. State of Maharashtra. We have carefully considered the decision but we find nothing therein to support the contention of Mr. Page 649 of 674 C/SCA/15599/2008 JUDGMENT Nariman. It is true that courts constituted under a law enacted by the Parliament or the State Legislature have limited jurisdiction and they cannot assume jurisdiction in a matter, not expressly assigned to them, but that is not so in the case of a superior court of record constituted by the Constitution. Such a court does not have a limited jurisdiction instead it has power to determine its own jurisdiction. No matter is beyond the jurisdiction of a superior court of record unless it is expressly shown to be so, under the provisions of the Constitution. In the absence of any express provision in the Constitution the Apex court being a court of record has jurisdiction in every matter and if there be any doubt, the Court has power to determine its jurisdiction. If such determination is made by High Court, the same would be subject to appeal to this Court, but if the jurisdiction is determined by this Court it would be final. Halsbury's Laws of England Vol. 10 Para 713, states:

"Prima facie no matter is deemed to be beyond the jurisdiction of a superior court unless it is expressly shown to be so, while nothing is within the jurisdiction of an inferior court unless it is expressly shown on the face of the proceedings that the particular matter is within the cognizance of the particular court."

The above principle of law was approved by this Court in Special Reference No. 1 of 1964 in holding that the, High Court being a superior court of record was entitled to determine its own jurisdiction in granting interim bail to a person against whom warrant of arrest had been issued by the Speaker of a State Legislature. In Mirajkar's case this Court again reiterated the principles that a superior court of record unlike a court of limited jurisdiction is entitled to determine about its own jurisdiction. In Ganga Bishan v. Jai Narain, the Court emphasised that the Constitution has left it to the judicial discretion of Supreme Court to decide for itself the scope and limits of its jurisdiction in order to render substantial justice in matters coming before it. We therefore hold that this Court being the Apex Court and a superior court of record has power to determine its jurisdiction under Article 129 of the Constitution, and as discussed earlier it has jurisdiction to initiate or entertain proceedings for contempt of subordinate courts. This view does not run counter to any provision of the Constitution."

(2) (1997) 3 SCC 11 in case of High Court of Judicature at Allahabad through its Registrar Vs. Raj Kishore Yadav and others Page 650 of 674 C/SCA/15599/2008 JUDGMENT Para-10: However the learned judges were persuaded to declare the impugned Rule as ultra vires on the ground that it conflicted with Article 215 of the Constitution of India, It is difficult to appreciate the said line of reasoning which appealed to the learned judges. All that Article 215 states is that every High Court shall be a court of record meaning thereby all the original record of the court will be preserved by the said court and it shall have all the powers of such a superior court of record including the power to punish for contempt of itself. It has to be kept in view that as a superior court of record the high Court is entitled to preserve its original record in perpetuity. It is also now well settled that even apart from the aforesaid attribute of a superior court of record the High Court as such has two-fold powers. Being a court of record the High Court (I) has power to determine the question about its own jurisdiction; and

(ii) has inherent power to punish for its contempt summarily. The aforesaid twin incidents of a court of record are well established by a catena of decisions of this Court. We may usefully refer to one of them. A majority of the Constitution Bench of nine learned Judges of this Court in the case of Naresh Shridhar Mirajkar and Others v. State of Maharashtra speaking through Gajendragadkar, CJ., has made the following pertinent observations in para 60 of the Report :

