2005 (12) TMI 297 - HC - Companies Law

Issues Involved
1. Validity of the Office Memorandum dated 13-1-2005 issued by the Ministry of Textiles.
2. Legality of the letter dated 20-4-2005 by the General Manager (Textiles) of the NTC.
3. Jurisdiction of the High Court of Delhi.
4. Compliance with the sanctioned scheme by BIFR.
5. Alleged infringement of legal rights of the petitioners.

Issue-wise Detailed Analysis

1. Validity of the Office Memorandum dated 13-1-2005
The writ petitioners, employees of the National Textile Corporation Limited (NTC), challenged the Office Memorandum dated 13-1-2005 issued by the Ministry of Textiles. This memorandum aimed to review the rehabilitation scheme of several NTC units, which had already been sanctioned by the Board for Industrial and Financial Reconstruction (BIFR). The petitioners argued that the introduction of a modified Voluntary Retirement Scheme (MVRS) through this memorandum would lead to the closure of viable units without fulfilling statutory obligations and in violation of BIFR's sanctioned scheme and the Supreme Court's directions.

2. Legality of the Letter dated 20-4-2005 by the General Manager (Textiles) of the NTC
The petitioners also challenged the letter dated 20-4-2005, which instructed five NTC units to offer VRS to their workmen. They contended that the management would close down viable units if the majority of workmen accepted the VRS, thereby violating the BIFR's rehabilitation scheme and the Supreme Court's orders.

3. Jurisdiction of the High Court of Delhi
The counter-affidavit filed by NTC argued that the High Court of Delhi lacked jurisdiction as none of the petitioners were from Delhi. They were employed in mills situated in Rajasthan and Punjab, and their grievances were related to the MVRS extension in these states.

4. Compliance with the Sanctioned Scheme by BIFR
The BIFR had declared NTC as a sick company and sanctioned a revival scheme on 22-2-2002, which included the closure of unviable mills and revival of viable ones. The scheme also provided for offering VRS to surplus workers. The petitioners alleged that the MVRS introduced on 13-1-2005 modified the BIFR-sanctioned scheme without approval, which was arbitrary and in contravention of the sanctioned scheme.

5. Alleged Infringement of Legal Rights of the Petitioners
The petitioners, who were part of the management staff, claimed that their legal rights were infringed as the MVRS would lead to the closure of mills, affecting their employment. They argued that the NTC's actions were arbitrary and capricious.

Judgment Analysis

Validity of the Office Memorandum and Letter
The court held that the NTC had modified the scheme without BIFR's approval, which was beyond its jurisdiction. However, it was noted that offering VRS to employees was an administrative decision and not prohibited by the scheme. The memoranda of understanding between NTC and trade unions, part of the scheme, allowed for VRS even in viable mills.

Jurisdiction
The court did not find merit in the jurisdictional challenge, focusing instead on the substantive issues raised by the petitioners.

Compliance with the Sanctioned Scheme
The court observed that the sanctioned scheme allowed for VRS to surplus workers in viable mills. The NTC's actions, including the introduction of MVRS, were in line with the scheme's provisions. The court also noted that NTC had filed an application with BIFR seeking modification of the scheme, which was pending.

Alleged Infringement of Legal Rights
The court found that the petitioners failed to demonstrate any infringement of their legal rights. The NTC had no intention of dispensing with their services if they did not opt for VRS. The court emphasized that the petitioners' grievances were hypothetical and imaginary.

Conclusion
The court concluded that this was not a fit case for exercising discretion under Article 226 of the Constitution. The appeal was allowed, and the impugned judgment was set aside. The court highlighted the need for judicial restraint in administrative actions and the importance of public interest in deciding whether to intervene.

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