WORKMEN OF M/S ROHTAS INDUSTRIES versus ROHTAS INDUSTRIES AND ORS.

Citation: [1995] SUPP. 4 S.C.R. 459 · Decided: 18-10-1995 · Supreme Court of India · Bench: KULDIP SINGH, S.C. AGRAWAL · Disposal: Disposed off

Judgment (excerpt)

• 
WORKMEN OF MIS ROHTAS INDUSTRIES 
v. 
ROHTAS INDUSTRIES AND ORS. 
OCTOBER 18, 1995 
[KULDIP SINGH AND S.C.AGRAWAL, JJ.] 
Company Law-S 396-Winding up proceedings-Efforts of the Court 
to revive and rehabilitate the industry zmsuccessful-Directions for resuming 
the Winding up proceedings issued. 
Rohtas Industries situated in the State of Bihar, and its associate 
companies were engaged in producing cement, paper- board, asbestos etc. 
In 1984 the company closed down thus rendering about 10,000 workmen 
unemployed. A winding up petition was filed before the Patna High Court 
whereupon a Provisional Liquidator was appointed. 
A 
B 
c 
D 
The workers filed a writ petition before this Court, during the pen-
dericy of the company petition, which was admitted to provide relief to. the 
workmen and to revive the industry and notice given to both the State of 
Bihar and the Union oflndia. Since the Sick Industrial Companies (Special 
Provisions) Act 1985 came into force when the matter was before this Court, E 
an order was made directing the Union Government to refer the matter to 
the BIFR so that a scheme may be framed. On the report of the BIFR which 
had opined that three of the units of the company could be revived while 
one could not be, this Court in the interests of the workmen and the 
problems that would have to be faced by the company, passed an order on 
24-10-89 directing that the company in terms of vfable units should be 
revived. There was also a direction to the State to appoint an I.A.S. officer 
with the right background as Rehabilitation Commissioner who would take 
over from the Provisional Liquidator. A moratorium of one year in respect 
of the assets was granted. The State Government was willing to deposit Rs. 
F 
15 lakhs with the Administrator and this Court directed the Union oflndia G 
to deposit another sum of Rs.15 lakhs for use by the Administrator to meet 
the wage bill, disbursement of loans etc. The Rehabilitation Commissioner 
was successful in starting four units providing work for 2900 men. But he 
needed more funds and approached the Court. 
The State of Bihar and Financial Institutions could not provide the H 
459 
• 
460 
SUPREME COURT REPORTS [1995) SUPP. 4 S.C.R. 
A funds. The Court felt that it would be best to dispose off the undertaking 
and since a going institution would fetch a better price, directed the Union 
of the India to advance a sum of Rs. 111. crores to the State of Bihar so 
that the State could give the said sum to the industry. An advertisement 
was issued inviting offers and 14 offers were received. The maximum offer 
B 
c 
was Rs. 15 crores. Since the assets of the company were about Rs. 250 
crores and the offers were way below this amount, the Court did not 
entertain the offers and by another order directed the Union Government 
to revive the reference to BIFR. Industrial Finance Corporation was 
appointed by BIFR for preparing a report who in turn appointed SIRCON 
to prepare the report. On receipt of the report the Court found that there 
was no possibility of revival though there were two proposals under 
consideration. One of which offer was made by Shri L.N.Dalmia. Since 
there were reservations expressed by BIFR, Union of India, and the State 
of Bihar, the offer was found unworkable. 
Disposing the writ petition with certain directions to the State 
D Government, and the Rehabilitation Commissioner, this Court 
E 
F 
HELD : 1. In spite of best efforts the object with which this Court 
intervened in the matter by entertaining the writ petition, viz, to revive the 
undertakings, does not appear feasible. The writ petition should be 
brought to an end and the winding up proceedings pending before the 
Patna High Court be resumed. [474-B] 
2. Now while putting an end to these proceedings and permitting 
resumption of the winding up proceedings in Company petition No.3 of 
1984 pending before the Patna High Court, it is directed as under: [ 476-H] 
(1) The Winding up proceedings in Company petition pending before 
the Patna High Court will be resumed by the Company Judge. The parties 
and the Rehabilitation Commissioner shall appear before the Company 
Judge for seeking necessary directions on November 20,1995. [477-A] 
G 
(2) The Rehabilitation Commissioner shall-
(a) complete the sale of the raw materials/finished products/wasted/ 
damaged materials including the burnt out transformer and rejected 
copper cable be November 30, 1995; [477-B] 
H 
(b) sub

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