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Judgment
P.D. Dinakaran, J.—The brief material facts of the case, which led the petitioners to file these writ petitions are stated as follows:-
(i) The Binny Limited (hereinafter referred to as ""the respondent/Company"") incurred cash losses consecutively for two years, i.e, in the years
1992 and 1993, and as on 31.3.1993, the networth of the respondent/Company had been completely eroded. Hence, the respondent/company
filed a reference u/s 15(1) of the SIC Act on 7.7.1993 and the same was registered as Case No. 48 of 1993.
(ii) The Board of Industrial and Financial Reconstruction (for brevity ""the BIFR"") declared the respondent/Company as a sick industrial company
within the meaning of Section 3(1) of the SIC Act and appointed IDBI as the Operating Agency to formulate a rehabilitation scheme in respect of
the respondent/company.
(iii) Several hearings took place before the BIFR in respect of rehabilitation of the respondent/company and the BIFR vide its order dated
13.6.1994 sanctioned a rehabilitation scheme for the respondent/Company, which includes settlement of dues to consortium banks, financial
institutions and the debenture holders as one time settlement, as well as the dues payable to the workeRs. The scheme envisages restructuring the
respondent/company by giving off the Engineering Division into two separate companies, viz., Binny Engineering Works Ltd. (BEWL) and Binny
Processors Ltd (BPL).
(iv) However, by order dated 12.1.1996, the BIFR de-registered the respondent/company from its purview for the reason that the networth of the
respondent/company had exceeded its accumulated losses as on 31.3.1995.
(v) But, upon a writ petition, viz., W.P. No. 1198 of 1997, filed by the workers of the respondent/Company alleging deviation in the
implementation of the scheme, this Court by order dated 25.2.1998 in the said W.P. No. 1198 of 1997 set aside the order dated 12.1.1996 of
the BIFR regarding de-registration of the respondent/company.
(vi) Pursuant to the order of this Court dated 25.2.1998 in W.P. No. 1198 of 1997, the respondent/Company submitted a fresh rehabilitation
proposal to the BIFR which provided for:-
(a) bifurcation of the assets and liabilities of the respondent/company between the original promoters and the co-promoters;
(b) Voluntary Retirement Scheme for the entire workforce both at Chennai and Bangalore units;
(c) relocation of the manufacturing facilities and processing house from Chennai to Singaparumal Koil, near Kancheepuram, as well as Bangalore
Silk Mills at a new location in Bangalore; and
(d) investment in subsidiary, namely Binny Engineering Ltd (BEL).
Even though the said revised proposal was broadly accepted by the financial institutions and the State Bank of India, the same was not accepted
by other consortium banks.
(vii) Pending the above proceedings before the BIFR, the respondent/Company and the workers entered into a settlement u/s 12(3) of the
Industrial Disputes Act on 28.3.1998, in the presence of the then Hon''ble the Chief Minister, which provided for Voluntary Retirement Scheme
and settlement of Compensation and terminal benefits to the employees. The terms of the settlement read as follows:
Binny Mills will reopen on 14.1.1999.
When the mill reopens the Management would provide employment to not more than 1000 workmen from among the existing permanent
workmen at Binny Mills itself, at Chennai.
Such of those workmen and staff members who opt to retire under the Voluntary Retirement Scheme will be paid Rs. 1.25 Lakhs as
compensation. Besides the above, eligible gratuity as per law will be calculated separately and paid. The above compensation and the gratuity
amount will be paid in two installments by the Management. Out of the total amount, the first installment of 50% will be paid on 27.5.1998 and the
second installment on 15.9.1998. The above two installments will be paid through cheque.
All trainees will be paid a lump sum amount of Rs. 50,000/- inclusive of their gratuity and compensation and this amount will be paid on
27.5.1998.
The Management will not recover from the employees Rs. 6 Crores which was spend towards paying wages for 2 months and providing rations
and provisions to the employees. Similarly, workmen and staff members will not press their demand that they should be paid wages for the closure
period.
All workmen and staff members will be paid 15 days wages as ex-gratia within a week from the date of this settlement.
The Management has agreed to employ not more than 1000 workmen at Binny Mills. If more employees and trainees than the above opt to
remain in the service of the Company, the decision as to where they should be posted would be left to the Chief Minister and it was agreed that his
decision in this regard would be accepted by the Management and the Unions.
The terms governing wages to be paid and other issues in respect of those workmen who opt to remain in service till the reopening of the Mills
on 14.1.1999 would be left to the decision of the Chief Minister and it was agreed that his decision in this regard would be accepted by the
Management and the Unions.
