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2017 (2) TMI 603 - ANDHRA PRADESH HIGH COURT

2017 (2) TMI 603 - ANDHRA PRADESH HIGH COURT - TMI - Scheme for rehabilitating of sick company - revival of Adilabad Unit - Held that:- State of Telangana intends to represent to the Union of India seeking revival of the Cement Corporation of India Limited, Adilabad District, considering the number of representations received from the local public as well as employees of the Cement Corporation of India Limited, Adilabad District. Inasmuch as the learned Special Government Pleader requests this C .....

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Corporation of India Limited. - Inasmuch as the issue before the BIFR as well as the Appellate Authority was the revival of the Cement Corporation of India Limited the Sick Industrial Company with multiple units, the question of revival of Adilabad Unit on stand alone basis does not arises. However, it may not be construed that if the State of Telangana or any other party interested to rehabilitate or revive the Adilabad Unit, the same would have to be strictly done in accordance with the sc .....

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6:Standing Counsel for Central Government, No.3:G.P for Industries and Commerce., No.4:Ms. V. Uma Devi. ORDER: The petitioner is an employees union of the employees who were working with the 4th respondent (CCI) at its Adilabad Unit. The brief facts of the case are that the 4th respondent Cement Corporation of India is wholly owned by the Central Government Company with 12 units situated at (1) Bokajan, 2) Rajban, 3) Thandoor, 4) Nayagoan, 5) Adilabad, 6) Mandhar, 7) Kurkanta, 8) Akalthara, 9) C .....

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d senior counsel for the petitioners, there were about 54 employees consisting of 52 employees, one executive and one supervisor. The CCI was declared as a sick company within the meaning of Section 2(o) of the Sick Industrial Companies Act, 1985 (SICA) (for short the Act) on 8.8.1996. The Industrial Financial Corporation of India (IFCI) was appointed as operating agency under Section 17(3) of the Act for preparation of revival scheme. From time to time various draft schemes were submitted befor .....

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uthority for Industrial and Financial Reconstruction (AAIFR) (for short the AAIFR) constituted under Section 3(1)(b) of the Act by the petitioners union, the Cement Sramic Sangh, ONGC and M/s. K.C.P Limited. The AAIFR by its order dated 17.11.2006 dismissed the appeals of the Cement Sramic Sangh and the petitioners while giving certain directions with respect to other appellants. Challenging the order of the BIFR dated 28.07.2000 as affirmed by the AAIFR by its order dated 17.11.2006, the presen .....

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ents 1,2, and 4 i.e., in mechanically and irrationally accepting the draft rehabilitation scheme as revised at the instance of 4th respondent, without application of mind and without reasons, is utterly contrary to the doctrine of fairness, application of mind and suffers from discriminatory treatment and as such is utterly invalid in law apart from being unconstitutional. Respondents 5 and 6 did not even consider the Andhra Pradesh Governments support, tax waiver and other concessions for reviv .....

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uch the same is partisan and invalid. The action of the CCI, FIFR & AAIFR in not acting as per the viability study reports submitted by the experts in that field, such as Holtec, IFCI and Development Consultancy, is not only illegal and discriminatory but also contrary to settled principle of law with regard to sanctity of experts opinion. The BIFR grievously erred in law in failing to implement its own repeated findings and observations regarding viability for revival of Adilabad unit and B .....

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ra Pradesh without revival of Adilabad Unit is arbitrary, irrational and is utterly devoid of bona fides apart from illegal and discriminatory. The Appellant Authority has neither applied its mind nor has given any reasons in confirming the BIFR orders and its order is a mere mechanical approval of original authoritys order and hence the same is unsustainable in law. It is the submissions of the learned senior counsel that the expert body reports of Development Consultants Limited (for short, th .....

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t appointed by the CCI, M/s.Holetec Consulting Private Limited found Adilabad unit as viable unit for revival. The Government of Andhra Pradesh had also committed to extend the concessions to the tune of ₹ 30.00 crores for revival of the Adilabad unit and the then Central Minister himself designed to continue the Adilabad unit. This Court while admitting the writ petition granted the status quo order and thereafter taking note of the above factors modified the status quo order while allowi .....

