Judgment :- Patherya, J. Two applications have been filed by the Union of India, the 100% shareholder in Bengal Immunity Ltd. (BIL) for stay of the winding up order dated 6th July, 2005 and for setting aside the order dated 1st March, 2006 and modification of the order dated 24th March, 2006. Case of the Applicant The case of the applicant contributory is that a reference was filed before the Board for Industrial and Financial Reconstruction (BIFR) in 1992. An order was passed on 25th February, 2003 recommending winding up of the Company (in liquidation). An appeal was filed by the Workers’ Union before the Appellate Authority (AAIFR). Such appeal was dismissed on 13th May, 2005 and thereafter restored and order passed setting aside the order recommending winding up passed by BIFR. Prior to the order of AAIFR the matter was placed under Section 20 of the 1985 Act before the Company Court and by order dated 6th July, 2005 an order of winding up was passed. The applicant seeks stay of the winding up order as bonafide steps has been taken by the contributory to revive the Company (in liquidation) on the basis of a revival report submitted. United Bank of India is the only secured creditor of the Company and a compromise has been reached with it. The basis for calling tenders for sale of 392.04 cottahs of land at 88, Akshay Kumar Mukherjee Road, Calcutta no longer exists as the offer made though accepted initially was subject to a forfeiture clause. The terms of the offer have not been satisfied as certain new terms were imposed for implementation of the offer made by HSCL. Therefore, the agreement stands terminated which termination is to the knowledge of HSCL as it has called upon the applicants to repay the money with interest. The agreement between HSCL and Avinash Raj Construction Pvt. Ltd. (ARCPL) is a private agreement and in no way is the applicant involved with the same. In fact an order was passed on a writ application filed by ARCPL (W.P. 2060 of 2003) on 29th September, 2003. An application has been filed to re-call the said order and the same is pending. BIFR’s order dated 25.2.2003 no longer exists as the said order was set aside by the order dated 3rd March, 2008. Therefore the jurisdiction of the Company Court stands ousted. An application has been filed to re-call the said order and the same is pending. BIFR’s order dated 25.2.2003 no longer exists as the said order was set aside by the order dated 3rd March, 2008. Therefore the jurisdiction of the Company Court stands ousted. For the said proposition reliance is placed on the decisions reported in 89 Company Cases 609, 89 Company Cases 600 and (2000) 1 CLT 69. The order dated 6th July, 2005 has been passed contrary to the decisions cited above and the mandatory provisions of winding up and formalities of sale have not been followed as no opportunity was given to the contributories. For the said proposition reliance is placed on (2005) 8 SCC 219 . By the order dated 1.3.2006 the Company Court has sought to transfer the said property to a private party. The Court could not have passed such an order as it is BIFR alone who is empowered to sell the same. For the said proposition reliance is placed on (2003) 9 SCC 490 . The dispute is between two Government agencies and it will be proper that the high powered committee constituted do settle such dispute. The order dated 3rd March, 2008 has been passed on an application filed by the Workers’ Union. Ten crores have been paid to the secured creditor and there is no concluded contract between BIFR and HSCL. The Union of India is the 100% share holder and the order dated 29th September, 2003 passed in W.P. 2060 of 2003 filed by ARCPL has not been implemented as no payment has been made thereunder and it is only pursuant to order dated 1st March, 2006 that the balance payment has been made. For all the said reasons the orders sought be passed. Case of the Workers’ Union : On the appeal filed by the Workers’ Union BIFR’s order dated 25th February, 2003 has been set aside by AAIFR on 3rd March, 2008 with a direction upon BIFR to consider the scheme propounded by the workers in the appeal. Therefore the application filed by the contributory be allowed and orders sought be passed. Case of HSCL After the order of winding up an application (CA 92 of 2006) was filed in February, 2006 by HSCL for a direction upon the Official Liquidator to accept the balance sum. Therefore the application filed by the contributory be allowed and orders sought be passed. Case of HSCL After the order of winding up an application (CA 92 of 2006) was filed in February, 2006 by HSCL for a direction upon the Official Liquidator to accept