1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.7585 OF 2008 Sarva Shramik Sangh. ...Petitioner. Vs. M/s.Burlington Exports & Ors. ...Respondents. .... Ms.Gayatri Singh with Ms.Bhavana Mhatre for the Petitioner. Mr. C.U. Singh, Senior Advocate with Mr.Neel Helekar i/b. M/s. Haresh Mehta & Co. for the Respondents. ..... CORAM : DR. D.Y.CHANDRACHUD, J. November 20, 2008. P.C. The First Respondent has been engaged in the manufacture of ready made garments at an industrial Unit situated at Wagle Industrial Estate, Thane. In April/May 2007, the Company made an application under Section 25-O of the Industrial Disputes Act, 1947, seeking permission to close down the industrial establishment. By an order dated 31st August 2007, permission was granted for the closure of the industrial establishment, namely, the factory situated at Wagle Industrial Estate. On 28th October 2007 a reference was made to the Industrial Tribunal under Section 25-0(5) 2 of the Industrial Disputes Act, 1947 by the Commissioner of Labour. The management filed its Statement of claim to which the Union filed its Written Statement. An application was filed for the grant of interim relief. The interlocutory relief that was sought was to the following effect : “(a) To restrain the First Party Employer from transferring, selling, leasing, conveying, creating third party interest and/or from disposing off the landed property of the Company and the premises at Wagle Estate, Thane. (b) To restrain the First Party Employer from removing machines, tools, equipments, raw materials, fixtures, furniture and all other materials and articles lying at the premises of the Establishment situate at Wagle Estate, Thane. (c ) To direct the First Party Employer to bring back and restore all the equipments, like computers and other equipments, files, documents, raw materials and other articles removed from the factory premises on 23.01.2008, 24.01.2008 or on any date immediately after the Reference was made to this Hon'ble Court in respect of the Application for Closure of the Company by the First Party Employer. (d) To restrain the First Party Employer from destroying and/or disposing off the files, documents, equipments and articles removed from the factory premises of the Establishment in any manner whatsoever.” 2. An interim order was passed by the Industrial Court, 3 confirming an ad-interim order which was passed earlier on 30th January 2008, restraining the management from disposing of the property, including the machinery. This order was challenged in a Writ Petition before this Court. By a judgment dated 5th May 2008, the interim order was set aside and the proceedings were remitted back to the Tribunal for reconsideration of the application for interim relief. 3. According to the employer, a total number 184 workmen were affected by the closure of the factory, out of which 158 workmen had filed individual affidavits stating that they were duly accepting the closure compensation together with their terminal dues and recording that they had no claim for reinstatement. Besides this, according to the employer, individual declarations were signed by the aforesaid 158 workmen. The remaining 26 workmen had, according to the management, accepted the closure compensation but had not come forward thereafter to receive their terminal dues. The contention of the Union was that apart from the figure 184 workmen, there were 73 other workmen. While remitting the proceedings back to the Industrial Tribunal, this Court observed that the Tribunal had not even prima 4 facie evaluated the question as to whether as a matter of fact 158 workers had accepted the closure compensation and their terminal dues. 4. On remand, the Industrial Tribunal has declined to grant interim relief and has found, prima facie, merit in the submission of the employer that 158 out of the 184 workmen, had filed affidavits and declarations which reflected the acceptance of closure compensation, terminal dues, including leave encashment and gratuity and the settlement of their claims. In so far as the remaining 26 workers are concerned, it has been found by the Tribunal that prima facie, these workers had accepted their closure compensation and pay in lieu of notice. The Industrial Court has in the circumstances, declined to grant an interim order restraining the employer from creating third party rights in respect of the property, including the machinery. 5. At the hearing of the petition, it has been urged on behalf of the Petitioner that (i) The matter which has been referred to the Industrial Tribunal for adjudication is not merely the order of the 5 Commissioner of Labour, but the matter in the application dated 5th July 2007 under Section 25-O (1) seeking permission for closure of the industrial establishment; (ii) The grant of closure permission under sub-section (1) of Section 25-O is final and binding subject to the provisions of sub-section (5). Once a reference to adjudication is made, the grant of closure permission is not binding and in the circumstances, pending the disposal of the proceedings before the Industrial Tribunal, an interim injunction ought to be issued restraining the employer from dealing with the property, including the machinery; (ii) 158 workers out of 184 as alleged, have not accepted the closure compensation and their terminal dues without demur; on the contrary, the Union had by a letter dated 28th October 2007, informed the management that the workers had in a meeting resolved to accept the payment under protest; (iii) As a matter of fact, the case of the Union is that a total number of 260 workers and not just 184 would be affected by the closure. 