The employment rights of the employees will continue till the final settlement of compensation and gratuity in respect of those workmen who opt
for voluntary retirement scheme.
The Unions will not interfere in the administrative rights of the Management including that of recruitment. Similarly the management will not
interfere in the rights of the Union.
After implementation of the above settlement in full, all the cases will be withdrawn.
Both the parties fully agree to the above settlement.
(viii) Hence, a third revised rehabilitation proposal was submitted, which provided for reduction in cost of scheme. Even though the same was
accepted in the joint discussion dated 15.3.1999 by all, the consortium banks did not agree to grant any concession in the interest rates. As a
result, the said proposal was declared failed by the BIFR on 17.9.1999 and IDBI was reappointed as Operating Agency u/s 17(3) of the SIC
Act.
(ix) Thereafter, the respondent/company submitted another rehabilitation scheme on 19.11.1999 and again submitted another revised proposal on
13.12.1999 and thereafter, two more proposals one on 24.5.2000 and another on 29.5.2000 for scrutinization by the IDBI as per the guidelines
enclosed by the BIFR with the proceedings dated 31.7.2000. A hearing was held to examine the above proposals, dated 19.11.1999,
13.12.1999, 24.5.2000, 29.5.2000, before the BIFR on 31.7.2000 and in the said meeting the Operating Agency (IDBI) represented that the
respondent/company submitted another proposal on 10.7.2000.
(x) Again, a hearing was held before the BIFR in the presence of the respondent/company, Operating Agency, financial institutions and consortium
banks on 1.3.2001. In the said hearing, the Bench observed that (a) there was a broad consensus among all concerned; (b) the
respondent/company could be revived with one time settlement of the dues of SBI and other banks; (c) a rehabilitation scheme could be
formulated by the Operating Agency, and accordingly, the BIFR directed the Operating Agency (IDBI) to suggest some amendments to the draft
rehabilitation scheme; and (d) constituted an Asset Sale Committee for the sale of surplus assets of the respondent/company.
(xi) Pursuant to the said hearing held on 1.3.2001, the BIFR in its order dated 29.5.2001 directed the draft rehabilitation scheme to be circulated
to all the parties concerned inviting their suggestions and thereafter, a meeting was held among all the parties concerned on 6.8.2001. The
Operating Agency, IDBI, by its letter dated 5.10.2001 forwarded the revised draft rehabilitation scheme incorporating the changes which were
agreed in the meeting held on 6.8.2001.
(xii) The draft rehabilitation scheme circulated by the IDBI by letter dated 5.10.2001, inter alia provides that:-
(a) the respondent/company would be split into two companies, viz., Binny Ltd., and Binny Karnataka Ltd. (a new company to be incorporated)
as at 1.4.2001, after repaying the dues and giving effect to all the reliefs and concessions mentioned in the scheme;
(b) the said two companies would function under two independent managements;
(c) all the existing share holders would have 50% shareholding of their respective shareholding in each of the company;
(d) both the promoter groups would have 50% shareholding in both the companies on reciprocal basis;
(e) after discharging all the liabilities relating to workers, the secured creditors and statutory liabilities, both the promoters and co-promoters would
exchange their shareholdings in both the companies between themselves so as to enable the promoter group to run M/s. Binny Ltd. and the co-
promoter group to run M/s. Binny Karnataka Ltd., independently;
(f) to develop the real estate properties of the respondent/company in a joint venture with any third party on such terms and conditions to be
approved by the Asset Sale Committee, including transferring such properties to 100% subsidiary of M/s. Binny Ltd. and M/s. Binny Karnataka
Ltd.;
(g) the transfer of properties to any subsidiary would be done with the prior approval of BIFR;
(h) if any amount is realised through sale of immovable properties and sale of machinery within 90 days of sanction of the scheme, such amount
would be deposited in a separate interest bearing ''No-lien account'' with the Operating Agency;
(i) the sale proceeds along with loans from the associate companies of the promoters and co-promoters were to be distributed by the operating
agency for payment of the secured creditors, statutory liabilities and workers dues within 90 days from the date of sanction of the scheme;
(j) in case the funds raised within 90 days by sale of assets and brought in by the promoters/co- promoters were not sufficient to pay all the
secured creditors, statutory liabilities and workers dues, the amount lying in the ''No-Lien'' account to the extent of proceeds from the sale of
aforesaid assets would be distributed by the Operating Agency among first charge holders on pro rata basis;
(k) if any amount is still left, it would be paid to the workers and crystalised statutory liabilities on pro rata basis and if still some amount is left, it
would be paid to the second charge holders and then to the unsecured creditors on pro rata basis in that order; and the workers shall accept the
entire claim and vacate the quarters occupied by them; shall hand over vacant possession to the management before final settlement of the dues;
shall also withdraw all cases pending in various forums on settlement of the dues; and shall not disrupt any activity which would be undertaken by
the management at the B & C Mill premises including that of sale of machinery, yarn, scrap, etc.
