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....dv., Mr. Dhruv Mehta, Sr. Adv., Ms. Ruby Singh Ahuja, Adv., Ms. Meenakshi Grover, Adv., Mr. Vishal Singh, Adv., Ms. Akanksha Thapa, Adv., Ms. Kritika Sachdeva, Adv., Ms. Megha Dugar, Adv., Ms. Anupama Dhurve, Adv., Mr. Amit Bhandari, Adv., M/S. Karanjawala & Co., AOR, Mr. Vikas Singh, Sr. Adv., Mr. Vijayendra Pratap Singh, Adv., Ms. Vatsala Rai, Adv., Mr. Tanmay Sharma, Adv., Ms. Shubhangni Jain, Adv., Ms. Mitali Umat, Adv., Mr. Abhay Pratap Singh, AOR Mr. Santosh Paul, Sr. Adv., Mr. Snehasish Mukherjee, AOR Mr. Maneesh, Adv., Mr. Balbir Singh, Sr. Adv., Mr. Arun Kathpalia, Sr. Adv., Mr. Abhijnan Jha, AOR Ms. Simran Bhat, Adv., Mr. Shivam Jain, Adv., Mr. Shiv Mangal Sharma, A.A.G. Ms. Sonali Gaur, Adv., Ms. Nidhi Jaswal, AOR Mr. Rameshwar Prasad Goyal, AOR Mr. Barun Kumar Sinha, Adv., Mrs. Pratibha Sinha, Adv., Mr. Sneh Vardhan, Adv., Mr. Rakesh Mudgal, Adv., Mr. Pankaj Kumar Shukla, Adv., Mr. Vaibhav Singh, Adv., Mr. Chhal Bihari Singh, Adv., Mr. Arun K. Sinha, AOR Mr. Ansar Ahmad Chaudhary, AOR Ms. Tulika Mukherjee, AOR Mr. Anuvrat Sharma, AOR Ms. Chitrangda Rastravara, AOR Mr. Abhijeet Singh, Adv., Mr. Anirudh Singh, Adv., Mr. Aishwary Mishra, Adv., Mr. Dhananjai Shekhwat, Adv.,....
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.... of action for the assets of JUL and JAIL 98-99 190-195 04 RELIEFS Regarding dues of the workmen 100 196-196.1 Houses/ Flats in possession of workers 100 - 101 196.2 Assets of JUL and JAIL 101 196.3 Sale of Properties of JUL and JAIL 101 -102 196.4 Sale of assets by GDCL 102 196.5 -196.6 Company Petition No. 21 of 2001 pending in Rajasthan High Court 103 196.7 Regarding applications filed by M/s Frost Reality LLP and M/s Dickey Asset Management Private Limited 103 197 Court Administrator 103-105 198-199 BRIEF FACTS 1. The case in hand has a checkered history. 2. A writ petition was filed in this Court praying for the following reliefs: (a) For a writ of mandamus or order or direction to the Respondents to forthwith pay the wages and dues of the workmen of the M/s Jaipur Udyog Ltd. and its units including M/s Kanpur Jute Udyog. (b) For a writ of mandamus or order or direction to the Respondents to forthwith implement the Award dated 05.12.2008 passed by Justice N.N. Mathur (Retd.) in favour of the workmen. (c) For a writ of mandamus or order or ....
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....t Kanpur. JUL was declared a 'sick industry' vide order dated 17.09.1987 passed by BIFR [Board for Industrial and Financial Reconstruction (For short, 'BIFR')] under Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 [The Sick Industrial Companies (Special Provisions) Act, 1985 (For short, 'SICA')]. 5. On 21.04.1992, a rehabilitation scheme submitted by GDCL was sanctioned by BIFR. JUL was to be reconstituted as a going concern under the scheme. Inter alia, sale of the assets was permitted only to the extent those were surplus or some scrap. The sale proceeds were to be utilized for renovation of the plant. Otherwise, GDCL was to infuse its own funds. There were a lot of waivers/concessions given by the banks and other financial institutions. In addition to that, there were other conditions also laid down in the scheme. 6. On 19.09.1994, it was found by the BIFR that the proposal submitted by GDCL could not be implemented. It called for fresh proposals. With the aforesaid order, the 1992 scheme, sanctioned by the BIFR, had gone into eclipse as BIFR passed an order calling for fresh proposals. This order was challenged by GDCL before AAIFR [Appella....
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....ns. [Cement Workers Karamchari Sangh V. Jaipur Udyog Ltd., 2008 INSC 390; (2008) 4 SCC 701] 13.1 Firstly, Appeal No. 22 of 2001 was restored to AAIFR on conditions of deposit of Rs.10 crores. Liberty was given to the AAIFR to consider a fresh scheme at the instance of GDCL and also the workmen. 13.2 Secondly, the status of appointment of Justice N.N. Mathur (Retd.) was converted into an Arbitrator under Section 10-B added in the Industrial Disputes Act, 1947, vide local amendment made in the State of Rajasthan vide Act No. 34 of 1958, w.e.f. 01.07.1960. 14. It was submitted that, up to this stage, the order passed by BIFR recommending winding up of JUL was existing and further GDCL did not have any locus, as initial order passed in its favour for rehabilitation of JUL had lost significance with the passing of winding up order on 24.11.2000. 15. On 06.06.2008, on pre-deposit as directed by this Court, the appeal filed by GDCL/JUL before AAIFR was restored. Fresh schemes were submitted by the workers as well as by GDCL. At that stage M/s Shree Cements Ltd. [M/s. Shree Cements Ltd. (for short, 'SCL')] filed application (M.A. No. 185 of 2008 in Appeal No. 22 of 2001) for im....
