WORKERS OF M/S ROHTAS INDUSTRIES LTD. versus M/S ROHTAS INDUSTRIES LTD.

Citation: [1987] 2 S.C.R. 1216 · Decided: 27-04-1987 · Supreme Court of India · Bench: RANGANATH MISRA · Disposal: Directions issued
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Judgment (excerpt)

A 
WORKERS OF MIS ROHTAS INDUSTRIES LTD. 
v. 
MIS ROHTAS INDUSTRIES LTD. 
APRIL 27, !987 
r· 
B 
[RANGANATH MISRA AND G.L OZA, JJ.J 
Bihar Relief Undertakings (Special Provisions) Act 1981-Section 
3-'Re/ief undertaking'-Declaration of-Workers not paid salaries 
~. 
and wages as ordered by Court-Ordered that goods lying in stock be 
sold and out of sale proceeds the workers be paid their dues. 
c 
--: 
By order dated 5.2.1986 this Court had directed that all salaries 
and wages due to the workers from May 1984 onwards shall be paid to 
them in three instalments. They have not yet been paid. 
~ 
It was brought to the notice of the Court that the State of Bihar 
D has issued a Notification dated December 12, 1986 declaring the 
respondent-industry a sick industry under s. 3 of the Bihar Relief 
Undertakings (Special Provisions) Act, 1981 and that the said Industrial 
Undertaking shall be and remain a relief undertaking for one year. 
On behalf of the industry it was contended that the liability of the 
E industry for payment to the workers cannot be enforced. However, + 
counsel for the State conceded that the State Government wants that the 
wages to the workers should be paid. 
.-. 
According to the Report of the Official Liquidator finished pro· 
ducts of the value of Rs.91, 77,000 are lying in stocks and that from 
... 
F May, 1984 till 8th July, 1984 an amount of Rs.89 ,00 ,000 remains to be 
paid to the workers as their salaries and emoluments. 
~ 
On behalf of the financial institution it was contended that the 
products lying in stocks are pledged with them and Ibey have prior 
claim over the sale proceeds of these stocks and, therefore, the products 
G could not be sold and the workers could not be paid off. It was suggested 
that a scheme has been drawn up to revive the industry and financial 
problems may arise if the stock is sold out and wages paid to the work· 
~ 
ers out of sale proceeds. 
Issuing directions the Court, 
h 
1216 
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' 
I 
WORKERS v. ROHTAS INDUSTRIES 
1217 
HELD: 1. Though the stock of products is pledged with Banks A 
and they have a priority in law, but it is the result of the bard-work of 
the workers that these stocks could be produced. Therefore, it could not 
be said that the wages and emoluments for the period npto closure 
would not rank in priority. Their subsistance and living is also of 
paramount importance and bas to rank with highest priority. For this 
reason the Government of India is keen to have a scheme for revival of B 
this industry and the State Government also desires that the workers 
should be paid their salaries. [1219A-D] 
2. Looking to all the circumstances and taking a broad and 
humane view of the situation it would be just and proper that these 
goods which are lying in stock should be sold out and out of the sale C 
proceeds the workers should be paid their dues upto the date of the 
closure (from May 1984 to 8th July, 1984). The Official Liquidator will 
ensure that the disposal fetches the best rates. This shall be completed 
within two months. [1219F] 
3. The financial institutions have other sufficient securities and D 
properties of the Company and if the stocks of finished products are 
sold to meet the basic requirements of the workers, their interests 
wouldnotbeinjeopardy. [1219G-H) 
+ 
4. The balance out of the sale proceeds, if any, will be utilised for 
meeting other pressing demands in the discretion of the Official E 
Liquidator subject to orders of the Court. [12208) 
S. The Official Liquidator may keep the amount of insurance 
claim separately and allow the State Bank to adjust the same against its 
insurance. [ 1219G] 
6. Issuance of the Notification by the Bihar State Government 
will not come in the way of sale of these assets and payment of the 
workers. [ 1220C I 
ORIGINAL JURISDICTION: Writ Petition No. 5222 of 1985. 
Under Article 32 of the Constitution of India. 
R.K. Garg, R.S. Singh and S.K. Verma for the Petitioner. 
F 
G 
K. Parasaran, Attorney General, B. Datta, Additional Solicitor 
General, A.K. Ganguli, Dr. Y.S. Chitale and Dr. Shankar Ghosh, H 
1218 
SUPREME COURT REPORTS 
(!987] 2 S.C.R. 
A P.P. Singh, Ranjit Kr. Pramod Dayal, D. Goburdhun, K. Swamy, Ms. 
Sushma Suri, Probir Mitra, A.K. Ghose, M.M. Gangadeb, Dhanjay 
)--
Chandrachud, P.R. Seetharaman, D.K. Sinha, K.R. Nambiar and 
A.K. Sil for the appearing parties. 
The Order of the Court was delivered by 
B 
OZA, J. Heard learned counsel for the petitioners as well a
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