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lose the Adilabad unit while providing for revival of Bokjan unit. The same has been done on account of the pressure exerted by the Union Minister hailing from North East at relevant point of time. In approving the draft rehabilitation scheme, the BIFR miserably failed to advert to and deal with the various aspects of the advantageous in rehabilitating the Adilabad unit as recommended by the consultants viz., DCL, IFCI, Holetec and Government of Andhra Pradesh apart from the assurances from the .....

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or counsel appearing on behalf of Ms. V. Uma Devi, learned counsel for the 4th respondent- CCI submits that the Adilabad unit had stopped production in the year 1996 and on 27.3.2001 Government of India had decided to sell all units individually or collectively. However, efforts were made from time to time to explore the possibility of rehabilitating some of the units of the company and finally the draft scheme was circulated in terms of the statutory provisions and after taking into considerati .....

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8.9.2004 of the department of heavy industry is not reason for rehabilitating Bokjan unit as set out in para 7.2.3 of the scheme. By drawing attention of this Court to para 44 of the writ affidavit wherein a reference was made to W.P.No.1322 of 2006 (mistakenly mentioned as W.P.No.13221 of 2006) pending before the Delhi High Court, this Court granted initial status quo order and now the said W.P was dismissed on 11.1.2008 along with two other writ petitions bearing W.P.No.4461 of 2007, 8295 of 2 .....

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self before this Court based on the orders of the writ petition pending before the Delhi High court and in fact the orders passed by this Court are only based on the initial interim orders passed by the Delhi High Court and on account of the dismissal of the writ petition by the Delhi High Court, the present W.P to be dismissed. He further submits that pursuant to the modification of the order dated 27.2.2008 Ministry of Labour and Employment, Government of India by proceedings dated 14.07.2008 .....

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CI is unable to proceed incurring idle expenditure of about ₹ 3.00 crores per annum. Though as on 25.8.2008, there were 102 employees pending disposal of the writ petition many of the employees have accepted the VSS scheme and as on date only 54 employees are required to be settled. Finally he prays for dismissal of the writ petition submitting that the BIFR has passed final orders after prolonged deliberations by following the procedure as prescribed under the Act. At the outset, it may b .....

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the BIFR and Appellate Board; that the decision to rehabilitate Bokjan Plant in preference to the Adilabad Plant is only for extraneous considerations and inasmuch as there was no consideration of these aspects by the respective authorities, the matter requires reconsideration and it is a case for remanding the case for reconsideration by the Primary Authority itself. At the outset it may be noted that it is not in dispute that the order of the appellate authority was subject matter of challeng .....

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parate writ petitions assailing the order dated 17.11.2006, passed by the AAIFR. Third writ petition is filed by the Employees Union of Delhi Grinding Unit. This is how all the three writ petitions assailing the same order were heard together and we proposed to decide the same by this common judgment. From the above, it appears that the cause of the Adilabad Unit as espoused in the present writ petition was also argued before the Delhi High Court. The Division Bench of the Delhi High Court after .....

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ich are operational, have good chance to become profitable and because of this reason, the company will revive and shall not be forced to wind up. thus, even though it may appear to be harsh to seven units, the move is the only possible solution to save at least other three units as the other alternative was to close all units and wind up the company, which was a tentative opinion formed by the BIFR on an earlier occasion. If that happens, in so far as the petitioners herein, viz., unions of thr .....

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xcept submitting their objections, there is no alternative workable scheme that was proposed either by the petitioners or by the State Government. It may also be noted that what is required to be considered by the BIFR is the possibility of revival and rehabilitation of the Sick Industrial Company as defined under Section 2(o) of the Act, but not a Unit of the Sick company. In other words, what is required to be considered by the Board is not the individual revival and rehabilitation of individu .....

