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CASE NO.: Appeal (civil)  2076 of 2008

PETITIONER: Cement Workers Karamchari Sangh

RESPONDENT: M/s. Jaipur Udyog Limited & Ors

DATE OF JUDGMENT: 24/03/2008

BENCH: C.K.Thakker & Aftab Alam

JUDGMENT: J U D G M E N T

CIVIL APPEAL NO 2076 OF 2008 [@ SLP (C) NO.4088/2005]

AFTAB ALAM, J.

1.      Leave granted.        2.      This appeal was filed against the order, dated  August 2, 2004 by which a learned Single Judge of the  Rajasthan High Court set aside both the interim and final  orders, dated August 3 and September 6, 2001 passed by  the Appellate Authority for Industrial and Financial  Reconstruction, New Delhi (AAIFR) and remitted the  matter to it for passing fresh order after giving an  opportunity of hearing to all the concerned parties. The  AAIFR order (that was set aside by the High Court) had  dismissed the appeal filed by M/s.Jaipur Udyog Ltd.,  respondent No.1, and affirmed the order of its winding up   passed by the Board for Industrial and Financial  Reconstruction Bench-II (BIFR) on November 24, 2000 in  Case No.17 of 1987.  The High Court took the view that  the AAIFR had dismissed the appeal of respondent No.1  without giving it a reasonable opportunity of hearing and,  accordingly, gave direction for fresh hearing of the  matter.  The order passed by the High Court was brought  before this Court in appeal by a workers’ union, namely,  Cement Workers Karamchari Sangh.  The appeal was  based on the plea that the remand to the AAIFR would  not serve any useful purpose but would lead to an  unnecessary and unreasonable prolongation of the  matter causing great prejudice and distress to the  workers who had already suffered much due to non- payment of their dues for a very long time. Thus the  appeal at its inception appeared to present for  consideration the simple and limited issue as to whether  the High Court was justified in taking the view that the  order passed by the AAIFR was in breach of the  principles of natural justice and for that reason remitting  the proceeding to it. 3.      However, during the pendency of the proceeding  before this Court certain developments took place that  tend to somewhat shift the focus from the limited issue  as indicated above. On August 26, 2006, while the  Special Leave Petition giving rise to the appeal was  pending before the Court, the appellant-workers’ union  entered into a bipartite agreement with respondent No.1,  M/s.Jaipur Udyog Limited (JUL) in purported settlement

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of the dues of the workers/employees at Sawai  Madhopur, Phallodi Quarries, Jaipur, Delhi and  Chandigarh offices represented by the Sangh.   A copy of  the agreement was brought on record as Annexure ’A’ to  I.A.No.8 of 2006 filed in the Special Leave Petition on  August 31, 2006.  The settlement between the appellant- union and JUL gave rise to a chorus of protests by other  sections of workers who alleged that the settlement was  fraudulent, collusive and a sell out to the management of  JUL. A number of impleadment applications were filed  (vide I.A.Nos.9 & 10 of 2006, 12 of 2007) on behalf of  different Unions claiming to represent the workmen of  JUL at Jaipur and at Kanpur. 4.       On December 4, 2006 when the Special Leave  Petition was taken up the settlement was brought to the  notice of the Court and a joint prayer was made by the  appellant and JUL that the dispute between the  employees and the employer may be permitted to be  settled in terms of the agreement and the AAFIR be  directed to monitor the implementation of this settlement  in letter and spirit.  The other Unions seeking  impleadment in the proceedings before this Court raised  strong objections to the settlement.  The Court, however,  permitted the agreement to be implemented in terms of  prayer (b) in the application (I.A.No.8 of 2006) subject, of  course, to the rights of those Unions who had filed  applications for impleadment and/or had approached the  Labour Commissioner (against the settlement in  question).       On April 10, 2007, it was represented before  the Court that a large number of employees had received  payments in terms of the settlement.  The claim made on  behalf of the appellant and respondent No.1 was  disputed by others. Hence, the Court felt the need for  some investigation on certain issues of facts and as  agreed by the counsel for the parties, appointed Mr.  Justice N.N.Mathur, a former Judge of the Rajasthan  High Court, to make an enquiry on points indicated in  the order as follows: "(a) How many of the employees have opted for  settlement with respondent No.1 Company  and/or respondent No.7.

"(b) It is stated by Mr.Mukul Rohtagi, learned  senior counsel that about 1700 employees  have already accepted the settlement.  In case,  necessary materials and records are produced  to justify the claim, Mr.Justice N.N.Mathur  need not ascertain the views of those who have  opted for settlement.  So far as others are  concerned, the views of individual workers  shall be ascertained."