"There is yet another aspect of this matter to which it is necessary to refer, The High Court is a superior Court of Record and under Art. 215 shall all powers of such a Court of record including the power to punish contempt of itself. One distinguishing characteristic such superior Courts is that they are entitled to consider questions of their jurisdiction raised before them. This question fell to be considered by this Court in Special Reference No. 1 of 1964 SCR at p. 499. In that case, it was urged before this Court that in granting bail to Keshav Singh, the High Court had exceeded its jurisdiction and as such the order was a nullity. Rejecting this argument this Court observed that in the case of a superior Court of Page 651 of 674 C/SCA/15599/2008 JUDGMENT Record, it is for the Court to consider whether any matter falls within its jurisdiction or not. Unlike a Court of limited jurisdiction, the superior Court is entitled to determine for itself questions about its own jurisdiction. That is why this Court did not accede to the proposition that in passing the order for interim bail, the High Court can be said to have exceeded its jurisdiction with the result that the order in question was null and void. In support of this view, this Court cited a passage from Halsburys Laws of England where it is observed that 'prima facie, no matter is deemed to be beyond the jurisdiction of a superior Court unless it is expressly shown to be so, while nothing is within the jurisdiction of an inferior court unless it is expressly shown on the face of the proceedings that the particular matter is within the cognizance of the particular Court.' If the decision of a superior Court on a question of its jurisdiction is erroneous, it can, of course, be corrected by appeal or revision as may be permissible under the law; but until the adjudication by a superior Court on such a point is set aside by adopting the appropriate course, it would not be open to be corrected by the exercise of the writ jurisdiction of this Court."

(3) (1996) 4 SCC 622 in case of Delhi Development Authority Vs. Skipper Construction Co. (P) Ltd. And another:

"17. The principle that a contemner ought not to be permitted to enjoy and/or keep the fruits of his contempt is well-settled. In Mohd. Idris v. R. J. Babuji, this Court held clearly that undergoing the punishment for contempt does not mean that the Court is not entitled to give appropriate directions for remedying and rectifying the things done in violation of its Orders. The petitioners therein had given an undertaking to the Bombay High Court. They acted in breach of it. A learned Single Judge held them guilty of contempt and imposed a Page 652 of 674 C/SCA/15599/2008 JUDGMENT sentence of one months' imprisonment. In addition thereto, the learned Single Judge made appropriate directions to remedy the breach of undertaking. It was contended before this Court that the learned Judge was not justified in giving the aforesaid directions in addition to punishing the petitioners for contempt of Court. The argument was rejected holding that "the Single Judge was quite right in giving appropriate directions to close the breach (of undertaking)".

18. The above principle has been applied even in the case of violation of orders of injunction issued by Civil Courts. In Clarke v. Chadburn, Sir, Robert Megarry V-C observed :

"I need not cite authority for the proposition that it is of high importance that orders of the Court should be obeyed. Wilful disobedience to an order of the Court is punishable as a contempt of Court, and I feel no doubt that such disobedience may properly be described as being illegal. If by such disobedience the persons enjoined claim that they have validly effected some charge in the rights and liabilities of others, I cannot see why it should be said that although they are liable to penalties for contempt of Court for doing what they did, nevertheless those acts were validly done. Of course, if an act is done, it is not undone merely by pointing out that it was done in breach in law. If a meeting is held in breach of an injunction, it cannot be said that the meeting has not been held. But the legal consequence of what has been done in breach of the law may plainly be very much affected by the illegality. It seems to be on principle that those who defy a prohibition ought not to be able to claim that the fruits of their defiance are good, and not trained by the illegality that produced them."

19. To the same effect are the decisions of the Madras and Calcutta High Courts in Century Flour Mills Limited v. S. Suppiah, and Sujit Pal v. Prabir Kumar Sun, In Century Flour Mills Limited, it was Page 653 of 674 C/SCA/15599/2008 JUDGMENT held by a Full Bench of the Madras High Court that where an act is done in violation of an order of stay or injunction, it is the duty of the Court, as a policy, to set the wrong right and not allow the perpetuation of the wrong-doing. The inherent power of the Court, it was held, is not only available in such a case, but it is bound to be exercise it to undo the wrong in the interest of justice. That was a case where a meeting was held contrary to an order of injunction. The Court refused to recognize that the holding of the meeting is a legal one. It put back the parties in the same position as they stood immediately prior to the service of the interim order.

20. In Sujit Pal, a Division Bench of the Calcutta High Court has taken then same view. There, the defendant forcibly dispossessed the plaintiff in violation of the order of injunction and took possession of the property. The Court directed the restoration of possession to the plaintiff with the aid of police. The Court observed that no technicality can prevent the Court from doing justice in exercise of its inherent powers. It held that the object of Rule 2-A of Order 39 will be fulfilled only where such mandatory direction is given for restoration of possession to the aggrieved party. This was necessary, it observed, to prevent the abuse of process of law.

