1 MSS IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO. 446 OF 2008 IN WRIT PETITION NO. 1332 OF 2007 PAINT EMPLOYEES UNION ) B-29, Jeevan Nagar,Mithagar Road Mulund (E), MUMBAI 400 081 ) APPELLANT (Org. Respondent) Versus KANSAI NEROLAC PAINTS LTD. ) Formerly known as Goodlass ) Nerolac Paints Ltd., having its) registered office at Nerolac ) House, P.O. Box No. 16322 ) Ganpatrao Kadam Marg, ) MUMBAI 400 013. ) RESPONDENT (Orig.Petitioner) Ms. Meena Doshi for appellant Mr. J. P. Cama with Mr. C. U. Singh i/b Sanjay Udeshi & Co. for respondents. CORAM:SMT.RANJANA DESAI & K. K.TATED, JJ. DATE ON WHICH THE JUDGMENT IS RESERVED :28TH NOVEMBER, 2008 DATE ON WHICH THE JUDGMENT IS PRONOUNCED:15TH JANUARY, 2009 2 JUDGMENT:-(Per Smt. Ranjana Desai, J.) . The appellant is the original respondent and the respondent is the original petitioner in Writ Petition No.1332 of 2007. The said writ petition was filed by the respondent challenging order dated 24/4/03 passed by the Commissioner of Labour, Maharashtra State insofar as it dealt with review of earlier order dated 27/3/03. It is necessary to begin with the facts of the case. 2. The respondent is a company registered under the Companies Act, 1956 ("the respondent company" for convenience). It has various manufacturing units in different parts of the country. It had a manufacturing unit at Lower Parel. The appellant is a registered trade union and has been representing the employees of the Lower Parel unit of the respondent company since 1945. It is a recognized union under Chapter II of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 ("MRTU & PULP Act" for short). For convenience, we shall refer to the appellant as "the appellant union. 3 3. On 27/1/03, the respondent company made an application seeking permission to close down the Lower Parel factory unit under Section 25-O of the Industrial Disputes Act, 1947 ("the said Act" for short). In the application several reasons for proposed closure were noted. It was stated that the financial condition of the Lower Parel factory unit had deteriorated to a great extent; that the Lower Parel factory unit as a whole had incurred losses of about Rs.320 lakhs in the first half of the current year; that it is estimated that the same trend would follow in the second half of the current financial year and that there are no chances of revival of the unit. This application was resisted by the appellant union. On 27/3/03, after hearing the parties the Commissioner of Labour who is the Specified Authority under the said Act ("Specified Authority" for convenience) granted permission to the respondent company to close down the Lower Parel unit. On 15/4/03 the appellant union filed an application under Section 25-O (5) of the said Act seeking review of the order dated 27/3/03 or a reference to the Industrial Tribunal. That application was opposed by the respondent company. 4 4. The Specified Authority passed order on 24/4/03. The Specified Authority observed that it was of the opinion that the appellant union had not made out a case for review of the order dated 27/3/03 granting permission to effect the closure. The Specified Authority further observed that it had gone through the submissions made by both the parties and had come to the conclusion that the matter needs judicial scrutiny. The Specified Authority, therefore, referred the matter under Section 25-O (5) of the said Act to the Industrial Tribunal. 5. The proceedings before the Industrial Tribunal were held. Parties filed their documents and led oral evidence. Written submissions were also filed before the Industrial Tribunal. The respondent company raised objection as regards maintainability of the reference under Section 25-O(5) of the said Act on the ground that the review was rejected by the Specified Authority and the reference was consequentially barred as the Specified Authority did not have the power to adjudicate the review application and also make a reference to the Industrial Tribunal. 5 6. The Industrial Tribunal by its order dated 5/5/07 refused permission to close down the Lower Parel Factory Unit. The reference was rejected and it was held that the workmen were entitled to the wages for the period from 2/5/03 onwards. 7. It needs to be noted at this stage that on 20/6/07 the respondent company issued notice informing individual workman that without prejudice to its contention that the closure dated 2/5/03 is legal and valid, it had decided to close down the Lower Parel unit vide notice dated 20/6/07 issued under Section 25FF A of the said Act. It appears that a separate complaint is filed by the appellant union under the provisions of the MRTU & PULP Act, 1971 in respect of the said notice. 8. Being aggrieved by the award dated 5/5/07 passed by the Industrial Tribunal refusing permission to close down the Lower Parel unit, the respondent company filed Writ Petition No. 1332 of 2007 praying inter alia that the said award dated 5/5/07 be quashed and set aside. 9. By order dated 28/7/08 learned Single Judge made the Rule absolute in terms of prayer clause 6 (a) i.e. he quashed and set aside the award dated 5/5/07. While setting aside the award learned Single Judge observed that the Specified Authority could not have referred the matter to the Tribunal in exercise of its power under Section 25-O (5) of the said Act, having rejected the application for review. He observed that the power of the Specified Authority to deal with and decide an application made to it under Section 25-O stood exhausted on the rejection of review application and a reference to the Tribunal thereafter was not competent. The said order is challenged in this appeal. 