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....ered with Rajasthan High Court as Company Petition No. 21 of 2001. As per the records of the High Court, the matter was last taken up on 04.08.2020, wherein the High Court adjourned the same sine die, since the matter between the parties was pending before this Court. 22. During the pendency of the present writ petition before this Court, a settlement was arrived at between the workmen of Kanpur Jute Unit along with JUL and GDCL. In terms of that settlement, the workmen were to receive Rs.48.74 crores towards the claim of 1334 workmen out of a total of 3535 workers. The amount was to be paid by GDCL. It is despite the fact that GDCL did not have any right, either to settle on behalf of JUL or offer to pay wages to the workmen. However, nearly 7 years later, till date, even that amount has not been paid. Though it is claimed by GDCL that amount was deposited with this Court, however, it was submitted that Rs.20 crores out of that was by selling the scrap of JUL. Hence, the amount was not deposited out of its own funds by GDCL. It was further submitted that in the memorandum of settlement, it was wrongly recorded that the management of the JUL was transferred in favour of GDCL as ....
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....es remained unidentified. 27. As GDCL was not able to clear the dues of the workmen of Cement Unit they arranged for an investor who is ready to revive the company and also pay dues to the workmen. I.A.No. 170433/2024 was filed with the proposed scheme by M/s Frost Realty LLP. 28. On 23.08.2024, this Court was informed that GDCL had sold the properties of JUL without seeking permission of the Court. These alleged sales included three Sale Deeds executed by JUL and JAIL, involving properties in Kanpur, Sawai Madhopur, and Jodhpur. The sales included a Rs.51 Crore transaction for sale of Kanpur Jute Unit (June 2024), a Rs.21 Crore transaction (April 2021), and a Rs.2.84 Crore transaction (September 2022) for sale of properties of JAIL. All sale transactions were undervalued. The sales were made by GDCL to overcome its financial difficulties. This Court restrained GDCL and JUL from further alienating any assets, except scrap, which was permitted by this Court. Further direction was issued for deposit of Rs.51 crore from the Kanpur sale proceeds with the Registry within two weeks. The respondents at that time claimed the other properties belonged to JAIL, which was no longer a su....
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....s of the award by Justice Aftab Alam (Retd.), they do not have any concern with the company. All false promises are being made by different applicants. If the prayer in the writ petition is seen, it is for payment of wages only. 34. The submission is that as far as Kanpur Jute Unit is concerned, the settlement was for 1334 workmen. Out of which 938 have been paid and the balance remain. The amount due to them, to the tune of Rs.8.75 crores is lying deposited in this Court. 35. As far as Sawai Madhopur Unit is concerned, there were 3585 workers, out of which he represents a group of about 2000. Justice Aftab Alam's (Retd.) report calculated Rs.115 crores as the amount due to them, plus interest and the provident fund. Rs.146 crores are lying deposited in this Court. Another sum of Rs.150 crores will be required to clear the arrears of wages, provident fund plus interest thereon, for which verification is in progress. JUL presently has assets of about Rs.2000 crores. Adequate money being available, the workers are interested only in settlement of their dues as the amount was determined long back as the unit is lying closed since 1987. They should be paid some interest on accoun....
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....oticee No. 3 is thus evident. 41. It was further submitted that the scheme initially approved, was for revival of the unit, however, nothing was done. The assets of the Kanpur Jute Unit were sold by GDCL. In the garb of sale of scrap, even the machinery of Sawai Madhopur Unit was sold. In fact, it is from such sale proceeds only that the dues are being paid to the workmen. 42. As the dues of the workmen have not been paid despite decades having gone by, they have got investor to take over the unit and square off the dues of the workers. In his opinion, the offer by M/s Frost Reality LLP seems to be best, which has offered payment and in addition a 50 sq. yard plot at Sawai Madhopur besides Rs.1,00,000/- each to Kanpur Jute Unit workers. ARGUMENTS BY APPLICANTS I.A. No. 174033/2024 43. Mr. Krishnan Venugopal, learned senior counsel appearing for M/s Frost Realty, a Limited Liability Partnership (LLP), submitted that his client has given a proposal for rehabilitation of the unit in association with Bhartiya Cement Mazdoor Sangh, who is Noticee No. 1 before this Court. Vide order dated 29.10.2025 passed by this Court, M/s Frost Realty LLP was allowed to intervene. While....