(l) after de-merger, each company would meet their various commitments as per the provisions of the sanctioned scheme;
(m) The Central and State Governments, viz., the Department of Income Tax, Ministry of Labour, Ministry of Railways, Ministry of Company
Affairs, as well the Public Works Department, Tamil Nadu Electricity Board, Department of Sales Tax, Department of Urban Land Tax,
Corporation of Chennai, Government of Karnataka, and Bangalore Development Authority, shall consider the waiver and concession in respect of
the dues payable by the respondent/Company, as the case may be.
(n) IDBI would be designated as Monitoring Agency (MA) to review the operation of the respondent/Company on monthly basis in all aspects
and to implement the project.
(xiii) A further hearing was held before the BIFR on the above proposal of the IDBI on 31.10.2001, wherein the financial institutions including
IDBI, ICICI and IFCI have given their consent to the reliefs and concessions as provided under the draft rehabilitation scheme enclosed by the
IDBI along with their letter dated 5.10.2001.
(xiv) Thereafter, the matter was adjourned for further hearing on 13.12.2001 and finally the scheme was sanctioned by order dated 13.12.2001 of
the BIFR, but holding that the period of 90 days provided for in the scheme to make payment of the one time settlement to the financial institutions
would commence from 13.12.2001 and would therefore expire on 12.3.2002.
(xv) It is, therefore, the scheme approved by the IDBI by the letter dated 5.10.2001, which provides for splitting of the respondent/company into
two companies; for sale of properties of the respondent/company and transferring the properties to the subsidiary companies with the prior
approval of the BIFR; and for settlement of the dues to the financial institutions and consortium banks in one time settlement and thereafter to settle
the dues to the workers as second charge holder and then to the unsecured creditors on pro rata basis, in that order, of course with a modification
as referred to above, was ultimately sanctioned.
(xvi) However, the SBI, by their letter dated 30.1.2002, informed BIFR that the 90 days period provided for the settlement of dues should reckon
from 31.10.2001, when the financial institutions and Banks had agreed for the scheme but not from 13.12.2001, and the BIFR, unilaterally,
without any hearing, by order dated 8.2.2002 modified the order dated 13.12.2001 to the effect that the period of 90 days to settle the dues
would reckon from 31.10.2001, instead of 13.12.2001.
2.1. It is pertinent to observe that the basis of settlement of the dues to the workers is arrived at based on Clauses 3(B)(ii), 7(d)(iii) and 7(d)(iv) of
the scheme sanctioned by the BIFR by proceedings dated 31.10.2001, as modified by the proceedings dated 13.12.2001. Clauses 3(B)(ii), 7(d)
(iii) and 7(d)(iv) read as follows:
Clause 3(B)(ii):
As per agreement with the workers, an aggregate amount of Rs. 6775 lakh was payable towards workers dues comprising VRS compensation,
arrears of salaries and wages, PF, ESIC, etc. The Company has already made payment of Rs. 2642 Lakhs. The balance liabilities amounting to
Rs. 4133 Lakhs; would now be discharged, within 90 days from the date of sanction of the scheme by BIFR. Interest calculated at 11.25% p.a.
(SBI PLR) from September 15, 1998 till March 31,2001, along with interest from 27.5.1998 to 14.9.1998 to those employees who were not
paid first installment, and from 27.5.1998 to 31.3.2001 in respect of those workers who had not been paid first installment, would be repayable in
4 equal annual installments, the first installment commencing from one year from the date of payment of principal. The company has clarified that
interest is payable on the amount of Rs. 3374 Lakhs only, representing the liabilities directly payable to workers and workers'' Co-op society. No
interest is payable on balance amount of Rs. 759 Lakh which represents arrears of PF, ESIC and gratuity payable to management staff, etc. The
total balance dues in respect of workers along with interest as above upto March 31, 2002 (cut off date), have been estimated at Rs. 5138 Lakhs
(inclusive of interest of Rs. 40 Lakhs as stated above).
Clause 7(d)(iii):
Workmen occupying the company''s quarters shall vacate all the quarters occupied by each one of them. With the handing over of clear vacant
possession of each quarter, the company would simultaneously hand over the cheque in full settlement of each workman''s dues as per the scheme.
