- (1.) This special appeal has been filed against an order dated 29 April 2015 passed by a learned Single Judge. The learned Single Judge rejected an objection to the maintainability of contempt proceedings initiated by the first, second and third respondents. The breach alleged was of an order passed by a Division Bench in a company appeal, recording the terms of a settlement entered into in pursuance of mediation proceedings which took place before the Mediation and Conciliation Centre of this Court at Lucknow.
(2.) On 8 August 2012, a reference was made to the Board for Industrial and Financial Reconstruction(BIFR) under the Sick Industrial Companies (Special Provision) Act, 1985(SICA). The reference was registered on 3 December 2012. The company in respect of which the reference was registered is J R Organics Ltd of which the appellants as well as the third and fourth respondents are Directors. The reference, admittedly, was registered at the behest of the appellants. Winding up proceedings had been instituted against the company by Balrampur Chini Mills Ltd(Company Petition 3 of 2010). An order was passed by a learned Single Judge of this Court on 15 February 2011 rejecting an application of the creditor in the petition for winding up, for withdrawal of the company petition. Instead and in place of the original creditor, the learned Single Judge permitted the transposition of Somaiya Organics Employees Union, Barabanki as the applicant for pursuing the petition for winding up. A company appeal was filed against the order of the learned Single Judge(Company Appeal No 1 of 2011). By an order dated 21 November 2011, the Division Bench noted that counsel for the parties had agreed to attempt a solution by entering into negotiations. The Division Bench referred the matter to the Mediation and Conciliation Centre of this Court at Lucknow where the representatives of the workmen and the management were permitted to appear together with the creditors. On 4 January 2013, the Division Bench noted that a settlement agreement had been entered into and signed by the parties before the Mediation Centre on 1 June 2012. Under the agreement, the management agreed to pay the outstanding dues of the workmen and employees in the amount of Rs 9.38 crores and outstanding dues of creditors in the amount of Rs 2.76 crores. These dues were directed by the Division Bench, with the consent of counsel, to be paid by 31 December 2013. The workmen and employees were to be entitled to the payment of their dues up to 31 December 2012. The Division Bench recorded that all the settlement agreements shall form part of the judgment. Keeping in view the amicable settlement between the parties, the Division Bench set aside the order of the learned Single Judge, expressing a hope and expectation that parties would cooperate in the implementation of the settlement agreement and would not create any disturbance in the functioning of the company and the sugar mill. The settlement agreements were to be binding on the signatories. The appeal was, accordingly, disposed of. The order of the Division Bench was confirmed by the dismissal of a special leave petition filed by the appellants, on 7 May 2014 by the Supreme Court.
(3.) In the meantime, on 12 December 2013, the BIFR passed an order declaring the company as a sick industrial company under Section 3 (1) (o) of SICA and appointed Punjab National Bank as the Operating Agency under Section 17 (3). The following order was passed by the BIFR: "(i) The company shall prepare a fully tied up draft rehabilitation scheme (DRS) within four weeks and submit the same to OA, with a copy to the Board. (ii) The OA shall examine the DRS prepared by the company within further six weeks' time and hold a joint meeting of all the stakeholders to consider the company's DRS and submit a report with a fully tied up DRS, if it emerges. The Guidelines and Checklist for preparation of DRS is also enclosed herewith. (iii) The company shall not dispose of any of its assets as per provisions of Section 22 of SICA without prior approval of the Board.";