{"id":157927,"date":"2006-04-26T00:00:00","date_gmt":"2006-04-25T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/state-of-u-p-and-anr-vs-uptron-employees-union-cmd-i-and-on-26-april-2006"},"modified":"2019-04-09T07:55:50","modified_gmt":"2019-04-09T02:25:50","slug":"state-of-u-p-and-anr-vs-uptron-employees-union-cmd-i-and-on-26-april-2006","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/state-of-u-p-and-anr-vs-uptron-employees-union-cmd-i-and-on-26-april-2006","title":{"rendered":"State Of U.P. And Anr vs Uptron Employees’ Union Cmd-I And … on 26 April, 2006"},"content":{"rendered":"
Supreme Court of India<\/div>\n
State Of U.P. And Anr vs Uptron Employees’ Union Cmd-I And … on 26 April, 2006<\/div>\n
Author: B Singh<\/div>\n
Bench: B.P. Singh, Altamas Kabir<\/div>\n
           CASE NO.:\nAppeal (civil)  6217 of 1999\n\nPETITIONER:\nSTATE OF U.P. and ANR.\n\nRESPONDENT:\nUPTRON EMPLOYEES' UNION CMD-I and ORS.\n\nDATE OF JUDGMENT: 26\/04\/2006\n\nBENCH:\nB.P. SINGH & ALTAMAS KABIR\n\nJUDGMENT:\n<\/pre>\n
JUDGMENT<\/p>\n
B.P. SINGH, J.\n<\/p>\n
The State of Uttar Pradesh is the appellant in these appeals Civil Appeal
\nNo. 6176\/1999 has been preferred against the order of the Board of
\nIndustrial and Financial Reconstruction (hereinafter referred to as the
\n“BIFR”) dated 28.8.1998 whereby it directed the State of Uttar Pradesh to
\nmake on account payment to the workers towards their wages for the period
\nJune, 1998 on wards on humanitarian grounds. Civil Appeal Nos.
\n6171-6172\/1999 has been preferred against the order of the High Court of
\nDelhi whereby the writ petition preferred by the State of Uttar Pradesh
\nagainst the order of BIFR dated 27.8.1997, as affirmed by the Appellate
\nAuthority vide its order dated 6.5.1998, was rejected. Civil Appeal No.
\n6217\/1999 has been preferred against the interim order of the High Court of
\nJudicature at Allahabad, Bench at Lucknow dated 23.12.1998 directing the
\nState of Uttar Pradesh to pay salary to the workers of M\/s. UPTRON, as
\ndirected by the BIFR till the State Government takes final decision in the
\nmatter relating to revival\/rehabilitation proposal made by it.\n<\/p>\n
A few facts which are relevant may be noticed at the threshold. M\/s. UPTRON
\nis a company incorporated under the Companies Act, 1956 and is a subsidiary
\nof U.P. Electronics Corporation, a company wholly owned and controlled by
\nthe State of Uttar Pradesh. UPTRON became a sick industry since its net
\nworth became negative and, therefore, a Reference was made under Section 15
\nof The Sick Industrial Companies (Special Provisions) Act, 1985
\n(hereinafter referred to as “SICA”). The Reference was made on 22.1.1994
\nand M\/s. UPTRON was declared a sick industry on 19.8.1994. The Industry
\nFinance Corporation of India (IFCI) was appointed the Operating Agency. It
\nappears from the record that advertisements were issued in normal course
\ninviting proposals for take over and\/or revival of the sick unit. From the
\nOrder of the BIFR dated 27.8.1997 it appears that advertisement was issued
\npursuant to its order dated 29.1.1997 but no viable acceptable offer was
\nreceived. The Company had proposed a one time settlement whereby it offered
\nto pay off 100% of the principal amount and only 25% of the interest due.
\nHowever, for whatever reasons this proposal made no progress in the absence
\nof a confirmation by the State Government. M\/s. UPTRON India Ltd. stated
\nthat it had made a fresh proposal which had been submitted to the
\nGovernment and that the Government was likely to consider it on 1.9.1997.
