Workmen Of Mysore Lamp Works Ltd. vs Board For Industrial And ...
2021 Latest Caselaw 1561 Kant

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     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 10TH DAY OF FEBRUARY 2021

                        PRESENT

         THE HON'BLE MR. JUSTICE ALOK ARADHE

                           AND

     THE HON'BLE MR. JUSTICE NATARAJ RANGASWAMY

                   O.S.A. NO.36 OF 2014
BETWEEN:

WORKMEN OF MYSORE LAMP WORKS LTD.,
REPRESENTED BY MYSORE LAMP WORKS
STAFF & EMPLOYEES UNION (REGD.),
(A REGISTERED TRADE UNION REGISTERED UNDER
THE INDIAN TRADE UNIONS ACT),
REPRESENTED BY THE GENERAL SECRETARY
HAVING ITS OFFICE AT OLD TUMKUR ROAD,
MALLESWARAM WEST, BANGALORE-560 055.
                                             ... APPELLANT
(BY SRI. K. SUBBA RAO, SR. COUNSEL FOR
    SRI. K.N. SATHEESHA, ADV.,)

AND:

1.     BOARD FOR INDUSTRIAL AND FINANCIAL
       RECONSTRUCTION, NEW DELHI
       REPRESENTED BY THE REGISTRAR.

2.     THE STATE OF KARNATAKA
       REPRESENTED BY ADDITIONAL CHIEF
       SECRETARY, DEPARTMENT OF
       INDUSTRIES & COMMERCE
       VIKASA SOUDHA, BANGALORE-560 001.
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3.   MYSORE LAMP WORKS LTD.,
     HAVING ITS REGISTERED OFFICE AT
     PB NO. 5551, MALLESWARAM WEST
     BANGALORE-560 055.

4.   M/S. MYSORE MINERALS LTD.,
     HAVING ITS REGISTERED OFFICE AT
     TTMC, 'A' BLOCK, 5TH FLORR
     BMTC BUILDING, K.H. ROAD
     SHANTHINAGAR, BENGALURU-560027.
                                            ... RESPONDENTS
(BY SRI. DHYAN CHINNAPPA, AAG FOR R2
    SRI. UDAYA HOLLA, SR. COUNSEL FOR
    SMT. ANUPARNA BORDOLOI, ADV., FOR R3
    SRI. K. KASTURI, SR. COUNSEL FOR
    SRI. SAJI P. JOHN, ADV AND
    SRI. B. RAJASHREE, ADV., FOR IMPLEADING
         APPLICANT ON IA 1/16 & IA 2/20
         R1 SERVED
   SRI. V. BALAKRISHNA, ADV., FOR
       IMPLEADING APPLICANT IN IA 1/2020)
                             ---
      THIS O.S.A. IS FILED U/S 483 OF THE COMPANIES ACT,
PRAYING   TO   SET   ASIDE   THE    IMPUGNED   ORDER      DATED
28.07.2014 MADE IN COMPANY PETITION NO.231/2000 AND
ACCEPT THE PROPOSALS OF THE GOVERNMENT AND DIRECT THE
COMPANY      COURT   TO   ACCEPT   THE   PROPOSALS     OF   THE
GOVERNMENT AND GRANT APPROVAL FOR REVIVAL OF THE
COMPANY AND ETC.


     THIS O.S.A. HAVING BEEN HEARD AND RESERVED ON
08.02.2021     FOR   HEARING       AND   COMING      ON     FOR
PRONOUNCEMENT OF JUDGMENT, THIS DAY, ALOK ARADHE J.,
DELIVERED THE FOLLOWING:
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                      JUDGMENT

This Original Side Appeal in Company Petition No.

231/2000 has been filed by the workmen of Mysore

Lamp Works Ltd., in which the appellant has assailed

the validity of the order dated 28.07.2014 passed by

learned Single Judge in Company Petition No.231/2000

by which the learned Single Judge has allowed the

petition for winding up of M/s Mysore Lamp Works Ltd.

(hereinafter referred to as 'the Company' for short) and

has appointed Official Liquidator has Liquidator of the

company.

2. Facts leading to filing of this appeal briefly

stated are that the Company filed an application before

the Board of Industrial and Finance Reconstruction

under Section 15(1) of the Sick Industrial Companies

(Special Provisions) Act, 1985. The Board of Industrial

and Finance Reconstruction (hereinafter referred to as

'the BIFR' for short) passed an order on 18.07.2000

directing that Mysore Lamp Works Ltd. be wound up.

The order passed by the BIFR was challenged by the

Company before the Appellate Authority For Industrial

And Finance Reconstruction (hereinafter referred to as

'the Appellate Authority' for short). The Appellate

Authority by an order dated 18.07.2001 dismissed the

appeal preferred by the company. The Company

thereafter, made an application before Appellate

Authority for review of its order, but the application for

review was rejected by the Appellate Authority. The

Company thereafter, challenged the orders of winding

up before this court in Company petition viz.,

CoP.No.231/2000. The appellant made an application for

impleading as additional respondent in Company

Petition, which was allowed and the appellant filed a

detailed statement of objections to the company

petition. The company petition was decided by the

learned Company Judge by an order dated 28.07.2014.

