M.P.THAKKAR - (1.) MORE than a thousand brimming eyes are waiting to replace the tears of despair by tears of relief. No less than 600 wronged workers of a once prosperous industrial unit (Kamani Tubes Limited (KTL)) induced or reduced to 'sickness' are on their toes to resort to self-help to restore the lost source of their butterless bread. Their pens are quivering to write a new chapter in the saga of workers' struggle for finding their true 'identity' and 'dignity'. Their dream is coming true with the enlightened and refreshing approach of the Central and State Governments, and the concerned Nationalized Banks (Bank of India, Canara Bank and Dena Bank), coupled with prompt, efficient and swift decision making on the part of the BIFR*1 and the IDBI (Industrial Development Bank of India). And with the consensus of all the parties (which is the most heartening feature) who have risen above narrow individual interests by not opposing the workers' scheme in order to promote the larger National interest of reviving the industry, augmenting the National product and providing employment to hundreds of starving workers (three of whom became martyrs to the cause by committing suicide).
(2.) INTERNAL discord gave rise to disputes and litigations between different branches of a family headed by a pioneering and successful industrialist Shri Ramjibhai Kamani in the wake of his demise, which culminated in SLP No. 15228 of 1983 wherein all the concerned members of the family were impleaded. When the said matter came up before this Court it was impressed upon the parties that the internecine conflict between the warring factions deserved to be speedily resolved, not only in their own interest, and for saving the name and honour of the founder, but also to ensure that neither the industrial units nor the workers employed in the industries which were controlled by one or the other branch of the industrial family, were ruined. A retired Judge of the Supreme Court Justice A. C. Gupta was accordingly prevailed upon to accept the assignment of resolving the innumerable problems in the larger interest of the warring factions as also in order to protect the interests of the community and the workers in August 1984. The learned Mediator has invested considerable time, effort and accumen in order to resolve the problems presented in the course of the proceedings and has successfully disentangled the economic mess to a considerable extent. This is evident from the fact that after the learned Mediator came on the scene Income-tax and Capital Gains-tax dues to the tune of over Rs. 48 lakhs and over Rs. 35 lakhs respectively have been paid. In the course of the proceedings it came to light that : (1) KTL has stopped production and ceased working in August 1985. (2) KTL has not resorted to closure of the unit or to retrenchment of the workers in accordance with the relevant provisions of law. (3) While in the eye of law and in theory the workers continue on the rolls of KTL and in employment of KTL, the workers have not been paid wages for over 8 months since December 1984 till stoppage of work in August 1985 and ever since till now. The arrears till August 1988 work out in the region of Rs. 6 1/2 crores. (4) The wages due to the workers amounting to approximately Rs. 2.5 crores have remained unpaid since December 1984. (5) Employees contribution to Provident Fund actually deducted from the wages of the workers to the tune of approximately 3 1/2 lakhs had been wrongfully retained by the management and criminal prosecutions are pending in the Criminal Courts. (6) The starving workers who have not been paid their wages since December 1984 have been squatting on the factory premises which have been abandoned by the Management. The workers have remained on the premises in order to keep day and night vigil for all these years since August 1985 in order to protect the plant which had provided them work and enabled them to earn their bread by the sweat of their brow. (7) Three of the starving workers have committed suicide on account of their inability to survive the burden of misfortune heaped on them. The plight of the workers notwithstanding, they exhibited exemplary conduct on their part, and the Kamani Employees Union (KEU) extended its hand of co-operation to the Kamani family group as has been noticed by the learned Mediator in his minutes dated 2/07/1986 :- "the bona fides of the applicant workers would be clear from the fact that in spite of the fact that no wages have been paid to them for the last 14 months, yet, in order to demonstrate their spirit of co-operation, the workers, through their union, had offered in writing to co-operate with the management. and accept deferred payment of unpaid wages. The applicants repeat and reiterate that offer. The workmen always were, and still are ready and willing to accept the arrears of unpaid wages with increase of production and creation of surplus. I shall be happy if the authorities who have to take a decision in this matter could find their way to accepting the request of the workers who have not received wages for about 16 months now. As regards the two proposals given by the workers, neither of them was found acceptable by any of the Kamani family groups present; they thought that the proposals were not feasible." A proposal was then mooted to sell 90% of the shares of KTL. Meanwhile the workers sought leave to frame a scheme of their own for revival of the 'sick' unit. What exactly transpired 2 1/2 years back has been recorded in the Mediator's minutes dated 2/07/1986 : "At the end of the discussions it was decided that the different groups of the family or any of them would try to find a buyer willing to buy the 90% shares held by the family in Kamani Tubes Limited as it is at present. The buyer will have to sit with the workers of the company to come to an agreement with them with regard to the payment of their dues. If the prospective buyer wishes to inspect the factories, no objection would be raised either by the workers or the present management of the company. Parties will report to me within six weeks any progress made in this matter. On behalf of the workers it was submitted that as the search for a buyer was likely to take time, they may be permitted in the meantime to try and frame a scheme of their own for restarting the factories after discussing the matter with the Bank and other authorities. They are free to do so." And after an exasperating waiting period of nearly one year thereafter the workers instituted CMP No. 3805 of 198 7/07/1987 inter alia seeking the following prayers :- "(a) "All appropriate orders and directions for the sale of the shares of KTL to KEU on behalf of and representing the proposed society at such price and on such valuations as this Hon'ble Court in its absolute discretion deems proper and subject to such terms and conditions as may be stipulated. (b) appropriate orders and directions to the said Board respondent No. 59 to take expeditious remedial and other measure for the revival of the factories of the K.T. including directions to the said Board to consider the scheme of the applicants for the revival and rehabilitation of K.T. in terms of, Exhibits 10 and 12 hereto. (c) all appropriate orders and directions for the implementation and consideration of the scheme for the revival of the factory of K.T. as per Exs. 10 and 12 hereto including directions for management of K.T., amendment of Articles of K.T. and all matters connected therewith with such modifications as may be deemed necessary."
