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Workmen of Mysore Lamp Works Ltd., Represented by Mysore Lamp Works Staff & Employees Union (Regd.), Bangalore v/s Board for Industrial & Financial Reconstruction, Represented by The Registrar, New Delhi & Others

    O.S.A. No. 36 of 2014

    Decided On, 10 February 2021

    At, High Court of Karnataka

    By, THE HONOURABLE MR. JUSTICE ALOK ARADHE & THE HONOURABLE MR. JUSTICE NATARAJ RANGASWAMY

    For the Appellant: K. Subba Rao, Sr. Counsel, K.N. Satheesha, Advocate. For the Respondents: R2, Dhyan Chinnappa, AAG, Udaya Holla, Sr. Counsel, R3, Anuparna Bordoloi, K. Kasturi, Sr. Counsel, Saji P. John, B. Rajashree, V. Balakrishna, Advocates.



Judgment Text

(Prayer: 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.)

Alok Aradhe, J.

1. 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 y

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ears 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.
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