9911796707
TMI Blog2006 (4) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... ses the BIFR to pass an interim order directing the State Government in such circumstances to pay the wages due to the employees of the sick industrial company. We, therefore, allow all these appeals and set aside the impugned orders. - CIVIL APPEAL NOS. 6171-6172, 6176 AND 6217 OF 1999 - - - Dated:- 26-4-2006 - B.P. SINGH AND ALTAMAS KABIR, JJ. Dinesh Dwivedi, Abhishek Choudhary and Ms. Kavita Wadia for the Appellant. Prateek Jalan, Ms. Malvika Trivedi, A.K. Raina, Vikram Dholakia, Niel Hilduth, Shiraz C. Patodia, Sanjay Kapur, Mrs. Shubra Kapur, Rajiv Kapur, Miss Arti Singh, Ms. Meera Mathur, S.K. Mehta, Mrs. Sarla Chandra, M.T. George, Ms. Meenakshi Arora and Pradeep Misra for the Respondent. JUDGMENT B.P. Singh J. - The State of Uttar Pradesh is the appellant in these appeals. Civil Appeal No. 6176/1999 has been preferred against the order of the Board of Industrial and Financial Reconstruction (hereinafter referred to as the BIFR ) dated 28-8-1998 whereby it directed the State of Uttar Pradesh to make on account payment to the workers towards their wages for the period June, 1998 onwards on humanitarian grounds. Civil Appeal Nos. 6171-6172/1999 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g a joint meeting with the concerned parties. It also directed the Managing Director of M/s. UPTRON to discuss the matter further with the concerned banks with a view to obtain their consent as to the minimum acceptable quantum of one time settlement and quantum of sacrifices in terms of waiver of interest. M/s. UPTRON was also directed to have discussions with the Chief Secretary of the Government of Uttar Pradesh in regard to the quantum of funds proposed to be inducted by the Government of Uttar Pradesh for revival/rehabilitation of M/s. UPTRON. The last direction made by the BIFR was in the nature of a direction to the Government of Uttar Pradesh to make arrangements for payment of salaries/wages of the workers till the proposed package of revival/rehabilitation of M/s. UPTRON was finalised by the BIFR. This last direction for payment of salaries/wages to the workers of M/s. UPTRON was challenged by the U.P. Electronics Corporation before the Appellate authority under SICA which was dismissed. Thereafter, the State of Uttar Pradesh filed a writ petition before the High Court of Delhi which was dismissed by order dated 9-9-1998. As noticed earlier, C.A. Nos. 6171-6172/1999 have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FR is challenged before us in C.A. No. 6176/1999. 5. In the same order the BIFR noted that the case had been before the Board since August, 1994 and no rehabilitation scheme could be finalised primarily on account of the State Government not being able to take a decision regarding infusion of funds for rehabilitation of the company. It, therefore, directed the Government of Uttar Pradesh to convey their decision positively within eight weeks to the Operating Agency and the BIFR whether it could induct Rs. 171.04 crores as envisaged in the scheme submitted by the Government of Uttar Pradesh for the revival of M/s. UPTRON. The Board also indicated that in case the State Government was not agreeable to provide the amount as aforesaid, the Bench may pass further appropriate orders which may include issue of show-cause notice for winding up of the company without holding any further hearing. If the Government of Uttar Pradesh was willing to provide the necessary funds the directions would be made accordingly. Some other directions were made which we do not consider necessary to notice at this stage. 6. While the position stood thus, the M/s. UPTRON Employees Union - respondent N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the BIFR till the State Government took a final decision in that regard. C.A. Nos. 6216-6217/1999 have been preferred against the said interim order of the High Court of Judicature at Allahabad, Lucknow Bench, Lucknow. 7. In all the appeals before us the submission urged on behalf of the State of Uttar Pradesh is that the BIFR had no jurisdiction in a proceeding under SICA to make a direction to the State Government to pay the wages due to the workers of a sick company. It has also been the stand of State of Uttar Pradesh that M/s. UPTRON India Ltd. is a subsidiary of U.P. Electronics Corporation Limited, which is a company wholly owned and controlled by the State of Uttar Pradesh. In any event, it was submitted that there was no provision in the SICA which authorises the BIFR to pass an order directing the State of Uttar Pradesh to pay the salaries/wages of the employees of a sick company in regard to which an inquiry is pending before the BIFR. 8. One fact which may be noticed is that the Government of Uttar Pradesh has since informed the BIFR by its letter of 12-1-1999 that it is not willing to induct any further funds for the revival/rehabilitation of M/s. UPTRON. