IN THE HIGH COURT AT CALCUTTA

Original Jurisdiction
ORIGINAL SIDE
CA No.593 of 2015
CP No.84 of 2013

TYRE CORPORATION OF INDIA LTD.

-Versus-

MR. DIPAK SAHA

-AND-
RABINDRA LAL DATTA & ORS.

CA No.390 of 2015
CP No.84 of 2013

TYRE CORPORATION OF INDIA LTD.

-Versus-

SATISH KUMAR JAIN

-AND-
OFFICIAL LIQUIDATOR.

Appearance:
Mr. Asish Kumar Roy, Adv.
Mr. Sonia Sharma, Adv.
...for the petitioners.

Mr. Kumar Jyoti Tiwari, Adv.

...for the Central Government.
...for UCO Bank.

Mr. S.S. Bose, Adv.

Mr. Siddhartha Banerjee, Adv.
Mr. K.L. Yadav, Adv.
Ms. Amrin Khatun, Adv.
...for the applicant.

Mr. Ranajit Chowdhury, Adv.

Ms. Tanushree Dasgupta, Adv.
...for the official liquidator.

BEFORE:
The Hon'ble JUSTICE SANJIB BANERJEE

Date : December 1, 2015.

The Court : C.A.No.593 of 2015 is an application by some

erstwhile employees of the company (in liquidation). The

applicants claim that their dues of about Rs.8 crore till the date

of the company being wound up have not been paid despite the
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company, at the time of its liquidation, being a Central

Government undertaking.

It appears that pursuant to a Nationalisation Act of

1984, a privately-run company was taken over by the Central

Government for the purpose of ensuring that the employees of the

company were not jeopardized by the imminent closure of such

company.

Under the Central Governments management, the company

(prior to its liquidation) operated two principal units at Tangra

and Kankinara. In or about 1990 a reference pertaining to the

company was made under the Sick Industrial Companies (Special

Provisions) Act, 1985 and the Board for Industrial and Financial

Reconstruction (BIFR) recommended that for saving the Kankinara

unit of the company it was necessary that the land and the

entirety of the Tangra unit should be sold. The Tangra unit was,

accordingly, sold.

The company has been wound up on November 29, 2013 on a

creditors petition.

In an affidavit filed by the Central Government, its

stand is that a sum of Rs.11 crore was apparently sanctioned for

payment of the employees of the company and to some creditors, but

since such amount was not expended within the time, the grant has

lapsed.

Prima facie, it is unacceptable that a company managed

by the Central Government will leave its employees and workmen in

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the lurch by washing its hands off and saying, just like a private

entrepreneur, that the dues of the employees should come out of

the assets of the company (in liquidation). If the Central

Government intervened and took over the management of the company

by a Nationalisation Act, ostensibly to ensure that the employees

were not jeopardized by the imminent closure of the units, it

appears, tentatively, that the Central Government will remain

liable to pay the dues of the employees.

In particular, the stand taken by the Central Government

that its grant had lapsed cannot be appreciated.

Let a copy of this order be reached to the Ministry of

Heavy Industries for the Secretary in such Ministry to indicate

the further stand of the Central Government in such regard and as

to whether the Central Government will provide funds for the

payment of the dues of the erstwhile employees of the company. It

may also be permissible for the company Court to involve the

Central Government in the process of the sale of the assets of the

company (in liquidation) to ensure that the best price therefor is

obtained for settling the claims of the creditors of the company

(in liquidation).

Let the application appear six weeks hence.

There is a second application, C.A.No.390 of 2015, where

the prayer is for a Daryagunj flat in Delhi let out to the company

(in liquidation) to be disclaimed in favour of the owners thereof.

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Ordinarily, the company Court does not indulge in the

practice of obtaining money for the company (in liquidation) for

any property to be released in favour of the landlord or the

owners. But if the Central Government can wish away the claim of

the employees of a Central Government undertaking, the company

Court may also resort to the innovative mode of demanding money

from a landlord or the owner of any property before releasing the

same.

Urgent certified website copies of this order, if

applied for, be supplied to the parties subject to compliance with

all requisite formalities.

(SANJIB BANERJEE, J.)

A/s.