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....ere under physical control of GDCL, without there being any right vested in it. Any property sold by GDCL is void and has to be declared so, without even issuing notice to the subsequent buyers. The buyers cannot be allowed to raise the plea of bona fide purchaser as they were required to do due diligence. In support of his argument reliance was placed upon the judgments of this Court in Kanhaiyalal v. Dr. D. R. Banaji & Ors. 1958 INSC 32; 1958 SCC OnLine SC 149, NGEF Ltd. vs. Chandra Developers (P) Ltd. 2005 INSC 459; (2005) 8 SCC 219 and Raheja Universal Limited Vs. NRC Limited and Ors. 2012 INSC 77; (2012) 4 SCC 148. 49. He further referred to the scheme prepared by M/s Frost Realty LLP. In terms of which subject to certain conditions, namely, setting aside of sale of Kanpur Jute Unit, others properties of JUL and JAIL, M/s Frost Realty LLP will pay Rs.233.69 crores, due to the workmen, allot plots measuring 50 sq. yards at Sawai Madhopur to all the workmen, refund the entire money, if any, deposited by GDCL from its own resources besides other small benefits for the workmen. 50. On a query by the Court, as to the properties owned by JUL and JAIL, reference was made to the....
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.... status of the properties/assets of JUL and JAIL sold during the pendency of the litigation. 55. Taking us through the historical background, it was submitted that JUL was declared a sick company under the SICA on 17.09.1987 by BIFR. Industrial Reconstruction Bank of India (IRBI) (which was later on renamed as 'Industrial Investment Bank of India" (IIBI)) was appointed as the operating agency to examine the viability and preparation of the scheme for rehabilitation of JUL. 56. On 30.01.1989, BIFR formed a prima facie opinion that JUL should be wound up. However, the recommendation for the purpose was vague. On 12.06.1989, in an appeal preferred against the aforesaid order, AAIFR directed the operating agency/IRBI to furnish fresh scheme. On 23.08.1990 GDCL submitted a proposal for taking over and revival of JUL. 57. On 21.04.1992 BIFR sanctioned the scheme. The workers preferred appeals against the aforesaid order. Vide order dated 13.04.1993, AAIFR approved the scheme of GDCL. On 20.10.1993 AAIFR directed GDCL to deposit Rs.3.035 crores by 10.11.1993. The condition was complied with by GDCL. 58. On 19.09.1994, BIFR called for fresh proposals as the earlier rehabilitati....
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.... dated 04.12.2006, this Court approved the aforesaid settlement. 65. In the aforesaid petition on 10.04.2007, this Court appointed Justice N.N. Mathur, a Retired Judge of the Rajasthan High Court, to determine the wages and other lawful dues payable to different categories of workmen. 66. Vide order dated 24.03.2008, this Court disposed of SLP (C) No.4088 of 2005 (C.A. No. 2076 of 2008), by converting the appointment of Justice N.N. Mathur (Retd.) into an Arbitrator under Section 10-B of the Industrial Disputes Act, 1947 as amended in the State of Rajasthan. 67. On 16.05.2008, JUL deposited Rs.10 crores. In the proceedings pending before the AAIFR after remand by the Rajasthan High Court, SCL filed an application for impleadment. The same was dismissed vide order dated 17.07.2008. The aforesaid order was challenged by SCL before Delhi High Court by filing W.P.(C) No.5878 of 2008. The same was disposed of by Delhi High Court by directing AAIFR to consider the scheme of SCL as well. The aforesaid order was challenged by GDCL before this Court by filing SLP(C)No. 22719 of 2008 wherein this Court vide order dated 22.09.2008 stayed further proceedings before the AAIFR. 67.1 ....
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....tition and C.A. No. 3927 of 2012 together. Vide the aforesaid order passed in the aforesaid writ petition, GDCL was directed to deposit Rs.35 crores with the Registry of this Court for payment to the workmen/beneficiaries. Notice was directed to be issued to various unions. 73. Vide order dated 21.08.2018, to make an effort to resolve the pending dispute of payment of wages of the workmen, this Court appointed Justice Aftab Alam, a former Judge of this Court as mediator for quantification of the dues. All along, the effort of GDCL was to clear the dues of the workmen. It had not shirked its responsibility towards that. Besides initial contributions, GDCL had deposited Rs.35 crores with this Court on 01.10.2016. Thereafter, the process of verification of claim of the workmen started, with appointment of retired District Judges for the purpose. 74. On 31.03.2019, Justice Aftab Alam (Retd.) submitted his report specifying the principles for calculating the dues of workers in the Sawai Madhopur and Phallodi Quarry units. This report fixed December 31, 2008, as the cut-off date for the cessation of employment and mandated that simple interest @5% per annum be applied to all dues f....
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....d that it was an error, for which an apology was tendered. 82. Vide order dated 23.08.2024, this Court directed GDCL to deposit the entire sale consideration of Rs.51 crores received from sale of Kanpur unit, with this Court. 83. Responding to the arguments raised by learned senior counsel for the petitioner and the applicants regarding the assets of JAIL, Mr. Mehta submitted that, for the last two decades no issue was raised with reference to the assets of JAIL or the shareholding pattern thereof. The issue cannot be permitted to be raised at this late stage. For the purpose of allotment of new shares of JAIL proper procedure under the Companies Act was followed. It was a sick unit. Money was required to be infused to put it on rails. 84. As far as the assets of JUL is concerned, he submitted that the record being very old, whatever is available with GDCL has been placed on record. He referred to a communication dated 24.09.2003 sent by JUL to the State Bank of India, New Delhi wherein it enumerated the details of title deeds of properties returned after the loans were repaid. JUL being sick, its entire properties were under mortgage. It was further submitted that more th....
