A.K.Banerji, J. - (1.) The Board for Industrial and Financial Reconstruction (BIFR in short) had vide its order dated February 14, 1995, recommended the winding up of the company Tannery and Footwear Corporation of India Limited ("TAFCO" in short) under Section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985 ("SICA" in short), and forwarded the aforesaid opinion to this court for action in accordance with law. The said opinion has been registered in this court as Miscellaneous Company Application No. 4 of 1995. Before the matter could proceed however appearance was put before this court by the TAFCO Officers' Association and, it was stated by learned counsel that an appeal has been preferred before the Appellate Authority (AAIFR) against the recommendation made by the BIFR and the same was pending. Subsequently, it was brought to the notice of the court that the said appeal had also been dismissed vide order dated April 19, 1995, passed by the Appellate Authority and against the said order a writ petition has also been filed before the Delhi High Court which was pending. In the meantime, appearance has been put before this court by the TAFCO Janta Mazdoor Union, Kanpur, Tannery Employees Union and the TAFCO and Tannery Mazdoor Sabha. Objections supported by an affidavit have been filed against the recommendation made by the BIFR and the appellate order by the TAFCO Officers' Association and the aforesaid three workers' unions. Appearance has also been put by the Union of India, Ministry of Industries, Department of Heavy Industries, New Delhi, who have supported the recommendation made by the BIFR and prayed for appropriate orders by this court.
(2.) I have heard Shri Vinay Khare and Somesh Khare, learned counsel for the TAFCO Officers' Association, Shri S. C. Budhwar, learned senior counsel assisted by Shri Yashwant Varma on behalf of three unions of the workmen, Shri Narendra Mohan is also appearing on behalf of the TAFCO Janta Mazdoor Union and Shri Sandeep Saxena for the Union of India, Department of Heavy Industries. I have carefully perused the affidavits exchanged between the parties and the record of the case including the revival proposals which are on the record.
(3.) Before proceeding to consider the respective submissions made by learned counsel for the parties, it would be proper to state in brief the relevant facts and the background of the case which resulted in the matter culminating before this court. Tannery and Footwear Corporation of India Limited (TAFCO) was incorporated in the year 1969, by taking over the two sick units of the British India Corporation Limited (BIC), namely, Cooper Allen and North West Tannery, as the private owners of the same were unable to run them due to the losses suffered. The promoter of TAFCO was the Government of India. The TAFCO was mostly producing boots and shoes and over 60 per cent. of the production was being taken by the Defence Department. The company, however, continued to suffer heavy losses and, ultimately, it was resolved that it had become a sick industrial concern and the matter was referred to the BIFR which registered the case and appointed the IFCI as the operating agency. Before the BIFR a number of hearings took place in which the management of the TAFCO Officers' Association, Prominent Workers' Unions including the Janta Mazdoor Union participated. The representatives of the operating agency, State Bank of India as well as the Government of India, Department of Heavy Industries, also appeared before the BIFR and submitted their views and proposals. Having considered all the aspects of the matter including the proposal submitted and the views of the operating agency as well as the different parties who had made their submissions, the BIFR ultimately was of the opinion that the sick industrial company was not likely to make its net worth exceed the accumulated losses within a reasonable time while meeting all its financial obligations, therefore, it was not likely to become viable in future. Consequently, it was just and equitable that it should be wound up under Section 20(1) of the Act and forwarded the opinion to this court for necessary action. Aggrieved, the TAFCO Officers' Association preferred an appeal before the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) wherein, the order passed by the BIFR was challenged on the ground that the scheme submitted before the said authority had not been properly considered and the opinion cannot be justified in the facts and the circumstances of the case. The Appellate Authority considered the submissions of the appellant who were supported by the workers' union and, after considering the submission concurred with the opinion of the BIFR and, consequently, dismissed the appeal vide order dated April 19, 1995. It appears that a writ petition was filed against the said orders before the Delhi High Court, which has also been dismissed and as the order was not filed before this court, it is not very clear whether the writ petition was dismissed on the merits or was dismissed as withdrawn.;