Case: Chandrabhushan Ramehandra Garu Vs. State of Maharashtra

JHUNJHUNUWALA, J. ( 1 ) THE petitioners who were employed with Kirlakar Pneumatic Company Ltd. , the 3rd Respondent hercin, seek declaration that the closure of 3rd respondent Companys Undedaking at Nasik without complying with the provisions of Sec. 25-0 of the Industrial Disputes Act, 1947 (for short,the said Act) is illegal. The petitioners also seek appropriate writ, order or directions directing the State of Maharashtra to take action against the said company under the provisions of Section 25-0 and 25-R of the said Act. ( 2 ) AT the material time, the 1 st petitioner was employed as Supervisor, the petitioners 2, 3, 4 and 5 as Junior Assistants and the 6th petitioner as senior assistant with the 3rd respondent. One Kirloskar Tractors Ltd. , a company incorporated and registered under the provisions of the Companies Act, 1956 had established a factory for manufacture of tractors at Nasik within the State of Maharashtra. The said Kirloskar Tractors Ltd. had applied to this Court by company petition No. 27 of 1983 for sanction of a scheme of amalgamation with the 3rd respondent which was sanctioned on September 7, 1983 with retrospective effect from July 1, 1982. After arnalgamation, the Undertaking at Nasik was styled as kirloskar Pneumatic Company Ltd. (Tractor Division). In or about the month of September, 1985, after reviewing the prospect of the Tractor Division, the 3rd respondent came to the conclusion that it was impossible to run the Tractor Division with full complement and that there was imperative necessity to cut down its labour force as there was hardly any market for the products manufactured by the Tractor Division. At that time, the 3rd respondent had in its employment about 659 employees inclusive of workmen, supervisors, managers and executives. In September, 1985, the services of two 3 workmen and two supervisors were terminated by the 3rd respondent and about 37 supervisors resigned from service, bringing down the total force to about 618. In or about October, 1985 the 3rd respondent offered a voluntary retire ment scheme to its workmen whereunder about 481 workmen opted for the said scheme and retired from the services after collecting their legal dues and additional amounts payable to them. In addition thereto, about 11 supervisors 4 resigned from services and 2 workmen and 16 supervisors/officers were removed from services. In or about the beginning of November, 1985 the total complement of employees had come down to 180 inclusive of all categories. It may be mentioned here that in or about October, 1985, 94 emploees had applied to the Ubour Court, Nasik, by way of complaint under Section 28 read with item 1 of Schedule (IV) of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 alleging inter alia that they apprehended that their services would be terminated and sought relief by way of anticipatory injunction to restrain the 3rd respondent from terminating 0 their services. Subsequently, about 76 employees amicably settled their disputes with the 3rd respondent under a Settlement dated June 30, 1986. More employees thereafter entered into settlement with the 3rd respondent and on and 5 from April, 1987 the total number of employees in the Tractor Division at Nasik continued to be 8 only.( 3 ) AN application dated September 8, 1986 was made by the 3rd respondent to the Secretary, Ministry of Industries, Government of India, New Delhi, for permission to shift its Tractor manufacturing activity to the 3rd respondents factory at Saswad, District Flune within the state of Maharashtra so as to ensure economic viability to the Tractor Division. By an order of July 22, 1988, Government of India, Ministry of Industry, Department of Industrial Development, Secretariat for Industrial Approvals (LA-III Section) amended the Industrial Licence of the 3rd respondent and granted permission to change the location of the unit for manufacutre of tractors from Nasik Road, District Nasik to Saswad, District Flune. On or about September 11, 1987, the 3rd respondent also made an application to the Government of India, Ministry of Industry, Department of Company Affairs for permission under Section 22 of the MRTP Act, 1969 to shift the Tractor Division from Nasik to Saswad. By order dated March 16, 1988, the Central Government approved the proposal of the 3rd respondent to shift the Tractor Division from Nasik to Saswad and accordingly the 3rd respondent transferred almost all the machinery and equipments from Nasik Road Factory to its Saswad factory in Puie District. With effect from November 24, 1988, the entire Undertaking of the 3rd respondent was transferred to Saswad and since January 1989,the said Undertaking has been closed down. ( 4 ) IN the year 1985, the petitioners had filed Writ Petition No. 5285 of 1985 in this Court for the same reliefs as claimed herein. By the Order passed on December 6, 1986, that writ petition was rejected on January 16, 1989,the Special leave Petition No. 5499 of 1988 filed by the petitioners was also dismissed by the Supreme Court. At that time, the learned Counsel appearing for the 3rd respondent had made a statement before the Supreme Court that the Undertaking of the 3rd respondent was closed. Liberty was granted to the petitioners to apporach this Court. On or about April 20, 1989, the petitioners have filed the present petition.