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TMI Blog2006 (12) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... neral meeting of the company on 24-6-2005. By such resolution the company had resolved that steps be taken for it to be wound up. 2. The Rehabilitation Industries Corporation Ltd. ( the company ), was incorporated in 1959, and promoted by the Central Government, inter alia, to establish industries and enterprises to provide employment to displaced persons from erstwhile East Pakistan and West Pakistan and repatriates for the then Burma and the then Ceylon. 3. In the course of time funds have been poured into the company by the Central Government in furtherance of the cause for which the company was set up. There was little or no return but that was a social cost that the Central Government incurred through the instrumentality of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany complained that its right to the land in its occupation would be in jeopardy if the company was wound up. A claimant in an arbitration reference involving the company sought protection of its claim. Another employee and a creditor wanted their claims to be secured. 6. The company has relied on a notice issued on its behalf on September 1 and 4, 2000. By such notice a revised VSS for the employees of the company was introduced. The opening lines of such notice reads as follows : "It is notified to all concerned that Government of India proposes to close down Rehabilitation Industries Corporation Ltd. On closure compensation to the employees will be paid as per provision of the Industrial Disputes Act, 1947. However, as a safety ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of workman." 8. The decision to close down the company was challenged as to the authority of the Central Government to declare closure. Such challenge failed in W. P. No. 128 of 2001. It appears from the final order in that writ petition that a question relating to the closure had been referred to the Industrial Disputes Tribunal and in view of the pendency of the dispute, the court did not enter into the question of validity of the approval granted under section 25-O of the Industrial Disputes Act, 1947. The question as to whether the Central Government had authority to issue the notice was answered in favour of the Central Government. 9. The Central Government made provision for the VSS to be honoured and in March, 2000, sanctio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion as to whether such employees should be afforded the VSS is pending consideration of this court in W.P. No. 2648 of 2001. 12. The latest audited annual accounts of the company have been placed. The directors have reported that the operations in all undertakings of the company continued to remain dosed. The accumulated losses of the company are more than 50 per cent of its net worth. Cash losses continue to be incurred by the company each year. The unsecured loan of the company as at 31-3-2006, is a staggering Rs. 689 crores. 13. In view of the net worth of the company having been eroded, the company had made a reference to the Board for Industrial and Financial Reconstruction under the Sick Industrial Companies (Special Provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed upon the company being wound up. 16. The order of winding up does not lead to the obliteration of the company. This is what happens upon dissolution and the company s name being finally struck off. The rights and liabilities of the company and against it remain, but the machinery to enforce it or be proceeded against alters upon the order of winding up being made. 17. There is no conflict with a company being wound up despite complaints and questions under the Act of 1947, remaining unresolved. The decision in Bombay Metropolitan Transport Corpn. Ltd. v. Employees of Bombay Metropolitan Transport Corpn. Ltd. (CIDCO) [1991] 71 Comp. Cas. 473 (Bom.), is authority for such purpose. In the Act of 1947, the workers interest are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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