6. On the other hand, it has been submitted on behalf of the management that the application that was submitted on 18th May 6 2007 was for the closure of the industrial establishment comprised in the factory of the management at Wagle Industrial Estate. The closure would affect 184 workers whose services came to be terminated consequent upon the grant of closure permission. 158 workers accepted the closure compensation as well as their legal dues, including gratuity and leave encashment and the dispute only survives in so far as the balance of 26 workers is concerned. These 26 workers had accepted their closure compensation and pay in lieu of notice, but not the terminal dues, including gratuity and leave encashment. In the reference before the Industrial Tribunal, it has been stated on behalf of the management in its Statement of claim that 184 workers were affected by the closure, out of which 152 had accepted their dues. This statement has not been denied in the Written Statement. It has been submitted that the alleged letter dated 20th October 2007 (Exh.F to the petition) is a fabricated document to which there is no reference at any anterior stage in the proceedings pending before the Industrial Tribunal. Finally, it was submitted that on 3rd May 2008, the Company has proceeded to issue a closure notice for the closure of the entire business. The second notice of 7 closure has not been challenged, though it was stated in a rejoinder filed on 18th June 2008 by the Union that it intended to challenge the second closure. In these circumstances, it was submitted that the application for the grant of interim relief cannot in any event survive inasmuch as the second closure notice has been declared now of the entire business of the Company. 7. At the present stage, for the purposes of deciding as to whether a case has been made out for the grant of interim relief, it would be necessary to peruse the pleadings before the Industrial Tribunal in order to determine as to whether a prima facie case has been made out. In the Statement of claim that has been filed by the employer before the Industrial Tribunal, it has been averred that 184 workmen were affected by the closure of the factory with effect from 1st September 2007, out of which 152 had settled their dispute. Averments to that effect have been made in paragraph 1(d) and paragraph 8 of the Statement of claim which read as follows: “(d) that, out of the one hundred and eighty four workmen affected by the closure of the undertaking's factory with effect from 01.09.2007, as many as one hundred and fifty two of the said affected workmen have resolved and settled 8 their disputes arising out of the said closure and the resultant termination of their services in its entirety, including their disputes, causes, claims, and interests, monetary or otherwise of any nature whatsoever including the subject matter of the terms of reference in the pending reference directly with the employer (first party herein) and hence, there exists no industrial dispute between the first party herein and the said one hundred and fifty two workmen affected by the closure of the undertaking's factory with effect from 01.09.2007 which is capable of being adjudicated upon and hence, on this ground also, the present reference in so far as it relates to the said one hundred and fifty two workmen affected by the said closure is concerned, the same is bad in law ab-initio, untenable, incompetent, infructuous and nonest. 8. The first party herein further states and submits that, immediately after grant of permission to close down the Undertaking's factory, the first party herein closed down its Undertaking's factory with effect from 01.09.2007 and as a part of the same transaction, terminated the services of all workmen/employees by following the due process of law. It is reiterated that out of the one hundred and eighty four workmen affected by the closure of the Undertaking's factory, as many as one hundred and fifty two workmen have accepted and settled their dues and claims arising out of termination of their services consequent upon the closure of the Undertaking's factory in its entirety, out of their free will and volition and the first party herein craves leave to refer to and rely upon the supporting evidence when produced.” 