Apart from advising the workmen to vacate the quarter as per the manner detailed above, the Worker''s Union will also cooperate with the
management in all possible legal manner in taking vacant possession.
Clause 7(d)(iv):
About 398 workmen who have applied under VRS pursuant to the settlement dated 28.3.1998 have not been relieved by the management and
have been retained. Of these 398 workmen, 281 workmen have already retired. Such of the above workmen who have already retired/will retire
shall claim only 50% of their last drawn wages (reckoning it as on 15.6.1996) from 28.3.1998 (the date of settlement) and their eligible gratuity till
the date of their superannuation. They shall not claim any other benefit under the settlement dated 28.3.1998.
2.2. Clause 3(B)(ii) provides for settlement of dues under the Voluntary Retirement scheme entered u/s 12(3) of the Industrial Disputes Act with
interest for the belated payment which shall be paid in four annual installments. Clause 7(d)(iii) provides for payment of cheques in full settlement to
the workers and simultaneous handing over of the quarters by the workers concerned to the respondent/company. Clause 7(d)(iv) provides for
settlement of the terminal benefits to the 398 workmen who have applied for Voluntary Retirement, but, have not been relieved by the
respondent/company and, out of whom, 281 workmen have already retired. The above terms were incorporated in the scheme sanctioned by the
BIFR by proceedings dated 31.10.2001, as modified by proceedings dated 13.12.2001 only after due deliberation and agreement of the workers
Union.
3.1. Aggrieved by Clauses 3(B)(ii) and 7(d)(iii) of the sanctioned scheme approved by the proceedings of the BIFR dated 31.10.2001 modified
by proceedings dated 13.12.2001, the petitioners in W.P. No. 37671 of 2002, seek a writ of Certiorarified Mandamus to call for the records of
the 3rd respondent herein in Case No. 48 of 1993 dated 26.12.2001 in so far as deciding the issue of payment of V.R.S. compensation, terminal
benefits and payment of interest thereon under Clause 3(B)(ii) and Clause 7(d)(iii) of the sanctioned scheme instead of settling the entire settlement
entered into between the parties concerned u/s 12(3) of the Industrial Disputes Act, dated 28.3.1998 with terminal benefits and the accrued
interest thereon, quash the same and to direct the 1st respondent herein to allot necessary extent of land for resettling the petitioners herein as
allotted to the workers of Binny Karnataka Limited who were facing eviction orders from the quarteRs.
3.2. Challenging clause 7(d)(iv) of the sanctioned scheme approved by the proceedings of the BIFR dated 31.10.2001 modified by proceedings
dated 13.12.2001, the petitioners in W.P. No. 5112 of 2002, seek a writ of Certiorarified Mandamus to call for the records of the third
respondent herein pertaining to order passed in Case No. 48 of 1993 dated 26.12.2001 and quash that portion of the order in so far as Clause
7.0.(d)(iv) is concerned denying the benefits to the petitioners herein under 12(3) settlement entered into between the parties concerned before the
2nd respondent herein dated 28.3.1998 and direct the 1st respondent herein to settle the entire amount based on the Voluntary Retirement
Scheme as settled u/s 12(3) of the Industrial Disputes Act entered into between the parties concerned, dated 28.3.1998 with accrued interest.
4.1. However, at this juncture, the respondent/company preferred an appeal before the AAIFR for the limited purpose that the period of 90 days
to settle the dues would reckon from 13.12.2001 and not from 31.10.2001 and in the said appeal, the AAIFR, by order dated 11.3.2002, taking
into consideration that what was sanctioned by the BIFR by order dated 13.12.2001 is only a scheme which was approved in the meeting on
31.10.2001, held that the period of 90 days for settlement of dues as per the scheme would reckon from 28.12.2001, i.e., the date following the
date on which the respondent/company received the copy of the order sanctioning the scheme dated 13.12.2001, and set aside the order dated
8.2.2002 of the BIFR.
4.2. In the meanwhile, a writ petition W.P. No. 23404 of 2001 was filed by the workers seeking a direction to the respondent/Company to settle
the entire amount based on the Voluntary Retirement Scheme prepared under the settlement entered u/s 12(3) of the Industrial Disputes Act on
28.3.1998 and to forbear the respondent/company from evicting the workers from the quarters before settling the entire settlement amount as per
the settlement entered u/s 12(3) of the Industrial Disputes Act with accrued interest. The High Court, by order dated 8.3.2002, in the said W.P.
