1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH NAGPUR. WRIT PETITION NO. 528 OF 1993 Development Corporation of Vidarbha Limited (A Govt. of Maharashtra Undertaking) through its Managing Director, having its Registered Office at Mahajan Building, Main Road, Sitabuldi, Nagpur. PETITIONER. VERSUS Harisingh Saini, Adult, Occu. Service R/o 36/3A, Gillis Bazar, Nagpur. Presiding Officer, Industrial Court, Nagpur. RESPONDENTS. Shri. D. L. Dharmadhikari, Counsel for the petitioner. Shri. V. C. Marpakwar, Counsel for the respondents. CORAM: S. A. BOBDE J. Date: 18th JANUARY 2006. ORDER: 2 This petition is directed against the order of the Industrial Court upholding the reinstatement of the respondent with back wages in the post of Chemist. 2. The petitioner is a Government Company registered under the Companies Act. It is established for the purpose of looking after the Industrial Development of the Vidarbha Region of the State of Maharashtra. The Government has entrusted various programmes, projects to the petitioner Corporation. These are administered by the petitioner by constituting subsidy of the companies. The petitioner runs the following projects/companies: i)Tasar Silk Project. ii)Khandsari Project. iii)Woolen Carpet Weaving Project. iv)Rosha Grass Oil Project. v)Gondwana Paints and Minerals Limited. vi)Vidarbha Quality Seeds Limitted. vii)Vidarbha Tanneries Limited. viii)Shivraj Fine Art Litho Works. The respondent was employed by the petitioner/corporation 3 as Chemist in the Khandsari Project on an initial basic pay of Rs. 525/-. Clause 6 of the appointment order reads as follows: In case the Management decides that his appointment is treated for a particular Project only, then in that case, he shall be borne on the establishment of that Project exclusively and/that case he shall be governed by the Rules and Regulations as may be made applicable to that Project as in force and as amended from time to time. The Khandsari Project of the Corporation is indicated in the business of manufacture of Khandsari Sugar from Sugarcane and is a Seasonal Industry. 3. There after on 01.12.1984 the Government of Maharashtra accorded permission to the petitioner to close down the Khandsari Unit at Sakoli in Bhandara district, as a result the petitioner terminated the respondent's services after paying salary in lieu of a notice of 3 months'. This termination was dated 31.01.1985. The termination letter states that the petitioner decided not to carry on crushing of Sugar Cane in the Khadsari Sugar Factory and, therefore, his services are no longer required. Aggrieved by the termination the petitioner approached the Labour Court under Clause (1) 4 of Schedule IV of M. R. T. U. & P. U. L. P. Act, 1971. The Labour Court dismissed his complaint. Thereafter the petitioner filed a revision before the Industrial Court who remanded the matter back to the Labour Court for reconsideration. In the second round the Labour Court allowed the respondent's complaint and directed reinstatement of the petitioner with back wages. 4. Against the order of the Labour Court the petitioner moved the Industrial Court under Section 44 of the M. R. T. U. P. U. L. P. Act. The Industrial Court also affirmed the order of the Labour Court. This Writ Petition is directed against that order. 5. It must be noted that in the meanwhile the petitioner has reinstated the respondent on 18.12.1994 and thereafter has taken voluntary retirement from the service w. e. f. 31.03.2003. There is no dispute about this fact. The only question that arises for consideration in this case is whether the respondent's services were discharged by way of victimisation etc. as provided by Clause (1) of Schedule IV and in contravention of law. It has been the respondent's 5 case throughout that his termination is in contrvention of Section 25(N) in particular Clause (b) of Sub Section (1) thereof. That provision reads as follows: 25(N)(1)(b): the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereafter in this section referred to as the specified authority) has been obtained on an application made in this behalf. Section 25(N) applies vide Section 25(K) only to an industrial establishment in which not less than one hundred workmen were employed on an average per working day for the preceding twelve months. 6. Now there is no dispute that if the Khandsari Project is taken as a separate industrial undertaking then clearly more than one hundred workmen are not employed. Clause (ka) of Section 2 of Industrial Disputes Act defines industrial establishment or undertaking as follows: 2(ka): “Industrial establishment or undertaking” means an establishment or undertaking in which any industry is carried on: Provided that where several activities are carried on in an establishment or undertaking and only one or some of such 6 activities is or are an industry or indutries, then- (a) if any unit of such establishment or undertaking carrying on any activity, being an industry, is severable from the other unit or units of such establishment or undertaking, such unit