21.There is no doubt that this salutary rule has to be applied and given effect to by this Court, if necessary, by overruling any procedural or other technical objections. Article 129 is a constitutional power and when exercised in tandem with Article 142, all such objections should give away. The Court must ensure full justice between the parties before it. Claims of Prabhjot Singh and Prabhjit Singh (Sons of Tejwant Singh)."

(4) AIR 2008 SC 3016 in case of Patel Rajnikant, Dhulabhai & Ors. Vs. Patel Chandrakant Dhulabhai & Ors.:

"39. We are, therefore, fully convinced that during the pendency of the proceedings and in spite of Page 654 of 674 C/SCA/15599/2008 JUDGMENT interim orders passed by this Court, agreements have been entered into by the contemners, cheques had been accepted and consideration had been received at least in part. So far as the first order passed by this Court on April 26, 2004 is concerned, there was total prohibition from creating any interest in favour of third party either by sale, mortgage, transfer, assignment, gift or 'in any other manner whatsoever'. Hence, entering into an agreement or acceptance of full or even part consideration would be hit by the said order. In our considered view, it would amount to 'creation of interest' prohibited by this Court.

46. The next question is whether for disobedience of the order passed by this Court, the respondents/contemners are liable to punishment? In this connection, we may refer to some of the legal provisions. Article 129 of the Constitution declares this Court (Supreme Court) to be "a Court of Record having all the powers of such a Court including the power to punish for the contempt of itself". Clause (c) of Section 94 of the Code of Civil Procedure, 1908 enacts that in order to prevent the ends of justice from being defeated, the Court may, commit the person guilty of disobedience of an order of interim injunction to civil prison and direct his property be attached and sold. Rule 2A of Order XXXIX as inserted by the Code of Civil Procedure (Amendment) Act, 1976 (Act 104 of 1976) reads thus:

"2A. Consequence of disobedience or breach of injunction--(1) In the case of disobedience of any injunction granted or other order made under rule 1 or rule 2 or breach of any of the terms on which the injunction was granted or the order made, the Court granting the injunction or making the order, or any Court to which the suit or proceeding is transferred, may order the property of the person guilty of such disobedience or breach to be attached, and may also order such person to be detained in the civil prison for a term not exceeding Page 655 of 674 C/SCA/15599/2008 JUDGMENT three months, unless in the meantime the Court directs his release.

(2) No attachment made under this rule shall remain in force for more than one year, at the end of which time, if the disobedience or breach continues, the property attached may be sold and out of the proceeds, the Court may award such compensation as it thinks fit to the injured party and shall pay the balance, if any, to the party entitled thereto."

62. We must frankly admit our inability to agree with the learned counsel. In the light of what is stated above, we are convinced that the contemners have intentionally and deliberately violated the orders of the Court. We are also convinced that the orders were clear, unambiguous and unequivocal having one and only one meaning. Willful and deliberate disobedience of the orders passed by the apex Court of the country can never be said to be bona fide, honest or in good faith. If it is so, the action calls for serious view to ensure proper administration of justice.

69. Considering the facts and circumstances in their entirety, in our opinion, ends of justice would be served if we hold the respondents/contemners guilty under Section 12 of the Contempt of Courts Act, 1971, read with Section 94(c) and Rule 2-A of Order XXXIX of the Code of Civil Procedure, 1908 as amended by the Code of Civil Procedure (Amendment) Act, 1976 and Article 129 of the Constitution and order the respondents contemners to undergo simple imprisonment for a term of two weeks i.e. fourteen days."