No. 23404 of 2001 appointed a Retired District Judge, Thiru S. Vijayarangam as Commissioner to collect the cheques from the
respondent/company for the amounts due and hand over the cheque to the concerned occupant after collecting the key and taking possession of
the quarters on behalf of the respondent/Company, if necessary with police assistance, and the said order had become final.
4.3. Since the dues were not paid within 90 days from 28.12.2001, the financial institutions, consortium banks and the Unit Trust of India,
requested for the payment of interest in terms of the sanctioned scheme and therefore, a meeting was convened on 24.4.2002 calling on the
promoters to implement the scheme without any modification.
4.4. A show cause notice was issued to the respondent/company on 1.5.2002 for non-payment of dues of the financial institutions and banks as
per the sanctioned scheme and a status report was called for from the Operating Agency (IDBI).
4.5. On receipt of the said show cause notice, the respondent/Company submitted its reply to the BIFR, and the Operating Agency (IDBI), which
was appointed as the monitoring agency as per the sanction order of the BIFR, also submitted a status report dated 25.6.2002.
4.6. As per the direction of the Asset Sale Committee, the respondent/Company had advertised for the sale of 1260 grounds at Perambur,
Chennai, but did not receive any valid response and finally they got an offer from Carnatic Real Estate Limited (CREL), through BREAD, a
subsidiary company to the respondent/ company, for a consideration of Rs. 75 Crores payable as follows:
(Rs. Crores)
Advance to be paid 6.50
After 90 days of sanction
of scheme by BIFR and transfer
of property to BREAD 43.50
Within 18 months of sanction
of the scheme 25.00
Total 75.00
The above proposal of the CREL was also discussed in the meeting held on 26.6.2002, wherein it was felt by the Asset Sale Committee that sale
consideration of Rs. 77 crores could be considered reasonable on present value basis.
4.7. Thereafter, a meeting was convened on 28.6.2002 wherein it was reported by the promoters that they had promptly brought in Rs. 19.50
Crores which was directly distributed to the workeRs. It was also brought to the notice that out of Rs. 19.50 Crores, Rs. 6.50 Crores was paid by
Carnatic Real Estate Limited (CREL), a joint venture Company with Binny Real Estate and Assets Developers Ltd (BREAD), a subsidiary of
Binny Limited. Since, the proposal of the CREL was not impressive to the settlement of the dues of the secured creditors, workers and financial
institutions, the same got frustrated.
4.8. The BIFR, however, found fault with the respondent/Company for having paid the said Rs. 19.50 Crores directly to the workers instead of
routing the same through the Monitoring Agency, without paying to the secured creditors, namely financial institutions and Banks, as provided in
the sanctioned scheme. In that view, the BIFR, by their order dated 1.7.2002, found that no useful purpose would be served by further delaying
the recovery of dues by the secured creditors and allow the respondent/company to enjoy the protective umbrella of the SIC Act, and accordingly
declared the scheme sanctioned on 31.10.2001 as failed; prima facie came to be conclusion that the respondent/company is not likely to make its
networth exceed its accumulated losses within a reasonable time; recommended to wind up the respondent/company u/s 20(1) of the SIC Act; and
directed to issue a show cause notice for the winding up. However, by the same order dated 1.7.2002, the BIFR expressed their willingness to
consider any viable rehabilitation proposal which the promoters with or without a co-promoter may submit within 30 days from the date of receipt
of the order dated 1.7.2002, and disbanded the Asset Sale Committee with immediate effect and restrained the respondent/company from
proceeding further in the matter in regard to sale/development of properties of the respondent/company.
4.9. Pursuant to the option given to the respondent/company in the order dated 1.7.2002, the respondent/company submitted a revised draft
rehabilitation scheme to the BIFR and the BIFR, in turn, directed the Operating Agency to examine the same. Accordingly, a joint meeting was
convened on 10.10.2002. In the meeting held on 10.10.2002, the respondent/company also brought to the notice about the proposed sale of
1260 Grounds of land proposed to be transferred to BREAD, a subsidiary company at Rs. 79 Crores. In the said meeting the Promoters had
agreed to deposit Rs. 20 Crores on or before 28.10.2002. But, since the respondent/ company could not deposit Rs. 20 Crores with the
Operating Agency till 25.10.2002, as they only anticipated to effect the sale of properties to BREAD, a subsidiary company and proposed to take
loans from other banks, the representatives of the financial institutions, consortium banks, debenture holders as well as the Ministry of Textile
favoured winding up of the respondent/Company.
4.10. Therefore, the BIFR, by proceedings dated 28.10.2002 directed the respondent-company/promoters/ co-promoters to transfer/deposit Rs.