10. Mr. Cama, learned counsel for the respondent raised a preliminary objection. He submitted that before filing the present appeal, the appellant union had filed Writ Petition No. 1794 of 2008 challenging order dated 24/4/03 passed by the Specified Authority under Section 25-O(5) declining to review permission granted for closure and instead referring the matter to the Industrial Tribunal for adjudication. In that petition in paragraphs b to e, the appellant union had contended that the order dated 24/4/03 is not an order amounting to rejection of the review 7 application preferred by the appellant union. The appellant union withdrew those grounds with the permission of the court. Mr. Cama submitted that by withdrawing the said grounds the appellant union has accepted the existence of the order of review, therefore, the appellant union is estopped from raising a contention that the Specified Authority has not decided the review; that there is no order passed by it on the review application and, therefore, the reference is validly made. The present appeal is, therefore, not maintainable. 11. Ms. Doshi, learned counsel for the appellant union on the other hand submitted that Section 25-O(5) grants a statutory remedy to a party who seeks review or reference. Relying on the judgment of the Supreme Court in Orissa Textile and Steel Ltd. v. State of Orissa, 2002 2 SC 578, she submitted that this remedy is in addition to the judicial review under Article 226 and Article 32 of the Constitution of India. She submitted that Writ Petition No. 1794 of 2008 seeks judicial review of the order dated 24/4/03 without prejudice to the right of the appellant union to file an appeal challenging the impugned order. Therefore, filing of Writ Petition No. 1794 of 2008 will not come in 8 the way of the appellant union in prosecuting the present appeal. 12. So far as the deletion of grounds is concerned, Ms. Doshi submitted that the said grounds were deleted because at the stage of admission of Writ Petition No. 1794 of 2008 a contention was raised by the counsel for the respondent company that since learned Single Judge had concluded vide his judgment and order dated 28th July, 2008 in Writ Petition No. 1332 of 2007 that the order of the Specified Authority was a clear rejection of a review, another writ petition on the said issue could not be filed by the appellant union. Ms. Doshi submitted that, therefore, and in view of the fact that learned Single Judge had so held, he permitted the appellant union to withdraw the last sentence of paragraph 3 and grounds (b) to (e). She submitted that, learned Single Judge permitted her to raise these grounds in the present appeal memo and accordingly she has raised them. 13. Though, we find some substance in Mr.Cama’s argument, we do not want to go into this aspect because in the circumstances of the case, we feel 9 that correct approach will be to deal with the case on merits. We shall deal with the appeal on merits. 14. Extensive arguments have been advanced by learned counsel for the parties. We have carefully read the written submissions filed by them. We shall deal with their submissions as we discuss the various issues which have been raised in this case. 15. Since we are concerned here with Section 25-O of the Industrial Disputes Act, it is necessary to quote it. Section 25-0, so far as it is relevant for the present case reads as under: . "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 10 workmen in the prescribed manner. . Provided that . . . . . . (2) Where an application for permission has been made under subsection (1), the appropriate Government, after making such enquiry 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) . . . . . . (4) An order of the appropriate Government granting or refusing to grant permission shall subject to the provisions of subsection (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 shall 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 subsection 11 (2) or refer the matter to a Tribunal for adjudication: . Provided that where a reference has been made to a Tribunal under this subsection, it shall pass an award within a period of thirty days from the date of such reference. . (6) Where no application for permission under subsection (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) . . . . . . (8) . . . . . 16. Before we go to the rival contentions it is necessary to see how the Supreme Court has interpreted Section 25-O(5). At this stage it must be noted that there is no dispute about the fact that Section 25-O(5) of the said Act is in pari materia with Section 25-N(6) of the said Act. 17. In Engineering Mazdoor Sabha v. Addl. Commissioner of Labour & Ors., 2005 II LLJ, the 12 respondent company made an application for permission to retrench workmen. The said application was partly allowed by the Addl. Commissioner by granting permission to retrench only 276 workmen. Against that order the petitioner Mazdoor Sabha filed an application under Section 25-N(6) of the said Act for review of the said decision or for reference of the matter for adjudication. That application was rejected inter alia on the ground that no new point was raised in the review proceedings which warranted examination. The petitioner Mazdoor