(5) 2008 SCC 348 in case of Arjan Singh Vs. Punit Ahluwalia and others:

17. Was the order of injunction operative so as to attract the provisions of Rule 2A of Order 39 of the Page 656 of 674 C/SCA/15599/2008 JUDGMENT Code of Civil Procedure or invoking the inherent jurisdiction of the Court under Section 151 thereof ? The learned Trial Judge opined that it was so because it was for the Court to pass an appropriate order thereunder. The High Court, however, differed with the aforementioned finding of the learned Trial Judge to hold that no order of injunction was operative. It, furthermore, held that any transaction carried out in violation of the order of the Court is void; it would be a nullity. The decision of the High Court is based on the decisions of different High Courts including Pranakrushna and others v. Umakanta Panda, Phani Bhushan Dey v. Sudhamoyee Roy and Anr.

Harbalas v. The State of Haryana . We agree with the High Court on this issue. If the order of injunction was operative upto a particular date, technically the order of injunction shall not remain operative thereafter. The owner of the land Dr. Bawa and the defendant 2 Sanjeev Sharma, thus, could have entered into the compromise. The effect thereof would be that the said deed of sale was not binding on the appellant. It would be hit by the doctrine of lis pendens, as adumbrated under Section 52 of the Transfer of Property Act. The said deed of sale would not come in the Court's way in passing a decree in favour of the appellant. Its validity or otherwise would not be necessary to be considered as the appellant is not bound thereby. Sanjeev Sharma and consequently Puneet Ahluwalia would be deemed to be aware of the pendency of the suit. Even Section 19 of the Specific Relief Act will be attracted.

18. Reliance has been placed by Mr. Gupta on Surjit Singh v. Harbans Singh, wherein this Court opined : (SCC p.52, para-4) "4...........In defiance of the restraint order, the alienation/assignment was made. If we were to let it go as such, it would defeat the ends of justice and the prevalent public policy. When the Court intends a particular state of affairs to exist while it is in seisin of a lis, that state of affairs is not only required to Page 657 of 674 C/SCA/15599/2008 JUDGMENT be maintained, but it is presumed to exist till the Court orders otherwise. The Court, in these circumstances has the duty, as also the right, to treat the alienation/assignment as having not taken place at all for its purposes..."

19. We must also take notice of the fact that even a Court in exercise of its inherent jurisdiction under Section 151 of the Code of Civil Procedure, in the event of coming to the conclusion that breach to an order of restraint had taken place, may bring back the parties to the same position as if the order of injunction has not been violated. (Gurunath Manohar Pavaskar v. Nagesh Siddappa Navalgund.

(6) 1995 6 SCC 50 in case of Surjit Singh and others Vs. Harbans Singh and others:

4. As said before, the assignmentis bymeans of a registered deed. The assignment had taken place after the passing of the preliminary decree in which Pritam Singh has been allotted 1/3 rd share. His right to property to that extent stood established. A decree relating to immovable property worth more than hundred rupees, if being assigned, was required to be registered. That has instantly been done. It is per se property, for it relates to the immovable property involved in the suit. It clearly and squarely fell within the ambit of the restraint order. In sum, it did not make any appreciable difference whether property per se had been alienated or a decree pertaining Page 658 of 674 C/SCA/15599/2008 JUDGMENT to that property. In defiance of the restraint order, the alienation/assignment was made. If we were to let it go as such, it would defeat the ends of justice and the prelavent public policy, When the Court intends a particular state of affairs to exist while it is in seizin of a lis, that state of affairs is not only required to be maintained, but it is presumed to exist till the Court orders otherwise. The Court, in these circumstances has the duty, as also the right, to treat the alienation/assignment as having not taken place at all for its purposes. Once that is so, Pritam Singh andhis assignees, respondents herein, cannot claim to be impleaded as parties on the basis of assignment. Therefore, the assignees-respondents could not have been impleaded by the trial court as parties to the suit, in disobedience of its orders. The principles of lis pendens are altogether on a different footing. We do not propose to examine their involvement presently. All what is emphasised is that the assignees in the present facts and circumstances had no cause to be impleaded as parties to the suit. On that basis, there was no cause for going into the question of interpretation of paragraphs 13 and 14 of the settlement deed. The path treaded by the courts below was, in our view, out of their bounds. Unhesitatingly, we upset all the three orders of the courts below and reject the application of the assignees for impleadment under Order 22 Rule 10 C.P.C.