8. In the Written Statement which has been filed on behalf of the Union, the aforesaid statement has not been converted. In the 9 course of the submissions before this Court, Counsel appearing on behalf of the Petitioner has not controverted the basic position that the averments contained in paragraphs 1(d) and 8 of the Written Statement have not been traversed. On 29th January 2008, an application was filed by the Union for the grant of interim relief. In paragraph 2(a) of the reply to the application, the management averred that on 14th November 2007, out of a total number of 184 employees in the bargainable category affected by the closure, 158 employees have filed individual declarations and affidavits stating that they have received all their legal dues and claims in full satisfaction, arising out of the termination of their services consequent upon the closure of the Industrial establishment. The Management averred that 26 employees remained in the bargainable category who were affected by the closure. This averment has again not been controverted. On 18th June 2008, a further affidavit in reply was filed by the management placing on record, the second closure notice dated 3rd May 2008 pertaining to the entire business of the employer. In the rejoinder that was filed, it has been stated that the Union intended to file a separate proceeding in respect of the aforesaid 10 closure. Admittedly, no proceedings have been initiated until date. 9. Prima facie, therefore, on the pleadings before the Industrial Tribunal, as they stand, the Tribunal was justified in coming to the conclusion that 184 workers were affected by the closure of the industrial establishment with effect from 1st September 2007 out of which 158 had settled their disputes by executing individual affidavits and declarations. The Industrial Tribunal has noted that these have been filed on the record and have been marked as Exh.C-4. An effort was made in the course of these proceedings to urge that the notice which was issued by the Company on 1st September 2007 (Exh.N) covered 204 workmen. It was also submitted that an inspection report under the Minimum Wages Act (Exh.O) showed 252 workers on the roll. On the other hand, it has been urged on behalf of the employer that the closure which was brought into force with effect from 1st September 2007 covered only the factory which is situated on the ground and the First Floors of the premises at Wagle Industrial Estate and it is only now with effect from 3rd May 2008 that the entire business is sought to be closed. Hence, it was submitted 11 that as a matter of fact, the closure of 1st September 2007 only governed 184 employees of whom 158 have settled their dues. In view of the position as it emerges, on the basis of the pleadings before the Industrial Tribunal, it is prima facie apparent that the closure of 1st September 2007 of the establishment of the factory covered 184 workmen. This statement in the pleadings together with the statement that 158 workmen had accepted their dues has not been controverted in the pleadings before the Industrial Tribunal. In that view of the matter, the order passed by the Tribunal declining to grant interim relief as the overwhelming majority of workmen has accepted their dues in final settlement does not warrant interference under Article 226 of the Constitution of India. This is coupled with the circumstance that by a subsequent notice of closure dated 3rd May 2008 the entire business was closed. The closure notice dated 3rd May 2008 has not been challenged by recourse to appropriate proceedings in law until date. For the purposes of deciding the question as to whether a prima facie case has been made for the grant of interim relief, it would not be either appropriate or proper for this Court to enter upon the merits of the rival contentions on 12 questions of law, which will be urged before the Industrial Tribunal during the course of the adjudication. Interim proceedings cannot be allowed to be converted into a rehearsal for a full fledged adjudication. Interim orders are in aid of a final adjudication. When an overwhelming body of workmen has accepted a final settlement and the balance, as here, is covered by a closure notice, no prima facie case exists. The balance of convenience will not weigh in favour of the grant of an injunction. On facts as they stand, no case for the grant of interim relief is made out and the application for interim relief was rejected for cogent reasons. 10. The 26 workers who are affected by the closure which has taken place on 1st September 2007, would, at the highest, be entitled to a claim for wages for the period between 1st September 2007 and 3rd May 2008. Counsel appearing on behalf of the First Respondent has stated, on instructions that the First Respondent shall within a period of four weeks from today furnish a Bank Guarantee of a Nationalised Bank to secure the dues of the remaining 26 workers including the wages for the period between 1st September 2007 and 13 3rd May 2008 and the difference in the closure compensation. This statement is accepted. The Bank Guarantee shall be furnished to the satisfaction of the Industrial Tribunal and shall be kept alive during the pendency of the proceedings. Subject to the aforesaid, no case for interference with the order declining interim relief has been made out. The petition shall accordingly stand disposed of. 11. Counsel appearing on behalf of the Petitioner has requested the Court to extend the operation of the interim order which held the field. Counsel appearing on behalf of the First Respondent has stated that for a period of three weeks from today, the First Respondent shall continue to abide by the ad-interim protection which continued during the pendency of the proceedings. The statement is accepted. ....