The learned Company Judge inter alia held that the

Company cannot be possibly revived and being a sick

industrial company, it is just and equitable to wind up

the company. The company petition was allowed and

the company was directed to be wound up. The Official

Liquidator was appointed as Liquidator of the company.

In the aforesaid factual background, this appeal has

been filed.

3. During the pendency of this appeal, the

Government of Karnataka has taken a conscious

decision by an order dated 01.12.2020, which reads as

under:

GOVERNMENT ORDER NO:CI 108 CMI 2020 (E), BENGALURU, DATED 01.12.2020

In the circumstances explained in the preamble, Government is pleased to accord approval for utilization of land assets of M/s Mysore Lamp Works Ltd. (MLWL) for Experience Bengaluru Project as below:

(i) To develop Experience Bengaluru Project on the land assets of MLQWL as a novel concept showcasing both the culture of Karnataka but also maintaining lung space in the heart of the city as per the National Green Tribunal Act.

(ii) Withdrawal of Government Order dated 20.03.2020 according approval to the Scheme of Amalgamation of the Mysore Lamp Works Limited with Karnataka State Minerals Corporation Limited and empowering Mysore Lamp Works Limited to implement Experience Bengaluru Project by making necessary changes in the Memorandum of Association and Article of Association.

(iii) BDA to consider for change of land use from industrial to public and semi public of MLWL land to suit the proposed Experience Bengaluru Project.

(iv) In principal approval to initiate process of buy out minority shareholders of 5.6% and settle liabilities and make the MLWL to 100% Government Shareholding Company.

The above approval is accorded subject to the following terms and conditions:

(1) A detailed valuation of the company is to be done after the change in nature of the company and after the change in nature of ht eland. The value of each share is then assessed and shared with GoK.

(b) The liability with respect to employees will continue to be the responsibility of the KSMCL as decided in the previous amalgamation order.

(c) MLWL board decision is taken as mandated by the companies act wherever necessary.

(d) Hon'ble High Court is briefed of the new developments before hand since a case is still pending in the court with respect to employees issue.

(e) Since majority of the employees are already absorbed in KSMCL, they will continue to work there and employees' issues with respect to fitment, payment of arrears, etc will be handled by KSMCL.

(f) On the liabilities (primarily Government debts and some dues towards Government companies etc.) - since MLW will continue to be in existence, the liabilities need not be retired as of now. A decision on this can be taken at a later date.

This order is issued with the concurrence of Finance Dept. vide its Note No. FD 320 Exp-1/2020 dated 25.11.2020; Commerce and Industries Department (Mines) vide File No. CI 108 CMI 2020 (P2) (E) dated 26.11.2020 & Urban Development Department vide File No .CI 108 CMI 2020 (P3) (E) and Cabinet approval in its meeting held on 27.11.2020 vide subject No.C:612/2020.

By Order and in the name of the Governor of Karnataka

Sd/-

Under Secretary (C &C) Commerce & Industries Department.

4. Thus, from perusal of the aforesaid

Government Order, it is evident that the Government

has taken a conscious decision to approve for utilization

of the land assets of the company for Experience

Bengaluru Project and has withdrawn the Government

Order dated 20.03.2020 according approval to the

scheme of amalgamation of Company with Karnataka

State Minerals Corporation Limited and empowering the

company to implement Experience Bengaluru Project by

making necessary changes in its Memorandum of

Association and Articles of Association. In-Principal

approval has also been accorded to initiate the process

of buy out minority shareholders of 5.6% and settle

liabilities and make the company to a 100%

Government Share Holding Company and the aforesaid

decisions have been taken subject to the terms and

conditions, which have been mentioned in the order. It

is pertinent to mention here that this O.S.A. was being

heard along with connected writ appeals in which order

granting permission to close the company, which was

upheld by the learned Single Judge is under challenge.

A bench of this court passed an interim order dated

08.12.2016, in which direction was given to make

payment of a sum of Rs.1,25,000/- each to the

workmen who are before us subject to verification and

the M/s Karnataka Minerals Corporation Ltd. was

directed to decide the issue with regard to absorption of

the employees. Thereafter, another order was passed by

a bench of this court on 13.11.2020 in this O.S.A. as

well as connected matters, in which direction was given

to make adhoc payment of Rs.15,000/- per employee

per month for last three years and the aforesaid amount

was directed toi be paid within a period of four weeks.

However, the payment was made subject to result of

the appeal and orders that would be passed on the

merger by the appropriate Government and also subject

to future adjustment that can be made. Needless to

state that it is trite law that life of an interim order is co

terminus with the main proceeding. Therefore, the

aforesaid interim orders do not survive after decision of

this appeal. However, the impact and effect of the

interim orders has been considered by us in connected

writ appeal viz., W.A.No.16925/2011.

In view of the conscious decision taken by the

State Government during the pendency of this appeal,

the order dated 28.07.2014 is hereby quashed and set

aside. In the result, the appeal is allowed.

Sd/-

JUDGE

Sd/-

JUDGE ss