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nd the Government of Indias principal share holder had initially decided to close and sell all the units and thereafter considering the various aspects had come to a conscious decision to resurrect and rehabilitate three units and as one of the means of financing had decided to sell the other units in the absence of valid reasons, cannot be found fault. This Court can also take judicial note of the fact that there are large technological developments which are taken place in the Cement Industry .....

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had specifically dealt in paras 7.2.3 and 10.3. It is not necessary for this Court once again to repeat what was in detail considered by the Division Bench of the Delhi High Court with respect to the statutory scheme and scope of Sections 15 to 19 of the Act. Further, there is no dispute with respect to the specific contention that the permission granted by the Government of India, Ministry of Labour and Employment under Section 25(o) of the Industrial Disputes Act, 1947 and the failure of the .....

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statutory in nature. A reference may be made to para 13 of the judgment of the Full Bench of this Court in a case reported in V.S.R Murthy and others vs. Engineer In-Chief (Irrigation) 1997(5) ALT 696. It may not be out of place to refer to the caution expressed by the Supreme Court in the judgment referred in International Finance Corporation and another vs. Bihar State Industrial Development Corporation and others (2005) 10 SCC 179 with regard to interference of the proceedings before the BIFR .....

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ational or perverse, the Court should not interfere in the process. In Bombay Dyeing and Manufacturing Company Limited Vs. Bombay Environmental Action Group 2006 (3) SCC 434, the Apex Court observed at paras 2, 314, 325 as under: 2. Whether any synthesis between environmental aspects and building regulations vis-vis the scheme floated by the Board of Industrial and Financial Reconstruction ( for short BIFR) in terms of the provision of the Sick Industrial Companies (Special Provisions ) Act, 198 .....

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g the said order, it was required to hear all concerned, namely, the management, the workmen, the financial institutions, banks, etc., as also the operating agencies. It did so. 325. It is not in dispute that NTC was a sick company. As a sick company, it might not have in a position to reopen any close mill at all. Reference to BIFR in terms of Section 16 of the Act evidently was made for the aforementioned purpose. If the schemes sanctioned by BIFR are given effect to, at least some of the NTC .....

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ppeal before the BIFR. Even there does not exist any material to show that at any point of time they had approached the High Court in judicial review. The workmen were parties in the proceedings before BIFR. Presumably BIFR made the said schemes after hearing of parties concerned including the workmen. On 22.12.2016, when the matter came up under the caption for pronouncement of judgment, learned Advocate General for the State of Telangana appeared before this Court and made a request to defer p .....

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l, the matter was adjourned beyond Sankranti Vacation, 2017. Today, when the matter has been listed under the same caption, learned Special Government Pleader places before this Court an affidavit sworn to by the Principal Secretary to Government, Information & Technology Department holding Full Additional Charge of Principal Secretary to Government and Commissioner of Industries Promotion, Industries and Commerce Department, Government of Telangana and requests that the same be taken on rec .....

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ration of India Limited, Adilabad and keeping in view of the same and after formation of State of Telangana, the Telangana State Government intends to represent the Union of India for the revival of the Cement Corporation of India Limited, Adilabad District. In the aforesaid circumstances, some more time is required to persuade the matter with the Central Government. The above-quoted paragraph merely records that the State of Telangana intends to represent to the Union of India seeking revival o .....

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ng a number of units is different from the Cement Corporation of India Limited, Adilabad District as there is no Company existing like Cement Corporation of India Limited, Adilabad District in strict legal sense. Probably, what the Principal Secretary means is Adilabad unit of Cement Corporation of India Limited. Inasmuch as the issue before the BIFR as well as the Appellate Authority was the revival of the Cement Corporation of India Limited the Sick Industrial Company with multiple units, the .....

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missioner for Industrial Promotion & Mines, Industries & Commerce Department, Government of Telangana is placed on record by the learned Standing Counsel for the CCI. The learned counsel for the petitioner objects for the said document to be brought on record. The objection is not sustainable as this letter, in fact, has no bearing on the facts or law as considered by this Court in the preceding paragraphs. The sum and substance of the said letter is that Union of India as of now is not .....

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