Rakesh Ranjan Prasad, J. - (1.) MICA Trading Corporation Limited (MITCO) was incorporated under the Companies Act in the year 1973 as a subsidiary of Minerals and Metal Trading Corporation (MMTC). MITCO was formed for manufacturing and marketing of mica powder, mica paper, mica capacitors etc. and also for exporting mica to erstwhile USSR and to eastern European countries like Bulgaria, Romania, Germany etc. The manufacturing activities got started in the year 1981 at Abhraknagar situated within the territory of Jharkhand. Much before it in the year 1974, MMTC vide its order as contained in letter dated 9.9.1974 (Annexure 1) delegated several powers to its subsidiary company MITCO including the power to frame its own rules relating to service conditions with the prior approval of the MMTC. At the same time, it also stipulated that all the rules/orders governing the service conditions of MMTC employees will be applicable to the employees of MITCO. In the year 1984, there was wage settlement with the federation of MMTC employees with the approval of the Ministry of Commerce. Thereupon the General Manager (P) of the Minerals and Metals Trading corporation of India Limited (MMTC) wrote a letter dated 7.8.1984 (Annexure 2) to the Chairman, Mica Trading Corporation of India Limited (MITCO) regarding revision of pay scales etc. of staffs in MITCO stating therein that Ministry of Commerce has been intimated that the pay scales of staffs of MMTC and MITCO are identical and therefore, the revised scale of pay will be applicable to the staffs of MITCO as well. In course of time, on account of global changes in eastern European countries and disintegration of USSR affected the business of MITCO adversely. The changes in ratio of rupee/ruble, further affected the business of MITCO. Its miseries further got aggravated when a decision was taken in the year 1990 by the Government of India to the effect that export of mica could be undertaken by any individual exporter and thereby income of MITCO a canalizing agency got halted. In that eventuality, the case of MITCO was referred to Board for Industrial and Financial Reconstruction (BIFR) on 21.12.1992 in terms of the provision of Sick Industrial Companies Act (SICA),1985. In 1993, MITCO was declared as sick company by BIFR. The Bench examined various possibilities of its revival on stand alone basis but could not succeed in its efforts. However, it considered merger/amalgamation to be the best solution for long term viability of the company. For that purpose, State Bank of India was appointed as an operating agency (OA), who after taking into account several factors submitted a draft rehabilitation -cum -amalgamation/merger scheme (DRAM) for revival of the aforesaid company which upon finding its approval by BIFR, was circulated to all concerned parties for their consent as required under Section 19(2) read with Section 19(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. At the same time, schemes were published in two local dailies inviting objections/suggestions. Under the draft rehabilitation -cum -amalgamation/merger scheme, stipulation was made that all the employees, who are not surplus to requirements being retained in service as per Annexure 2, shall become the employees of MMTC from the effective date of merger/amalgamation without interrupting their services in any manner and the terms and conditions of service applicable to such employees on the effective date will not in any way be less favourable to them than those applicable immediately before the appointed date, i.e. 1.4.1994.
(2.) WHEN the matter again came up before a Bench of BIFR, a representative of the Government of India (Ministry of Commerce) stated that the Ministry will have no objection to the relief envisaged in draft rehabilitation -cum -merger/amalgamation Scheme (DRAM). However, it was pointed out that the Group of Ministers while approving the scheme had, however, pointed out that the rationalization of workforce of the company should be duly carried out and the employees of the company, who were to continue in employment, would not insist on getting the pay scales of MMTC. The representative of MMTC also reiterated that the company's employees should not agitate for the scale of MMTC. On such objection being taken, it was observed by the Bench that stipulation is there in the DRAM to the effect that the employees being retained in service would become employees of MMTC without interruption of their services in any manner. The terms and conditions of their service will not less favourable to them than those applicable immediately before the effective date of merger/amalgamation. Certain other objections were also taken care of and ultimately, the Bench of BIFR with certain modification approved the DRAM under Section 18(4) Read with Section 19(3) of the Sick Industrial Companies Act (SICA),1985. Thereupon MMTC in its extraordinary general meeting held on 2.5.1996 approved the draft rehabilitation -cum -merger/amalgamation scheme and accordingly, an order as contained in annexure 5 was drawn on 10.6.1996 declaring therein that the MITCO stand merged with MMTC effective date of which would be as 1.4.1994. Subsequently, after fulfillment of certain conditions, which had been put in by the Bench of BIFR while approving the draft rehabilitation -cum -merger/amalgamation scheme, passed an order on 21.4.1997 (as contained in Annexure 6) declaring that MITCO stand amalgamated with MMTC with effect from 1.4.1994. In spite of that order, when, according to the case of the petitioners, pay scales of employees of MITCO were not revised either in the year 1992 or 1997, some of the petitioners made representation before the Chairman -cum -Managing Director, MMTC Limited, respondent No. 2 for revision of their pay scales and also for granting seniority, promotion and other benefits at par with the employees of MMTC Limited but when nothing was done, petitioner No. 1 working as Operator in MMTC at Abhraknagar, petitioner No. 2 initially working at Giridih but transferred to Channai working as Deputy Manager at Ennor Port, MMTC Limited, petitioner No. 3, Office Manager at Kakinada, Andhra Pradesh, petitioner No. 6, working as Assistant at Visakhapatnam in MMTC Limited, petitioner No. 7 working as Operator in MMTC Limited posted at Hospet, petitioner No. 9 working as Operator at Palm Oil Operation at Kakinada, Andhra Pradesh, all initially were posed at Abhraknagar have filed this writ application along with petitioner Nos. 4 and 8 but since they have taken voluntarily retirement, their cases are not being pursued, wherein prayer has been made to direct the respondents to grant pay scales/revised pay scales as per pay revision in the year 1992, 1997 and 2007 and also the seniority and promotion at par with the employees of MMTC. However, during pendency of this writ application, representation of one of the petitioners was rejected which order was communicated to that petitioner by Deputy Manager (IR), MMTC Limited, vide its letter dated 10.3.2009 as contained in Annexure 9 holding therein that the petitioner is an employees of MICA Division of MMTC and is governed by the service conditions and pay scales as applicable in the erstwhile Mica Trading Company which was prevailing at the time of merger of MITCO with MMTC. That order was challenged by way of interlocutory application and has been sought to be quashed. At the same time, an order was passed on 4.5.2009 as contained in Annexure 11 with respect to revision of scales of pay with effect from 1.1.2007 of the Executives of the MMTC but the pay revision would not be applicable to the Executives of Mica Division. That part of the order has also been challenged.
(3.) IT be stated that when a counter affidavit was filed, it was brought to the notice that Ministry of Commerce and Industry, Government of India did consider the issue of grant of wage parity between the employees of MMTC and Mica Division of MMTC whereby decision has been taken that status quo be maintained in respect of employees who do not opt for VRS. Upon filing of such affidavit, that order regarding maintenance of status quo as contained in Annexure 12 has also been challenged.;