TMI Blog1990 (8) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... ef Undertaking' for a period of two years from December 2, 1988 under Section 3 of the Karnataka Relief Undertaking (Special Provisions) Act, 1977, with a view to enable the continuous running of the undertaking and for providing relief against unemployment. 4. The first respondent-company which was engaged in the manufacture of edible refined oils and oil cakes, has suffered accumulated losses on March 31, 1987, amounting to ₹ 406.71 lakhs. The capacity utilisation came down to 15 to 20% while the break-even point was 60%. Therefore, a reference was made to the Board for Industrial and Financial Reconstruction (BIFR) Delhi, for determining the measures to be adopted under the Sick Industrial Companies (Special Provisions) Act, 1985, with respect to the company. After an enquiry in Case No. 269 of 1987, the Board for Industrial and Financial Reconstruction has declared the first respondent as a sick industrial company under Section 16(4) of the Sick Industrial Companies (Special Provisions) Act, 1985, and directed notice to the first respondent to show cause why it should not be wound up under the provisions of the Act. 5. The petitioner-Union, after it came to know ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipulated by the latter as there is no final decision taken in the matter and it is only in the process of offer and acceptance. It is further contended that this respondent is a body corporated competent, among other things, to enter into contracts, buy and sell its assets. This right cannot be restricted or curtailed by imposing a condition on the buyer which is opposed to the law governing transfer of properties and assets. The writ petition is liable to be dismissed on the ground that the petitioner has no legal right to compel this respondent to transfer its assets subject to the condition that the workman employed by its are also transferred to employment of the intending buyer of the assets. The petitioner has no such legally enforceable right and even on this score, the petition is liable to be dismissed. 9. The third respondent has contended that they are co-operative societies registered under the Karnataka Co-operative Societies Act to carry out activities conducive to economic and socio-economic development of agriculturists by organising effectively production, procurement, processing and marketing of commodities. Neither the State nor the Central Government have con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter is not finalised, it is premature to get a direction from this Court directing the third respondent that at the time of transfer of ownership, the third respondent should absorb and continue the services of the workman of the first respondent company. 13. Learned counsel for respondent No. 3, Sri R. J. Babu, submitted that if they took over the ownership of the first respondent, which is minus ₹ 3.3 crores worth, it cannot be burdened with absorbing all the workmen as it has to plan for employing the required number of workmen in accordance with the capital outlay and if it is burdened it is burdened with taking the workmen who are presently engaged in the first respondent, it cannot think of purchasing the company. Learned counsel further submitted that initially the petitioner has no legal right to pray this Court to give a direction of this nature and the third respondent is not duty-bound to take the employees to have more burden after taking over the first respondent-company. 14. It is true that only two alternatives are left open for the first respondent, i.e., to wind up under the provisions of the Sick Industrial Companies (Special Provisions) Act, 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sistent with the decision of this Court in Hariprasad's case (1957 I LLJ 243). The Legislature, however, wanted to provide that though such termination may not be retrenchment technically so-called, as decided by this Court, nevertheless, the employees it question whose service are terminated by the transfer of the undertaking should be entitled to compensation, and so, Section 25-FF provides that on such termination compensation would be paid to them as if the said termination was retrenchment. The words 'as if' bring out the legal distinction between retrenchment defined by Section 2(oo) as it was interpreted by this Court and termination of services consequent upon transfer with which it deals. In other words, the section provides that though termination of services on transfer may not be retrenchment, the workmen concerned are entitled to compensation as if the said termination was retrenchment. This provision has been made for the purpose of calculating the amount of compensation payable to such workmen, rather that provide for the measure of compensation over again, Section 25-FF makes a reference to Section 25-F for that limited purpose, and, therefore, in all ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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