Sabha challenged the said order in this court. Learned Single Judge of this court was of the view that the Addl. Commissioner was right in holding that no new point was raised in the review application. Learned Single Judge held that that part of the order needs no interference. Learned Single Judge then considered whether the Addl. Commissioner was obliged to make reference. It was argued by the employer company that once review application is rejected there was no question of making reference. Learned Single Judge held that rejection of prayer of review cannot be the basis to decline the remedy of reference as is provided in Section 25-N(6) of the said Act. Learned Single Judge, therefore, 13 modified the order of the Addl. Commissioner by directing him to refer the matter for adjudication. That judgment was carried in appeal to the Division Bench. The Division Bench concurred with learned Single Judge and dismissed the appeal. 18. The judgment of the Division Bench was challenged in the Supreme Court. It was argued before the Supreme Court that once the review application was disposed of there is no scope for further making a reference in view of the clear language of Section 25N(6) which provides for the alternative and does not empower a reference after the review petition is rejected. The Supreme Court referred to its earlier decision in Orissa Textile’s case (supra) and observed that in that case it was considering the question whether the provision of review and reference were in addition to judicial review and it never said that they are cumulative and not alternative. The Supreme Court further held that had the legislature intended that the reference could be made after the Government or Specified Authority deals with the review power, it could have said so specifically by specific words. It could have provided for a direct reference. The Supreme Court further observed that a plain reading 14 of the provision makes the position clear that two courses are open. Power is conferred on the appropriate Government to either on its own motion or on an application made, review its order or refer the matter to the Tribunal. Whether one or the other of the courses could be adopted depends on the facts of each case, the surrounding circumstances and several other relevant factors. In the circumstances the Supreme Court allowed the appeal. 19. In view of the above clear enunciation of law there need not be any debate over the interpretation of Section 25-O(5) of the said Act. The Specified Authority can on its own motion or on an application made to it, review its order or refer the matter to the Industrial Tribunal. Once review application is disposed of there is no scope for further making a reference. 20. It is now necessary to refer to the facts of this case. The appellant union has prayed in its application that the Specified Authority may review its order dated 27/3/03 granting permission to close down the Lower Parel unit or in the alternative it may refer the matter to the 15 Industrial Tribunal. In the words of Ms. Doshi counsel appearing for the appellant union it is a consolidated application seeking a review or a reference under Section 25-O(5). Ms. Doshi argued that in the case of a consolidated application the Specified Authority has to either say ’yes’ to one prayer and ’no’ to another prayer. She submitted that in this case the Specified Authority has decided to refer the case. There is no categoric rejection of the review application. It has decided to choose one option i.e. to refer the matter to the Industrial Tribunal. Ms. Doshi submitted that one cannot read one observation made by the Specified Authority in isolation thereby ignoring the final conclusion reached by it to refer the matter. Ms. Doshi submitted that while considering application under Section 25-O(5) the Specified Authority has to consider the same factors which it has to consider while deciding an application under Section 25-O(2) seeking permission to close down an undertaking i.e. (a) whether the reasons are genuine (b) whether the reasons are adequate (c) whether granting permission is in general public interest and (d) other relevant factors. She submitted that in this case the Specified Authority has not categorically 16 rejected the application. It has stated that it was of the opinion that judicial scrutiny is required and has referred the matter for adjudication. There is no finality to its order in the sense that the order indicates that the Specified Authority was of the opinion that since judicial scrutiny is required there is no need to review the order. Mr. Cama, learned counsel for the respondent company on the other hand relied on Cable Corporation case (supra) and submitted that the above argument of Ms. Doshi must be rejected in view thereof. Relying on the Supreme Court’s judgment in National Insurance Co. Ltd. v. Mastan & Anr. (2006) 2 SCC 641, Mr. Cama submitted that a party must in law elect one of the two available remedies. If it does not expressly elect in its application as to whether it seeks a review or a reference it runs the risk of the Government taking up the matter by way of a review and by rejection thereof precluding an order of reference. 