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....ed with this Court. 88.1 The workers cannot be permitted to approbate and reprobate. Initially, the writ was filed only for getting the wages. Now after the same has reached at the fag end, proposals of rehabilitation are being submitted. Considering the present scenario there is no possibility of rehabilitation. The Kanpur Jute Mill had already been sold. The Cement unit at Rajasthan cannot function as there is neither mining lease nor any limestone available. 88.2 The action of the petitioner is also barred by doctrine of election. All along, they have been treating GDCL as the relevant party. The workers had been entering into settlement with it. GDCL was even permitted to represent JUL. Monies were being deposited by it and being released to the workmen. It is too late now to take a summersault and raise an argument that GDCL does not have any locus. In support of the aforesaid arguments, reliance was placed upon judgments of this Court in Tata Iron & Steel Co. Ltd. v. Union of India 2000 INSC 560; (2001) 2 SCC 41, and Bank of India v. O.P. Swarnakar 2002 INSC 547; (2003) 2 SCC 721. 89. The limited role, which the new applicant/intervener can play, is to assist the cou....
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....ojects worth Rs.2500 crores in hand. 94. To the proposal submitted by M/s Frost Realty LLP, it was submitted that it is a limited liability partnership, which was constituted only about two months prior to submission of the offer. It has no background or source of funds. The offer submitted by it is conditional. It does not have any locus. Such offers deserve to be rejected at the threshold. M/s Frost Realty LLP is showing itself to be a representative of some workers which, in fact, is a new union formed just on 11.06.2024. 95. With reference to an application filed by the M/s Dickey Asset Management Private Limited, it was submitted that the applicant herein is a paratrooper who has just filed the application in the matter at the fag end of the litigation. It is claimed to be supported by a small section of workmen whose credentials are yet to be proved. Even otherwise, the Dickey Asset Management Private Limited does not have any locus to enter into this litigation. No third party has been invited to submit offers. The prayers made in the application go well beyond the scope of the writ petition. The same accordingly deserves to be rejected. 96. Dr. Abhishek Manu Singhv....
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....point out the same, only when they came to know about it. 99. Mr. Colin Gonsalves, learned senior counsel appearing for Noticee No. 3 (Cement Work Karamchari Sangh), submitted that, in addition to what he had argued initially, the workers also need to be paid their provident fund dues and also the interest on account of delayed payments. Verification of dues of a large number of workmen is still pending. The same should be carried out without any delay. 100. Mr. Krishnan Venugopal, learned senior counsel appearing for M/s Frost Realty LLP, submitted that after reference was registered, BIFR had the control of the company. Reliance was placed upon judgment of this Court in Ghanshyam Sarda v. Shiv Shankar Trading Co. 2014 INSC 775; (2015) 1 SCC 298 GDCL was only given the management. It did not mean that it could sell assets belonging to either JUL or JAIL, which is its subsidiary. No part of the scheme can be relied upon for the purpose, as the same was never approved. To show the financial worth of GDCL, it was submitted that this company itself is sick. Bids were invited to sell off the debts of GDCL running into about Rs.1600 crores. This happens only when a borrower is not....
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.... for taking over and reviving JUL. 21.04.1992 BIFR sanctioned the scheme known as Sanctioned Scheme 1992 (SS-92). In terms thereof, JUL was to be reconstituted as a going concern. June 1992 The aforesaid order was challenged by the workers before AAIFR. 13.04.1993 AAIFR approved the scheme submitted by GDCL. 20.10.1993 BIFR directed GDCL to deposit Rs.3.035 crores by 10.11.1993. The same was deposited by GDCL. January 1994 CWP No. 146 of 1994 was filed before Allahabad High Court by the workers of Kanpur Jute unit challenging the order dated 13.04.1993 passed by AAIFR. 19.09.1994 As the scheme proposed by GDCL could not be implemented, BIFR called for fresh proposals. 30.09.1994 Appeal No.179 of 1994 was filed by GDCL impugning the order dated 19.09.1994 passed by BIFR. 11.11.1994 AAIFR set aside the order dated 19.09.1994 passed by BIFR and handed over the management of JUL to GDCL subject to certain conditions regarding infusion of funds as there was default in compliances to be made earlier. GDCL agreed to deposit the entire balance amount as per schedule up to 31.05.1995. Rs.1 crore was to be deposited within one week and remai....
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...., which had failed. In view of the above and keeping the view the RBI guidelines limiting the maximum period for rehabilitation of sick unit to 7 years, the bench formed its prima facie view that the company was unlikely to revive and make its net worth positive while discharging its due financial obligations within a reasonable period." 24.11.2000 After hearing all the stakeholders, BIFR recommended winding up of JUL. The stand of all the creditors was recorded, who prayed for the winding up of JUL except the promoters. The JUL had even failed to submit the audited/provisional Balance Sheet as on 30.06.2000, which could have shown its financial status. At this stage, JUL was under the management of GDCL, in pursuance of order dated 11.11.1994 passed by AAIFR. Even the MOU with the workers had not been renewed. The BIFR found it just and equitable to recommend winding up of JUL. The creditors were granted liberty to file suit or initiate proceedings for recovery of the amount due to them before appropriate forums. 12.01.2001 JUL filed Appeal No.22 of 2001 against the order dated 24.11.2000 passed by BIFR. 04.01.2001 AAIFR stayed the order dated 24.11.2000 passed b....