As requested by the Court, Mr.Justice Mathur made the  enquiry and submitted his report dated August 9, 2007.   It is a detailed report and it considerably helped the  Court to appreciate the main features of the controversy. 5.      These developments taking place after the filing of  the Special Leave Petition compel us to take note of  certain facts and circumstances antecedent to the  immediate cause that brought this matter to this Court. 6.      All the controversies in the case, as may be  gathered from the above, revolve around the attempts at  the rehabilitation/revival, or conversely the winding up of  M/s.Jaipur Udyog Limited (JUL).  JUL was incorporated  in May 1948 as a private limited company. It set up a

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cement factory at Sawai Madhopur for which the supply  of raw material, i.e., limestone came from Phallodi  Quarry at a distance of about 25 kms. In the year 1955,  it was converted into a public limited company. In 1967,  it acquired a jute mill in Kanpur with a view to  manufacture cement bags for captive consumption in the  cement unit at Sawai Madhopur.  After going through  many ups and downs over a period of about forty years  the cement factory of the company came to be closed  down in the year 1987. And finally JUL was declared a  sick company by the order, dated August 26, 1987  passed by the BIFR that came to find and hold that the  company was not in a position to make its net worth  positive on its own within a reasonable time. At that time  the company had on its hands, apart from a number of  very onerous financial liabilities, large bodies of workmen  both at Sawai Madopur and at Kanpur.  7.     After some initial attempts at the  revival/rehabilitation of JUL failed, another company  M/s.Gannon Dunkerley Company Ltd. (GDCL) came on  the scene. In 1991 a proposal for the revival of JUL came  up before the BIFR. GDCL was the main party to the  revival plan. The BIFR sanctioned the revival scheme by  order, dated July 21, 1992 and it was called ’SS-92’.  Under the sanctioned scheme GDCL was to take over  JUL, for its revival, along with all assets and liabilities.  The cut off date for the restructuring of capital and  liabilities was fixed as March 31, 1992. The IRBI was  appointed as the monitoring agency. The scheme  stipulated that GDCL would take over of the management  of JUL from its erstwhile promoters. The cost of the  scheme (SS 92) was Rs.38.41 crores, out of which  Rs.18.12 was to come from the promoters (GDCL) as  contribution/unsecured loans, Rs.10 crores by sale of  assets and the remaining Rs.10.29 crores by sales tax  deferment. The liability of JUL was restructured and after  substantial wavers the restructured liabilities of Rs.53.86  crores were rescheduled for payment. In order to meet  the pressing liabilities, an amount of Rs.2.54 crores was  marked for immediate disbursement. In the scheme (SS  92) it was stated that the strength of workers at the time  of the closure of the unit was 3515, including 1030  workers employed in the quarry. The company (JUL) had  also employed, on an average, 150 workers on casual  basis and 200 workers on contract basis. 8.      At that time (as we shall see later) JUL had many  creditors, including government departments, statutory  bodies, banks and private parties but the dues of the  employees need to be specially mentioned. In the  sanctioned revival scheme in regard to the employees it  was provided as follows:  "Employees: (i)     Shall accept settlement of arrear  wages/salaries/bonus (including the  same during the period operation of JUL  was under suspension) (amounting to  Rs.1241 lacs approximately) for Rs.300  lacs payable on deferred basis in 3 equal  annual installments.

(ii)    Shall agree for labour rationalization  programme as would be implemented,  with higher productivity norms."

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Later on, in the proceedings both the BIFR and the  AAIFR had the occasion to comment that in order to  make the revival of JUL possible under SS-92 the  employees had made great sacrifices and had settled for  the much smaller amount of only Rs.3 crores (payable in  three installments) in place of  Rs.12.41 crores being  their lawful dues. The workmen had given up three-  fourth of their dues in the hope and trust that the new  promoter (GDCL) would start the unit and they would be  able to keep their jobs. Their hope was, however,  completely belied and the workmen were left ’in a very  pathetic situation.’  9.      On January 9, 1996, GDCL commissioned the unit  only to declare lock out seven months later on August 12,  1996. It was alleged that the commissioning was an eye  wash and the promoters had no intent to run the unit on  a sustained basis. No repairs were made in the plant  lying idle for a long time; no raw materials were brought  and no supervising, managerial or technical staffs were  engaged. The lock out declared by the management was  prohibited by the state government by order, dated May  25, 1999, issued under section 10(3) of the Industrial  Disputes Act. On August 11, 1997 the management of  GUL entered into a revised tripartite settlement with the  representatives of the workers. But the revival of JUL  remained as illusive as ever before. 10. When no head way was made towards the  rehabilitation of the company even after eight years of the  passing of the revival scheme (and passing of thirteen  years since it lay sick!)       the BIFR held the review  hearing on July 12, 2000 and found that GDCL not only  did not carry out the directions given to it but had also  failed to keep its own commitments under the sanctioned  scheme for rehabilitation. The BIFR, accordingly, gave  directions inter alia, to (i) issue a notice to the company  and other interested parties under Section 20(1) of The  Sick Industrial Companies (Special Provisions) Act (SICA)  to show cause why it should not be wound up, (ii) a  separate notice to the promoters (GDCL) under Section  33 of SICA to show cause why they should not be  prosecuted for non-payment of labour dues and failure to  comply with other provisions of SS-92.  At the same time,  it allowed the workers to file suits in Labour Courts to  enforce payment of their dues. It also directed the  Rajasthan Finance Corporation to take over possession of  the assets of the company under section 29 of the State  Financial Corporation Act and the State Bank of India to  insure the company’s assets. 11.     In pursuance of the directions, the show cause  notice under Section 33 of the SICA was issued to GDCL  and JUL on November1, 2000.  12.  Finally, the BIFR passed the order, dated November  24, 2000, giving direction for the winding up of JUL with  a number of ancillary directions.  Here, it would useful to  extract paragraph 29 of the order that sums up the facts  and circumstances that finally led the BIFR to pass the  order of winding up of JUL: "After hearing various submissions made and  on the basis of the material on record, the  Bench noted that all concerned secured  creditors, unsecured creditors, the  representatives of all concerned State  Governments Department of GOI, Chandigarh  Housing Board, etc., were for winding up of the  company; except from the representatives of

