Civil Appeal Nos
6092  6093 of 1983 Appeals by Special leave from the Judgment and order dated the 4th February 1983 of the Bombay High Court in WP No 173 of 1983 MK Ramamurthi and Urmila Sirur for the Appellant
Gobind Das PH Parekh and Indu Malhotra for the Respondent The Judgment of the Court was delivered by DESAI J
General Labour Union Red Flag Bombay filed two complaints one against Ms Delta Wires Pvt Ltd and second against Ms Delta Spokes Manufacturing Company two sisters concerns  employers  for short under Sec
28 read with Items la lb 2 4a 4f and 6 of Schedule II of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971  Act  for short
Broadly stated the complaints were that the employers were guilty of imposing and continuing a lock out and had thus committed unfair labour practice
The employers contended that they had finally and irrevocably closed the industrial undertaking and were not guilty of any unfair labour practice
The complaints were filed in the Industrial Court Maharashtra Bombay
The learned Judge framed an issue whether the employers had committed an unfair labour practice by imposing and continuing a lock out as provided in Item 6 of Schedule II of the Act
After hearing the parties the learned Judge answered the issue in negative and dismissed the complaints
The appellant Union filed two special civil applications in Bombay High Court under article 226 of the Constitution questioning the correctness of the decision of the Industrial Court
Both the applications were dismissed in limine
The Union thereupon filed these two appeals by special leave
66 At the hearing of the appeals Mr Govind Dass learned counsel for the employers stated that the employers have re opened the industrial units and there is partial resumption of manufacturing process
He further stated that the employers are willing to take back all the old workmen and in order to satisfy the court about the bonafides of the employers he pointed out that nearly 16 old workmen who responded to the advertisement in a local newspaper have already been re employed
Mr Govind Dass stated that the employer will put on record an unconditional undertaking as affidavit in these appeals that no new workman will be recruited in afore mentioned two industrial undertakings who had not been in previous employment with them without giving first preference to the workmen who were in employment of the two concerns on April 8 1980 when they were closed down
Mr M K Ramamurthy learned counsel for the appellant union on the other hand contended that the industrial undertakings of the employers had never been closed or at any rate have resumed working in full and that the old workmen are not being re employcd and new hands arc being recruited
We record the unequivocal undertaking given on behalf of the employers by the learned counsel Shri Govind Dass that all the old workmen who were in service of the employers at the time of the alleged closure that is upto and inclusive of April 8 1980 will be re inducted in service as resumption of work is gradually expanding and that till all the old workmen are re inducted in service no new hand will be recruited
An undertaking to that effect by Dr P D Meghani so Dharam Chand Meghani has been placed on record and is treated as an integral part of this judgment
In order to be assured that the undertaking is carried out in letter and spirit we direct the Industrial Court Maharashtra Bombay to depute its senior ministerial officer to visit the industrial undertakings of the employers and to satisfy itself that the old workmen are being re inducted in service and that as resumption of production is gradually expanded the old workmen will be re inducted in service
There will be a continuous watch by the ministerial officer to be appointed by the Industrial Court till all the old workmen who are willing to be re inducted in service are taken back in service
In fact this undertaking should have concluded the matter
But there is a statement of law made by the Industrial Court while rejecting the complaints filed by the appellant union which does not command to us and to avoid any such error being repeated in future we with a view to set right the matter proceed to examine the same in this judgment
67 The complaints of the union were that the employers were guilty of imposing and continuing a lock out which under the law was illegal
On the other hand the submission on behalf of the employers was that there was a closure of the industrial undertaking and it was not a case of lock out
In such a situation there the parties are at variance whether the employers have imposed a lockout or have closed the establishment it is necessary to find out what was the intention of the employer at the time when it resorts to lock out or claims to have closed down the industrial undertaking
It is to be determined with accuracy whether the closing down of the industrial activity was a consequence of imposing lock out or the owner employer had decided to close down the industrial activity
Lock out is generally an employer s response to some direct action taken by the workmen
Closure may be on account of various reasons which may have necessitated closing down of the industrial undertaking
In this case the issue was whether the employer had imposed a lock out or has closed down the business
In examining this aspect the Industrial Court observed as under D It is not necessary to refer to each and every decision pointed out by Mr Bhatt on the point of lock out and closure since now it is well established that in case of a lockout there is only closure of the place of business where as in case of a closure there is a closure of the business itself permanent and irrevocable
Whether the closure is brought about malafide and whether it could have been avoided are matters irrelevant and what is to be seen is whether in fact and in effect there is a closure or not
 We fail to appreciate both the approach and the reasons in support of the approach
Lock out has been defined in Sec