(3.) BY an order of this Court, dated 13/10/1987 in CMP 3805/87 (reported in 1987(5) JT 150), this Court directed the BIFR to file a feasibility report with respect to the scheme presented by the workers for the revival of KTL. This Court also directed the BIFR to hear the workers as well as the different groups of Kamani family before making its recommendations. As per this direction the Board held a number of hearings which were attended inter alia, by representatives of KEU, Financial Institutions, Banks, State Government, Central Government and different groups of the Kamani family. IDBI, an apex institution in the field of term lending and one of the operating agencies of BIFR, was entrusted with the examination of KEU's scheme particularly with regard to technical health of the plant and time required to run it, various assumptions made in respect of the parameters of costs/prices, estimates of production pattern vis-a-vis projection of future demand, correctness of cost of production, working capital requirement, projected operating cash surplus etc. IDBI submitted its report which was discussed in the subsequent hearings and the views of the concerned agencies, such as, Banks, State Government, Central Government, and the commitments regarding reliefs and concessions that would be available from these agencies, were obtained. On being so required IDBI subsequently revised its projections and viability estimates. Based on the above, BIFR prepared its Feasibility Report and submitted it to this Court. After considering the report of BIFR, and hearing various parties and with the consent of the parties, this Court vide its order dated 20/04/1988 directed, inter alia, that the matter be placed before BIFR for consideration whether it should proceed to pass an order in terms of the proposed scheme as revised in consultation with IDBI under S. 18(4) of the Sick Industrial Companies (Special Provisions) Act, 1985. The Board was requested to arrive at a decision after giving notice to all the concerned parties. The relevant part of the order deserves to be quoted :- "In compliance with the Court's order dated 13/10/1987 the Board for Industrial & Financial Reconstruction, New Delhi, established under S. 4 of the Sick Industrial Companies (Special Provisions) Act, 1985 in consultation with the Industrial Development Bank of India, constituted under S. 3 of the Industrial Development Bank of India Act, 1964 as its operating agency within the meaning of S. 3(1) of the Act, considered in depth the scheme submitted by the Kamani Employees Union and has evaluated the same by its 'feasibility report' dated 12/01/1988. We have heard learned counsel for the parties and they agree to the order we propose to make. We direct that the matter shall now be placed before the Board for Industrial & Financial Reconstruction for consideration as to whether it should proceed to pass an order in terms of the proposed scheme as revised in consultation with the Industrial Development Bank of India under S. 18(4). The Board shall come to a decision after notice to all the parties and it shall act in conformity with the provisions of the Act. The Board may, if necessary, frame its own scheme or adopt the proposed scheme framed by the Kamani Employees Union, with such modifications as it deems fit. The Board shall also be at liberty to consider any alternative scheme at its discretion but the whole exercise shall be completed within eight weeks from today. If the objections to the Kamani Employees Union's scheme are not sustained the said scheme shall be dealt with according to law." Pursuant to the direction of this Court, the Board afforded a hearing to all the concerned parties on 20/05/1988 and after having examined the submissions made by the various groups of Kamani family, Banks, State Government and Central Government, prepared a Draft Scheme for revival of KTL. The said Draft Scheme was circulated to all the parties concerned and short particulars thereof were also published in two news dailies for the information of the shareholders, the creditors and the employees etc. in general. The parties were given due notice for making suggestions/ raising objections with respect to the Scheme. On receipt of various suggestions/objections the Board held its hearing on 28-7-88 for considering the same. After hearing all the parties, and after having examined all the written/oral submissions made, the Board had financed, and sanctioned the scheme as per its decision dated 6/09/1988 which has now been placed before this Court for further orders in the light of the submissions of the concerned parties. Two questions arise in the context of the Workers' Scheme which has been sanctioned by the BIFR as per its decision dated 6/09/1988 : (1) Whether the Scheme presented by Shri Ashish Puranchand Kamani, applicant in CMP No. 22428 of 1988, at the time of the hearing on 12/09/1988 (which was not presented before BIFR) deserves to be considered having regard to his claim that his scheme is preferable to the Workers' Scheme already sanctioned by the BIFR on 6/09/1988; (2) Whether the Workers' Scheme as sanctioned by BIFR deserves to be stamped with the imprimatur of the Court. ;