\nIn these circumstances, the BIFR considered the matter and passed certain
\ndirections by its order of 27.8.1997. It directed the Operating Agency to
\nmake an indepth study of the proposal submitted by M\/s. UPTRON to the State
\nGovt, of Uttar Pradesh and to make its suggestions. It was directed to
\nsubmit its report within 10 weeks after holding a joint meeting with the
\nconcerned parties. It also directed the Managing Director of M\/s. UPTRON to
\ndiscuss the matter further the concerned banks with a view to obtain their
\nconsent as to the minimum acceptable quantum of one time settlement and
\nquantum of sacrifices in terms of waiver of interest. M\/s. UPTRON was also
\ndirected to have discussions with the Chief Secretary of the Govt. of Uttar
\nPradesh in regard to the quantum of funds proposed to be inducted by the
\nGovt. of Uttar Pradesh for revival\/rehabilitation of M\/s. UPTRON. The last
\ndirection made by the BIFR was in the nature of a direction to the Govt. of
\nUttar Pradesh to make arrangements for payment of salaries\/wages of the
\nworkers till the proposed package of revival\/rehabilitation of M\/s. UPTRON
\nwas finalised by the BIFR. This last direction for payment of
\nsalaries\/wages to the workers of M\/s. UPTRON was challenged by the U.P.
\nElectronics Corporation before the Appellate authority under SICA which was
\ndismissed. Thereafter, the State of Uttar Pradesh filed a writ petition
\nbefore the High Court of Delhi which was dismissed by order dated 9.9.1998.
\nAs noticed earlier, C.A. Nos. 6171-6172\/1999 have been preferred against
\nthe aforesaid order of the High Court of Delhi.\n<\/p>\n
From the order of the BIFR dated 28.8.1998 it would appear that there was a
\nproposal submitted by the State of U.P. for the revival of M\/s. UPTRON. The
\nOperating Agency was directed to examine the proposal and hold a joint
\nmeeting and submit its report by 17.7.1998. It also appears that the
\nOperating Agency prepared a background note to be considered in the joint
\nmeeting wherein it was estimated that a sum of Rs. 171.04 crores was
\nrequired for the revival of the sick industrial unit. The fund was to be
\nprovided by the Govt. of Uttar Pradesh. The joint meeting considered the
\nproposals of the Govt. of Uttar Pradesh in the light of the background note
\nprepared by the Operating Agency and though no final decision was taken,
\nthe financial institutions and the banks took time to consider the matter
\nparticularly by reference to the working capital loans after receiving the
\nconcrete proposal from M\/s. UPTRON. Ultimately, the State Bank of India on
\nbehalf of the consortium of banks did not respond and it appears that no
\nfurther development took place. The Operating Agency also found the
\nproposal received from the State Government to be sketchy and not providing
\nany details relating to the assumptions underlying the projections.\n<\/p>\n
It appears from the said order that the Special Secretary of the Govt. of
\nUttar Pradesh submitted before the BIFR that the revival package for the
\ncompany has been discussed with the Chief Secretary and thereafter the
\nChief Minister. Although the same had been approved in principle by the
\nChief Minister, the matter had been sent to the Prime Minister’s office who
\nsought commitment from the State Government about its contribution. Some
\ntime was prayed for to enable the Government to take a decision in the
\nmatter and to convey its views. The order of the BIFR also notes the fact
\nthat the State Government had given a sum of Rs. 6.98 crores in addition to
\nRs. 2 crores for payment of salaries by way of loan carrying interest @ 22%
\nper annum. The workers had received their wages for the period November,
\n1997 to May, 1998 but no payment had been made for the period subsequent
\nthereto. The order of the BIFR thereafter directed the State Government to
\nmake on account payment to the workers towards their wages after May, 1998
\n. This order of the BIFR is challenged before us in C.A. No. 6176\/1999.\n<\/p>\n
In the same order the BIFR noted that the case had been before the Board
\nsince August, 1994 and no rehabilitation scheme could be finalised
\nprimarily on account of the State Government not being able to take a
\ndecision regarding infusion of funds for rehabilitation of the company. It,
\ntherefore, directed the Government of Uttar Pradesh to convey their
\ndecision positively within eight weeks to the Operating Agency and the BIFR
\nwhether it could induct Rs. 171.04 crores as envisaged in the scheme
\nsubmitted by the Government of Uttar Pradesh for the revival of M\/s.