20 Crores within 2/3 days in a ''No-Lien Account'' with the Operating Agency (IDBI), in the name of Binny Limited, stating that the amount would
become a ""Lien"" marked deposit in case a scheme was sanctioned. The BIFR specifically observed that the secured creditors would have a final
view including on the valuation and transfer price of the assets/property, and the respondent/Company would allow the bankers and other secured
creditors to inspect the properties/records for satisfying themselves and the assets sold/amounts received, etc., and further directed the Operating
Agency, IDBI to submit its clear report within thirty days from 28.10.2002, in any case on or before 30.11.2002, after holding a discussion/joint
meeting. The BIFR also permitted the workers to submit their comments on the said direction dated 28.10.2002 within 10 days. In the absence of
any such proposal, the BIFR observed that they may confirm winding up orders on file.
Pursuant to the order dated 1.7.2002 of the BIFR disbanding the Asset Sale Committee and the further direction dated 28.10.2002 given to the
respondent/Company, promoters and co-promoters to deposit Rs. 20 Crores within 2/3 days from 28.10.2002 and directing the secured
creditors to take a final view including on the valuation and transfer price of the assets/property, and also directing the respondent/Company to
allow the bankers and other secured creditors to inspect their properties/records for satisfying themselves and the assets sold/amounts received,
etc., the respondent/company took efforts to find offers for the sale of 1260 grounds of land located at Perambur, Chennai that belongs to the
respondent/ company.
Accordingly, the respondent/company, in the light of the directions dated 28.10.2002 of the BIFR, requested the secured creditors to consider
the offer received from Shri Reddy and others for payment of Rs. 60 Crores within ten days from the date of sanction of the approval from the
secured creditors and the BIFR, towards the sale consideration of 1260 Grounds of land located at Perambur, Chennai, explaining that even
though there is a difference of Rs. 15/17 Crores, the respondent/company would get Rs. 60 crores within 15 days which would meet the needs of
the respondent/company to discharge the dues of the secured creditors, viz., financial institutions and banks in one time settlement.
As per the directions of the BIFR dated 28.10.2002, the proposed offer of Sri Reddy and others was discussed at the joint meeting held on
9.1.2003, whereat all the secured creditors were agreeable for sale of the said property/land at the valuation/ transfer price of Rs. 60 Crores,
subject to the condition that the sale proceeds shall be deposited directly in No-Lien Account with the Operating Agency, IDBI, within thirty days
from the date of approval of the BIFR. This proposal, acceptance and agreement among the respondent/company and the proposed purchaser
through BREAD, a subsidiary company was also agreeable to the secured creditors, viz., financial institutions and banks, workers, and the
Operating Agency, IDBI, strictly in accordance with the directions of the BIFR dated 28.10.2002.
Accordingly, the respondent/company submitted a revised draft rehabilitation scheme on 14.2.2003, thereby agreeing to cancel the agreement
entered into between the respondent/Company and the CREL, through BREAD, a subsidiary company to the respondent/Company, and to
proceed with the agreement entered with the proposed purchaser, viz., Shri Reddy and others for the sale of 1260 grounds of land.
The respondent/company also proposed to raise funds through the sale of 1260 grounds of land at a consideration of Rs. 60 crores, de-merger
of Binny Ltd., into two companies to be run independently by the promoters and co-promoters, shifting of the textile mills in Chennai to a new
location, etc. A joint meeting was also held on 20.2.2003 by the Operating Agency, IDBI, with respect to the Revised Draft Rehabilitation
Scheme submitted by the respondent/company on 14.2.2003, in which the Operating Agency, IDBI as well as IFCI, UTI AMC, SBI, ICICI,
Bank of Baroda, Federal Bank, Oriental Bank of Commerce, Department of Labour, Employees Provident Fund Organisation, B&C Mills Staff
Union, Madras Labour Union, Binny Beach Engineering Employees Union, Binny Employees'' Union, B&C Mills Employees'' Co-operative
Society, Binny Beach Engg. Anna Thozilalar Sangam, Binny Beach Engg. Workers'' Union, Binny Engineering Employees Union, Binny Ltd., ETA
and SSI & Dr. Reddy Labs, participated. In the said meeting, the secured creditors, consortium banks as well as the State and Central
Government authorities and departments as well as the statutory authorities agreed for the revised draft rehabilitation scheme submitted on
14.2.2003. Even though the workers expressed their inability to indicate any acceptable price for the property, namely 1260 grounds, finally, it
was resolved by the participants to request the BIFR to approve the proposed sale of land and the revised draft rehabilitation scheme dated
14.2.2003. Accordingly, the revised draft rehabilitation scheme submitted along with minutes of the meeting held on 20.2.2003 was placed for the
consideration and sanction of the BIFR.
