IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.GIRI MONDAY, THE 28TH JULY 2008 / 6TH SRAVANA 1930 WP(C).No. 20116 of 2008(T) -------------------------- PETITIONER: ------------ 1. JNAPRAKASH.S., KELTRON CRYSTALS LTD., KELTRON NAGAR, PO.KAILLIASSERI, KANNUR PIN-670 562 2. P.RAVEENDRAN, KELTRON CRYSTALS LTD., KELTRON NAGAR, PO.KAILLIASSERI, KANNUR-670 562. 3. T.C.GOPALAKRISHNAN, KELTRON CRYSTALS LTD. KELTRON NAGAR, PO.KAILLIASSERY, KANNUR, PIN-670 562 4. KRISHNADAS.M., KELTRON CRYSTALS KELTRON NAGAR, PO.KALIASSERI KANNUR, 670 562. BY ADV. SRI.V.C.JAMES SRI.GEORGE MECHERIL RESPONDENTS: ------------- 1. THE STATE OF KERALA, REP. BY THE SECRETARY TO GOVERNMENT INDUSTRIES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM 2. THE MANAGING DIRECTOR, KERALA STATE ELECTRONICS DEVELOPMENT CORPORATION LTD., VELLAYAMBALAM, THIRUVANANTHAPURAM 3. THE MANAGING DIRECTOR, KELTRON COMPONENT COMPLEX, KELTRON NAGAR, KALLIASSERY, KANNUR BY ADV. SRI.T.P.KELU NAMBIAR (SR.) FOR R3 SRI.M.GOPIKRISHNAN NAMBIAR FOR R3 BY GOVERNMENT PLEADER SMT.M.R.SREELATHA THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: V. GIRI, J. ------------------------------- WP(C).NO. 20116 of 2008 --------------------------------- Dated this the 28th day of July, 2008. JUDGMENT Petitioners 1,2 and 4 are holding the post of Foreman and the third petitioner is working as Master Technician in Keltron Crystals Limited, a unit of Keltron Component Complex Limited at Kalliassery. Apparently, Keltron Component Complex Limited had 4 units, viz.Keltron Component Complex Limited, Keltron Crystals Limited, Keltron Magnetics Limited and Keltron Resisters Limited. All the four units started incurring a heavy loss and therefore there was apparently a proposal for merger of the four companies. This was accorded sanction under Ext.P1. The petitioners make reference to Ext.P1 which shows that the proposal for merger of companies was tentatively approved by the Government along with the conversion of the unsecured Government loan of Rs.730 lakhs as Government equity in the restructured Keltron Component Complex Limited (merged entity) subject to certain conditions. Condition Nos. 2 and 3 read as follows:- WPC. 20116/2008 2 “ (b) All posts in the merged subsidiaries will be declared as supernumerary so that the vacancies resulting out of retirements and resignations will not filled up. (c) Any post which is inevitable for operations should be filled up only with the concurrence of Government. “ 2. Ext.P1 was followed by Ext.P2 order by which the Government accorded sanction for the merger of four companies into one under the name and style of Keltron Component Complex Limited. Conditions (b) and (c) read as follows:- “(b) All posts in the merged subsidiaries will be declared as supernumerary so that the vacancies resulting out of retirement and resignations will not be filled up. (c) Any post which is inevitable for operations should be filled up only with the concurrence of Government. “ 3. As stated above, the petitioners are employed in Keltron Crystals Limited. They allege that Ext.P2 order makes it clear that none of the posts in the four companies can be filled WPC. 20116/2008 3 up except with the sanction of the Government. But nevertheless they learn that certain posts in Keltron Component Complex Limited is sought to be filled up and this according to the petitioners is illegal and therefore they filed Ext.P3 representation which is addressed to the Chief Minister. It is apparently pending consideration before the Government. They then approached this court seeking a direction to the respondents to refrain from proceeding with filling up of the vacancies in Keltron Component Complex Limited until a decision is taken on Ext.P3 representation. 4. A statement has been filed on behalf of the third respondent viz. Managing Director, Keltron Component Complex Limited. It is pointed out that as per Ext.R3(a) a resolution was adopted by the Board of Directors of Keltron Component Complex Limited authorising the Managing Director to take appropriate steps to fill up the vacancies in the post of first line officers in certain core departments and functional areas brought about on account of retirements/resignations of some of the officers. The proposal made by the Managing Director was approved by the Board of Directors and pursuant to this WPC. 20116/2008 4 decision taken on 25.3.2008 as evidenced by Ext.R3(a), an interview was conducted and a select list is being finalised. 5. Restrictions in filling up the vacancies under clause (b) and (c) of Exts.P1 and P2 would apply only on merger being effectuated. In fact it would apply only in the merged entity. This is the contention taken by the respondent. 6. I heard learned counsel for the petitioners Sri.George Mecheril and Sri.Gopikrishnan Nambiar, learned counsel for the third respondent. The conditions contained in Exts.P1 and P2 are binding on the third respondent also. But the restrictions on the filling up of the vacancies in any one of the four units is a restriction that has been imposed as a condition, to be applicable in the merged entity. In fact sub clause (b) will have to be read in conjunction with sub clause (c). But I do not think it is necessary to make any final pronouncement on this aspect as it is made clear even in sub clause © that any post which is inevitable for operation may be filled up with the concurrence of the Government. There is nothing wrong in the third respondent making selection pursuant to Ext.R3(a). But as is evidenced from Ext.R3(b) the company has taken up the WPC. 20116/2008 5 matter with the Government. There are further formalities to be gone through before the merger actually takes place. In fact a merger in the eye of law can take place only after a scheme is approved by the company court in terms of section 391 of the Companies Act. It would not be practicable to require the companies not to proceed with the appointment to any of the posts until the merger actually takes place. In the result, the writ petition is disposed of holding that it is open to the third respondent to proceed with the recruitment as contemplated under Ext.R3(a). The actual filling up of the vacancies may be preceded by a sanction from the Government. V. GIRI, JUDGE. Pmn/ WPC. 20116/2008 6