(7) 2007 11 SCC 374 in case Allbengal Excise Licensees' Association Vs. Raghabendra Singh and others:

"Para-27 :Even assuming that there was any scope for bona fide misunderstanding on the part of the respondents, once it was found that the respondent had disobeyed the specific order passed earlier by the Court, the High Court should have directed the contemnors to undo the wrong committed by them which was done in clear breach of the order of the Court by restoring the status quo ante by canceling the lottery wrongfully held by them. The learned Page 659 of 674 C/SCA/15599/2008 JUDGMENT Judge found that the respondent-contemnors had held the lottery in violation of the Court's order and the results of the said lottery should not be permitted to take effect and should be treated as unlawful and invalid for the purpose of grant of license. The learned Single Judge for the purpose of upholding the majesty of law and the sanctity of the solemn order of the court of law which cannot be violated by the executive authority either deliberately or unwittingly should have set aside the lottery held and should not have allowed the respondents to gain a wrongful advantage thereby.

28. In our opinion, a party to the litigation cannot be allowed to take an unfair advantage by committing breach of an interim order and escape the consequences thereof. By pleading misunderstanding and thereafter retaining the said advantage gained in breach of the order of the Court and the wrong perpetrated by the respondent-contemnors in contumacious disregard of the order of the High Court should not be permitted to hold good. In our opinion, the impugned order passed by the High court is not sustainable in law and should not be allowed to operate as a precedent and the wrong perpetrated by the respondent-contemnors in utter disregard of the order of the High Court should not be permitted to hold good."

(8) AIR 1975 Madras 270 in case of Century Flour Mills Ltd. Vs. S. Suppiah and others:

"para-9: In our opinion, the inherent powers of this Court under Section 151 C.P.C are wide and are not subject to any limitation. Where in violation of a stay order or injunction against a party, something has been done in disobedience, it will be the duty of the court as a policy to set the wrong right and not allow the perpetuation of the wrong doing. In our view, the inherent power will not only be available in such a case, but it is bound to be exercised in that manner in the interests of justice. Even apart from Section 151, we Page 660 of 674 C/SCA/15599/2008 JUDGMENT should observe that as a matter of judicial policy, the court should guard against itself being stultified in circumstances like this by holding that it is powerless to undo a wrong done in disobedience of the court's orders. But in this case, it is not necessary to go to that extent as we hold that the power is available under Section 151, C.P.C."

And the decision of this Court reported in 2014(0) GLHEL-HC- 23112 in case of Nareshbhai Hathising Shah Vs. Dinaben Jitendrabhai Thaker, would require that the transactions are to be declared null and void. The buyers also cannot claim any immunity as the knowledge of the proceedings including the proceedings of company petition cannot be said to be not available to them. However, by this order, court would not restrict their right to seek appropriate relief from the company by way of proceeding which may include seeking refund of the sale price.

The court at this stage need not go into the aspect of contempt as thought the court is more than convinced that the responsible directors in the management from the company were liable to be proceeded against appropriately including for committing contempt of this court. However, at present, the court is of the view that let this liberty be reserved to the workmen or the concerned for bringing appropriate action against the responsible Directors in accordance with law. The Page 661 of 674 C/SCA/15599/2008 JUDGMENT sale deeds dated 11.10.2006, 8.11.2006, 13.11.2006 and 14.11.2006 are quashed and set aside.

In view thereof, all these applications are disposed of and sale deeds as prayed for are cancelled as ordered hereinabove, which in turn, will entitle the original purchasers to seek appropriate compensation in accordance with law from the Company. So far as prayer for joining the parties are concerned, as it is discussed hereinabove, are fully heard in this proceedings and therefore, said prayer is accepted. Civil application is allowed.

In view of the order passed in main matter and observations made hereinabove, no order in Civil Application no. 3052 of 2011 and is so disposed of accordingly. Notice, if any, stands discharged. No costs.