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....ties, considering the long pendency of the matter before different forums, however, with a caveat that the order is without prejudice to rights of other parties. Certain unions and workmen had raised objections. It is relevant to add that at that stage JUL had been recommended to be wound up against which an appeal filed by the AAIFR was rejected. However, in SBCWP No.4380 of 2001, the Rajasthan High Court had remanded the matter back to AAIFR. Meaning thereby, whatever action GDCL was taking, it was on behalf of JUL and not in its independent capacity. The earlier rehabilitation scheme, SS-92, submitted by it had already been rejected and the matter was to be considered afresh. 10.04.2007 This Court appointed Justice N.N. Mathur, a retired Judge of the Rajasthan High Court for undertaking the exercise of finding out the dues of the workmen. 24.03.2008 Civil Appeal No.2076 of 2008 was finally disposed of. In the judgment, this Court noticed that as per the rehabilitation scheme approved in the year 1992, the cost was Rs.38.41 crores out of which Rs.18.12 crores were to come from GDCL. A sum of Rs.10 crores was to be arranged by the sale of assets and remaining Rs.....
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....ted, to make reference to the Company Law Tribunal under the IBC within 180 days from the commencement of IBC. The undisputed fact which remains on record is that neither JUL nor GDCL filed any proceedings before NCLT and the appeal pending before AAIFR stood abated. Meaning thereby, the recommendation made by BIFR for winding up of JUL stood revived. REHABILITATION SCHEME SUBMITTED BY GDCL (SS-92) 106. The salient features of the rehabilitation scheme submitted by GDCL in the year 1992, were as under: (i) Management of JUL to be taken over by GDCL along with assets and liabilities. (ii) Jute Mill was to be disposed of, for which process was to be monitored by a Sales Committee comprised of representatives from SBI, IRBI, Special Director BIFR, State of Uttar Pradesh and GDCL. (iii) Disposal of other assets not connected with the production was also permitted through the same Sales Committee. (iv) Existing promoters were to write off equity and preference shares by 90%. New promoters (GDCL) were to contribute Rs.8 crores with upfront Rs.6.07 crores immediately on sanction of scheme by BIFR. The amount was to be converted into equity, ....
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....in Rs.) Payments made to secured creditors 7,47,00,000 Settlement amount paid against utility bills 9,05,63,609 Payment of statutory liabilities 5,82,49,262 Payment against advance from customers and sundry creditors 2,52,44,343 Workers dues 44,18,91,082 Deposited with Hon'ble Supreme Court 166,00,00,000 Total 235,06,48,296/- (Rupees Two Hundred and Thirty Five Crores Six Lakhs Forty Eight Thousand Two Hundred and Ninety Six only) 109.2 For details of payment made to the creditors, reference was made to 'Annexure A' annexed therewith. The aforesaid annexure shows the total payments to the tune of Rs.236,72,63,660/-, which includes Rs.166 crores deposited with this Court. The total amount calculated at the end of the figures does not tally as such. 109.3 GDCL had, earlier to that, only paid a meagre amount between 2003 till 2009 which as per its own affidavit amounts to Rs.22,57,11,133/-. This amount includes a substantial sum of Rs.8,93,13,000/- paid to Rajasthan Electricity Board and Rs.4,17,05,901/-paid to the Rajasthan Sales Tax. When we look at the amount paid to multiple creditors between the years 2010 till 2012, it comes to Rs.....
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....rehabilitation prepared for JUL is defective to the extent that it does not take into account the finances of JAIL. In fact, it is a patent error in the entire process which goes to the route of the case and in our opinion, is also incurable. 113. GDCL is claiming that it has taken all actions as per the rehabilitation scheme (SS-92), however, the fact remains that JAIL is not at all part of the scheme. On failure of implementation of the rehabilitation scheme when the BIFR vide order dated 24.11.2000, had recommended winding up of JUL, the rehabilitation scheme (SS-92) had lost its significance. Even as per arguments raised by learned counsel for GDCL, JAIL was an independent company. In the absence of any mention of JAIL in the entire process, there is no explanation available with reference to GDCL's control over JAIL. 114. As is evident from the rejoinder affidavit dated 21.08.2024 (Annexure R4) filed by the Noticee No. 1, subscribed capital of JAIL was 2,50,000 shares out of which 2,49,974 were in the name of JUL. Subsequent thereto, 1,00,000 shares each were allotted in the names of United India Agencies Pvt. Ltd., Abhyuday Investments Ltd. and M.R. Holdings Pvt. Ltd. o....
