TMI Blog2008 (3) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout giving it a reasonable opportunity of hearing and, accordingly, gave direction for fresh hearing of the matter. The order passed by the High Court was brought before this Court in appeal by a workers' union, namely, Cement Workers Karamchari Sangh. The appeal was based on the plea that the remand to the AAIFR would not serve any useful purpose but would lead to an unnecessary and unreasonable prolongation of the matter causing great prejudice and distress to the workers who had already suffered much due to non- payment of their dues for a very long time. Thus the appeal at its inception appeared to present for consideration the simple and limited issue as to whether the High Court was justified in taking the view that the order passed by the AAIFR was in breach of the principles of natural justice and for that reason remitting the proceeding to it. 3. However, during the pendency of the proceeding before this Court certain developments took place that tend to somewhat shift the focus from the limited issue as indicated above. On August 26, 2006, while the Special Leave Petition giving rise to the appeal was pending before the Court, the appellant-workers' union en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o justify the claim, Mr. Justice N.N.Mathur need not ascertain the views of those who have opted for settlement. So far as others are concerned, the views of individual workers shall be ascertained. As requested by the Court, Mr. Justice Mathur made the enquiry and submitted his report dated August 9, 2007. It is a detailed report and it considerably helped the Court to appreciate the main features of the controversy. 5. These developments taking place after the filing of the Special Leave Petition compel us to take note of certain facts and circumstances antecedent to the immediate cause that brought this matter to this Court. 6. All the controversies in the case, as may be gathered from the above, revolve around the attempts at the rehabilitation/revival, or conversely the winding up of M/s. Jaipur Udyog Limited (JUL). JUL was incorporated in May 1948 as a private limited company. It set up a cement factory at Sawai Madhopur for which the supply of raw material, i.e., limestone came from Phallodi Quarry at a distance of about 25 kms. In the year 1955, it was converted into a public limited company. In 1967, it acquired a jute mill in Kanpur with a view to manufacture cem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyees it was provided as follows: Employees: (i) Shall accept settlement of arrear wages/salaries/bonus (including the same during the period operation of JUL was under suspension) (amounting to ₹ 1241 lacs approximately) for ₹ 300 lacs payable on deferred basis in 3 equal annual installments. (ii) Shall agree for labour rationalization programme as would be implemented, with higher productivity norms. Later on, in the proceedings both the BIFR and the AAIFR had the occasion to comment that in order to make the revival of JUL possible under SS-92 the employees had made great sacrifices and had settled for the much smaller amount of only ₹ 3 crores (payable in three installments) in place of ₹ 12.41 crores being their lawful dues. The workmen had given up three- fourth of their dues in the hope and trust that the new promoter (GDCL) would start the unit and they would be able to keep their jobs. Their hope was, however, completely belied and the workmen were left 'in a very pathetic situation.' 9. On January 9, 1996, GDCL commissioned the unit only to declare lock out seven months later on August 12, 1996. It was alleged that the commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditors, the representatives of all concerned State Governments Department of GOI, Chandigarh Housing Board, etc., were for winding up of the company; except from the representatives of the company and its promoters, to the proposed winding up of the company. As regards the company's objections, the Bench further noted that the company had failed to submit their audited/provisional balance-sheet as on June 30, 2000, which would have enabled the Bench to appreciate the correct picture of the accounts at the time of the hearing. The company's representative had also not given any specific answer to the query regarding treatment of the liability on account of various decrees obtained by secured- unsecured creditors. The Consultant for the company was also asked to submit their modified proposal, but no updated proposal was forthcoming, and he only indicated that their modified proposal submitted in May 1998 was still pending with IIBI (MA). It was also stated that an OTS proposal was pending with SBI. However, the representative of SBI present during the hearing categorically stated that the proposals submitted by the company for OTS of the bank's dues were found unaccept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SBI. No adjustment or payment shall be made from this amount except with prior orders of this Authority. The appellant company and the CWKS shall immediately prepare a statement of the retired workers showing the terminal dues of each of them. An amount of ₹ 3 crores out of the no-lien deposit of ₹ 10 crores shall be utilized for part payment of the terminal benefits to the retired workers. Failure to deposit the amount of ₹ 10 crores, as stated above, will result in dismissal of this appeal. To come on 6.9.2001. JUL challenged the interim order passed by the AAIFR before the Rajasthan High Court and from this stage the matter becomes somewhat confused and murky. 