the balance sum. Such application was allowed by order dated 1st March, 2006 wherefrom no appeal has been filed. The application filed by the contributory (CA 662 of 2006) is subsequent to the application filed by HSCL. In fact, in 1976 the Union of India, a 100% share holder of the company abandoned it and at the direction of BIFR took steps to sell the surplus land by a tender in 1996. The agreement between HSCL and the Company was made when BIFR was in seisin of the matter. By C.A. 662 of 2006 the Company seeks stay of winding up and by C.A. 663 of 2006 the Company seeks to recall the order dated 1st March, 2006 and modification of order dated 24th March, 2006. The application of the Workers’ Union is also for stay of winding up. In fact, the workers have accepted Voluntary Retirement and received payments under such Scheme. Therefore the workers have no locus standi and the Union is nothing but a busy body. Reliance is placed on (2006) 11 SCC 731 . The Worker’s Union though registered does not have a single member. There has been suppression of facts and on this ground of suppression alone the application is liable to be dismissed. For the said proposition reliance has been placed on (2007) 8 SCC 449 . On acceptance of VRS the jural relationship between the Company and its employees ceases and therefore the appeal and the application herein are not maintainable. For the said proposition reliance is placed on (2003) 5 SCC 163 and (2005) 9 SCC 262 . After the winding up order was passed the proceedings before AAIFR merged into the winding up order. Therefore AAIFR had no authority to hear the appeal and the order dated 3rd March, 2008 is a nullity and the winding up order revives. The order dated 3rd March, 2008 passed by AAIFR based on the doctrine of merger is a nullity. After the winding up order was passed the proceedings before AAIFR merged into the winding up order. Therefore AAIFR had no authority to hear the appeal and the order dated 3rd March, 2008 is a nullity and the winding up order revives. The order dated 3rd March, 2008 passed by AAIFR based on the doctrine of merger is a nullity. For the said proposition reliance is placed on 4 CLJ 566, AIR 1959 Calcutta 153, (1969) 2 SCR 432, AIR 1974 SC 1380 , (2004) 8 SCC 724 and (2006) 5 SCC 119 . An application has been filed for recalling the order passed in the writ petition. Such application is pending and no step taken for its disposal. HSCL is only concerned with the surplus land sold to it and for the proposition that sale to 3rd parties must be protected, reliance is placed on (2006) 3 SCC 434. The orders dated 1st March, 2006 and 24th march, 2006 do not suffer from any infirmity as the Company Court is entitled to exercise its inherent powers under Rules 7 and 9 of the Company (Court) Rules. For the said proposition reliance is placed on (2005) 8 SCC 219 . AAIFR lacks inherent power to recall its order as it had no power to review and for the said proposition reliance is placed on AIR(1996) SC 641 and (2005) 13 SCC 777 . The winding up order dated 6th July, 2005 was suppressed from AAIFR on 3rd March, 2008. For the said proposition reliance is placed on (2006) 11 SCC 731 . The said sale is outside the purview of BIFR proceedings as BIFR approved the sale and thereafter tenders were floated. On the ground of delay the Court ought to protect the rights of the parties as held in (2005) 3 SCC 91 . The Company was never represented before the BIFR or AAIFR. In fact, the Company supported its winding up in 2003 on the ground that revival was impossible. The Scheme is nothing but a mirage, without substance and an attempt to grab lands including the lands to be sold to HSCL. Case of Avinash Raj Construction Pvt. Ltd. (ARCPL) The agreement between ARCPL and HSCL was pursuant to the tender floated. The monies paid by HSCL was paid by ARCPL and therefore W.P No. 2060 of 2003 was filed by ARCPL and orders passed. Case of Avinash Raj Construction Pvt. Ltd. (ARCPL) The agreement between ARCPL and HSCL was pursuant to the tender floated. The monies paid by HSCL was paid by ARCPL and therefore W.P No. 2060 of 2003 was filed by ARCPL and orders passed. An application for recalling has been filed by the contributory but no step has been taken thereunder. An application was filed in 2004 by ARCPL before the Company Court and payments directed. The steps mentioned above have been taken by ARCPL as its money is at stake. The winding up order was passed when no order was passed by AAIFR. In fact, after the winding up order was passed it was incumbent on the Workers’ Union to obtain leave under Section 446 of the Companies Act, 1956 to continue the proceedings before