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....owing the account of GDCL to be NPA. In fact, it is the time when the assets of JUL and JAIL were sold by GDCL without taking the court into confidence. 119. If we go into the background, there is an order dated 03.08.2001 passed by the AAIFR which directed GDCL (as the promoter of JUL) to deposit Rs.10 crores into a no-lien account. Rs.3 crores from that were to be utilized for payment of retiral dues of workers. This was a pre-condition for hearing the appeal filed by GDCL. Meaning thereby, failure of the same would have led to dismissal of the appeal. However, GDCL challenged that order before the Rajasthan High Court by filing SB C.W. No. 4380 of 2001. Later, the AAIFR dismissed the appeal on 06.09.2001. On 02.08.2004, the Rajasthan High Court set aside both orders dated 03.08.2001 and 06.09.2001 and remanded back the matter to the AAIFR to decide afresh. However, the order dated 02.08.2004 was challenged by the Cement Works Karamchari Sangh before this Court in S.L.P.(C) No.4088 of 2005 (Civil Appeal No. 2076 of 2008. Finally, vide final order dated 24.03.2008 in the aforesaid Civil Appeal, this Court while remanding the matter back to AAIFR, directed GDCL to deposit the am....
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....om December 1994 to March 1995. Additionally, GDCL was directed to deposit further Rs.2 crores (Rs.1 crore in April and Rs.1 crore in May 1995) to meet any shortfall in implementation of the scheme. Total amount required to be deposited was Rs.7 crores in addition to the earlier deposited amount of Rs.3.035 crores. 126. Against this, GDCL deposited only Rs.6.07 crores out of the total Rs.8 crores due. The additional Rs.2 crores directed to be deposited to cover shortfalls was never paid. 127. On 19.01.1996, GDCL commissioned the Sawai Madhopur cement unit, only to declare a lockout seven months later on 12.08.1996. Arguments of workmen have been noticed by this Court in its judgment dated 24.03.2008 in Cement Workers Karamchari Sangh's case (supra), to state that the commissioning was an eyewash and the promoters had no intention to run the unit on a sustained basis, no repairs were made in the plant lying idle for a long time, no raw materials were brought in, and no supervisory, managerial or technical staff were engaged. The lockout by the management was subsequently declared illegal by the State Government by order dated 25.05.1999 passed under Section 10(3) of the Indust....
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.... legal control of the assets of JUL. 131. GDCL challenged the order dated 24.11.2000 before AAIFR, which stayed the proceedings on 14.02.2001. However, on 03.08.2001, AAIFR directed JUL to deposit Rs.10 crores as a condition precedent for admitting the appeal. JUL filed a writ before the Rajasthan High Court challenging this direction on 04.09.2001, and the High Court stayed that direction, though no stay was granted in respect of the proceedings before AAIFR. On 06.09.2001, AAIFR dismissed the appeal due to non-compliance of the condition as GDCL failed to deposit the amount as required, thereby confirming BIFR's winding up order. 132. The Rajasthan High Court, vide order dated 02.08.2004 passed in SBCWP No.4380 of 2001, set aside both the AAIFR orders dated 03.08.2001 and 06.09.2001, and remitted the matter back to AAIFR for fresh consideration after affording opportunity to all concerned parties. The direction to deposit Rs.10 crores as a condition for admitting the appeal had, in the meantime, not been complied with by GDCL/JUL. 133. The order of remand passed by the Rajasthan High Court was challenged before this Court by the Cement Workers Karamchari Sangh (supra....
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....999 by issuing fresh shares to GDCL's group companies, thereby reducing JUL's shareholding in JAIL from 99.99% to 33.33%. 137. Thereafter, GDCL sold JAIL's agricultural land situated at Jodhpur by a registered sale deed dated 26.04.2021 for Rs.21 crores, and another agricultural land at Sawai Madhopur by sale deed dated 14.09.2022 for Rs.2.84 crores, all without seeking prior permission of this Court. The proceeds of these sales remain with GDCL. 137.1 The scrap of machinery lying at the Sawai Madhopur Unit was also sold by way of private negotiation by GDCL. Although permission for this was subsequently obtained from the Court. An objection raised by the workmen led to a stay on lifting of the scrap. The sale proceeds thereof continue to lie with GDCL. 138. Further, during the pendency of the present Writ Petition, GDCL sold the Kanpur Jute Mill Unit by a registered sale deed dated 07.06.2024 for Rs.51 crores, again without seeking any permission from this Court or proceeding through the Sale Committee as envisaged under the sanctioned scheme. Pursuant to the directions of this Court, the sale proceeds were directed to be deposited with the Registry. SALE O....
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....fore AAIFR stood abated with repeal of SICA. Further, at the time when the sales were carried out, the matter was pending in this Court. At least this Court could have been taken into confidence. Nothing was done. Such an illegality cannot be condoned by any stretch of imagination. 143. This Court vide order dated 23.08.2024 directed GDCL to deposit Rs.51 crores with this Court within two weeks. Needful was done. 144. Mere deposit of the sale proceeds in this Court, that too only when the same was pointed out by opposite counsel or otherwise will not come to the rescue of GDCL. 145. Even at the time of seeking permission for sale of scrap, this Court was not taken into confidence about the status of the GDCL and complete facts of the case. The permission was sought in a casual manner. Even the conduct of the labour unions before this Court is also fishy as neither of them pointed out complete facts of the case or the status of GDCL nor did they object to the sale. However, when the scrap was being lifted, the issue was raised and thereafter this court passed an order dated 23.08.2024, restraining the sale of any properties (movable/immovable) of JUL without permission of t....