14. In S.B.Civil Writ Petition No. 4380/2001 filed by JUL the prayers were made in the following manner: a) pass a writ, order or direction in the nature of mandamus, to quash the impugned order of the AAIFR dated 3.8.2001 in Appeal No. 22 of 2001; b) Pass a writ, order or direction to call for a summon the records of the case from the AAIFR/BIFR of Reference No. 17, 1987; c) x x x The writ petition was taken up before the High Court on September 4, 2001 and the order of the Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even the amount of ₹ 3 cr to the workers which was part of the restructured liabilities in 1992. We had therefore given time to JUL/promoters for OTS negotiations with SBI afresh and for arriving at understanding with workers' union and asked them to deposit ₹ 10 cr in no-lien account in two installments out of which ₹ 3 cr was to be utilized for part payment of terminal dues to retired workers. A large number of workers have retired and have died and their families are in indigent circumstances. However, every person who is aggrieved by orders of this Authority has a right to seek redress from superior courts. The appellants have chosen to approach the Hon'ble High Court of Rajasthan at Jaipur and obtained stay of the order dated 3.8.2001. This shows that they are not prepared to make the deposit of ₹ 10 cr and make payment of ₹ 3 cr out of that to the workers. Having made the observations and come to the findings, as noted above, the AAIFR dismissed the appeal and granted permission to the creditors for initiating proceedings for recovery of their dues and for execution of the decrees already obtained by them. 16. JUL then filed an app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for it or has asked for a wrong relief. Petition under Article 226 will not be thrown out on the ground that no proper writ or direction has been prayed for. (Emphasis supplied) The High Court accordingly set aside both the interim and final orders passed by the AAIFR dated August 3, 2001 and September 6, 2001 and remitted the matter for a fresh decision on merits after providing an opportunity of hearing to all the parties who were impleaded in appeal and who had sought impleadment in the writ petition. 19. The Cement Workers Karamchari Sangh, a workers' union, sought to challenge the order passed by the High Court by filing this special leave petition before this Court. But as noted above, during the pendency of the SLP the petitioner-Sangh entered into an agreement with JUL/GDCL. As result of the intervening development, at the time of hearing of the case for its final disposal, the petitioner was content to take a seat on the sidelines and the space left by it was sought to be occupied by some of the respondents (creditors of the company) and some workers groups/unions seeking to intervene in the matter either to oppose the settlement or to press for the winding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated September 6, 2001 passed by the AAIFR on the ground that it was passed in violation of the principles of natural justice. Learned Counsel submitted that in the facts and circumstances of the case, the refusal to grant adjournment could not be viewed as a violation of the principles of natural justice. From the copy of the High Court order that was produced before the AAIFR, it was evident that the High Court had stayed the operation of the interim order but not the proceedings in the pending appeal. The AAIFR was, therefore, justified in refusing to grant adjournment in view of the strong opposition by the other parties. At that stage the counsel for the company declined to make submissions on the merits of the appeal even though repeatedly asked by the Chairman. Hence, there was no question of any violation of the principles of natural justice and the very premise of the High Court order was, therefore, unfounded. She further submitted that, as a matter of fact, it was the order of the High Court that was completely without jurisdiction inasmuch as it purported to set aside an order that was not even brought to it under challenge. She submitted the High Court was conscious th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIFR would be legally bound to reiterate the order of winding up of the company. Any remand to the AAIFR would, therefore, be quite futile and it would only delay the inevitable. The delay, however, would greatly benefit JUL/GDCL by giving it the opportunity for further tiers of litigation. At the same time the inherent delay in remand would cause great prejudice to the workmen and it may even break their fragile capacity to sustain. In support of his submissions, Mr. M. Singhvi relied upon the decisions of this Court in Meghal Homes Pvt. Ltd. v. Shree Niwas Girni K.K. Samiti AIR2007SC3079 and International Finance Corporation and Anr. v. Bihar State Industrial Development Corporation and Ors. (2005) 10 SCC 179. 