: 1 : IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.6187 OF 2008 Navnath Kanha Naik & Ors. ... Petitioners V/s. United Breweries Ltd. & Anr. ... Respondents Mr.A.V. Bukhari with Mr.P.M. Mokashi for Petitioner Mr.S.K. Talsania with V.P. Vaidya for Respondents CORAM: SMT.NISHITA MHATRE, J. DATED: SEPTEMBER 15, 2008 P.C.:: 1. Rule. By consent of the parties, Rule made returnable forthwith and heard finally. 2. The order challenged in this petition has been passed by the Industrial Court in Complaint (ULP) No.90 of 2008 filed by the Petitioners. By this order dated 8.5.2008, the Industrial Court has rejected the application for interim relief filed in the complaint. The Petitioners had sought a direction against the Respondents from removal of the plant and machinery of the factory at Nerul pending the review application filed by them u/s 25-O (5) of the Industrial Disputes Act (for short, hereinafter referred to as `the Act'). 3. The facts involved in the present Petition are as follows: : 2 : In 2001, the Respondent Company took over the management of M/s.Associated Breweries and Distilleries Limited in 2001 which had a manufacturing plant at Nerul. The aforesaid Company was then merged with the Respondent Company in 2005. It appears that after the merger, the Chairman of the Respondent Company issued a press statement to the effect that an aviation university would be started at the Nerul plant. The Respondent Company continued to run the Nerul plant after the merger and made profits according to the Petitioners in 2005. Bonus was paid to the workmen @20% in 2006. Profits increased in 2006. In the year 2007 also, the workmen were paid @20%. According to the Petitioners, there was a manifold increase in the production at the Nerul plant in 2007. An average wage rise of Rs.2300/- per month was agreed to be paid to the workmen under a settlement arrived at between Bharatiya Kamgar Sena (for short, `BKS') and the respondents u/s 2(p) r/s 18(1)(b) of the Act. 4. According to the Petitioners immediately thereafter in September 2007, the production activities in the Nerul plant were stopped and the raw material was transferred to other plants belonging to the United Breweries group of Companies. An application was filed on 3.1.2008 by the Respondent Company u/s 25-O (1) of the Act before the appropriate government for permission to close down its Nerul plant. On 2.4.2008 the permission was granted to the Respondent Company. A copy of that order was made available to the Petitioners on 4.2.2008. However, it appears that on the same day i.e. on 2.4.2008, the services of the employees were : 3 : terminated by the Respondent Company. The BKS, the union representing the Petitioners and other workmen employed in the Nerul plant filed an application u/s 25-O (5) before the Appropriate Government on 17.4.2008 seeking a review or a Reference of the application for closure to the Tribunal. While this application was pending hearing before the Commissioner of Labour, the Petitioners preferred Complaint (ULP) No.90 of 2008 on 24.4.2008. This complaint was filed under Item 9 of Schedule IV of the MRTU & PULP Act. The application for interim relief filed by the Petitioners was vehemently opposed by the Respondent. By the order dated 8.5.2008, the Industrial Court rejected the application. While the interim application was being heard before the Industrial Court, the proceedings before the Commissioner of Labour u/s 25-O (5) continued. Ultimately on 24.6.2008, the Commissioner of Labour referred the following dispute for adjudication: “The matter in the application dated 4.2.2008 filed by M/s.United Breweries Limited, Plot NO.D1103/104, TTC Industrial Estate, Nerul, Navi Mumbai-400706 seeking closure permission for its industrial establishment situated at Nerul his hereby referred under section 25-O (5) of the Act to the Industrial Tribunal, Thane consisting of Shri L.A. Borde”. 5. Incidentally, the dispute has been referred to the same Presiding Officer who has passed the impugned order. A notice was issued by the Industrial Tribunal on 3.7.2008 directing the parties to remain present in : 4 : Court on 16.8.2008. Strangely, while issuing notices to parties, the Industrial Tribunal does not seem to have taken into account the fact that the dispute referred was one u/s. 25 O which is expected to be decided within one month of the reference being made for adjudication. The matter before the Tribunal has now been adjourned to 17.9.2008. The Respondent Company has not filed its statement of claim as yet before the Tribunal. 6. While all these proceedings were pending, the Respondent Company filed Regular Civil Suit NO.133 of 2008 and applied for an injunction restraining the Defendants i.e. BKS, the General Secretary of the BKS and Navnath K. Naik i.e. the Petitioner No.1, herein, from (i) entering the factory premises of the Respondent Company at Navi Mumbai; ii) holding meetings and gathering in numbers, shouting slogans or staging demonstrations within a radius of 200 metres at the factory; (iii) obstructing the officers, employees or managerial or administrative persons, visitors or any person dealing with the factory and; (iv) obstructing the trucks/vehicles carrying the material and equipment to and from the factory premises and while in transit, etc. This application was filed in July 2008. It appears that no ad interim relief was granted and therefore on 12.8.2008, a fresh application was made contending that 5 persons who had undertaken the job of dismantling the plant and machinery in the Nerul plant would not be able to survive if the workers did not permit food to be taken into the factory for them. By an order of the same day, the Civil Court restrained the Defendants from obstructing vehicles providing food to the employees till arguments were heard on Exhibit : 5 : 5 i.e. the interim application. 