Sachi Kanta Hazari, J. - (1.) This writ application has been filed by New Bra Fabrics Ltd., Shri Ram Jute Products Ltd., Narmada Laminators Pvt. Ltd, and Anand Kumar Agarwalla, petitioner nos. 1 to 4 herein respectively, inter alia, praying for an order that section 20 of the Sick Industrial companies (Special Provisions) Act, 1985 be declared ultra fires the Constitution of India and null and void and also for other reliefs.
(2.) The petitioner No. 1 is a public limited company having an authorised capital of Rs. 2 crores. The petitioner No. 2 is also public company limited by shares having an authorised capital of Rs. 95 lakhs and providing employment of 300 workers directly. The petitioner No. 2 carries on ware housing business and the said warehouse is situate at 43/1, Garden Reach Road, Calcutta and the annual income from the laid warehousing business for the year ended on 31st Much, 1992 was Rs. 79 lakhs.
(3.) It is the petitioners' case that, he Dunbar Mills Ltd., the respondent No.11, has a composite textile mill located at Shamnagar, District 24-Parganas (North), having a licensed capacity for 68084 spindles and 978 looms and the present installed capacity is 66800 spindles and 978 looms with a processing capacity of 60.000 meters of cloth per day and has captive diesel generator sets to cater to the electricity/power needs of the company for production. The said company was Initially promoted in the year 1896 by M/s Kilburn & Co. for setting up a spinning mill which was eventually converted into a composites textile mill. the controlling interest in the company was taken over by the Bangers a family of industrialists, in or about 1954 and later the manufacturing unit of the company was leased out lo M/s Maharaja Shree Umaid Mills Ltd., the respondent No. 12 heroin, initially for a period of two years. Subsequently the said M/s. Maharaja Shree Umaid Mills Ltd. acquired the majority shareholding of the company and thus become a holding company thereof. In 1983 the financial institutions sanctioned term loans aggregating Rs. 260 lakhs for modernisation of that said manufacturing unit of the company at s total coat of Rs.410 lakhs, the break-up of which is as follows; JUDGEMENT_69_LAWS(CAL)3_1993.html Modernization of the manufacturing unit of the company was subsequently abandoned after incurring an expenditure of about Rs. 395 lakhi out of which the financial Institutions disbursed term loans to the extent of Rs. 253.75 lakhs. Ultimately the said company was closed down with effect from 30th May, 1987. The company incurred a cash loss of Rs. 108 lakhs to 1986 and about Rs. 345 lakhs. In 1987 On 31st December, 1987 the accumulated losses of the company amounted to Rs. 587 lakhs. In 1987 the company made a reference to the Board for Industrial and Financial Reconstruction under the provisions of section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. On 10th March, 1988 the BIFR declared the company as a sick company under clause (0) of the sub-section (1) of section 3 of the said Act and IFCI, the respondent No. 2, was appointed as the Operating Agency for the purpose of formulating a viability scheme under section 17(3) of the Act for rehabilitation and revival of the company. BIFR also appointed Mr. M.L. Giliani as Special Director of the company under Section 16(4} of the said Act. On 14th November, 1988 the BIFR formed a primo facie opinion that the company should be wound up. On 27th February 1989, the representative of the Government of Weal Bengal requested the BIFR for granting three months' time so as to enable the State Government to consider the revival of the company, Mr. K.N. Fatehpuria of Martin Burn Ltd. submitted a rehabilitation scheme for the revival of the company. Subsequently Mr. K.N. Fatehpuria backed out and informed the BIFR to be was no longer interested in taking over this company. On 12th August, 1991 one Shri Kant Bangur, a member of the Bangur family, submitted before the BIFR that his group would be in a position to mobilise this required interest free fund for reviving the company. On 11th May, 1992 the scheme submitted by Shrikan Bangur was found to be unworkable mainly on the issue of employment of existing worker and waiver of penalties interest by the statutory authorities, such us, ESI, BPF and CESO Mo. The representatives of the various Workers' Unions of the company submitted before the BIFR that time be given to the Workers' Unions to form a workers' co-operative for operating the company and submit a comprehensive proposal in respect thereof. It was further submitted that some financiers might be agreeable to invest substantial amounts for the revival of the company. By an order dated 24th June, 1992 the BIFR under section 20(1) of the said Act held that the company was not viable and should be would up and the order was forwarded to the Hon'ble High Court, Calcutta for further necessary action in accordance with law. The petitioners' case is that they want revival of the company and why are vitally interested as the petitioner No. 2 and 3 are shareholders of the company. The petitioner have entered into an agreement and/or settlement with the workers' unions for the purpose of rehabilitation and revival of the company and have annexed a copy of the agreement dated 6.12.92 to the writ petition. The ease of the petitioners is that by virtue of the said agreement the entire outstanding dues of the workers including wages, gratuity, bonus, leave wages etc. would be paid in accordance with the said agreement and the workers have accepted the mode of payment. The petitioners have filed a scheme for revival of Dunbar Mills Ltd. Copy of the scheme was given to all the pasties and the parties filed their affidavits.;