The BIFR, by proceedings dated 24.2.2003, refused to grant sanction to the scheme submitted by the respondent/company dated 14.2.2003
and forwarded by the Operating Agency (IDBI) through the minutes dated 20.2.2003. Against the order dated 24.2.2003 of the BIFR and in the
light of the memo of compromise entered into between the respondent/company and CREL on 20.3.2003 cancelling the agreement of sale entered
between the respondent/company and CREL dated 12.3.2002, the respondent/company preferred an appeal to the AAIFR seeking to set aside
the order of the BIFR dated 24.2.2003 and to approve the scheme dated 14.2.2003, expeditiously. However, the AAIFR, by order dated
9.5.2003 in Appeal No. 83 of 2003, confirmed the order of the BIFR dated 24.2.2003.
Aggrieved by the said order dated 9.5.2003 of the AAIFR, the respondent/Company preferred W.P. No. 14856 of 2003, and in the said
W.P. No. 14856 of 2003, the order dated 24.2.2003 of the BIFR and the order dated 9.5.2003 of the AAIFR were set aside by a separate
order of this Court, today, giving a direction to the respondent/Company and the Operating Agency (IDBI) to dispose of the Voluntary Retirement
compensation and terminal benefits to the workers out of the sale proceeds as provided thereunder, recording the no objection made on behalf of
the workers to sanction the scheme and for the sale of 1260 grounds of land at Perambur, Chennai for revival and rehabilitation of the sick unit of
the respondent/Company.
In view of the above pendency with regard to the settlement of VRS compensation, terminal benefits to the workers as per the settlement
entered u/s 12(3) of the Industrial Disputes Act, one of the worker preferred W.P. No. 45804 of 2002 seeking a writ of Mandamus to direct the
second respondent to enforce the implementation of Section 12(3) settlement dated 28.3.1998 under the Industrial Disputes Act, 1947, and
further direct the second respondent to prosecute the third respondent under Sections 25(u), 29 and 32 of the Industrial Disputes Act, 1947.
Similarly, the petitioner in W.P. No. 405 of 2003, alleging that even though he had opted for voluntary retirement and the same was accepted,
his voluntary retirement compensation and terminal benefits were not paid with accrued interest merely because he continues to be in occupation of
the quarters, seeks a writ of Mandamus to direct the BIFR not to accept any of the revised proposal of the respondent/company in contravention
to the summary record of the proceedings of the hearing in Case No. 48 of 1993 dated 28.10.2002 of the BIFR, on the ground that he was not
called for the meeting before the BIFR to decide the payment of his voluntary retirement compensation and terminal benefits with accrued interest
as per the settlement dated 28.3.1998 entered u/s 12(3) of the Industrial Disputes Act.
Concededly, the petitioners in W.P. Nos. 45804 of 2002 and 405 of 2003 are respondents 43 and 45 respectively, in W.P. No. 14856 of
2003, and the petitioner in W.P. No. 405 of 2003 is also the first petitioner in W.P. No. 37671 of 2002.
In all these writ petitions, in precise, the petitioners challenge Clauses 3(B)(ii), 7(d)(iii) and 7(d)(iv) of the scheme sanctioned by the BIFR, by
proceedings dated 31.10.2001, as modified by proceedings dated 13.12.2001.
16.1. Mr. G. Purushothaman, learned counsel for the petitioners in W.P. No. 5112, 37671 of 2002 and 405 of 2003, contends that the petitioners
are entitled for the voluntary retirement compensation and terminal benefits as per the settlement dated 28.3.1998 entered u/s 12(3) of the
Industrial Disputes Act with accrued interest thereon, and denial of the same by placing reliance on Clauses 3(B)(ii), 7(d)(iii) and 7(d)(iv) of the
scheme sanctioned by the BIFR, by proceedings dated 31.10.2001, as modified by proceedings dated 13.12.2001, is illegal.
16.2. Mr. G. Purushottaman, learned counsel for the petitioners in W.P. No. 5112, 37671 of 2002 and 405 of 2003, also contends that the
workers who are in occupation of the quarters are entitled to continue in the quarters on humanitarian basis. However, Mr. G. Purushottaman,
fairly concedes that the claim of the workers concerned to continue in their respective quarters is not based on any statutory provision.