21. It is difficult to accept the submission of Ms. Doshi that since the application was a composite application, the Specified Authority has to say ’yes’ to one prayer and ’no’ to other. This 17 view will run counter to the authoritative pronouncement of the Supreme Court in Cable Corporation’s case (supra). At the cost of repetition, it must be stated that in that judgment the Supreme Court has referred to its judgment in Fakir Mohd. (dead) by Lrs. v. Sita Rani, 2002 (1) SCC 741, where it was held that the word ’or’ is normally disjunctive. The use of the word ’or’ in a statute manifests the legislative intention of the alternatives prescribed under law. The Supreme Court has observed that had the legislature intended that the reference could be made after the Specified Authority deals with the review power, it would have said so specifically by specific words. It could have provided for a direct reference. These observations of the Supreme Court make it clear that, if the Specified Authority exercises its review power it cannot make a reference. Now to ascertain whether the Specified Authority’s order is in consonance with the judgment of the Supreme Court in Cable Corporation’s case (supra) or not, it is necessary to quote the relevant paragraphs of the Specified Authority’s order dated 24/4/03. They read as under: . "As regards various prayers made by 18 the Applicant Union in the review and stay application, I have to state that there is no provision under Section 25-O of the Industrial Disputes Act,1947 to grant such prayers, therefore, I am of the opinion that various prayers made by the Applicant Union cannot be granted. I am also of the opinion, that the Applicant Union has not made out a case for review of the order dated 27/3/2003." . I have gone through the submissions made by both the parties in the instant matter and have come to the conclusion that the matter needs judicial scrutiny. Hence, I pass the following order: ORDER . The matter in the application dated 27/1/03 of M/s. Goodlas Nerolac Paints Ltd., Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013 under Section 25-O(1) of the Industrial Disputes Act, 1947 seeking permission of closure of its Lower Parel Unit situated in the abovementioned 19 address is hereby referred under Section 25-O(5) of the said Act to the Industrial Tribunal, Mumbai consisting of Sou. S. V. Ayarekar." 22. There is no dispute about the fact that the reference made by the Specified Authority in it’s order to various prayers made in the application and its observation that for those prayers there is no provision under Section 25-O of the said Act, relate to prayers regarding interim relief. The question is whether the sentence "I am also of the opinion, that the Applicant Union has not made out a case for review of the order dated 27/3/2003", should be read as rejection of the prayer for review or not. We have no doubt that when the Specified Authority expresses its opinion, that no case is made out for review, it exercises its jurisdiction to deal with the review application and rejects it. Merely because it does not categorically state that review application is rejected, it cannot be said that review application is not rejected. The opinion expressed by the Specified Authority is not worthless. The law contemplates that, if it expresses that in its opinion, no case for review is made out, the matter 20 must end there. Once it expresses opinion, that no case for review is made out the application cannot be processed further. It is not possible to interpret this order to mean that the Specified Authority proceeded on the basis that since judicial scrutiny is required it need not review the order. In this case when the Specified Authority expresses that no case for review is made out, it is clear that it has applied its mind to the rival contentions which it has reproduced in detail and formed an opinion. It has dealt with the application. It has exercised its review jurisdiction and rejected it. The order is susceptible to no other inference. 23. We must, however, record that in our opinion the doctrine of election has no application here and the reliance placed by Mr. Cama on National Insurance Co’s case (supra) is totally misplaced. In that case the court was considering two remedies available to an injured workman to get compensation. He is entitled for compensation under the Workmen’s Compensation Act, 1923 and also under the Motor Vehicles Act, 1988. Under Section 167 of the Motor Vehicles Act, 1988 the aggrieved party has the option to elect either of them but 21 not both. Observations of the Supreme Court will have to be read against the background of these facts. We are not concerned here with a provision akin to Section 167 of the Motor Vehicles Act, 1988. The said judgment has, therefore, no application to this case. 24. It is pointed out by Mr. Cama that before the Tribunal, the appellant union had conceded that the Specified Authority had decided the review application on merits. This is recorded by the Tribunal in its order. In the impugned order learned Single Judge has also said so. Mr. Cama submitted that the appellant union is estopped from taking a contrary stand now. 25. It is pertinent to note that in the statement of claim filed by the respondent company in the reference which was decided by the Industrial Tribunal pursuant to the Specified Authority’s order dated 24/4/03, the respondent company clearly stated that the Specified Authority had rejected the review application, however, in view of the mandatory provision of Section 25-O of the said Act, the Specified Authority had referred the matter of permission for closure to the Tribunal. 22 Even in its