TMI Blog2003 (9) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... 174 of 1991. Initially the respondents arrayed in the contempt petition were Shri Dharam Godha, Chairman, Nouveau Capital Finance Ltd., Shri S. Jagadeesan, Joint Secretary, Ministry of Industry, Deptt. of Industrial Policy and Promotion, Government of India; and Shri G.S. Kang, Secretary, Department of Industry, Govt. of Bihar. Subsequently, Shri S.N. Khan, Chairman and Managing Director and Shri R.P. Chhabra, Chief General Manager, Rehabilitation Finance Department, Industrial Development Bank of India, were also impleaded as respondents. 2. Ashok Paper Mills was a joint sector company and its shares were held by Government of Bihar, Government of Assam and Industrial Development Bank of India (for short 'IDBI'). The company had two units; one in Darbhanga, Bihar and the other in Assam. The company became sick in the year 1988 and was referred to BIFR. A decision was taken on 15.11.1989 to bifurcate the two units and give the responsibility of administering/taking over the units to the concerned State Governments. The Assam unit was thus taken over by the Government of Assam in 1990. The Bihar unit was, however, not taken over by the Government of Bihar. The petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the take over of the unit. Prior to take over a tripartite agreement between workers' union, government of Bihar and NCFL will be entered into. NCFL will not take over way of the past liabilities in respect of the workers. However, there would be no break in services and wages would be paid as per the prescribed norms of the industry on the date of absorption. Besides from the date of the take over NCFL will also pay to the worker (as are willing to be absorbed) a monthly salary @ 50% of their last earned salary of the month when production was not terminated. The scheme provided for rehabilitation and running of the units in two phases. Para 1.7 of the Scheme gave details of the expenditure and tentative cost for Phase I as ₹ 26.15 crores. Paras 1.8 and 1.9 gave details as to how this amount was to be raised and they are as follows : 1 . 8 The total cost estimated is ₹ 26.15 crores. The above requirement of funds would be financed as under:- 1. Share capital from promoters 11.15 2. Term loans/equipment finance 15.00 26.15 <! ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he implementation of the above mentioned revival package. 1. 35 Status quo will be maintained as on 18.03.1996 till the unit is taken over by NCFL. There shall not be any new postings, transfers, fresh appointment on the roll of Bihar Unit. All physical assets of the company should remain on as it is where it is condition. If there are any pending issues in relation to workers, the same would be kept pending and decided by the new management. 1. 36 The implementation of Phase-I would be completed within a period of 18 months from the date of signing of agreement and taking over the possession of assets of M/s. Ashok Paper Mills (Bihar Unit). Implementation of Phase-II should be taken up concurrently alongwith Phase-I and completed within a period of 3 years. 1. 37 On failure of NCFL to bring in the required investment as envisaged in Phase-I and Phase-II within the stipulated time, the agreement concluded with NCFL would be liable to be cancelled and transferred assets would revert to M/s. Ashok Paper Mills Ltd. 4. By the order dated 8.7.1996 the writ petition was disposed of in terms of the report submitted by Government of India on 28.6.1996 which contained the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any as a joint venture with the active participation of IDBI and under this venture, units were established in Assam and Bihar. The company did well till 1978 but thereafter its performance slided downhill and ultimately production in both the units was suspended in 1982. The equity participation by the Government of Assam in APM Jogighopa (Assam) is 31% and the equity participation of the Government of Bihar in APM Rameshwarnagar, Darbhanga is 16%. After several efforts to revive the units failed, the company made a reference to the BIFR. The State Governments of Assam and Bihar agreed to bifurcate and nationalise their respective units and in consequence thereto the Assam unit was nationalised in February, 1990. This Court by its order dated 4.1.1995 had directed the Secretary, Industrial Development to explore the possibility of the revival of the mill by privatisation, consistent with the requirement to safeguard the rights and interests of the workmen, through negotiations. It was accordingly decided that IDBI would act as merchant banker for the purpose of privatisation of the unit. In response to an advertisement issued by IDBI, offers were received from two firms. The negot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng capital of ₹ 9.25 crores from United Bank of India. It is further pleaded that the Department of Industrial Policy and Promotion had been making serious efforts for the revival of the unit and as such there has been no disobedience or non-compliance of the orders passed by this Court. 