AAIFR. AAIFR is a Tribunal guided by the Civil Procedure Code and the order dated 3rd March, 2008 has been passed on the workers’ application. The proposal of Concept was rejected on consideration. Therefore the same cannot be accepted as held in (1969) 2 SCR 432. An application before AAIFR was dismissed and restoration application was filed. AAIFR is not empowered to recall its order of dismissal nor can it review its order as it lacks inherent power to do so and without any statutory power the said cannot be exercised. Therefore the order passed by AAIFR on 3rd March, 2008 is a nullity and it cannot act beyond powers vested in it. In fact, the order of dismissal has not been set aside, by order dated 3rd March, 2008 nor has the restoration application been disposed of. Petitioner-in-Reply Counsel for the petitioner in reply submits that an application was filed under Section 466 of the 1956 Act for stay of the winding up order. BIFR’s recommendation has been set aside by AAIFR and therefore there is no winding up order. Section 22 is operative and therefore no steps can be taken to sell the assets of the Company. Both the applicant and HSCL are government companies. The applicant is the sole contributory holding 100% shares. Therefore the application is maintainable. The purpose of the Scheme is to revive the Company and not to develop its properties. Section 22 is operative and therefore no steps can be taken to sell the assets of the Company. Both the applicant and HSCL are government companies. The applicant is the sole contributory holding 100% shares. Therefore the application is maintainable. The purpose of the Scheme is to revive the Company and not to develop its properties. The doctrine of merger applies when the trial Court order merges into the order of the appeal Court and has no application here as the BIFR’s order cannot merge with that of the High Court. The order dated 6.7.2005 is a nullity as the same has been passed without application of mind. It has been argued that AAIFR has no power to review therefore the dismissal order cannot be set aside. The order of dismissal was ex parte and can be recalled under the inherent powers exercised. No third party interest has intervened between the ARCPL and HSCL and the Bombay Dyeing case is distinguishable as the same is based on a contract. The Court is to consider the proposal to revive vis-a-vis development of a part of the assets of the Company. HSCL terminated the contract and asked for refund. The money was not returned as the forfeiture clause became operative. The agreement between ARCPL & HSCL is dated 4th October, 1997. The tender was floated on 17th November, 1995, and the offer made by HSCL was to be completed by 31st August, 1996. HSCL asked for refund and therefore the agreement has been cancelled. There is no concluded contract and therefore no right exists. In fact, specific performance of the agreement dated 4th October, 1997 is being sought. The said agreement is based on presumption. The conduct of HSCL must be considered in C.A. 92 of 2006. Nowhere has cancellation been disclosed by the applicants therein and on the basis of such suppression of material facts the order of 1st March, 2006 was passed. Such application was filed without notice to the applicant. In the writ petition filed by ARCPL an order was passed but no step was taken therefore the writ petition was jettisoned and C.A. 92 of 2006 was filed. In W.P. No. 2060 of 2003 an application for re-call of order dated 29th September, 2003 is pending. The procedure of sale has not been followed as no reserve price has been fixed, and no advertisement published. In W.P. No. 2060 of 2003 an application for re-call of order dated 29th September, 2003 is pending. The procedure of sale has not been followed as no reserve price has been fixed, and no advertisement published. Therefore the order is a nullity. The sale is without jurisdiction and the winding up order is also without jurisdiction as the process of winding up has not been followed. A mere recommendation of BIFR has been stamped by the winding up order passed and with the appellate authority setting aside the BIFR’s order the winding up order cannot be sustained. The winding up Court has made no decision on merit but has accepted the recommendation without any finding. The decisions cited are distinguishable. There is a report for revival and in the application filed the applicant is seeking revival. The conflict between two government agencies be referred to the high powered committee. The power of the Court is inherent as held in AIR 2000 SC 941 . Lack of advertisement to determine the correct market price will