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....IFR called for fresh proposals for revival of the company. 11.11.1994 In a challenge to the BIFR order, AAIFR directed transfer of management to GDCL to proceed with rehabilitation efforts. 24.11.2000 After more than 6 years of failed rehabilitation attempts, BIFR formally recommended winding up of JUL, noting that no viable proposal had been submitted. Post-2000 GDCL/JUL preferred an appeal (Appeal No. 22/2001) before the AAIFR impugning the BIFR's winding-up recommendation. Repeal of SICA During the pendency of the appeal, the Sick Industrial Companies Act, 1985 (SICA) was repealed w.e.f 01.12.2016. The Insolvency and Bankruptcy Code, 2016 was enacted and in terms of Section 252 thereof which amended the The Sick Industrial Companies (Special Provisions) Repeal Act, 2003, all proceedings before BIFR and AAIFR abated. Interested parties were given 180 days to approach the NCLT within 180 days. The appeal stood abated as JUL/GDCL did not file any reference before the NCLT within the permissible 180-day window. Current Status The BIFR's order recommending winding up stands revived. The matter is currently pending in the Rajasthan High Court (Com....
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....age Facility, a 34 MW Solar Power Plant and a 100-key Luxury Hotel. 151. At the most, according to the AAIFR order dated 11.11.1994, management of JUL was handed over to GDCL, but the promoters failed to fulfil their financial commitments. BIFR recommended for winding up of JUL vide order dated 24.11.2000. The appeal preferred by JUL/ GDCL against the aforesaid order to AAIFR stands abated with the repeal of SICA, 1985. 152. Meaning thereby, as on today, the rehabilitation or restart of the unit is a factual impossibility, and only the assets of JUL and its subsidiary, JAIL, are available to satisfy the long-standing dues of the workmen. HOUSES/ FLATS CONSTRUCTED BY GDCL IN OCCUPATION OF THE WORKERS/ EMPLOYEES 153. At the time of hearing, it was pointed out by learned counsel for the GDCL that there are more than 1600 houses/flats constructed by JUL in its Sawai Madhopur unit, which were allotted to the erstwhile employees as licensees. Though the unit was closed more than 4 decades back, they are still occupying the same, without paying any rent or license fee. If the workers are claiming their arrears of wages, JUL is also required to be compensated for use and occupa....
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....uperannuation, with the sole exception being compassionate employment for the ward of an employee, who dies during service. This again is subject to specific rules or policies of the employer and on fulfilment of certain mandated conditions. Application by M/s Frost Reality LLP [Ι.Α. Νο. 170433/2024 in W.P. (Civil) No. 392 of 2015] 156. The scheme submitted by M/s Frost Reality LLP shows that they intend to develop the area as an integrated multi-sector redevelopment project by making further investments. This implies that the primary interest lies in substantial properties of JUL or JAIL. The proposal provides for reimbursement of the amount already paid by GDCL to the lenders or for clearance of statutory liabilities, allotment of plots of specific size to the workers of the Rajasthan unit, and additional lump-sum payments to the workers of the Kanpur unit, who had otherwise settled their dues. Furthermore, it is argued that these investors will infuse huge amounts of capital, which will provide employment to the family members of erstwhile employees and generate further local employment. 157. There is a long list of assets belonging to JUL, as is e....
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....nt of worker dues. Analysis of Offers 161. How can such offers be accepted when there is a long list of properties owned by JUL and its associate JAIL, and the current market value of those assets remains unquantified before this Court? The Court, acting as custodia legis of the assets of JUL and its associate, must weigh all options to act in the best possible interest of the estate rather than for the benefit of any single party. 162. None of the aforementioned parties have pointed to any legal provision that would allow the assets of JUL to be transferred to them through acceptance of these schemes without a formal valuation being available with the Court. 163. At this stage, the first priority is to identify the workers or their family members for payment of their dues and thereafter to deal with the assets of JUL and JAIL. 163.1 The offers as submitted cannot be accepted. CREDIT TO APPLICANTS 164. Still, in our opinion, credit for some core issues pointed out by the applicants before this Court regarding sales of assets of JUL or JAIL by GDCL, has to be given to them. However, effectively they cannot be granted any relief. Had they not flagged some of the ....
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....dered view that it is not a fit case for exercise of power under Article 142 of the Constitution of India as it is not a case where merely ironing of creases is required, rather, it will require condoning number of illegalities, which cannot be done. LEGITIMATE EXPECTATION 168. GDCL also invoked the jurisdiction of this Court raising the principles of legitimate expectation. It was argued that GDCL having cleared all the debts of JUL legitimately expected that the scheme for revival, even if failed, the entire dues of JUL having been cleared by it, the ownership and management of JUL along with its all assets and liabilities will stand transferred to it. However, we do not find any merit in the aforesaid submission as well. An illegality cannot be condoned. Legitimate expectation cannot override the illegalities committed by a party. The principle of legitimate expectation have been dealt with by the Constitutional Bench of this Court in Sivanandan C.T. and Others vs. High Court of Kerala and Others 2023 INSC 709; (2024) 3 SCC 799. Relevant paragraph for ready reference is extracted below: "46. From the above discussion, it is evident that the doctrine of substantive....