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Operating Agency is required to prepare such a scheme with respect to such a company providing for any one or more of the measures enumerated in sub-clauses ( a ) to ( f ) of sub-section (1) of section 18. The scheme prepared by the Operating Agency is then examined by the BIFR and necessary steps taken in accordance with the remaining provisions of section 18, section 19 deals with Schemes which relate to preventive, ameliorative, remedial and other measures with respect to any sick industrial company. In such a scheme provision is made for financial assistance by way of loans, advances or guarantees or reliefs or concessions or sacrifices from the Central Government, a State Government, any scheduled bank or other bank, a public financial institution or State level institution or any institution or other authority etc. 10. Section 20 of the Act mandates that where the BIFR after making inquiry under section 16 after consideration of the relevant facts and circumstances, and after giving an opportunity of being heard to all the parties, is of the view that the sick industrial company is not likely to make its net worth exceed the accumulated losses within a reasonable time wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated company as Central Government. It is also equally well-settled that the employees of the Government company are not civil servants and so are not entitled to the protection afforded by Article 311 of the Constitution ( Pyare Lal Sharma v. Managing Director ). Since employees of Government companies are not Government servants, they have absolutely no legal right to claim that the Government should pay their salary or that the additional expenditure incurred on account of revision of their pay scale should be met by the Government. Being employees of the companies it is the responsibility of the companies to pay them salary and if the company is sustaining losses continuously over a period and does not have the financial capacity to revise or enhance the pay scale, the petitioners cannot claim any legal right to ask for a direction to the Central Government to meet the additional expenditure which may be incurred on account of revision of pay scales." This Court specifically held that the economic viability or the financial capacity of the employer is an important factor which cannot be ignored while fixing the wage structure, otherwise the unit itself may not be able to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Industries 1995 Suppl. (4) SCC 5. In that case this Court passed an order directing the State Government and the Central Government to contribute a sum of Rs. 30 crores each with a view to work the industry which has closed down, having regard to its potential. However, as noticed by the Court, the experiment did not yield any result and this Court noted that the unprecedented course adopted by this Court of assuming direct control over the functioning of the undertaking with a view to secure its revival and rehabilitation had failed, and it was therefore, constrained to put an end to the proceedings and permit resumption of the winding up proceedings before the High Court. It would, thus, appear that the order passed in the matter of Rohtas Industries case ( supra ) was passed in the peculiar facts of the case and no principle had been laid down that in such a case it is the duty or obligation of the State Government or the Central Government to provide funds for payment of dues of workers. Reliance was also placed on the decision of this Court in the case of Kapila Hingorani v. State of Bihar [2003] 6 SCC 1. The order passed therein was passed in the peculiar facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We are, therefore, satisfied that in respect of a sick industrial company, even if it be a subsidiary of a Government company, there is no legal obligation cast upon the State Government to pay the wages due to the workmen. The rights of workmen are governed by the relevant provisions of the Companies Act where their claim has been accorded priority. Moreover, in any view of the matter we find nothing in SICA which authorises the BIFR to pass an interim order directing the State Government in such circumstances to pay the wages due to the employees of the sick industrial company. We, therefore, allow all these appeals and set aside the impugned orders. 16. These appeals are, accordingly allowed with no order as to costs. 17. Before parting with this case, we must notice that the proceedings under SICA in the instant case are pending before the BIFR since August, 1994. We are told that in view of the pendency of the appeals before this Court the BIFR as well as the High Court did not proceed further in the matters. This is rather unfortunate, because in the absence of any order of stay passed by this Court in these proceedings, the High Court as well as the BIFR should have ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