\nUPTRON. The Board also indicated that in case the State Government was not
\nagreeable to provide the amount as aforesaid, the Bench may pass further
\nappropriate orders which may include issue of show cause notice for winding
\nup of the company without holding any further hearing. If the Govt. of
\nUttar Pradesh was willing to provide the necessary funds the directions
\nwould be made accordingly. Some other directions were made which we do not
\nconsider necessary to notice at this stage.\n<\/p>\n
While the position stood thus, the M\/s. UPTRON Employees Union – respondent
\nNo. 1 herein and two other associations of the workers and officers of M\/s.
\nUPTRON filed a writ petition before the High Court of Judicature at
\nAllahabad, Lucknow wherein it was stated that the Cabinet of Uttar Pradesh
\nhad taken a decision of closure of M\/s. UPTRON on 1.12.1998 as appeared
\nfrom the press reports. The press report showed that M\/s. UPTRON had
\nincurred a loss to the tune of Rs. 330 crores which was not the correct
\nfigure. Having regard to the fact that financial institutions were willing
\nto waive a part of the liability, the loss if any was only Rs.93 crores.
\nReliance was placed on a photocopy of news item published on 2.12.1998 in
\nthe Hindustan Times a local daily. In the writ petition it was prayed that
\na writ of mandamus be issued restraining the Govt. of U.P. from
\nimplementing the Cabinet decision of December 01, 1998. It was also prayed
\nthat a writ of mandamus be issued restraining the opposite parties from
\nclosing the Company without waiting for the decision of BIFR. It was also
\nprayed that a suitable direction be issued to the opposite party to honour
\nthe order of BIFR dated 27.8.1997 for payment of salary to the employees of
\nM\/s.UPTRON. It is not necessary to notice the other prayers in the writ
\npetition. In this writ petition an interim order was passed by the High
\nCourt on 23.12.1998. From a perusal of the order of the High Court it
\nappears that the Additional Advocate General for the State objected to the
\nmaintainability of the writ petition inasmuch as the matter was pending
\nbefore the BIFR. He also informed the Court that the State Government had
\nnot passed any order regarding closure of M\/s. UPTRON. This was
\ncontroverted by the writ petitioners who asserted that such a decision had
\nbeen taken by the Cabinet and in fact the Principal Secretary (Electronics)
\nof the State of U.P. had passed an order on 9.12.1998 for the
\nrehabilitation of the workers. The High Court noticed the submission urged
\non behalf of the State Government that it had not yet taken a final
\ndecision to close         M\/s. UPTRON and the matter was being considered
\nby the BIFR, and the State Government had been asked to indicate as to
\nwhether it was in a financial position to revive the unit. The High Court
\npassed an interim order in view of the aforesaid circumstances directing
\nthe State Government to pay salary to the workers pursuant to the order
\npassed by the BIFR till the State Government took a final decision in that
\nregard. C.A. Nos. 6216-6217\/1999 have been preferred against the said
\ninterim order of the High Court of Judicature at Allahabad, Lucknow Bench,
\nLucknow.\n<\/p>\n
In all the appeals before us the submission urged on behalf of the State of
\nUttar Pradesh is that the BIFR had no jurisdiction in a proceeding under
\nSICA to make a direction to the State Government to pay the wages due to
\nthe workers of a sick company. It has also been the stand of State of Uttar
\nPradesh that M\/s. UPTRON India Ltd. is a subsidiary of U.P. Electronics
\nCorporation Limited, which is a company wholly owned and controlled by the
\nState of Uttar Pradesh. In any event, it was submitted that there was no
\nprovision in the SICA which authorises the BIFR to pass an order directing
\nthe State of Uttar Pradesh to pay the salaries\/wages of the employees of a
\nsick company in regard to which an inquiry is pending before the BIFR.\n<\/p>\n
One fact which may be noticed is that the Government of Uttar Pradesh has
\nsince informed the BIFR by its letter of 12.1.1999 that it is not willing
\nto induct any further funds for the revival\/rehabilitation of M\/s. UPTRON.