Civil Application No. 4443 of 2014 :

This Civil Application would not survive in view of the order passed in main matter confirming the order passed by the Tribunal and as a result whereof, the workmen are to be reinstated. The Civil Application is disposed of accordingly. Notice, if any, discharged. No costs.

Page 662 of 674

C/SCA/15599/2008 JUDGMENT Special Civil Application No. 3916 of 2008:

In view of the aforesaid observations and discussions, Special Civil Application is required to be rejected and is rejected. Rule is discharged. Interim relief, if any, stands vacated.

Civil Application No. 2968 of 2010:

In view of the order passed in main matter being Special Civil Application No. 3916 of 2008, this Civil Application is also disposed of with a direction that the parties therein would be at liberty to take out appropriate proceedings before the appropriate forum and this disposal would not come in their way in governing their right. The amount deposited by the applicant is remitted to the Tribunal to do the needful in accordance with law.

Special Civil Application No. 15599 of 2008:

The Court has elaborately discussed the development and events in the matter and the Court is of the considered view that in the interest of justice, appropriate directions are required to be Page 663 of 674 C/SCA/15599/2008 JUDGMENT issued while disposing of the petition. The Court is of the view that even if the submission of counsel qua the proceedings before the BIFR or proceedings of Arbitration, Tribunal and other grounds are taken, then also, those workmen will not be deprived of their legitimate rights to seek their wages and their claim to be treated in accordance with law. In the instant case, as it is repeatedly mentioned hereinabove, the Company has brought about the situation where the secured creditors are being kept at bay, so that secularization provisions are not enforced. The BIFR was also moved during the pendency of the proceedings and BIFR was compelled to adjourn the matter sine-a-die. In the instant case, from any angle the protective umbrella cannot be stretched beyond the period of 7 years as envisaged by Section 22(2). The pendency of the proceedings to say the least, cannot be said to be for the purpose for which the SICA was enacted. As could be seen from the order dated 19.01.2012, it can well be said that the Company was attempting to dodge the final outcome, which has been arisen on account of provisions of Section 20 of the SICA. The elaborate discussion in respect of the pendency of the proceedings before the BIFR mentioned hereinabove would clearly indicate that there was no sincere attempt on the part of the company to take benefits of its reference to BIFR for getting up and making itself viable and working. The provisions of SICA, as has been discussed hereinabove, could not have been used or rather misused in such Page 664 of 674 C/SCA/15599/2008 JUDGMENT a fashion as to defeat the rights of the workmen to receive their wages. The series of orders are made by this court after the mediation proceedings or rather right from making the reference to the mediator, the report of Mediator qua company's unequivocal commitment to discharge its liabilities in making the payment to workmen by selling the properties. The court is more than convinced to hold that the workmen cannot be denied their regular wages nor can company be permitted to contend that the company has not offered work and therefore, company is immune from its liability to pay regular wages to the workmen. The company cannot be permitted to contend that workmen could not have remained without wages and they would have been working elsewhere so that company be exempted from paying the wages. This contention would not be lie as nothing prevented the company from taking disciplinary action against the workmen and in absence of any proceedings in this behalf the company cannot be permitted to take this plea.

The company cannot be permitted to contend that the workmen were not entitled to receive wages from august, 2008 as it stopped production. It is held that the company could have sought appropriate relief by way of laying off the workmen or even sought closure permission in accordance with law or retrench the workmen if permissible in accordance with law. But all these would have entailed payment of workmens' due Page 665 of 674 C/SCA/15599/2008 JUDGMENT and requirement of obtaining permission from the concerned court and tribunal, the company appears to have chosen not to resort to these remedies. Therefore, in view of the observations of the Supreme Court in case of Jaipur Jilla (supra) the workmen are entitled to receive their regular wages in accordance with law without any interruption.

