M/S BALLARPUR INDUSTRIES LTD. versus STATE OF ORISSA AND ORS.

Citation: [2000] SUPP. 5 S.C.R. 122 · Decided: 28-11-2000 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Disposed off

Judgment (excerpt)

A 
MIS BALLARPUR INDUSTRIES LTD. 
v. 
STATE OF ORISSA AND ORS. 
NOVEMBER 28, 2000 
B 
[S. RAJENDRA BABU AND S.N. VARIAVA, JJ.) 
Service Law: 
Backwages-Employee terminated and reinstated-Liability to pay 
C arrears of salary-Whether by company which has taken over the sick State 
mill or by State-Held, on facts, the State is liable to pay the arrears. 
The services of employee-respondent, working as Chief Welfare Officer 
with Respondent-Corporation, was terminated by an order dated 15.12.1981. 
D The respondent appealed before the State Government as per the Rules. The 
State Government set aside the order of termination and directed 
reinstatement of the respondent. The Corporation insisted that the 
reinstatement of the respondent could be done only prospectively from the 
date of the appellate order and not retrospectively from the date of order of 
termination. The respondent filed a Writ Petition before the High Court The 
E High Court directed that the respondent should be allowed to continue in the 
post of Chief Welfare Officer forthwith. The respondent joined the service 
again on 26.7.1989. He was not paid his arrears of salary as the Corporation, 
by then, had been declared sick under the provisions of the Sick Industrial 
Companies (Special Provisions) Act, 1985. The arrears of salary could be 
F paid only with the decision ofBIFR BIFR sanctioned a Scheme on 21.12.1990. 
Under this Scheme, the mill, where the respondent was working, had been 
purchased by the State and sold to the Appellant. When the respondent 
approached the Appellant for arrears of salary, the Appellant refused payment 
as the liability was not taken over by the Appellant. The respondent filed a 
Writ Petition before the High Court for direction of payment of arrears of 
G salary by the Appellant. During the pendency of this Writ Petition the 
respondent retired on 13.4.1992. High Court directed the Appellant to pay 
the dues to the respondent from 15.12.1981till2.8.1989. Hence this appeal. 
The Appellant contended that the State is liable to pay the dues to the 
H respondent as per the MOU entered into by the Appellant with the State. The 
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BALLARPUR INDUSTRIES LTD. v. STATE [VARlAVA,J.] 
123 
State, on the other hand, contended that as per the correspondences, MOU A 
and the Scheme of BIFR, the Appellant has to pay all dues of the workers 
upto December 1998, which includes the respondent also. 
Disposing the appeal, the Court 
HELD: 1.1 From the Scheme of BIFR and correspondences and the MOU B 
between the State and the Appellant, the liability of the arrears of salary 
payable to the respondent was not taken over by the Appellant even though 
under the Scheme, the State of Orissa had taken over the liability to pay all 
dues of the employees upto the date of the sanction of the Scheme. Thus dues 
of employees upto December, 1990 were payable by the State of Orissa. This C 
would include arrears of salary payable to the respondent. In this view of the 
matter the High Court was wrong in directing the Appellants to pay this 
amount. To that extent, the order of the High Court is required to be and is 
set aside. [129-C] 
1.2. It is clarified that the amounts due to the respondent are payable by D 
the State of Orissa. It must be mentioned that there was a dispute as to 
whether the respondent continued to discharge his duty after 2nd August, 
1989. As this was a disputed question of fact, the High Court only directed 
payment of arrears for the period from 15.12.1981till2.8.1989. There is no 
reason to vary that portion of the judgment of the High Court. The arrears of 
salary which will be payable by the State of Orissa to the respondent will only E 
be for the period from 15.12.1981till2.8.1989. The same must be paid as 
expeditiously as possible. [129-D-E) 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9294 of 1995. 
From the Judgment and Order dated 7.4.95 of the Orissa High Court in F 
O.J.C. No. 2736 of 1992. 
N. Sahni, Rajesh Malhotra and D.K. Malhotra for the Appellant. 
V.A. Mohta, Sobhesh Roy, Advocate General Orissa, R.S. Jena, P.N. 
Gupta and Pravir Choudhary for the Respondents. 
G 
The Judgment of the Court was delivered by 
S.N. VARIAV A, J. This Appeal is against a Judgment dated 7th April, 
1995, by which the Appellant has been directed to pay arrears of salary of 
the 4th Respondent for the period from 15.12.1981 to 2.8.1989. 
H 
124 
SUPREME COURT REPORTS (2000] SUPP. 5 S.C.R. 
A 
Briefly stated the facts are

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