25. In regard to the settlement arrived at between the petitioner, Cement Workers Karamchari Sangh and the JUL/GDCL Mr. M. Singhvi submitted that it was collusive and illegal and unjust and unfair to the workmen. He referred to Rule 58 of the Industrial Disputes Rules and submitted that the so-called settlement was not drawn up in Form-H and a copy of it was not sent to the appropriate government and the authorities as provided under Sub-rule (4) of Rule 58. The so-calle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atgi stoutly defended the settlement entered into between the petitioner-Sangh and JUL/GDCL. He stated that Justice Mathur had noted in his report that 1384 employees of the cement factory at Sawai Madhopur and 578 workmen at Phallodi Quarry had accepted the settlement and the company had paid to them the sums of ₹ 8.67 crores and ₹ 3.44 crores respectively. Similarly, at Kanpur 1198 workmen had accepted the settlement and the company had paid to them the aggregate sum of ₹ 3.74 crores. Thus, altogether 3160 employees had accepted the settlement and the company had paid to them the total sum of ₹ 15.18 crores. The report further noted that according to the list furnished by the company 1173 workmen of the cement factory, 457 at Phallodi Quarry and 136 at Kanpur had not accepted the settlement and the total amount due to them under the settlement was ₹ 10.23 crores. (Here it may be stated that before Justice Mathur one of the workmen's union claimed that the lawful dues of the workers amounted to ₹ 86 crores but the settlement was made for only 20-25 crores). 30. Mr. Rohatgi strongly contended that all the workmen who had received payment h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord the interim order of the High Court. The order that was produced before the AAIFR did not indicate that the proceeding of the appeal before it was stayed. The parties (creditors of the company) were strongly opposed to any adjournment. Under the circumstances, the AAIFR was within its rights to disallow the prayer for adjournment on behalf of JUL and to ask its counsel to make submissions on merits. We, therefore, feel that the strong displeasure against the AAIFR expressed by the High Court in its order of September 12, 2001 was quite uncalled for. We are further of the view that since the counsel for the appellant GUL declined to make submissions in support of the appeal even though repeatedly asked by the AAIFR, after the request for adjournment was turned down, there was no breach of the principles of natural justice. Having regard to the communication gap resulting from the mistake in recording its interim order, the High Court might have been justified in asking the AAIFR to pass a fresh order after giving the appellant JUL an opportunity of hearing. But the High Court was clearly in error in setting aside the final order passed by the AAFIR on the ground that it was pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made within the specified time, the AAIFR will proceed to dispose of the appeal after hearing the appellant and any of the parties to this appeal before this Court (including the proposed interveners) or the parties to the appeal before the AAIFR who may appear before it. The judgment of this Court is deemed sufficient notice to all concerned and the AAIFR need not issue any further notices to any of the parties. IV. In case the appellant makes the deposit within the specified time it will be open to it to file before the AAIFR a revised rehabilitation scheme. It will also be open to any other parties, including the workmen to file before the AAIFR a rehabilitation scheme for the sick company. In case a revised scheme is filed the AAIFR will consider it and pass appropriate orders in accordance with law. V. Most importantly, the AAIFR shall make all endeavours to dispose of the matter as early as possible and in any event not later than four months from the date of deposit of ₹ 10 crores by the appellant. B. Re. Determination of the lawful dues of the Workmen: I. Mr. Justice N.N.Mathur (a retired judge of the Rajasthan High Court) is appointed Arbitrator under S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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