Mr. S. Jagadeeshwaran, learned counsel for the petitioner in W.P. No. 45804 of 2002 contends that since the petitioner had not opted for
voluntary retirement, he is entitled to continue in service. However, since the petitioner had already been reinstated in service with effect from
17.2.2003, Mr. S. Jagadeeshwaran, learned counsel for the petitioner contends that the petitioner is entitled for backwages from 15.6.1996 till he
was reinstated, viz., 17.2.2003, and the said claim is, admittedly, pending before the Principal Labour Court, Chennai in C.P. No. 72 of 2000.
18.1. Per contra, Mr. R. Krishnamurthy, learned senior counsel for the respondent/company, contends that the settlement of voluntary retirement
compensation and terminal benefits as per Clauses 3(B)(ii), 7(d)(iii) and 7(d)(iv) of the scheme sanctioned by the BIFR, by proceedings dated
31.10.2001, as modified by proceedings dated 13.12.2001, had already been agreed by the workers'' Unions before the BIFR and was also
acted upon.
18.2. Mr. R. Krishnamurthy, learned senior counsel also brought to my notice the orders of this Court dated 8.3.2002, in the W.P. No. 23404 of
2001, appointing a Retired District Judge, Thiru S. Vijayarangam as Commissioner to collect the cheques from the respondent/company for the
amounts due and hand over the cheque to the occupant concerned after collecting the key and taking possession of the quarters on behalf of the
respondent/Company, if necessary with police assistance, and the said order had become final, and therefore, there is no bona fide in the demand
of the petitioners seeking settlement of the voluntary retirement compensation and terminal benefits with accrued interest without vacating the
quarters occupied by the workers concerned.
18.3. Mr. R. Krishnamurthy, learned senior counsel also pointed out that the petitioner in W.P. No. 405 of 2003 had already preferred a Claim
Petition, viz., C.P. No. 443 of 2000 on the file of the Labour Court, Chennai, claiming voluntary retirement compensation and terminal benefits
with accrued interest by refusing to vacate the quarteRs. However, Mr. R. Krishnamurthy, learned senior counsel fairly concedes that the
respondent/company shall abide by the final decision in the above claim petitions.
I have given careful consideration to the submissions of all sides.
Concededly, Clauses 3(B)(ii), 7(d)(iii) and 7(d)(iv) of the scheme sanctioned by the BIFR, by proceedings dated 31.10.2001, as modified by
proceedings dated 13.12.2001, were incorporated after due agreement of all the Workers'' Unions and the same was also acted upon by the
respondent/ company as well as the Workers'' Unions. It is not in dispute that the interest already paid by the respondent/Company and received
by the workers, namely Rs. 250 Lakhs till May, 2003 itself is in consonance with Clause 3(B)(ii) of the scheme sanctioned by the BIFR on
31.10.2001 as modified by proceedings dated 13.12.2001.
That apart, as rightly pointed out by Mr. R. Krishnamurthy, learned senior counsel, when the workers sought a direction in W.P. No. 23404 of
2001 to settle the entire amount based on the Voluntary Retirement Scheme prepared under the settlement entered u/s 12(3) of the Industrial
Disputes Act on 28.3.1998 and to forbear the respondent/company from evicting the workers from the quarters before settling the entire
settlement amount as per the settlement entered u/s 12(3) of the Industrial Disputes Act with accrued interest, this Court, by order dated 8.3.2002,
appointed a Retired District Judge, Thiru S. Vijayarangam as Commissioner to collect the cheques from the respondent/company for the amounts
due and hand over the cheque to the concerned occupant after collecting the key and taking possession of the quarters on behalf of the
respondent/Company, if necessary with police assistance, and the said order had become final.
In any event, Mr. G. Purushottaman, learned counsel for the petitioners in W.P. Nos. 5112, 37671, and 405 of 2003, fairly concedes that the
claim of the workers concerned to continue in occupation of the respective quarters or to allot necessary extent of land for resettling the petitioners,
is not based on any statutory provision. Therefore, it may not be proper for this Court to grant a writ of Mandamus as prayed for, when the claim
of the petitioners is not based on any statutory provision.
Moreover, with regard to the claims of the petitioners in W.P. Nos. 45804 of 2002 and 405 of 2003 are pending in C.P. Nos. 72 of 2000
and 443 of 2000, on the file of the Labour Court, Chennai, Mr. R. Krishnamurthy, learned senior counsel for the respondent/company fairly
concedes that the respondent/ company shall abide by the final decision in the said claim petitions.
For all these reasons, finding no merits, these writ petitions are dismissed. No costs. Consequently, the W.P.M.P. Nos. 56552, 56553, 65744,
66783 of 2002 are all dismissed.