7. It appears that 2 heavy machines have already been removed from the factory premises by the Respondents. The Petitioners now seek a direction that the machines which are still on the factory premises should not be removed pending the adjudication of Reference (IT) No.20 of 2008 by the Industrial Tribunal. 8. Undisputedly, the impugned order has been passed on 8.5.2008 and the petition has been filed on 25.8.2008. During the interregnum, these 2 heavy machines have already been removed by the Respondents. In the backdrop of these facts, it would be necessary to consider whether the Petitioners are entitled to the interim relief as claimed. The principle question is whether the Industrial Court while deciding a complaint under Item 9 of Schedule IV can restrain the Respondents Company from removing its plant and machinery till the reference made u/s 25-O(5) is adjudicated by the Industrial Tribunal. The crucial question would be whether an order for closure comes into operation immediately after it has been passed or does the employer have to wait for implementing the order till the reference is decided. If it is found that the order passed by the Commissioner of Labour u/s 25-O (2) of the Industrial Disputes Act does not become operative immediately it is passed, then the next question to be answered would be whether by dismantling the plant and removal of machinery the Respondents have prima facie committed an unfair labour practice under Item 9 of : 6 : Schedule IV of the MRTU & PULP Act. 9. Mr.Bukhari, learned counsel appearing for the Petitioners, has contended that an order passed permitting the closure u/s 25-O (2) is made subject to the provisions of subsection (5) of section 25-O. He submits that till the appropriate government decides an application filed by the workman for either review of its order granting permission to close or for a reference of the matter to the Tribunal for adjudication, the employer cannot close down the industry. He submits that in view of the provisions of section 25-O (1), the closure would come into effect 90 days after the date of the application filed under this provision. According to him, the scheme of section 25-O does not permit the employer to implement a closure immediately on receipt of the order of the appropriate government permitting the closure. This is because the application for closure must be decided within 60 days or else a deeming fiction u/s 25-O (3) would operate and the application for closure would be deemed to have been allowed. He points out that thereafter the workman can always file an application for review or a reference under section 25-O (5). Such an application has to be decided within a reasonable time and the Supreme Court in the judgment in the case of Orissa Textile & Steel Ltd. V/s. State of Orissa & Ors., 2002 I CLR 831 Supreme Court has held that 30 days would be the reasonable time for disposing of an application u/s 25-O (5). Thereafter if the matter is referred for adjudication, the tribunal has to pass an award within 30 days of the date of the reference. Thus, he submits that the employer cannot implement an order granting him : 7 : permission to close down the factory for a further period of 60 days or till the reference is decided whichever is later. He urges that in any event, the employer cannot implement the closure during the period the application filed u/s 25-O (5) is pending. The learned counsel has relied on several judgments which I shall advert to later. 10. Mr.Talsania, learned counsel appearing for the Respondents, submits that in the present case, the Petitioners are not entitled to any relief as they have approached this Court after an inordinate delay from the date when they were refused interim relief by the Industrial Court. He submits that although a delay of a little over three months may not be of any consequence in most other matters, in the facts and circumstances of the present case, the delay is fatal and disentitles the Petitioners from any relief. According to Mr.Talsania, the explanation given by the Petitioners for the delay, that the BKS which was representing them has decided not to cooperate with the Petitioners, is not plausible. On merits, the learned counsel submits that section 25-O is a complete code in itself and which has come into force from 21.8.1984, bridging the lacunae noticed in the earlier section by the Supreme Court in the case Excel Wear v/s. Union of India & Ors., 1979 (1) SCR 1009. Under the scheme of the section, the order passed by the appropriate government permitting closure comes into operation immediately after it is passed and continues to exist while the review/reference is pending. He submits that the scope of subsection (5) is that it provides a remedy to a party who is aggrieved by an order passed u/s 25-O (2) which is akin to an : 8 : appeal. Therefore, although a party can challenge such an order, the order continues to exist and operate and cannot be wished away, urges the learned counsel. The employer can act upon such an order immediately after it is passed. He points out that this is the only interpretation of section 25-O that suggests itself. He submits that it is practically impossible to have a Reference with respect to closure decided within 30 days although that is the requirement of laws in almost all cases the decision may be delivered after one year. According to the learned counsel, any