( 5 ) THE controversy pertains to interpretation of Section 25-0 read with Section 25-K of the said Act. Both these Sections are in Chapter VB of the said Act. Chapter VB contains special provisions relating to lay off, retrenchment and, closure in certain establishments. As per Section 25-K, the provisions of Chapter VB apply to an industrial establishment in which not less than 100 workmen were employed on an average per working day for the preceding 12, months. Section 25-O lays down the procedure to close down an undertaking of an industrial establishment to which Chapter VB applies. As per Section 25-O, an employer who intends to close down an undertaking of an industrial establishment to which Chapter VB applies, is to submit an application for prior permission to the appro ate Govermnent stating clearly the reasons tlorri the intended closure of the Undertaking. Such application is to be submitted in the prescribed manner at least 90 days before the date on which the intended closure is to become effective. It is evident from the clear and unambiguous language of Section 25-O that the Section makes it obligatory on an employer who intends to close down an undertaking of an industrial establishment to which the provisions of Chapter YB apply to submit application for permission to close down. (emphasis supplied ). Hence, the obligation to apply for prior permission to the appropriate Government to close down an undertaking under Section 25-O is only upon such employer to whose industrial establishment provisions of Chapter VB of the said Act apply and as stated in Section 25-K the provisions of Chapter VB apply to such industrial establishment in which not less than 100 workmen were employed on an average per working day for the preceding 12 months. If in an industrial establishment less than one hundred workmen were employed on an average per working day for the preceding twelve months, the provisions of Chapter VB did not apply.( 6 ) THE question, in the facts of the case, is whether the provisions of Chapter VB applied to the 3rd respondent Company who at the time of closure of its undertaking at Saswad in the month of January 1989 admittedly had less than s 100 workmen employed on an average per working day for the preceding 12 months from January 1989. Mr. Grover, learned Counsel apearing for the petitioners, has submitted that section 25-K does not mention the cut-off date, to which the preceding 12 months are to be reckoned and as such, it should be the date when the employer first intended to close down its industrial establishment. In our view, the submission made by the learned Counsel is devoid of 5 any merit. Chapter VB contains special provisions relating to lay off, retrenchment and closure in certain establishments. The period of preceding 12 months is to be reckoned to the date of happening of the event in respect of which the special provisions contained in the Chapter are made and in this case, to the date of closure of the Undertaking of the 3rd respondent which was in the month of January 1989. No doubt, earlier the 3rd respondent Company had intended to transfer the said Undertaking from Nasik to Saswad for which necessary applications were made and after obtaining the requisite approvals, the 3rd respondent did transfer its said entire Undertaking to Saswad with effect from November 1988. However, shifting of the Undertaking of the 3rd respondent from Nasik to Saswad cannot be considered as closure thereof under the said Act. As observed in the case of Parry and Company v. P. C. Pal and Ors. reported in (1 970-11-LLJ-429) (SC), the management has a right to reorgainse its workers in the manner it pleases. The shifting of the Undertaking of the 3rd respondent from Nasik to Saswad was nothing more than) exigency of the trade. Merely because the 3rd respondent intended to cut down the employment since the year 1985 and to shift its Undertaking from Nasik to S asward, it cannot be said that in the year 1985, the 3rd respondent intended to close its Undertaking so as to attract the provisions of Section 25-O of the said Act. ( 7 ) SINCE the said earlier writ petition filed by the petitioners for the same reliefs as claimed herein was dismissed the petitioners are not entitled to maintain the present petition. Mr. Grover has, however, submitted that by reason of the liberty granted by the Supreme Court in the Order passed on January 16, 1989, the petitioners are entitled to maintain this petition. The Supreme Court, in its said order, has stated as under :"the Special Leave Petition is dismissed on the ground of delay. It is stated by the learned Counsel for the respondent that subsequently there has been a closure. The petitioners will be at liberty to approach the High Court. "In our view, the Supreme Court has not granted leave to the petitioners to file a fresh petition on the same cause of action on which the said earlier Writ Petition No. 5285 of 1985 was filed by the petitioners. That apart, since in our view there is no merit in the contentions even 0 now raised in the present petition and on the facts of the case, it was not obligatory on the part of the 3rd respondent to take prior permission of the appropriate Government contemplated under Section 25-O of the said Act for closure of its undertaking at Saswad, the petitioners are not entitled to any relief whatsoever in the petition.

Decision:
0[ds]In our view, the Supreme Court has not granted leave to the petitioners to file a fresh petition on the same cause of action on which the said earlier Writ Petition No. 5285 of 1985 was filed by the petitioners. That apart, since in our view there is no merit in the contentions even 0 now raised in the present petition and on the facts of the case, it was not obligatory on the part of the 3rd respondent to take prior permission of the appropriate Government contemplated under Sectionof the saidAct for closure of its undertaking at Saswad, the petitioners are not entitled to any relief whatsoever in the petition.