Case: Crescent Iron and Steel Corporation Ltd Vs. Union of India

2. The appellant Crescent Iron and Steel Corporation Limited (in short thea private limited company was running a foundry. The appellant declared a lock out in its foundry in July 1985. Themade a reference to the Board for Industrial and Financial Reconstruction (hereinafter referred to as the BIFR) u/S. 15(1) of the Sick Industrial Company (Special Provisions) Act, 1985 (in short SICA). During the pendency of the said reference themade an application to the State of Maharashtra under S.of the Industrial Disputes Act, 1947 for seeking permission to close down its undertaking located at Goregaon and requested the BIFR to revive the undertaking at another location preferably in a backward area of Maharashtra. Thealso alleged to have paid up all the secured and unsecured creditors of the company as well as all the workers employed in the foundry. The BIFR onpassed an order proposing the winding up of the91 at a general meeting of thea special resolution was passed by the shareholders that the order of BIFR datedwas not in the interest of the company. Theforwarded the aforesaid special resolution along with a letter datedrequesting the BIER to revoke its order datedThe BIFR vide its order datedobserved that it was not possible to adopt any measures for revival of the company and reiterated its stand that theshould be wound up.3. Aggrieved against the aforesaid order of the BIFR datedny filed an appeal before the Appellate Authority for Industrial and Financial Reconstruction, New Delhi. The Appellate Authority by its order dated September 13, 1991 upheld the order of the BIER and did not find any reason to take a different view. The Appellate Authority further held that even carrying out the same activity at the new site does not constitute rehabilitation of a sick unit. It also held that developing of the land for commercial activity also does not constitute rehabilitation of a sick unit and there was no provision in the SICA to drop a case, once a reference has been made and heard by the BIFR. Thehas now come in appeal before this Court challenging the aforesaid order of the Appellate Authority.

Reasoning:
7. We have considered the submissions made by Shri Desai and have perused the record thoroughly. The foundry unit at Goregaon Bombay is lying closed since 1985 and according to the new management of the company the liabilities of all the secured and unsecured creditors has been settled and out of 288 workers, 286 have already resigned and accepted the retrenchment compensation. The remaining two workmen are not traceable. The new management of the appellant company is taking steps with the State Government and other authorities for shifting of the location of the new foundry unit at a place outside the metropolis of Bombay which would also be in the interest of the avoidance of pollution hazard. The State Government in its letter datedhas also taken the view that no permission for closure of the industrial undertaking under S. 25(4) of the Industrial Disputes Act, 1947 would be necessary. The shareholders in a general meeting of the appellant company held onhave passed a special resolution that the order of BIFR datedwas not in the interest of the company. TheAll the above circumstances have happened after the passing of the order by the BIFR and the order of the State Government datedhas come into existence after the order passed by the Appellate Authority. The BIFR and the Appellate Authority are authorised to take into consideration the facts and circumstances of each ease and then to decidewhether any reference under S. 15(1) of the Sick Industrial Company (Special Provisions) Act, 1985 was at all necessary or not and to pass any other appropriate order meeting the ends of justice in each case.