\nIt is suggested that in the circumstances the BIFR may, if so advised, wind
\nup M\/s. UPTRON since the State Government is not in a position to provide
\nthe requisite funds for its revival.\n<\/p>\n
In view of the submissions urged before us it is necessary to notice the
\nrelevant provisions of the SICA. There is no dispute about the fact that
\nM\/s. UPTRON is a sick company within the meaning of that term in SICA. A
\n“sick industrial company” has been defined under Section 3(0) of the Act to
\nmean, an industrial company (being a company registered for not less than
\nfive years) which has at the end of any financial year accumulated losses
\nequal to or exceeding its entire net worth. There is no dispute that the
\nnet worth of M\/s. UPTRON is negative. Under Section 15 of SICA if any
\nindustrial company has become sick an obligation is cast upon its Board of
\nDirectors to make a Reference to the BIFR for determination of the measures
\nwhich shall be adopted with respect to the company. This has to be done in
\nthe manner and within the period prescribed by Section 15. on receiving
\nsuch a Reference, the BIFR is required by Section 16 of the Act to make
\nsuch inquiry as it may deem fit for determining whether any industrial
\ncompany has become a sick industrial company. If after making inquiry under
\nSection 16, the BIFR is satisfied that the company has become a sick
\nindustrial company, it is required to decide as soon as may be by order in
\nwriting whether it is practicable for the company to make its network
\nexceed the accumulated losses within a reasonable time. This is provided in
\nSection 17 of SICA. Sub-section (2) of Section 17 is applicable if it is
\nfound practicable for a sick industrial company to make its net worth
\nexceed the accumulated losses within a reasonable time. In such a situation
\nthe BIFR may give to such a company directions so as to enable it to make
\nits network exceed the accumulated losses. However, if that is not
\npossible, the BIFR must proceed under sub-section (3) of Section 17. If the
\nBoard comes to the conclusion that it is necessary or expedient in the
\npublic interest to adopt all or any of the measures specified in Section 18
\nin relation to the said company, it may as soon as may be, by order in
\nwriting, direct the operating agency specified in the order to prepare a
\nscheme providing for such measures in relation to the company. Under
\nSection 18 the Operating Agency is required to prepare such a scheme with
\nrespect to such a company providing for any one or more of the measures
\nenumerated in sub-clauses (a) to (f) of sub-section (1) of Section 18. The
\nscheme prepared by the Operating Agency is then examined by the BIFR and
\nnecessary steps taken in accordance with the remaining provisions of
\nSection 18. Section 19 deals with Schemes which relate to preventive,
\nameliorative, remedial and other measures with respect to any sick
\nindustrial company. In such a scheme provision is made for financial
\nassistance by way of loans, advances or guarantees or reliefs or
\nconcessions or sacrifices from the Central Government, a State Government,
\nany scheduled bank or other bank, a public financial institution or State
\nlevel institution or any institution or other authority etc.<\/p>\n
Section 20 of the Act mandates that where the BIFR after making inquiry
\nunder Section 16 after consideration of the relevant facts and
\ncircumstances, and after giving an opportunity of being heard to all the
\nparties, is of the view that the sick industrial company is not likely to
\nmake its net worth exceed the accumulated losses within a reasonable time
\nwhile meeting all its financial obligations, and that the company as a
\nresult thereof is not likely to become viable in future, and that it is
\njust and equitable that the company should be wound up, shall forward its
\nopinion to the concerned High Court, which on the basis of the opinion of
\nthe Board, may order winding up of the sick industrial company in
\naccordance with the provisions of the Companies Act.\n<\/p>\n
None of the provisions noticed above provide that while considering a
\nscheme for revival, the BIFR has authority to direct payment of wages to
\nthe workers of the sick industrial company. It is quite apparent that
\nthough the matter has remained under consideration of the BIFR since the
\nyear 1994 no viable acceptable proposal has so far been received. At one
\ntime the State of Uttar Pradesh had shown some interest in reviving the
\nsick unit but now by its letter dated 12.1.1999 it has made its position
\nclear that it is not in a position to induct the necessary funds. In fact,
\nit had suggested that the unit may be wound up.\n<\/p>\n
Learned counsel appearing on behalf of the State of Uttar Pradesh has
\nreferred to the decisions of this Court in the case of A.K. Bindal and Anr.