In this scenario and in view of the aforesaid peculiar facts and circumstances of the case, while disposing of the petition, the Court is inclined to issue following directions:

(1) Before issuing any direction, the Court is of the considered view that the development of events and dates would indicate that the company is not interested at all in re-

etablishing itself in its manufacturing process. The Directors of the Company are responsible for managing the affairs of the company and they have not reveled any action whatsoever in the direction of either revival or survival of the company even at the behest of BIFR. The period of 7 years has elapsed. There appears to be no interest left in the revival of the company and an attempt to compel the workmen to accept the terms of the company, for giving employment or for giving up their claims. This is to say the least, can be said to be designed unfair labour practise with the help of Page 666 of 674 C/SCA/15599/2008 JUDGMENT technical statutory provisions, which in my view, would not available when the Court is examining the controversy under Article 226 of the Constitution of India, therefore, in the interest of justice, the Court is of the view that the employees are required to be paid their wages regularly. The employees, who have retired on account of attaining their age of superannuation and in those cases, the amount of retiral dues, gratuity and all other retiral dues are to be paid to employees and in cases of the employees, who died in harness and no more survive and who have left behind them their heirs and legal representatives, are required to be paid their all dues admissible to them and amount of gratuity as discussed hereinabove.

(2) The respondent Company and all its Directors, jointly or severally are hereby directed to make the payment of wages on regular basis to workmen, on their employment, who are before the Tribunal in Reference (IT) No. 15 of 2005. The arrears of wages till 7th June 2015 are directed to be paid on or before 31.5.2015.

(3) The payment of wages for the month of May, 2015 be paid to workmen on or before 7th June, 2015.

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C/SCA/15599/2008 JUDGMENT (4) The arrears of wages till 7th June 2015 are directed to be paid on or before 31.5.2015. In case if there is requirement of selling of the property for this purpose, it would be open to the Directors and Managing Director of the Company to approach the concerned Tribunal and any other authority as required under law, where the proceedings of Reference (IT) No. 15 of 2005 are pending and seeking its approval with a specific application naming the property which is sought to be sold and with a condition that the sell proceeds be deposited in the court before executing the sale document. The proposed price fetched be intimated to the Tribunal with a copy to workmen, which would in turn, permit the workmen to raise their grievances, so as to avoid any under prising of the property.

(5) The payment to the workmen, who have retired on account of age of superannuation, all their retiral dues including gratuity, PF etc. be worked out and paid to them on or before 31.5.2015. In the cases of employees, who died in harness and no more survived and who have left behind them their heirs and legal representatives are required to be paid their all dues admissible to them and amount of gratuity, be worked out and paid to them on or before 31.5.2015. In case, if Page 668 of 674 C/SCA/15599/2008 JUDGMENT there is requirement of selling the property for payment of aforesaid wages and dues, same procedure, as stated hereinabove be followed.

(6) In the eventuality of non-compliance with the aforesaid directions by the Company, its Directors, Managing Directors and in the event of non-payment of wages as directed hereinabove, the Tribunal concerned shall attach the properties and company's Director shall thereafter not entitle to deal with any of the property and the Tribunal shall form a Sale Committee consisting of Sole Secured Creditor, who shall be intimated and representative from the workmen and representative from the Management under the Chairmanship of office bearer, that may be deputed by the Tribunal, who can monitor the sale proceedings so as to fetch the highest value.

(7) The sale proceedings and aforesaid direction will not be in any manner jeopardize the company's right to seek appropriate rehabilitation or revival scheme, which shall not affect the workmens' dues and their wages in any manner, as the aforesaid directions would comply and would stand to be completed within stipulated time period.

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         C/SCA/15599/2008                            JUDGMENT



  (8)     It is further clarified that the amount that may be

received by the workmen under aforesaid directions, would be open to be adjusted in case of outcome of arbitration proceedings.

(9) It is further observed that aforesaid directions are not only to the Company but also to the Directors and Managing Director - Shri Damodar D. Patel and all other Directors jointly and severally, to comply, failure thereof, would made themselves liable to be proceeded under appropriate proceedings in accordance with law.

In view of aforesaid directions, the petition is allowed to aforesaid extent. Rule is made absolute to aforesaid extent. There shall be no order as to costs.