call for setting aside the order of sale. For the said proposition reliance is placed on (1969) 3 SCC 537 and (1999) 4 SCC 383 . Therefore orders be passed as sought. Workers’ Union in Reply The appeal was filed in May, 2003 and in June, 2003 a circular was issued calling upon the employees to opt for VRS. VRS is not relevant as when appeal was filed VRS issue did not exist. At the time when BIFR’s order was passed also the question of VRS did not exist and BIFR recommended winding up. Acceptance of VRS does not alter the position. By the order dated 2nd September, 2005 the dismissed application was restored and on restoration the bar of Section 22 of the 1985 Act revives. HSCL in Reply Counsel for HSCL in dealing with the two cases cited by the applicant submits that the same is distinguishable on facts as the sale to HSCL was after leave was obtained and as per BIFR direction, the sale is not one by Court. The order of dismissal was recalled without any reasons recorded thereby allowing the review application which is not contemplated by the 1985 Act. The order of dismissal was recalled without any reasons recorded thereby allowing the review application which is not contemplated by the 1985 Act. Conclusion C.A.662 of 2006 In this application the applicant has sought for stay of the order of winding up dated 6th July, 2005 and after considering the submissions of the parties the following conclusion is reached. A reference was filed in 1992 under Section 15 of the 1985 Act and the case registered as Case No. 538 of 1992 and an operating agency appointed to consider the revival of the sick Company. An order was passed on 25th February, 2003 by BIFR recommending winding up of the Company. The said order was challenged before the Appellate Authority by the Employees’ Union, subsequently the appeal was dismissed and although an application was filed for recall of the order of dismissal the application was disposed off in 2008 i.e. after the order of winding up of the Company was passed by the High Court on 6.7.2005. Therefore the Company Court was empowered to pass the order on 6.7.2005 as there was no appeal pending then. On an application filed by the Employees’ Union on 3.8.2005 the order of winding up dated 6.7.2005 was stayed for 4 weeks and the application for re-call was directed to be heard and disposed off by the appellate authority within 3 weeks. The 4 weeks expired so also the order of stay and the appellate authority could not have continued with the hearing as the order of winding up revived. The opinion formed under Section 20(1) of the 1985 Act by BIFR was forwarded to the High Court and on 6.7.2005 an order of winding up was passed. No appeal has been filed therefrom. Instead this application has been filed on the basis of the constitution of the Expert Committee. The Appellate Authority was not empowered to consider the appeal or the re-call application in view of the order dated 6.7.2005. All employees of the Company had accepted VRS on 30.9.2003. Therefore the Employees’ Union could not have maintained the Appeal as the only appeal filed was by the Employees’ Union being aggrieved by the order dated 25.2.2003 and in view of the subsequent event the appeal so also the application for re-call ought to have been dismissed by virtue of the doctrine of merger. Therefore the Employees’ Union could not have maintained the Appeal as the only appeal filed was by the Employees’ Union being aggrieved by the order dated 25.2.2003 and in view of the subsequent event the appeal so also the application for re-call ought to have been dismissed by virtue of the doctrine of merger. In fact at the meeting held on 25.2.2003 by BIFR it was specifically recorded that the Ministry of Chemical & Fertilizers, Government of India was the promoter of the Company and had failed to implement the scheme formulated by it, though sanctioned by BIFR. At the meeting held on 13.9.2002 the Board had issued the said directions:- “(i) x x x x x x x x x x x x x x x x x x x x (ii) The Board, however, even at this stage was willing to consider fully tied up proposal for rehabilitation of the company, if the promoters viz. Ministry of Chemicals and Fertilizers are interested in revival of this company and submitted to OA within 60 days with copies to all concerned. The Board appointed United Bank of India (UBI) as Operating Agency (OA) in terms of Section 17(3) of the Act to consider such a proposal if received by the OA within 60 days from today. The OA would consider the same in the joint meeting (JM) and submit the recommendation within 30 days thereof. If an acceptable, viable and comprehensive proposal emerged in such JM, OA would