Revival scheme for sick industrial company upheld as workers' plan prevailed over a late competing proposal.

A belated shareholder-backed revival proposal was rejected because it came after sanction of the workers' scheme and lacked firm institutional support, practical certainty, and protection against delay to employees. The workers' revival plan was accepted as the more workable scheme, supported by banks, government backing, and worker sacrifice. The statutory revival framework was treated as permitting reduction of shareholders' interests and transfer of shares to employees where necessary for reconstruction or revival, and the feasible and viable workers' scheme was approved for implementation.

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Issues: (i) Whether the belated scheme proposed by a shareholder deserved consideration in preference to the workers' scheme already sanctioned by the Board. (ii) Whether the workers' revival scheme sanctioned by the Board ought to be approved by the Court.

Issue (i): The proposed alternative scheme was presented after the Board had already sanctioned the workers' scheme and lacked concrete support from banks or financial institutions. It did not show firm financial backing, certainty of implementation, or any assurance that delay would not prejudice the workers. The Court compared the competing schemes and found the workers' scheme substantially more workable, supported by institutional commitments and worker sacrifice.

Conclusion: The belated alternative scheme was rejected and was not permitted to displace the workers' scheme.

Issue (ii): The statutory framework governing revival of sick industrial companies authorised reduction of shareholders' interests and transfer of shares to employees where necessary for reconstruction or revival. The Board had found the workers' scheme feasible and viable, and the Court accepted that finding. The scheme was backed by banks and governments, protected the interests of the employees, and was consistent with the objects of the special enactment and the Court's constitutional power to direct effective implementation.

Conclusion: The workers' scheme was approved and accorded the Court's imprimatur.

Final Conclusion: The revival plan framed for the sick industrial unit was upheld, while the competing late proposal was declined, so that implementation of the workers' scheme could proceed with immediate effect.

Ratio Decidendi: Where a revival scheme for a sick industrial company is found feasible and viable under the special statutory regime, supported by institutional commitments and designed in furtherance of reconstruction and employment protection, the Court may approve it and refuse a later competing proposal lacking comparable financial and practical certainty.

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