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....passed by the BIFR recommending winding up of JUL by filing an appeal before the AAIFR. The matter reached up to this Court. It was with reference to an application filed by SCL seeking to intervene and propose a scheme for rehabilitation of JUL. Finally, this Court vide judgment dated 24.08.2016 opined that SCL will not have any locus to intervene. The appeal before the AAIFR was revived. 172. On the other side, in Company Petition No. 21 of 2001 registered on the basis of recommendation made by the BIFR, Rajasthan High Court vide order dated 12.07.2018 had appointed provisional liquidator. He was directed to take immediate steps to take over the assets of the company. However, subsequently vide order dated 28.05.2019, the implementation of aforesaid order was stayed as the matter was pending in this Court. 173. During the pendency of the appeal before the AAIFR, Sick Industrial Companies (Special Provisions) Act, 1985 was repealed vide The Sick Industrial Companies (Special Provisions) Repeal Act, 2003, which came into force on 01.12.2016. Simultaneously, The Insolvency and Bankruptcy Code, 2016 was enacted. Section 252 thereof came into force with effect from 01.11.2016. T....
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....e in Section 4 of the 2003 Repeal Act provided that all pending proceedings before BIFR or AAIFR shall stand abated. However, any company affected by that, in whose case the proceedings were abated, was given liberty to make reference to the NCLT under IBC within 180 days from the commencement of IBC, in terms of provisions thereof. It is not in dispute that IBC came into force with effect from 01.12.2016. No proceedings were initiated by GDCL or JUL before NCLT within the permitted time. Meaning thereby, the appeal pending before AAIFR abated. As a consequence thereof, the recommendation of the winding up made by the BIFR to the High Court was revived. 175. The fact remains that neither any rehabilitation scheme was submitted by GDCL in terms of liberty granted by this Court years back in 2008 nor can the Unit be revived because of subsequent developments. It will be too late now to permit GDCL to submit any rehabilitation scheme. Firstly, the Unit cannot be revived, for which details have already been noticed in the previous paragraphs. And further none of the employees who may be working in the JUL may be up to the age, who can be reengaged for employment. It is only their ch....
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....f identifying the workers or their family members, exercise is being done since 02.09.2021 by appointment of Court Commissioners with representation of the workers union as well as GDCL. Substantial amount has been paid as well. Whatever amount remains, for that, exercise has to be carried out in a time bound manner as the matter cannot be kept pending for infinity for that purpose. Simultaneously, the provident fund dues of the workmen also need to be calculated for which Regional Provident Fund Commissioner, Rajasthan may have to be looped in. STATUS OF WINDING UP 184. From various documents on record, it is evident that BIFR had recommended winding up of JUL vide order dated 24.11.2000 to the Rajasthan High Court. Initial notice of the winding up of JUL was issued on 27.07.2001. However, subsequently on 18.01.2002, the proceedings were directed to remain pending on account of stay of the order dated 24.11.2000 passed by the BIFR recommending winding up of JUL in S.B. (Civil) Writ Petition No.4380 of 2001. After the appeal filed by JUL/ GDCL against the order dated 24.11.2000 abated with the repeal of SICA and enactment of IBC, the proceedings were re-initiated. 185. Bef....
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....ice. Accordingly, we do not set aside the sales. Even though, the allegation of the petitioners as well as the applicants is that the transactions were under valued. To reach to that conclusion, evidence will have to be lead. 193. As far as the sale of scrap of Sawai Madhopur Unit is concerned, though permission from this Court was taken, however, on an objection raised by some of the workers, lifting of the scrap was stayed by this Court. For how much amount the scrap was sold, was not disclosed before the Court. The amount is also lying with GDCL. 194. An application (I.A. No. 253716 of 2024) has been made by the buyer of the scrap, namely R.A. Enterprises seeking permission from this Court to lift the same. However, considering the fact that the scrap has not yet been lifted, we set aside the sale. GDCL shall refund the amount received on account of sale of scrap along with interest @ 8% p.a. within a period of two months. 195. As far as the balance properties of JUL and JAIL is concerned, in terms of the documents placed on record, an inventory thereof shall be prepared. Before any action is taken, its proper valuation has to be made after finding the status thereof. I....
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....ajasthan unit, they will handover, vacant physical possession of the accommodation in their possession to person nominated by this Court at that stage, i.e., 6 months after the payment is made to them. Thereafter, they may be charged penal rent to be decided by this Court at that time. They will not be liable to pay any charges for use and occupation of the same as their dues were not paid and they were in litigation before various forums. ASSETS OF JUL and JAIL 196.3 An inventory of assets of JUL and JAIL may be prepared. Its present status and the person in possession thereof may be found. An exercise may be undertaken for its valuation. Local authorities of the places concerned shall assist in the process. SALE OF PROPERTIES OF JUL and JAIL 196.4 For the purpose of payment of dues to the workmen and, reimbursement of the amount spent or invested by GDCL, some of the properties of JUL/JAIL may have to be sold. After the process of identification of the properties and its valuation is complete and report is before this Court, the issue will be decided as to how and which of the properties need to be sold. SALE OF ASSETS BY GDCL 196.5 The Kanpur Jute Mill and t....