8. Shri G.S. Kang, Secretary, Department of Industries, Government of Bihar has also filed a counter affidavit. It is stated therein that earlier the Bihar unit of Ashok Paper Mills never functioned properly and it remained closed most of the time. Under the rehabilitation scheme, Government of Bihar, Government of Assam, LIC and financial institutions were to transfer their shares to NCFL at 10% of the face value. The cost of the shares was to be paid by NCFL after 12 months of taking over ownership of the factory. Since there was a dispute on the date of take over and some shares of financial institutions and Government of Assam could not be transferred to NCFL, the cost of shares was not paid. NCFL paid the first installment of ₹ 37.5 lakhs out of ₹ 6 crores before the taking over of the unit. Before the take over, there was a tripartite agreement between the labour organi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was registered in the year 1961. All the certified standing orders and agreements with the erstwhile management were signed by this union alone. The petitioner Ashok Paper Kamgar Union was registered only in the year 1978 and was never a recognised union of the mill. When the physical possession of the unit was taken over by the new promoter (HCFL) on 18.8.1997, the assets were delivered short the value whereof was approx. ₹ 3.90 crores as per the inventory and list prepared at the time of handing over. The President of the petitioner Union, namely, Shri Umadhar Prasad Singh and officials of Government of Bihar were party to the same. The shortfall of ₹ 3.90 crores took place between the time the IDBI prepared its report in January, 1996, the preparation of the inventory list on 25.3.1996 and taking over of physical possession on 18.7.1996 despite the orders of this Court dated 18.3.1996 wherein it was directed that status quo shall be maintained. This shortfall took place as a result of theft, pilferage, damage, etc. which was caused when one Shri H.P. Singh was incharge of the site as Acting Works Manager. The plant and machinery of the unit was very old dating back t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provide requisite grid power supply for running the Unit. Thereafter, this Court passed an order on 26.4.1999 directing the Government of Bihar to stand guarantee to the tune of ₹ 3 crores for procurement of 4 DG sets so that the difficulty of power supply could be obviated. The offer of guarantee of the Government of Bihar for procuring 4 DG sets was not acceptable either to the term loan institutions or to the banks and till date no effective steps had been taken to ensure power supply. In para 37 it is averred that the entire eligible work force as directed by this Court has been in full employment since June 2000 and the cost so far incurred on the payment of salary and wages amounted to approx. ₹ 3 crores. The mill commenced production on 27.8.2000 but it could run only intermittently because of sabotage. Under the scheme, United Bank of India was to provide a working capital but the same was not done and as a stop gap arrangement the promoters managed to obtain external commercial borrowing from USA to the tune of ₹ 2.5 crores to run the mill. Inspection was done by the Deputy Director (Technical) on 27.12.2000 and by a team consisting of Industrial Developm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I has been filed by Nivedita Shetty, Deputy General Manager of the Bank. It is averred therein that the NCFL has paid only two installments of ₹ 37.5 lakhs each (totalling ₹ 75 lakhs) out of ₹ 6 crores which was decided as consideration for taking over the company's assets and an account of said default pro rata settlement of dues of secured creditors and workers did not take place. In Phase I of the scheme, major repairs and rectification work was carried out and certain capital equipment, additional waste paper pulping facility, coal handling plant, one boiler of 18th and part of the drinking equipment were acquired. On disbursement of the entire loan of ₹ 15 crores by IDBI by March 2001 and release of working capital by Union Bank of India in August 2001, the company had started the plant. It produced 2303 tonnes of paper upto January 2002 with the average daily production being around 25 tonnes as against the capacity of 60 tpd. Out of envisaged installation of 4 MW captive power plant 1 MW captive power plant had become operational and a 3 MW turbine had reached the site in July, 2001. To meet a part of the cost over run which had occurred on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settled. 