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the company and its promoters, to the  proposed winding up of the company.  As  regards the company’s objections, the Bench  further noted that the company had failed to  submit their audited/provisional balance-sheet  as on June 30, 2000, which would have  enabled the Bench to appreciate the correct  picture of the accounts at the time of the  hearing. The company’s representative had  also not given any specific answer to the query  regarding treatment of the liability on account  of various decrees obtained by secured- unsecured creditors.  The Consultant for the  company was also asked to submit their  modified proposal, but no updated proposal  was forthcoming, and he only indicated that  their modified proposal submitted in May 1998  was still pending with IIBI (MA).  It was also  stated that an OTS proposal was pending with  SBI.  However, the representative of SBI  present during the hearing categorically stated  that the proposals submitted by the company  for OTS of the bank’s dues were found  unacceptable to the bank and as on date, no  proposal was pending with the bank.  The  Bench further noted that such an OTS  proposal, if any, could have been considered  by the Bench only if the company had obtained  prior consent of all concerned parties, as  required under Section 19 of SICA; however,  no such consents were obtained by the  company.  Further, the company had not  renewed their MOU with the workers.  After  consideration of all these facts and  circumstances, the Bench came to the  conclusion that no acceptable and viable  proposal had been submitted by the company  under which the company could be revived  within a reasonable period of time, while  meeting all its financial obligations.  The  company has been with the BIFR for over 13  years as to now and the company had not  submitted any modified revival scheme even  after issue of the Show Cause Notice for  winding up.  The Bench, therefore, confirmed  its prima facie-opinion that it is just, equitable  and in public interest that the company viz.  Jaipur Udyog Ltd. is wound up as the  company was unlikely to revive and make its  net worth positive within a reasonable period  of time while discharging its due financial  obligations and directed that this opinion be  forwarded to the concerned High Court along  with the proceedings of this hearing and all the  previous proceedings of Bench  hearings/orders, for further necessary action  by the honourable High Court, in accordance  with the provisions of the Companies Act."

The BIFR left it open to the many creditors of JUL to file  suits before the appropriate courts/DRT for recovery of  their dues and to take further steps in that connection as  it had confirmed its opinion for winding up the company  JUL. 13.     Against the winding up order passed by the BIFR,

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JUL filed Appeal No.22 of 2001 before the AAIFR.  On  August 3, 2001, the AAIFR directed the appellant-JUL to  deposit an amount of Rs.10 crores as the condition  precedent for admission of the appeal.  It would be useful  to reproduce the order in full: "Arguments heard.  The appellant/promoter  (Cannon Dunkerley & Co.Ltd.) shall negotiate  OTS terms with SBI and also come to an  understanding with Cement Works  Karamchari Union (CWKS) about the  settlement of the dues of the workers and  make a deposit of Rs.10 crores (Rs.5 cr in two  weeks from today and Rs.5 crores in another  two weeks) in a no-lien account with SBI.  No  adjustment or payment shall be made from  this amount except with prior orders of this  Authority.

       The appellant company and the CWKS  shall immediately prepare a statement of the  retired workers showing the terminal dues of  each of them.  An amount of Rs.3 crores out of  the no-lien deposit of Rs.10 crores shall be  utilized for part payment of the terminal  benefits to the retired workers.        

       Failure to deposit the amount of Rs.10  crores, as stated above, will result in dismissal  of this appeal.  To come on 6.9.2001."

