Case Note & Summary
The dispute arose from the closure of four industrial units owned by Rohtas Industries Ltd. on September 9, 1984, which resulted in the loss of employment for approximately 10,000 workers. The workers filed a writ petition seeking immediate payment of wages, compensation under the Industrial Disputes Act, and other dues. The Patna High Court appointed a provisional liquidator in 1986, and the Supreme Court later directed the Central Government to refer the case to the Board under the Sick Industrial Companies (Special Provisions) Act, 1985 for a revival scheme. The Court noted that while three units were viable, no substantial progress had been made towards their revival by August 1989. The Court emphasized the urgency of the situation, highlighting the outstanding wages and the deteriorating condition of the company's assets. It directed the State of Bihar to appoint a Rehabilitation Administrator, establish a moratorium on liabilities for one year, and ensure the payment of Rs. 15 crores for the revival efforts. The Court also mandated the formation of a committee to examine claims and report back within six months, while allowing retrenched employees to return to work in phases. The case was scheduled for further hearing on March 1, 1990, with a clear directive to prioritize the revival of the company and protect the interests of the workers.
Headnote
A) Industrial Law - Rehabilitation of Sick Companies - Directions for Revival - Sick Industrial Companies (Special Provisions) Act, 1985, Sections 4 & 10 - The Court directed the State of Bihar to appoint a Rehabilitation Administrator and take necessary steps for the revival of viable units of the company, emphasizing the urgency due to the denial of livelihood to about 10,000 families for over five years. Held that immediate action was necessary to prevent further deterioration of assets and ensure payment of outstanding wages (Paras 620-622).
Issue of Consideration
Whether the company should be revived and what measures should be taken for the rehabilitation of the workers and assets.
Final Decision
The Supreme Court directed the appointment of a Rehabilitation Administrator, established a one-year moratorium on liabilities, mandated the payment of Rs. 15 crores for revival efforts, and allowed retrenched employees to return to work in phases.
Law Points
- Rehabilitation of sick companies
- Moratorium on liabilities
- Appointment of Rehabilitation Administrator
- Payment of wages
- Nationalisation of industries