11. The three respondents, namely, Shri Dharam Godha, Chairman, NCFL, Shri S. Jagadeesan, Joint Secretary, Ministry of Industry, Government of India and Shri G.S. Kang, Secretary, Department of Industry, Government of Bihar have stated in their respective affidavits that they tender their unconditional apology in case the Court came to the conclusion that they had committed contempt of the orders passed by this Court. 12. According to the petitioner, the respondents have not complied with the orders passed by this Court on 8.7.1996, 1.5.1997 and 31.7.2000 and, therefore, they are liable to be proceeded with. By the order dated 8.7.1996, the writ petition was disposed of in terms of the report dated 28,6,1996 submitted by Government of India in consultation with various agencies. The report contained the Scheme for revival of Ashok Paper Mills Ltd. and the relevant terms thereof have already been set out earlier. By the order dated 1.5.1997, I.A. No. 11 of 1996 was disposed of and a direction was issued to all persons and institutions concerned to participate in the implementation of the Scheme and the Finance Secretary, Government of India was directed to ensure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action and to ensure that nothing went out of the factory premises. Some machines in the factory required repairs and according to the affidavit of Shri Dharam Godha one motor got burnt on 4.10.2001. The machines and the motor were required to be sent to Calcutta for repairs. However, on account of the embargo imposed by the Government of Bihar, the same could not be taken out of the factory. According to the management it wanted to take out scrap worth about ₹ 30-40 lakhs for the purpose of sale to raise money to pay wages to the workmen. It even filed a writ petition being CWJC No. 5201 of 2001 before the Patna High Court praying that direction be issued to permit it to take out the iron scrap for the purpose of sale. The writ petition was disposed of on 28.6.2001 with the direction to the Monitoring Committee to decide the issue regarding removal of scrap for the purposes of payment of wages to the workers. The Government of India also sent a letter dated 25.7.2001 to the Government of Bihar requesting it to revoke the direction given by it to the District Magistrate on 22.2.2001. The machines installed in a big factory may break down or may need repairs and it is not alwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdles in arriving at a tri-partite agreement. The Labour Commissioner also sent a report that his department had been receiving representations from Ashok Paper Mill Mazdoor Panchayat, which was the only recognised Union, about their claim. After considering the report of the Labour Commissioner, the Government of Bihar gave its no objection by its letter dated 14.7.1998 and thereafter the management entered into an agreement with the aforesaid recognized Union, namely, Ashok Paper Mill Mazdoor Panchayat. In paras 13 and 17 of the Contempt Petition, it is alleged that on account of keeping out of the Petitioner and its President (Shri Umadhar Prasad Singh) in the meetings of the Monitoring Committee and on account of their non-involvement in the opening and running of the unit, there has been a disobedience of the orders passed by this Court. The material on record shows that as Shri Umadhar Prasad Singh was not cooperating and was creating hindrance in arriving at a tri-partite agreement, the Labour Commissioner wrote to the Government of Bihar for signing of the agreement with Ashok Paper Mill Mazdoor Panchayat, which was a recognised Union. The Government of Bihar also gave its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bey or to disregard the law. It signifies a deliberate action done with evil intent or with a bad motive or purpose. Therefore, in order to constitute contempt the order of the Court must be of such a nature which is capable of execution by the person charged in normal circumstances. It should not require any extra ordinary effort nor should be dependent, either wholly or in part, upon any act or omission of a third party for its compliance. This has to be judged having regard to the facts and circumstances of each case. The facts mentioned above show that none of the respondents to the petition can be held to be directly responsible if the Scheme which had been formulated by Government of India on 28.6.1996 and had been approved by this Court by the order dated 8.7.1996 could not be implemented in letter and spirit as many factors have contributed to the same. The reasons given for non inclusion of Shri Umadhar Prasad Singh in signing of the agreement appear to be quite plausible. NCFL has undoubtedly not discharged its liability of making payment of its entire liability of ₹ 6 crores. However it has come out with a case that some additional expenditure has been incurred in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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