delay in implementing the closure and making it effective causes the employer to lose the advantage that he had of an order u/s 25-O (2). He points out that in the case of Vazir Glass Works Ltd. V/s. Maharashtra General Kamgar Union & anr, 1996(72) FLR 335, the Supreme Court has observed that if a Reference is not decided within a year, the employer can always apply afresh for permission to close its undertaking. The learned counsel submits that u/s 25-O (4), the order of the appropriate government granting permission is final and binding on all parties and continues to remain in force for one year, albeit, subject to the provisions of sub-section (5). According to him, once the application for closure is granted, the embargo placed upon an employer from closing his concern is lifted and the closure comes into operation immediately. The employer need not wait for 90 days to elapse from the date of the application for closure in the event the application is decided within 60 days. According to him, the date of the proposed closure mentioned in the application is not relevant and if at all the employer obtains an order permitting him to close down before the expiry of 60 days from the date of the application for closure, : 9 : the employer need not wait for 90 days to elapse from the date of the application. He submits that in such a case the employer can always pay wages for the period from the date of the closure being implemented till the proposed date of the closure contained in the application. The learned counsel submits that the workmen are not entitled to any interim relief in the complaint as the only relief which can be given to the workmen in the case of an illegal closure is compensation or wages as held by the Supreme Court in the case of Managing Director Karnataka Forest Development corporation Ltd. V/s. Workmen of Karnataka Pulpwood Ltd. & Ors., 2008 I CLR 63. 11. The first question which I will consider now is whether any interim relief in the nature claimed by the Petitioners can be granted by the Industrial Court in the complaint filed by them. The complaint has been filed claiming that the Respondents have committed an unfair labour practice under Item 9 of Schedule IV of the MRTU & PULP Act. It is contended that the Respondents had started removing the machinery from the Nerul plant while the Petitioners' application filed u/s 25-O (5) was still pending. According to the Petitioners, this action of the Respondents is in breach of the provisions of section 25-O of the Act and, therefore, the Respondents have committed an unfair labour practice under Item 9 of Schedule IV. One of the interim reliefs claimed is an injunction restraining the Respondents from removing the plant and machinery from the Nerul plant. In my view, if it is found prima facie that there is an unfair labour practice on the part of the employer i.e. the Respondents Company in implementing the order of closure immediately on : 10 : the date it was passed, the Industrial Court would have jurisdiction to grant the interim relief claimed by the Petitioners during the pendency of the reference before the Industrial Tribunal. 12. It is trite that an implied condition of every agreement including a settlement is that parties thereto will act in conformity with law. If the employer acts in violation of any provision of law it would amount to an unfair labour practice under Item 9 of Schedule IV. The Supreme Court has so held in the case of S.G. Chemicals and Dyes Trading Employees v/s. S.G. Chemicals and Dyes Trading Limited & Anr., 1986 I LLJ 490. The question now is whether in the present case there is a breach of law i.e. the provisions of section 25-O, entitling the Petitioners to interim relief in the complaint filed by them. Before proceeding in the matter, in my opinion, it would be appropriate to set out the provisions of section 25-O of the Act. 13. Section 25-O reads thus: “25-O. Procedure for closing down an undertaking.- (1) An employer who intends to close down an undertaking of an industrial establishment to which this Chapter applies shall, in the prescribed manner, apply, for prior permission at least ninety days before the date on which the intended closure is to become effective, to the appropriate Government, stating clearly the reasons for the intended closure of the undertaking and a copy of such application shall also be served simultaneously on the representatives of the workmen in the prescribed manner : Provided that nothing in this sub-section shall apply to an undertaking set up for the construction of buildings, bridges, roads, canals, dams or the other construction work. (2) Where an application for permission has been made under sub- section (1), the appropriate Government, after making such enquiry : 11 : as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen and the persons interested in such closure may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the general public and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen. (3) Where an application has been made under sub-section (1) and the appropriate Government does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days. (4) An order of the appropriate Government granting or refusing to grant permission shall, subject to the provisions of sub-section (5), be final and binding on all the parties and shall remain in force for one year from the date of such order. (5) The appropriate Government may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (2) or refer the matter to a tribunal for adjudication : Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference. (6) Where no application for