JUL challenged the interim order passed by the AAIFR  before the Rajasthan High Court and from this stage the  matter becomes somewhat confused and murky.  14.     In S.B.Civil Writ Petition No.4380/2001 filed by JUL  the prayers were made in the following manner: "a) pass a writ, order or direction in the nature  of mandamus, to quash the impugned order of  the AAIFR dated 3.8.2001 in Appeal No.22 of  2001;

b) Pass a writ, order or direction to call for a  summon the records of the case from the  AAIFR/BIFR of Reference No.17, 1987;

c) xxx          xxx             xxx             xxx

d) xxx          xxx             xxx             xxx"

The writ petition was taken up before the High Court on  September 4, 2001 and the order of the High Court was  recorded in the follows terms: "Heard.  Admit.  Issue Notice.  Rule is made  returnable within six weeks.  Notice be given  Dasti apart from usual service.

Notice of stay application be also issued,  returnable within six weeks and be given Dasti  apart from usual service.

Pending service of notice on the Respondents,  there shall be stay of ex-parte (sic) impugned  order dated 3.8.2001. (Annexure-5) passed by AAIFR in Appeal  22/2001.

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List thereafter along with compliance report."

15.     Two days later on November 6, 2001, the appeal  was fixed for hearing before the AAIFR.  On that date, on  behalf of JUL a prayer was made for adjournment on the  plea that further proceedings in the appeal were stayed  by the High Court.  The prayer was strongly opposed by  the counsel representing the State Bank of India and the  other parties.  The AAIFR observed that from the copy of  the High Court order, it was evident that what was stayed  was not the proceedings in the appeal but the operation  of the order dated August 3, 2001 and commented that  even that order was passed with the consent of the  parties.  The AAIFR proceeded to hear the counsel for the  State Bank of India and then adjourned the hearing to be  taken up after lunch when submissions might be made  on behalf of JUL.  In the post lunch session, a lawyer’s  certificate was produced stating that apart from staying  operation of the order dated August 3, 2001, the High  Court had in fact stayed further proceedings before the  AAIFR.   The AAIFR did not accept the certificate and  asked the counsel to make submissions.  The counsel  declined.  And in those circumstances the AAIFR  proceeded to dispose of the appeal on merits.  It took into  consideration the material facts and circumstances and  came to hold as follows: "The workers and the secured creditors had  expressed their loss of confidence in the  management. The dues of the workers had not  been paid.  BIFR also took note of the fact that  the cement plant of JUL was based on old wet  process technology which was no longer  economically viable.  Moreover, according to  the modified scheme, even 50% of the dues of  SBI would not have been serviced by 2002,  which was the terminal year in SS92 and the  net worth would have continued to remain less  than the accumulated losses."         The AAIFR further observed as follows: "We have particularly concerned about the  non-payment of even the amount of Rs.3 cr to  the workers which was part of the restructured  liabilities in 1992.  We had therefore given time  to JUL/promoters for OTS negotiations with  SBI afresh and for arriving at understanding  with workers’ union and asked them to deposit  Rs.10 cr in  no-lien account in two  installments out of which Rs.3 cr was to be  utilized for part payment of terminal dues to  retired workers.  A large number of workers  have retired and have died and their families  are in indigent circumstances. However, every  person who is aggrieved by orders of this  Authority has a right to seek redress from  superior courts.  The appellants have chosen  to approach the Hon’ble High Court of  Rajasthan at Jaipur and obtained stay of the  order dated 3.8.2001. This shows that they are  not prepared to make the deposit of Rs.10 cr  and make payment of Rs.3 cr out of that to the  workers."   

16.     Having made the observations and come to the  findings, as noted above, the AAIFR dismissed the appeal

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and granted permission to the creditors for initiating  proceedings for recovery of their dues and for execution  of the decrees already obtained by them.         17.     JUL then filed an application in the pending writ  petition (No.7380/2001) bringing to the notice of the  High Court the development taking place before the  AAIFR.  The court observed that while admitting the writ  petition on September 4, 2001 "it was directed that there  would be stay of ex-parte impugned order dated August  3, 2000 passed by the AAIFR".  It then expressed its  displeasure rather strongly over the fact that the AAIFR  had proceeded with the hearing of the appeal and had  finally disposed it of on merits and by order, dated  September 12, 2001 stayed the operation of the final  order passed by the AAIFR on September 6, 2001. 18.     It may be noted here that the High Court did not  say that it had actually stayed further proceedings in the  appeal before the AAIFR but that part of the order was by  mistake omitted to be recorded.  It seems to have taken  the view that the AAIFR should have refrained from  proceeding with the appeal in view of its direction staying  the operation of the interim order of the AAIFR, more so,  as the counsel for the petitioner/appellant personally  intimated it that further proceeding before it was stayed  by the High Court. 19.     Be that as it may, the writ petition was finally  disposed of by the High Court by order, dated August 2,  2004. The order began with the observation that the writ  petition was filed against the interim order dated, August  3, 2001 passed by the AAIFR in Appeal No.22/2001; it  then spoke eloquently about the great value and  importance of the rule of audi alteram partem; it  proceeded to extract a passage from the final order of the  AAIFR to note that the petitioner’s appeal was dismissed  even without giving it an opportunity of hearing and it  finally observed as follows: "Since fair opportunity of hearing was not  provided to the petitioners the order dated  September 4 (sic 6) 2001 of AAIFR dismissing  the appeal is vitiated being opposed to the  principles of natural justice.  Although, the  order dated September 4 (sic 6) of 2001 has  been passed during the pendency of the writ  petition and it has not been impugned in the  writ petition but this court can take notice of  subsequent events. Article 226 covers a much  wider ground of jurisdiction.  The High Court  while hearing a petition under Article 226  should keep in mind the interest of justice as  paramount and appropriate relief may be  granted even if the petitioner has not asked for  it or has asked for a wrong relief.  Petition  under Article 226 will not be thrown out on the  ground that no proper writ or direction has  been prayed for."                                             (Emphasis added)