submit to Board well before the hearing fixed with its report.” On 25.2.2003 the views of the representative of the promoters (Ministry) was as follows:- “1. x x x x x x x x x x x x x x x x x x x x 2. x x x x x x x x x x x x x x x x x x x x 3. x x x x x x x x x x x x x x x x x x x x 4. x x x x x x x x x x x x x x x x x x x x 3. x x x x x x x x x x x x x x x x x x x x 4. When asked the representative of Ministry of Chemicals and Fertilizers stated that the views of the Ministry were the same as were conveyed in their letter dated 12.9.2001 i.e. the promoters were not willing to continue as the promoters of the company and they did not have any objection to wind up the company.” The Managing Director of the Company also stated as follows : 5. “When the Bench asked MD (S.K. Roy) of the company to make submissions, he stated that he had nothing to say.” From the order dated 25.2.2003 it will appear that ample opportunity was given to the Company and its promoters to submit a revival scheme and even after the formation of the prima facie opinion on 13.9.2002 a show-cause was issued and objections called to be heard on 25.2.2003. When no objection was filed or scheme submitted by the promoters BIFR recommended winding up. The last nail in the coffin so to say was the submission of the representative of the promoters. For all the said reasons, the order dated 6.7.2005 calls for no interference and this application warrants no order. The cases relied on are distinguishable on facts as in none of the cases was the appeal dismissed and without re-call of the order of dismissal the appeal disposed off. Therefore the decisions cited are not applicable. C.A.663 of 2006 In this application the applicant has sought for re-call of order dated 1st March, 2006 and modification of order dated 24th March, 2006 on the ground of suppression of facts, increase in price of the land since 1996 and termination of the sale contract which has been accepted by HSCL. The subject property belonged to the Company and after taking leave from BIFR which was granted on 9th October, 1996 the said property was put up for sale by tender process to generate funds for implementation of a scheme. The subject property belonged to the Company and after taking leave from BIFR which was granted on 9th October, 1996 the said property was put up for sale by tender process to generate funds for implementation of a scheme. It is not correct for the applicant to say that procedure of sale was not followed when such procedure was to be followed by the Company and none else and it is the Company if at all who did not follow the procedure and agreed to give it to HSCL who according to the Company was the highest bidder. The sale was being effected to raise funds for revival and was outside the Scheme. In fact the High Court had no role to play in sale of the subject land to HSCL except for directing payment of the balance sum. HSCL was the highest bidder and paid not only the earnest money but also sums aggregating to Rs.1,15,25,000/-out of the bid price of Rs.315.73 lacs till 7.1.1998. In 2003 a writ application was filed by ARCPL for delivery of possession upon payment of balance sums and implementation of Tender Notice dated 8th January, 1997 wherein an order was passed on 29th September, 2003 on the basis of submissions made by the parties. Payment was directed and thereupon handing over possession of property. On the basis of the said order the order dated 1.3.2006 has been passed and although the application for re-call of order dated 29th September, 2003 has been filed the same is pending. The parties have placed correspondence exchanged between HSCL and the Company wherefrom it is evident that each wanted to resile from the Agreement for different reasons. HSCL, as the Company had not converted the land from commercial to residential inspite of payment and the Company for non-payment. By order dated 1.3.2006 HSCL was granted leave to deposit the balance consideration within 30 days from 1.3.2006. No deposit was made within the time specified as it is only thereafter that the Deed of Conveyance was to be executed. Till the filing of this application by the sole contributory on 4th April, 2006, the applicant in C.A. 92 of 2006 (HSCL) had defaulted in making payment and the question of executing the Deed of Conveyance therefore could not arise. Till the filing of this application by the sole contributory on 4th April, 2006, the applicant in C.A. 92 of 2006 (HSCL) had defaulted in making payment and the question of executing the Deed of Conveyance therefore could not arise. Neither ARCPL nor HSCL has prayed for an extension of time to deposit the consideration