permission under this sub-section (1) is made within the period specified therein, or where the permission for closure has been refused, the closure of the undertaking shall be deemed to be illegal from the date of closure and the workmen shall be entitled to all the benefits under any law for the time being in force as if the undertaking had not been closed down. (7) Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as accident in the undertaking or death of the employer or the like, it is necessary so to do, by order, direct that the provisions of sub-section (1) shall not apply in relation to such undertaking for such period as may be specified in the order. (8) Where an undertaking is permitted to be closed down under sub- section (2) or where permission for closure is deemed to be granted under sub-section (3), every workman who is employed in that : 12 : undertaking immediately before the date of application for permission under this section, shall be entitled to receive compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months." 14. An analysis of the provisions of this section indicates that an employer desiring to close an industrial establishment in which more than 100 persons are employed must apply for permission to close down at least 90 days prior to the date on which the proposed closure is to become effective. The parties i.e. both the employer, the union representing the workmen or if there is no union the workmen themselves, are required to be heard by the appropriate government before passing any order. Once the appropriate government is convinced of the genuineness or adequacy of the reasons stated by the employer in his application for closure and after considering the interest of the general public and all other relevant factors, the appropriate government may either grant or refuse permission to close down an undertaking. The application must be decided by the appropriate government and the order should be communicated within 60 days from the date on which the application is made or else, the permission for closure is deemed to have been granted. The order either granting or refusing permission remains in force for one year from the date of the order. It is final and binding on all parties, subject to a review or a reference to the Industrial Tribunal for adjudication by the appropriate government. In the event, the appropriate government refers the application for closure to the tribunal for adjudication, the tribunal is expected to make an award within a period of 30 : 13 : days from the date of the reference. Where an employer closes an undertaking either without submitting an application as prescribed under subsection (1) or in spite of the permission to close down being refused, the closure of the undertaking is deemed to be illegal from the date of the closure. The workmen are entitled to all benefits under any law as if the undertaking had not been closed. The appropriate government may in exceptional circumstances, direct that the provisions of subsection (1) of section 25-O, would not apply to an undertaking. Every workman who was in employment immediately prior to the closure of the undertaking is entitled to compensation equivalent to 15 days average pay for every completed year of continuous service or part thereof in excess of 6 months. Thus, section 25-O appears to be a complete code in itself. 15. When would an order passed under section 25-O (2) become operative is the next issue which must be determined. Can it be enforced immediately on receipt of a permission to close down or does the employer have to wait for a reasonable period of time and in any event, 60 days after the permission is granted before he can actually implement the closure by terminating the services of the workmen? 16. Mr.Bukhari, learned counsel for the Petitioners, has submitted that once an application has been filed u/s 25-O (5), the employer loses the right to implement the order passed in his favour under section 25-O (2) till such time as the order is reviewed or the application for closure is referred for : 14 : adjudication. Undisputedly, once there is a reference, the Tribunal has to consider the application afresh without having to advert to the order of the appropriate goverment granting the permission for closure. In the case of Orissa Textiles (supra) it has been held that the provisions for review and/or reference available u/s 25-O is in addition to the remedy of a judicial review under Article 226 or Article 32 of the Constitution of India of an order passed under section 25-O (2). It has also been held that the period for disposing of an application u/s25 O (5) is 30 days from the date it was preferred. In the case of Workmen of Kempf (I) Ltd. V/s. Government of Tamil Nadu &Ors., 1991 II CLR 275, the Division Bench of the Madras High Court held that the finality of an order passed under section 25-O (2) r/w 25-O (4) is subject to the exercise of power under section 25-O (5). The Madras High Court has observed that when the review is undertaken under subsection (5) of section 25-O, it is a fresh adjudication on merits of the application and the procedure to be followed must conform to the one contained in section 25-O (2). All parties are expected to be heard by the appropriate government before it either reviews its order or refers the application for closure to the Tribunal for adjudication. A learned Single Judge of this Court in the case of Maharashtra General Kamgar Union v/s. State Oxides & Chemicals Ltd & anr., 1996 LIC 362 has quoted with approval the aforesaid decision of the Madras High Court, while dealing with the provisions