The High Court accordingly set aside both the interim  and final orders passed by the AAIFR dated August 3,  2001 and September 6, 2001 and remitted the matter for  a fresh decision on merits after providing an opportunity  of hearing to all the parties who were impleaded in appeal  and who had sought impleadment in the writ petition. 20.     The Cement Workers Karamchari Sangh, a workers’  union, sought to challenge the order passed by the High

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Court by filing this special leave petition before this  Court.  But as noted above, during the pendency of the  SLP the petitioner-Sangh entered into an agreement with  JUL/GDCL.  21.     As result of the intervening development, at the time  of hearing of the case for its final disposal, the petitioner  was content to take a seat on the sidelines and the space  left by it was sought to be occupied by some of the  respondents (creditors of the company) and some  workers groups/unions seeking to intervene in the  matter either to oppose the settlement or to press for the  winding up of JUL in terms of the order of AAIFR. 22.     Among the company’s creditors who took the stand  that the orders of its winding up passed by the BIFR and  AAIFR may not be interfered with by his court were  respondent No.12 (Chandigarh Housing Board),  respondent No.15 (Ghaziabad Development Authority),  respondent No.21 (Deputy Commissioner Income Tax),  respondent No.26 (Jaipur Vidyut Vitran Nigam Ltd.),  respondent No.30 (The Employees’ State Insurance  Corporation) and respondent No.31 (The Provident  Commissioner). According to the respective counsel the  aforesaid respondents had their dues against the  company as follows: I.      The Chandigarh Housing Board had a decree  against JUL for a sum of Rs.49,60,569/- which with  the accrual of interest has swelled upto  Rs.2,06,81,009/-. II.     The Ghaziabad Development Authority had a decree  against the company for a sum of Rs.60, 83,600/-  and it was pending for execution before the Civil  Judge, Ghaziabad. III.    The IT department has (unquantified) dues against  the company. IV.     The Jaipur Vidyut Vitran Nigam Ltd. has dues  against the company amounting to Rs.4549.28  lakh. V.      The ESI Corporation has dues against the company  amounting to Rs.37,78,881/- VI.     The PF department has dues against the company  amounting to Rs.81 lakh. (approx.).    23.     Among the interveners, Bhartiya Cement Mazdoor  Sangh (I.A.No.9) and Kanpur Jute Workers (I.A.No.12)  assailed the settlement arrived at between the petitioner  Cement Workers Karamchari Sangh and JUL/GDCL.   Learned counsel appearing for the two proposed  interveners submitted that the settlement was collusive  and fraudulent; it was made in breach of a number of  statutory provisions and it was unenforceable as finally  determining the lawful dues of the workmen. Counsel  appearing for Kanpur Jute Workers referred to passages  from the report of Mathur,J. and submitted that a  number of  workers of Kanpur Jute Mill had not accepted  any payment in terms of the agreement and, therefore,  the agreement was, in any event, not binding on them.                  24.     Ms. Rachna Joshi Issar, learned counsel appearing  for The Chandigarh Housing Board, strongly supported  the winding up order passed by the BIFR and confirmed  in appeal by the AAIFR.  Learned counsel submitted that  the High Court had completely misdirected itself in  setting aside the final order dated September 6, 2001  passed by the AAIFR on the ground that it was passed in  violation of the principles of natural justice.  Learned  counsel submitted that in the facts and circumstances of  the case, the refusal to grant adjournment could not be