shall be deemed to be a separate industrial establishment or undertaking; (b) if the predominant activity or each of the predominant activities carried on in such establishment or undertaking or any unit thereof is an industry and the other activity or each of the other activities carried on in such establishment or undertaking or unit thereof is not severable from and is, for the purpose of carrying on, or aiding the carrying on of, such predominant activity or activities, the entire establishment or undertaking or, as the case may be, unit thereof shall be deemed to be an industrial establishment or undertaking. Mr. D. L. Dharmadhikari learned counsel for the petitioner submitted that Indutrial Court committed a serious error of law by clubbing all the indutrial units and undertakings run by the petitioner together. By clubbing all the industrial units and undertakings by the petitioner together, and thereafter applying Section 25(N), Learned counsel submitted that there was no functional integrality between the petitioner and the 7 petitioner itself is one of its units. 7. On the other hand it is the submission of the learned counsel for the respondent Shri V.P. Marpakwar that Khandsari Project of the petitioner is not an independent unit and taking the number of workmen employed in the other units, the petitioner has more than one hundred workmen and, therefore, thereby bound to comply with the requirement of Section 25(N). The question that needs to be decided is whether the Khandsari Unit held by the petitioner company in which the respondent was employed can be clubbed along with the other units of the petiotioner company. As can be seen from the description in para 2 of the judgment that the various units or industrial undertakings held by the petitioner are as varied as; Tasar Silk Project, Khandsari Project, Woolen Carpet Weaving Project, Rosha Grass Oil Project, Gondwana Paints and Minerals Limited, Vidarbha Quality Seeds Limited, Vidarbha Tanneries Limited and Shivraj Fine Art Litho Works. It is difficult to see the functional integrality between all these units. The test of functional integrality was laid down by the Supreme Court as particularly as reported in Management of 8 Pratap Press, New Delhi (In both the Appeals) Vs. Secretary Delhi Press Workers' Union Delhi (In C.A.No. 482 of 58) and Its Workmen (In C.A.No. 189 of 59) A. I. R. 1960 Supreme Court 1213. Having regard to the fact that the units held by the petitioner are all different in the sense that they are established for different purposes and can exist independently with each other. They cannot be said to have any functional integrality. In the case referred to above the Supreme Court observed as follows: In all such cases therefore the Court has to consider with care how far there is “functional integrality” meaning thereby such functional interdependence that one unit cannot exist conveniently and reasonably without the other and on the further question whether in matters of finance and employment the employer has actually kept the two units distinct or integrated. In the present case no evidence is pointed out to show that the various undertakings or units of the petitioner are such integral integrality so that it is necessary to treat all the units as one for the purpose of application of Chapter V(B) of the Industrial Disputes Act. I am, therefore, of the view that the 9 Khandsari Project run by the petitioner is a separate industrial undertaking. In fact, permission for its closure was taken separately from the Government of Maharashtra who accorded for that particular unit. Admittedly, the Khandsari Project being a seasonal undertaking and in any case the number of persons employed therein not been demonstrated as if been excess of one hundred at any point of time, it is not possible to uphold the concurrent finding of the Courts below. In fact there is not even a whisper in the complaint that the Khandsari Project employed more than one hundred workmen which is a prerequisite for the adjudication of Chapter V(B). There is a mere allegation that the termination is not in accordance with Chapter V(B) of the Industrial Disputes Act, the difference being between a pleading of fact and a pleading of law. In this view of the matter I find that the Courts below have coimmitted an error of law apparent on the face of record in setting aside the respondent's termination on the ground that Khandsari Project is not an independent unit and by clubbing of the industrial undertakings of the petitioner together which are varied in their character and products. In 10 the result the petition must succeed. The impugned order suffers from an error or law apparent on its face and is, therefore, set aside. Rule is therefore made absolute in the above terms. However, I am of the view that it would be appropriate in the interest of justice to direct the petitioner not to make the recovery of any amount that may have already been paid to the respondent either under the voluntary retirement scheme or under other retiral benefits. JUDGE svk