\nv. Union of India and Ors.,<\/a> [2003] 5 SCC, 163 and Officer & Supervisors of
\nI.D.P.L. v. Chairman & M.D., I.D.P.L. and Ors.,<\/a> [2003] 6 SCC, 490 and
\nsubmitted that in similar circumstances this Court held in A.K. Bindal’s
\ncase (supra) that if a sick industrial company sustaining losses
\ncontinuously over a period, failed to pay salaries and dues to its
\nemployees, the workmen and employees cannot claim any legal right to ask
\nfor a direction to the Central Government to meet the additional
\nexpenditure which may be incurred on account of revision of pay scales. We
\nnotice that the aforesaid decision was rendered in a case where the company
\nconcerned had been declared to be a sick industrial company under SICA and
\nthe matter was under consideration of the BIFR. This Court observed:\n<\/p>\n
“17. The legal position is that identity of the government company remains
\ndistinct from the Government. The government company is not identified with
\nthe Union but has been placed under a special system of control and
\nconferred certain privileges by virtue of the provisions contained in
\nSections 619 and 620 of the Companies Act. Merely because the entire
\nshareholding is owned by the Central Government will not make the
\nincorporated company as Central Government. It is also equally well settled
\nthat the employees of the government are not civil servants and so are not
\nentitled to the protection afforded by Article 311 of the Constitution
\n(Pyare Lal Sharma v. Managing Director). Since<\/a> employees of government
\ncompanies are not government servants, they have absolutely no legal right
\nto claim that the Government should pay their salary or that the additional
\nexpenditure incurred on account of revision of their pay scale should be
\nmet by the Government. Being employees of the companies it is the
\nresponsibility of the companies to pay them salary and if the company is
\nsustaining losses continuously over a period and does not have the
\nfinancial capacity to revise or enhance the pay scale, the petitioners
\ncannot claim any legal right to ask for a direction to the Central
\nGovernment to meet the additional expenditure which may be incurred on
\naccount of revision of pay scales.”\n<\/p>\n
This Court specifically held that the economic viability or the financial
\ncapacity of the employer is an important factor which cannot be ignored
\nwhile fixing the wage structure, otherwise the unit itself may not be able
\nto function and may have to close down which will inevitably have
\ndisastrous consequences for the employees themselves.\n<\/p>\n
The same legal position has been reiterated by this Court in the case of
\nOfficer & Supervisors of I.D.P.L. v. Chairman & M.D., I.D.P.L. and Ors.<\/a>
\n(supra), this Court observed in paras 7 and 8 as under:-\n<\/p>\n
“7. In the above background, the question which arises for consideration is
\nwhether the employees of public sector enterprises have any legal right to
\nclaim revision of wages that though the industrial undertakings or the
\ncompanies in which they are working did not have the financial capacity to
\ngrant revision in pay scale, yet the Government should give financial
\nsupport to meet the additional expenditure incurred in that regard.\n<\/p>\n
8. We have carefully gone through the pleadings, the annexures filed by
\nboth sides and the orders passed by the BIFR and the judgments cited by the
\ncounsel appearing on either side. Learned counsel for the contesting
\nrespondent drew our attention to a recent judgment of this Court in A.K.