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viewed as a violation of the principles of natural justice.   From the copy of the High Court order that was produced  before the AAIFR, it was evident that the High Court had  stayed the operation of the interim order but not the  proceedings in the pending appeal.  The AAIFR was,  therefore, justified in refusing to grant adjournment in  view of the strong opposition by the other parties. At that  stage the counsel for the company declined to make  submissions on the merits of the appeal even though  repeatedly asked by the Chairman. Hence, there was no  question of any violation of the principles of natural  justice and the very premise of the High Court order was,  therefore, unfounded.  She further submitted that, as a  matter of fact, it was the order of the High Court that was  completely without jurisdiction inasmuch as it purported  to set aside an order that was not even brought to it  under challenge.  She submitted the High Court was  conscious that the writ petition was filed against the  interim order passed by the AAIFR asking the company  to deposit Rs.10 crores as pre-condition for the  admission of the appeal.  Nonetheless, it proceeded to set  aside the final order of the AAIFR. The High Court was  thus plainly in error in going beyond the scope of the writ  petition and granting relief that was not even prayed for  by the writ petitioner-company.   25.     Mr.Manish Singhvi, counsel appearing for the  proposed intervener Sarvadaliya Shramik Sangarsh  Samiti (I.A.No.10) was equally vehement in opposing both  the settlement and the order of the High Court  remanding the matter to the AAIFR.  Learned counsel  submitted that any remand to the AAIFR would be an  exercise in futility because the AAIFR would be legally  bound to reaffirm the order of winding up of JUL.  Mr.  Singhvi submitted that the revival scheme SS 92 was  sanctioned over a decade and half ago in the year 1992.   From the conduct of GDCL during the past more than  fifteen years it was evident that it had no interest in the  revival of JUL but it simply intended to appropriate the  vast assets of the company.  Learned counsel stated that  the company was already facing prosecution launched by  the BIFR under section 33 of the Sick Industrial  Companies (Special Provisions) Act, 1985 (SICA) for  making false statements before it and was also issued a  notice for prosecution under section 34 of the Industrial  Disputes Act for indulging in unfair labour practice  26.     Mr.M.Singhvi further submitted that in view of  Section 22(3) proviso and Section 22(4)(b)(i) of the SICA  and the circular of the Reserve Bank of India any revival  scheme was dead and inoperative after the expiry of  seven years. At present, therefore, there was no revival  scheme. The company had lost the statutory immunity it  enjoyed while SS 92 was alive and the only course open  was the winding up of the Company as provided under  Section 20(1) and (2) of the SICA.  Learned counsel  submitted the BIFR had passed the winding up order of  the company (on Nov.24, 2000) after expiry of eight years  from the date of sanctioning the scheme precisely under  the aforesaid provisions. He further submitted that now  after more than fifteen years the dues against the  company had further mounted up and there was no  scheme or a revised scheme in existence for its revival. In  these facts and circumstances the AAIFR would be legally  bound to reiterate the order of winding up of the  company. Any remand to the AAIFR would, therefore, be  quite futile and it would only delay the inevitable. The

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delay, however, would greatly benefit JUL/GDCL by  giving it the opportunity for further tiers of litigation. At  the same time the inherent delay in remand would cause  great prejudice to the workmen and it may even break  their fragile capacity to sustain. In support of his  submissions, Mr. M.Singhvi relied upon the decisions of  this Court in Meghal Homes Pvt.Ltd. vs. Shree Niwas  Girni K.K.Samiti   [(2007) 7 SCC 753] and International  Finance Corporation & Anr. Vs. Bihar State Industrial  Development Corporation & Ors. [(2005) 10 SCC179]. 27.      In regard to the settlement arrived at between the  petitioner, Cement Workers Karamchari Sangh and the  JUL/GDCL Mr. M.Singhvi submitted that it was collusive  and illegal and unjust and unfair to the workmen.  He  referred to Rule 58 of the Industrial Disputes Rules and  submitted that the so-called settlement was not drawn  up in Form-H and a copy of it was not sent to the  appropriate government and the authorities as provided  under sub-rule (4) of Rule 58. The so-called settlement  was thus in breach of the statutory provisions and it was  clearly unenforceable. It could not be held to determine  the rights of even those workmen who had received any  payments under it and it would certainly not affect the  rights of the workmen who had not received any payment  under it.   28.    On the other hand Dr. A.M.Singhvi, learned senior  counsel appearing for respondent No.1 (JUL) and Mr.  Mukul Rohatgi, learned senior counsel appearing for  respondent No.7 (GDCL) contended that after entering  into the settlement with the company the petitioner-  Sangh no longer wished to press the special leave  petition. This court should, therefore, dismiss it and  leave the order of the High Court undisturbed. 29.    In reply to the submissions made by Ms.Issar,  Mr.Rohatgi submitted that the AAIFR was not right in  disallowing the prayer for adjournment and dismissing  the appeal without giving an opportunity of hearing to  the appellant.  Learned counsel stated that, as a matter  of fact, the High Court in its interim order passed on  September 4, 2001 had also stayed further proceedings  in the appeal before the AAIFR but that part of the order  was, by mistake, omitted to be recorded.  Counsel for the  appellant intimated the fact to the AAIFR but the AAIFR  disregarded the lawyer’s certificate and unjustly  proceeded with the hearing of the appeal.  He further  submitted that on September 11, 2001 the company filed  a petition in the High Court stating all this and prayed  for clarification of its order passed on September 4, 2001.  On the same day it filed another petition bringing on the  High Court’s record the final order passed by the AAIFR  and sought to amend the writ petition and prayed for  leave to challenge the final order of the AAIFR as well. He  submitted that unfortunately the High Court’s orders did  not refer to those petitions. In support of the statement,  copies of those petitions were filed as additional  documents after the hearing of the case was concluded  on February 7, 2008. 30.    In response to the submissions made by Mr.Manish  Singhvi, Mr.Rohatgi submitted that Sarvdaliya Shramik  Sangharsh Samiti was not a party to the proceeding  before this court and, in any event, the submissions  made by Mr. Singhvi were completely at variance with the  prayers made in I.A.No.10 filed on behalf of the proposed  intervener.  31.      Further, Mr.Rohatgi stoutly defended the