Civil Application Nos. 1134 of 2011, 599 of 2010, 1440 of 2010, 6212 of 2010, 10337 of 2010, 11350 of 2010, 13135 of 2011, 14157 of 2010, 14236 of 2010, 14154 of 2010, 10183 of 2011, 9518 of 2011, 10154 of 2011, 10802 of 2011, 4364 of 2013, 8477 of 2012, 8202 of 2012, 5931 of 2012, 2185 of 2012, 2187 of 2012, 62 of 2012:

In view of the order passed in main petition being Special Civil Application No. 15599 of 2008, these civil applications are not survive and are disposed of accordingly. The amount, if any, Page 670 of 674 C/SCA/15599/2008 JUDGMENT deposited by the concerned applicant before this Court, the same shall may be refunded with interest accrued, after due verification. Notice, if any, in all the matters are discharged. No costs.

Civil Application No. 1436 of 2010:

In view of the order passed in main petition being Special Civil Application No. 15599 of 2008, this Civil Application does not survive and disposed of. Notice, if any, stands vacated. No costs.

Civil Application No. 16672 of 2010:

In view of the order passed in main petition being Special Civil Application No. 15599 of 2008, this Civil Application does not survive and disposed of. Notice, if any, stands vacated. No costs.

Civil Application No. 5662 of 2010:

The Court is not inclined to accept this Civil Application as the controversy is absolutely different then what is to be sought out in the main matter. The security agency is not falling within the definition of workman or agency of union and Page 671 of 674 C/SCA/15599/2008 JUDGMENT therefore, without prejudice to the rights and contentions of the applicant, this Civil Application is not entertained and is rejected. This order will not come in the way of the applicant and this would not preclude the applicant for realising their dues by taking appropriate proceedings before appropriate forum. Notice, if any, stands vacated. No costs.

Civil Application No. 752 & 753 of 2011:

In view of the order passed in main petition being Special Civil Application No. 134 of 2006, no orders are required to be passed in view of the order passed in civil application of the workmen seeking similar prayers.

Civil Application No. 3051 of 2011:

In view of the order passed in main petition being Special Civil Application No. 15599 of 2008, no order in this Civil Application and is disposed of accordingly. Notice, if any, stands vacated. No costs.

Civil Application No. 9650 of 2011: In view of the order passed in main petition being Special Civil Application No. 15599 of 2008, no order in this Civil Application and is disposed of accordingly. Notice, if any, stands vacated. No costs.

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C/SCA/15599/2008 JUDGMENT Civil Application No. 2367 of 2013: In view of the order passed in main petition being Special Civil Application No. 15599 of 2008, no order in this Civil Application and is disposed of accordingly. Notice, if any, stands vacated. No costs.

Civil Application No. 2059 of 2013 in Civil Application No 9650 of 2011 in Special Civil Application NO. 15599 of 2008:

As discussed hereinabove this Civil Application is required to be dismissed as having infructuous and is disposed of accordingly.

The registry is directed to keep copy of this order in each matter.

130. After the order was passed, learned counsel Shri Kunan Naik appearing for the Company appeared and submitted that on account of his engagement before the other court, he could not remain present, however, he is requesting for staying of this order at least for a period of 6 weeks so as to enable the Company to take out appropriate proceedings for challenging the same.

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C/SCA/15599/2008 JUDGMENT Shri Deepak Dave, learned counsel appearing for the workmen submitted that let the Company shall show its gester of at least disbursing the admitted amount of dues as per their own say within a period of 2 weeks, then the Court may consider the request, as the workmen also would receive something to fall back upon, as the workmen were without wages since August, 2008.

Shri Naik, learned counsel expresses his inability to concede this request and submitted that as the Company would not be in a position to commit, the request cannot be exceeded.

In this view of the matter and in view of the objection of Shri Dave and in view of the fact that workmen have been actually not paid since August, 2008, the Court is unable to accept the request for staying of the order, as even otherwise also, sufficient time is available to take out appropriate proceedings, as the Court has granted time upto 31.5.2015 for disbursement.

(S.R.BRAHMBHATT, J.) pallav Page 674 of 674

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