\nBindal v. Union of India<\/a> in support of her contention. We have perused the
\nsaid judgment. In our opinion, since the employees of government companies
\nare not government servants, they have absolutely no legal right to claim
\nthat the Government should pay their salary or that the additional
\nexpenditure incurred on account of revision of their pay scales should met
\nby the Government. Being employees of the companies, it is the
\nresponsibility of the companies to pay them salary and if the company is
\nsustaining losses continuously over a period and does not have financial
\ncapacity to revise or enhance the pay scale, the petitioners, in our view,
\ncannot claim any legal right to ask for a direction to the Central
\nGovernment to meet the additional expenditure which may be incurred on
\naccount of revision of pay scales. We are unable to countenance the
\nsubmission made by Mr. Sanghi that economic viability of the industrial
\nunit or the financial capacity of the employer cannot be taken into
\nconsideration in the matter of revision of pay scales of the employees.”\n<\/p>\n
We may observe that in both cases the earlier decision of this Court in
\nHeavy Engineering Mazdoor Union v. State of Bihar and Ors.,<\/a> [1969] 1 SCC,
\n765 was noticed and applied.\n<\/p>\n
Counsel for the respondents have placed reliance on Workmen of Rohtas
\nIndustries v. Rohtas Industries and Ors.,<\/a> [1995] Supp 4 SCC, 5. In that
\ncase this Court passed an order directing the State Government and the
\nCentral Government to contribute a sum Rs. 30 crores each with a view to
\nwork the industry which has closed down, having regard to its potential.
\nHowever, as noticed by the Court, the experiment did not yield any result
\nand this Court noted that the uprecedented course adopted by this Court of
\nassuming direct control over the functioning of the undertaking with a view
\nto secure its revival and rehabilitation had failed, and it was therefore
\nconstrained to put an end to the proceedings and permit resumption of the
\nwinding up proceedings before the High Court. It would, thus, appear that
\nthe order passed in the matter of Rohtas Industries (supra) was passed in
\nthe peculiar facts of the case and no principle had been laid down that in
\nsuch a case it is the duty or obligation of the State Government or the
\nCentral Government to provide funds for payment of dues of workers.
\nReliance was also placed on the decision of this Court in the case of
\nKapila Hingorani v. State of Bihar,<\/a> [2003] 6 SCC, 1. The order passed
\ntherein was passed in the peculiar facts and circumstances, where a large
\nnumber of employees employed in a large number of government corporations
\nand undertakings were not paid their dues for years together. Invoking the
\nprinciple enshrined in Articles 21 and 23 of the Constitution, this Court
\ndirected the State of Bihar to deposit a sum of Rs. 50 crores before the
\nHigh Court for disabursement of the salaries to the employees of the
\ncorporations. It also vested a discretion in the High Court to direct
\ndisabursement of some funds to the needy employees on adhoc basis so as to
\nenable them to sustain themselves for the time being. There was also a
\nclear direction that the rights of the workmen shall be considered in terms
\nof Section 529A of the Companies Act. There are observations in the
\njudgment of this Court to the effect that the Government\/public sector
\nundertakings being “State” would be constitutionally liable to respect life
\nand liberty of all persons in terms of Article 21 of the Constitution. They
\ntherefore, must do so in cases of their own employees. The Government of
\nthe State of Bihar for all intent and purport is the sole shareholder.