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settlement entered into between the petitioner-Sangh and  JUL/GDCL. He stated that Justice Mathur had noted in  his report that 1384 employees of the cement factory at  Sawai Madhopur and 578 workmen at Phallodi Quarry  had accepted the settlement and the company had paid  to them the sums of Rs.8.67 crores and Rs.3.44 crores  respectively. Similarly, at Kanpur 1198 workmen had  accepted the settlement and the company had paid to  them the aggregate sum of Rs.3.74 crores. Thus,  altogether 3160 employees had accepted the settlement  and the company had paid to them the total sum of  Rs.15.18 crores. The report further noted that according  to the list furnished by the company 1173 workmen of  the cement factory, 457 at Phallodi Quarry and 136 at  Kanpur had not accepted the settlement and the total  amount due to them under the settlement was Rs.10.23  crores. (Here it may be stated that before Justice Mathur  one of the workmen’s union claimed that the lawful dues  of the workers amounted to Rs.86 crores but the  settlement was made for only 20-25 crores). 32.     Mr.Rohatgi strongly contended that all the workmen  who had received payment had done so in full and final  settlement of their claims and they could no longer  question the agreement. Those who had not accepted  payments under the settlement were free to raise their  claims in accordance with law but they too could not  object to the settlement between the company and the  other workmen who had accepted payments.      33.   Interestingly, after the hearing of the case was  closed yet another petition (I.A.No.15) was filed on behalf  of GDCL on February 21, 2008 which was listed before  the Court on February 29, 2008. In this petition, the  company, making a complete departure from its earlier  stand in regard to the settlement, stated as follows: "The applicant submits that while the  judgment has been reserved in the captioned  matter, the applicant wants to put the  controversy at rest and submits that, the  applicant is ready and willing to get the dues  of the workers, including those who have  singed the settlement with the Respondent No.1  \026 Jaipur Udyog Ltd., to be adjudicated upon by  any statutory authority appointed by this  Hon’ble Court.  The applicant is filing the  present application without prejudice to the  arguments made before this Hon’ble Court on  07.02.2008.

The applicant submits that the present  application is being made bona fide and in the  interest of justice and in the interest of  workers".

Following the above statement, the prayer is made as  follows: "(a) Direct any statutory authority to  adjudicate on the dues of the said workers,  including those who have signed the settlement  with the Respondent No.1 \026 Jaipur Udyog Ltd.  within a period of two months; and

(b) Pass an order as this Hon’ble Court may  deem fit and proper considering the facts and  circumstances of the present case."

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By filing this petition JUL/GDCL, of its own accord,  opens up the claims of all the workmen and makes a   positive gesture in an attempt to satisfy the court that it  has no intent to run away with the lawful claims of the  workmen. 34.     On hearing counsel for the parties and on a careful  consideration of the materials on record, including the  affidavits and documents filed by the different parties, we  are of the opinion that the AAIFR can hardly be blamed  for proceeding with the hearing of the appeal on  September 6, 2001. If there was a communication gap  between the High Court and the AAIFR it was due to the  omission to correctly record the interim order of the High  Court. The order that was produced before the AAIFR did  not indicate that the proceeding of the appeal before it  was stayed.  The parties (creditors of the company) were  strongly opposed to any adjournment. Under the  circumstances, the AAIFR was within its rights to  disallow the prayer for adjournment on behalf of JUL and  to ask its counsel to make submissions on merits. We,  therefore, feel that the strong displeasure against the  AAIFR expressed by the High Court in its order of  September 12, 2001 was quite uncalled for. We are  further of the view that since the counsel for the  appellant GUL declined to make submissions in support  of the appeal even though repeatedly asked by the AAIFR,  after the request for adjournment was turned down,  there was no breach of the principles of natural justice.  Having regard to the communication gap resulting from  the mistake in recording its interim order, the High Court  might have been justified in asking the AAIFR to pass a  fresh order after giving the appellant JUL an opportunity  of hearing. But the High Court was clearly in error in  setting aside the final order passed by the AAFIR on the  ground that it was passed in breach of the audi alteram  partem rule. 35.     We find much substance in the grievance raised by  the respondent creditors and the workmen in regard to  the delay in the final disposal of the matter. It is quite  true that the delay only benefits JUL/GDCL and causes  great prejudice to the creditors and deep distress to the  workmen. We are also conscious that seven years have  passed by while the matter lay pending, first before the  High Court and then before this court. Had the appeal  not come to this court, the matter in all probability would  have been concluded by now.  36.     But for all this we are unable to overlook that  JUL/GDCL were practically denied the remedy of appeal  against the winding up order passed by the BIFR. We  recall here the hackneyed but very useful maxim: justice  should not only be done but it should also appear to have  been done. We are, therefore, of the view that at least one  chance should be afforded to JUL/GDCL to place their  case before the AAIFR. 37.      We are further of the view that central to the issue  of rehabilitation or winding of the company is the  question of the workmen’s dues. The dues of all other  creditors are ascertainable without difficulty. But in case  of the workmen’s dues there is great divergence between  the claim of the workmen and what is accepted by the  company’s management. It is, therefore necessary to get  the workmen’s dues authoritatively determined. Once the  workmen’s dues too are known precisely that can be  factored into a realistic revival scheme or accounted for  in the winding up process, in case the eventuality arises.