2L of the Industrial Disputes Act 1974  lD Act  for short to mean the closing of a place of business or the suspension of work or the refusal by an employer to continue to employ any number of persons employed by him
In lockout the employer refuses to continue
to employ the workmen employed by him even though the business activity was not closed down
The essence of lock out is the refusal of the employer to continue to employ workman
There is no intention to close the industrial activity
Even if the suspension of work is ordered it would constitute lock out
On the other hand closure implies closing of industrial activity as a 68 consequence of which workmen are rendered jobless
222 of the ID Act prohibits an employer in a public utility service from locking out any of his workmen without giving notice as provided therein
23 prohibits an employer from declaring a lock out in any of the eventualities mentioned therein
Lockout in contravention of Sec
23 is declared illegal
Section 26 of the ID Act provides that any of the practices listed in Schedule 11 III and IV would be an unfair labour practice
Imposing and continuing a lock out deemed to be illegal under the Act is an unfair labour practice
While examining whether the employer has imposed a lock out or has closed the industrial establishment it is not necessary to approach the matter from this angle that the closure has to be irrevocable final and permanent and that lockout is necessarily temporary or for a period
The employer may close down industrial activity bonafide on such eventualities as suffering continuous loss no possibility of revival of business or inability for various other reasons to continue the industrial activity
There may be a closure for any of these reasons though these reasons are not exhaustive but are merely illustrative
To say that the closure must always be permanent and irrevocable is to ignore the causes which may have necessitated closure
Change of circumstances may encourage an employer to revive the industrial activity which was really intended to be closed
Therefore the true test is that when it is claimed that the employer has resorted to closure of industrial activity the industrial court in order to determine whether the employer is guilty of unfair labour practice must ascertain on evidence produced before it whether the closure was a device or pretence to terminate services of workmen or whether it is bonafide and for reasons beyond the control of the employer
The duration of the closure may be a significant fact to determine the intention and bonafides of the employer at the time of closure but is not decisive of the matter
To accept the view taken by the Industrial Court would lead to a startling result in that an employer who has resorted to closure bonafide wants to re open revive and re start the industrial activity he can not do so on the pain that the closure would be adjudged a device or pretence
Therefore the correct approach ought to be that when it is claimed that the employer is not guilty of imposing a lockout but has closed the industrial activity the Industrial Court before which the action of the employer is questioned must keeping in view all the relevant circumstances at the time of closure decide and determine whether the closure was a bonafide one or was a device or a pretence to determine 69 the services of the workmen
Answer to this question would permit A the Industrial Court to come to the conclusion one way or the other
Having clarified the position in law we dispose of the appeals in terms of the undertaking of Dr PD Meghani as recorded in this judgment
Both the appeals are disposed of accordingly


Summary:
The appellant trade union filed two complaints against the employees
The complaints were that the employers were guilty of imposing and continuing a lock out and had thus committed unfair labour practice
The employers contended that they had finally and irrevocably closed the industrial under taking and were not guilty of any unfair labour practice
The Industrial Cc
Court dismissed the complaints
The union s appeals were dismissed by the High Court
Hence these appeals by special leave
Disposing of the appeals  HELD 
Lock out has been defined in Sec
2L of the to mean the closing of a place of business or the suspension of work or the refusal by an employer to continue to employ any number of persons employed by him
In lock out the employer refuses to continue to employ the workmen employed by him even though the business activity was not closed down nor intended to be closed down
The essence of lock out is the refusal of the employer to continue to employ workmen
There is no intention to close the industrial activity
Even if the suspension of work is ordered it would constitute lock out
On the other hand closure implies closing of industrial activity as a consequence of which workmen are rendered jobless67 G H 68 Al The true test to find out whether the employer has imposed a lock out or has closed the industrial establishment is that when it is claimed that the employer has resorted to closure of industrial activity the Industrial Court in order to determine whether the employer is guilty of unfair labour practice must ascertain on evidence produced before it whether the closure was a device or pretence to terminate services of workmen or whether it is bonafide and for reasons beyond the control of the employer
The duration of the closure may be a significant fact to determine the intention and bonafides of the employer at the time of the closure but is not decisive of the matter
When it is claimed that the employer is not guilty of imposing a lock out but has closed the industrial activity the Industrial Court before which the action of the employer 65 is questioned must keeping in view all the relevant circumstances at the time of A closure decide and determine whether the closure was a bonafide one or was a device or a pretence to determine the services of the workmen
Answer to this question would permit the Industrial Court to come to the conclusion one way or the other
68 F H 69A