and by virtue thereof the order dated 1.3.2006 has been rendered infructuous. The representatives of HSCL and the Company met on 27.2.1998 and the Company agreed to obtain conversion of the land and hand over peaceful possession free from all encumbrance. After a year in December, 1999 the Company sought payment of interest on the offered price and in default forfeiture of sums. This led to issuance of letter dated 17.2.2000 by HSCL. By a further letter dated 8.6.2000 HSCL was agreeable to develop a commercial-cum-residential project on deferred payment schedule. Both the parties had expressed their willingness to part ways and HSCL in fact sought refund with interest but the said stand was nullified by order dated 29th September, 2003 which is subsisting. By virtue of the said order the stand of the applicant was also set at naught, as the respondent No.1 Company (in liquidation) represented through counsel, agreed to hand over possession to the respondent No.2 (HSCL) if payment was made within a month and it was on the basis of the aforesaid that the order dated 29.9.2003 was passed so also the order dated 1.3.2006. In paragraph 16 of C.A 92 of 2006 the factum of termination of contract has been pleaded and has been dealt with in the following paragraph. For purposes of convenience paragraphs 16 and 17 are reproduced hereinbelow : 16. Despite the petitioner x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x the Company dilly-dallied in accepting the same and in or around 26th November, 2003 filed an application in the petitioner’s writ application praying for recalling of the said order dated 29th September, 2003 alleging that the contract entered into with the petitioner had been terminated x x x x x x x x x x x x x x. 17. The petitioner states and respectfully submits that despite having threatened to repudiate the contract with the petitioner, the company did not ultimately do so. In this context it is reiterated that upon being called upon by the petitioner to refund the said sum of Rs.1,16,25,000/-together with interest, the company took no step whatsoever in that regard. The constitution of the Expert Committee was invalid as without recalling the order of dismissal the Appellate Authority was not competent to take a decision on the appeal, as implied re-calling of order is unknown to all canons of laws. Reasons have to be given for re-call of an order after considering whether there is sufficient cause to re-call. This exercise was not undertaken by the Appellate Authority. Price cannot be a factor as the Company accepted the offer of HSCL in 1996 and is seeking a revision in price in 2006, although there is no document disclosed evidencing price revision. The only document disclosed is with regard to revised payment schedule. Therefore C.A. 663 of 2006 warrants no order and order dated 1.3.2006 calls for no interference. As the order dated 24.3.2006 is in implementation of order dated 1.3.2006, the said also calls for no modification or clarification. It will not be out of context to state that the Company (in liquidation) so also HSCL are both Government owned Companies and the High Powered Committee constituted to look into the disputes of two or more Government Companies or Organizations ought to have decided the said issue. C.A.208 of 2008 This application has been filed by the Employees’ Union of the Company. From the order dated 25.2.2003 recommending winding up an appeal was filed by the Union and the said appeal was dismissed on 13.5.2005. The restoration application was filed after the order dated 6.7.2005. In fact after the filing of appeal and before the filing of the restoration application the members of the applicant union had applied for VSS or VRS and on 3.3.2008 when the order was passed by the Appellate Authority there was no member of the Union. It has been admitted by the applicant Union that on revival the workers will need to be reinstated and the workers will return the sums received. Once an employee has received VSS or VRS Voluntarily he can have no jural relation with the Company as held in (2003) 5 SCC 163 . It has been admitted by the applicant Union that on revival the workers will need to be reinstated and the workers will return the sums received. Once an employee has received VSS or VRS Voluntarily he can have no jural relation with the Company as held in (2003) 5 SCC 163 . In fact the case of acceptance under compulsion was negatived by the Supreme Court. This is also not the case here. The VSS or VRS taken is not conditional, therefore this application warrants no order and is dismissed. (Patherya J.) Later : Prayer for stay made is considered and refused.