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38.     We accordingly make the following directions which  we consider, in the totality of the facts and  circumstances of the case, would meet the ends of  justice: A. Re. The proceedings before the BIFR/AAIFR. I.  The matter is remitted to the AAIFR and it is  directed to restore Appeal No.22/2001 filed by JUL  against the winding up order, dated November 24,  2000 passed by the BIFR, provided the deposit of  Rs.10 crores, as directed by the AAIFR by its order  dated August 3, 2001 is made within two months  from today.  II. In case the appellant JUL fails to make the  deposit within the specified time, the appeal shall  stand dismissed and the earlier order passed by the  AAIFR on September 6, 2001 shall stand restored. III.   In case, however, the deposit is made within  the specified time, the AAIFR will proceed to dispose  of the appeal after hearing the appellant and any of  the parties to this appeal before this court  (including the proposed interveners) or the parties  to the appeal before the AAIFR who may appear  before it. The judgment of this court is deemed  sufficient notice to all concerned and the AAIFR  need not issue any further notices to any of the  parties. IV. In case the appellant makes the deposit within  the specified time it will be open to it to file before  the AAIFR a revised rehabilitation scheme.  It will  also be open to any other parties, including the  workmen to file before the AAIFR a rehabilitation  scheme for the sick company.  In case a revised  scheme is filed the AAIFR will consider it and pass  appropriate orders in accordance with law.   V.      Most importantly, the AAIFR shall make all  endeavours to dispose of the matter as early as  possible and in any event not later than four  months from the date of deposit of Rs.10 crores by  the appellant. B. Re. Determination of the lawful dues of the   Workmen:   I. Mr.Justice N.N.Mathur (a retired judge of the  Rajasthan High Court) is appointed Arbitrator  under Section 10-B (Rajasthan Amendment) of the  Industrial Disputes Act, 1947. II. Justice Mathur shall hear representatives of the  management and the workmen and determine the  arrears of wages and other lawful dues payable to  the different categories of workmen of JUL employed  in the cement factory, Sawai Madhopur, at Phallodi  Quarries and in Kanpur Jute Mill (U.P.). Justice  Mathur will take into account, apart from the legal  provisions, the various settlements, arrived at  between the management and the workmen and  consider to what extent and upon whom those  settlements are binding. He will then work out a  principle on the basis of which the dues of every  individual workmen may be fixed and the total dues  of all the workmen may thus be reckoned.   III. Justice Mathur shall make his award and sign it  as provided under Section 10-F within four months  from the date of receipt/production of a copy of this  order.  He shall forward a copy of the award made  by him to the parties, the Commissioner of Labour,

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the Registrar and the State Government as provided  under Section 10-I.  The Registrar shall enter it in  the register kept for the purpose and the State  Government shall publish the award under Section  17 of the Act without any delay.   IV. JUL/GDCL shall pay to Mr.Justice N.N.Mathur  within one month from to day a sum of Rs.2 lakh as  his honorarium and an additional sum of Rs.1.5  lakh to meet the salary of the staff and other  incidental expenses, including traveling expenses. V. The Commissioner-cum-Secretary Industries  (GR-I) Department, the Labour Commissioner,  Government of Rajasthan, the Labour  Commissioner Government of U.P. and the  Collector(s) of the district(s)  where the cement  factory and Phallodi Quarry are situate and the  Collector, Kanpur shall extend all help and  assistance to Mr.Justice Mathur as may be required  by him in connection with the proceedings.    39.     The appeal is disposed of with the above  observations and directions. No Costs.