\nAlthough in law, its liability towards the debtors of the company may be
\nconfined to the shares held by it, but having regard to the deep and
\npervasive control it exercises over the government companies in the matter
\nof enforcement of human right and\/or rights of the citizen to life and
\nliberty, the State has also an additional duty to see that the rights of
\nthe employees of such corporations are not infringed. Having said so, the
\nCourt in para 74 of the judgment said,<\/p>\n
“74. We, however, hasten to add that we do not intend to lay down a law, as
\nat present advised, that the State is directly or vicariously liable to pay
\nsalaries\/remunerations of the employees of the public sector undertakings
\nor the government companies in all situations, We, as explained
\nhereinbefore, only say that the State cannot escape its liability when a
\nhuman rights problem of such magnitude involving the starvation deaths
\nand\/or suicide by the employees has taken place by reason of non-payment of
\nsalary to the employees of public sector undertakings for such a long
\ntime.”\n<\/p>\n
It would, thus, appear that this Court did not lay down any principle of
\nlaw of universal application and passed appropriate orders only in the
\ncompelling circumstances noticed by it. We are, therefore, satisfied that
\nin respect of a sick industrial company, even if it be a subsidiary of a
\ngovernment company, there is no legal obligation cast upon the State
\nGovernment to pay the wages due to the workmen. The rights of workmen are
\ngoverned by the relevant provisions of the Companies Act where their claim
\nhas been accorded priority. Moreover, in any view of the matter we find
\nnothing in SICA which authorises the BIFR to pass an interim order
\ndirecting the State Government in such circumstances to pay the wages due
\nto the employees of the sick industrial company. We, therefore, allow all
\nthese appeals and set aside the impugned orders.\n<\/p>\n
These appeals are, accordingly allowed with no order as to costs.\n<\/p>\n
Before parting with this case, we must notice that the proceedings under
\nSICA in the instant case are pending before the BIFR since August, 1994. We
\nare told that in view of the pendency of the appeals before this Court the
\nBIFR as well as the High Court did not proceed further in the matters. This
\nis rather unfortunate, because in the absence of any order of stay passed
\nby this Court in these proceedings, the High Court as well as the BIFR
\nshould have proceeded with the matters before them and concluded the
\nproceedings. It is most unfortunate that a sick industrial company which
\nneeds immediate attention and treatment has to wait for 12 years with no
\nresult in sight. The BIFR must be conscious of the fact that in the sick
\nindustrial companies the liabilities accummulate as time passes and,
\ntherefore, the condition of the sick unit becomes worse day after day. If a
\nproceeding before the BIFR is not concluded within a reasonable time, it
\nbecomes counter productive because rather than reviving the sick industrial
\nunit it makes it more sick and, therefore, it becomes even more difficult
\nto revive such an undertaking. One can well imagine what may be the dues
\nnow payable to the workmen and employees of the sick industrial company in
\nthis case. If no one was willing to submit a viable proposal in the year
\n1994, it will be even more difficult today to secure a proposal for the
\nrevival of the company. The pendency of the proceedings before the BIFR for
\nalmost 12 years has made the situation worse. The network of the sick unit
\nwas negative to begin with and as of date the dues to the workmen and the
\ninterest etc., payable to other creditors may have to be added to the
\nliabilities of the company. We only wish to impress upon the BIFR that
\nproceedings under SICA must not be kept pending for so long and having
\nregard to the fact that every day’s delay adversely affects the financial
\ncondition of the undertaking a final decision one way or the other must be
\ntaken within a reasonable time. We also cannot lose sight of the fact that
\nthe protective provisions of SICA places the creditors of the sick
\nindustrial company in a rather precarious position, since they are not able
\nto realize their dues from the sick industrial company in view of the
\nprovision of Section 22 of SICA. It is only desirable that the formulation
\nof the scheme and its execution must be done within a reasonable time.\n<\/p>\n
We do hope and trust that the BIFR will now take up the matter and dispose
\nof the proceedings within a short period, say, within a period of six
\nmonths from the date of receipt of a copy of this order or its production
\nby any of the parties before it. Similarly, the writ petition pending in
\nthe High Court should also be disposed of as early as possible and
\npreferably within a period of six months from today.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India State Of U.P. And Anr vs Uptron Employees’ Union Cmd-I And … on 26 April, 2006 Author: B Singh Bench: B.P. Singh, Altamas Kabir CASE NO.: Appeal (civil) 6217 of 1999 PETITIONER: STATE OF U.P. and ANR. RESPONDENT: UPTRON EMPLOYEES’ UNION CMD-I and ORS. DATE OF JUDGMENT: 26\/04\/2006 BENCH: B.P. SINGH […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-157927","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nState Of U.P. 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