1 IN THE HIGH COURT OF JUDICATURE OF BOMBAY IN THE HIGH COURT OF JUDICATURE OF BOMBAY IN THE HIGH COURT OF JUDICATURE OF BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1066 OF 2007 WITH NOTICE OF MOTION NO.600 OF 2007 M/s. Hedavkar Metal Processing Works. . ..Petitioner. V/s. Mr.Chandrakant Bhute & Anr. ..Respondents. Mr.Kiran Bapat i/b. Desai & Desai for petitioner. Mr.N.M.Ganguli for Respondent/in support of NM. CORAM: A.M.KHANWILKAR,J CORAM: A.M.KHANWILKAR,J CORAM: A.M.KHANWILKAR,J DATE : JANUARY 22, 2008. DATE : JANUARY 22, 2008. DATE : JANUARY 22, 2008. P.C. : P.C. : P.C. : 1. This Writ Petition takes exception to the Judgment and Order passed by the Labour Court, Mumbai dated 20th September, 2006, whereby it set aside the termination of the Respondent with effect from 1st April, 1999 as illegal, improper and void. In addition, the Labour Court directed the Petitioner to reinstate the second party with continuity of service and backwages with effect from 1st April, 1999 on his post Surface Grinder within a period one month from the date of award. This decision has been challenged by the Petitioner by way of present Writ Petition, which came to be admitted on 25th July, 2007. This Court passed conditional order while granting Interim 2 Relief to the Petitioner. It is common ground that the Petitioner has complied with the said conditional order by depositing the sum of Rs.1,50,000/- within the specified time. 2. During the pendency of the Writ Petition and operation of the Interim Relief, the Respondent has taken out Notice of Motion No.600/2007 for relief under section 17B of the Industrial Disputes Act. Opposing the said Motion, the Petitioner contended that the question of reinstatement of the Respondent does not arise in the fact situation of the present case. It was argued that it is admitted position that the establishment was already closed and all the employees have already been terminated. Except the Respondent, all other workmen accepted the compensation offered to them as the establishment was closed. In so far as the Respondent is concerned, the Petitioner had sent similar notice to the Respondent. However, the Respondent did not accept the said notice dated 26th April, 1999. It was argued that as the establishment was already closed, it is well established position in law that the order of reinstatement cannot be passed in such situation. The grievance of the Petitioner is that all relevant materials though placed on record have not been 3 adverted to by the Labour Court while answering the issue regarding reinstatement order passed in favour of the Respondent. It was contended on behalf of the Petitioner that if no order of reinstatement could be passed in fact or in law, the question of petitioner being made responsible for payment of compensation under section 17B of the Industrial Disputes Act does not arise. As the argument raised on behalf of the Petitioner, if answered would decide the main contention in the Petition, it was suggested to the parties that in that case appropriate course is to proceed with the hearing of the Writ Petition, which involves short question in the context of order of reinstatement. 3. Accordingly, the Writ Petition was proceeded for hearing by consent of both the sides. After having considered the materials on record, I am inclined to accept the stand of the Petitioner that the Labour Court has not considered all the materials, which were pressed into service on behalf of the Petitioner to contest the claim of the Respondent that the termination was illegal or for that matter the order of reinstatement. In the reply filed before the Labour Court, the Petitioner interalia had asserted as follows: 4 "(a) The Company says and submits that it was a small engineering company employing about 6 workmen for its manufacturing. It was engaged in manufacturing of Hand Press, and its parts and sell them as per the orders received from the parties. The Concerned Workman was working as Grinder. . The Company further submits that for last many years, its products being old designed coupled with heavy manufacturing cost and stiff competition in the market, particularly from Northern Indian there was large reduction in orders received by the company. In these circumstances it was difficult to run its business economically and the profit margin reduced to great extent. Due to said problems, the workmen by the Company were at times sitting idle and the Company had to pay idle wages to them. The company was suffering into operational losses and for meeting with both ends, it was running its activities with great difficulty, by taking loans/advanced from grey market. Considering the non availability of orders received by the company and piling up of ready products coupled with financial crises suffered by the proprietor, its employees voluntarily opted to resign from the job for their good prospect but subject to payment of ex-gratia payment over & above their legal dues. In view of selfless and efficient services rendered by workmen, the company decided to pay handsome amount as and by way of ex-gratia. Consequently, as per the understanding between the proprietor and all workmen, it was agreed that all submit resignation. Thus, 5 out of 6 workmen working for the manufacturing activities tendered their resignation. All these workmen resigned vide their resignation letter dated 30/03/99. The company retained one clerk only to look after the accounts work arising out of closure activities etc. . The concerned Workman had initially opted to resign from the company’s service alongwith others. However, he neither 5 tendered resignation on 30/03/99 nor reported for duty any time thereafter. He was in touch with the proprietor of the company and used to tell him that he was looking for other employment and that he would tender resignation and collect his dues at any time. As such he remained absent unauthorisedly and from 01/04/99 and did not sent any communication in writing to the company. . The company further submits that it waited for sufficient time but the Workmen neither reported for duty nor tendered his resignation and collect his legal dues. After resignation of 5 out of 6 workmen, the manufacturing activities of the company was totally stopped and there was no work to provide to the Workman he was doing in past as also there was no other work which could be provided to him. As such his services became surplus to the requirement of the management. The company had, therefore, no other alternative but to terminate the service of the workman as and by way of retrenchment as provided under sections 25F of the AC. The company further submits that in this regard, it has sent Notice alongwith its annexure to all concerned Authorities as per the provision of the Act. The company also displayed the Notice of retrenchment on its Notice Board alongwith seniority list as contemplated under the provision of the Act. The company submits that the services of the workmen were terminated vide letter dated 26/04/99 as and by way of retrenchment. Since the workman was absent unauthorisedly on and from 01/04/99, the termination letter dated 26/04/99 was sent alongwith his legal dues amounting to 30,574.95 by cheque bearing No.557276 dated 26/04/99 drawn on Bhandari Co.op.Bank Ltd., Dadar Branch to his residential address by registered A.D. The company submits that its action in terminating the services of the Workman is complete as on date. The company submits that it has followed due process of law while terminating the services of the workman and its action in terminating the services of the workman is legal, fair proper, justified, bonafide and the same is enforceable at law. The company, therefore, submits that the 6 demand raised by the workman is totally misconceived, untenable and liable to be rejected by this Hon’ble Court. Consequently, the above Reference is liable to be rejected on this ground alone." (emphasis supplied) 4. The abovesaid contention raised on behalf of the Petitioner has not been fully addressed by the Labour Court. The Labour Court has considered the issue about the validity of termination amongst others paragraph-13 and 14 of the impugned Judgment. However, the crucial aspects of the matter raised on behalf of the Petitioner referred to above have not been considered at all in this discussion. The fact as to whether other employees voluntarily opted to resign from the job for their good prospects, but subject to payment of ex-gratia payment over and above their legal dues and the manufacturing activities of the company was completely closed as five out of six workmen had already tendered their resignation and the Company retained only one clerk so as to look after the accounts work arising on account of the closure activities. The fact that the manufacturing activities were closed as claimed by the Petitioner has been admitted by the Respondent. The Lower Court has also not considered about the efficacy of the stand taken by the Petitioner that even service of the Respondent have been validly 7 terminated as notice of termination was sent by 26th April, 1999 by Registered Post A/D. If the Respondent did not accept the said notice, non-acceptance of the notice will have to be treated as good service in law. The fact that such notice was sent and was returned back to the Petitioner has been noted by the Labour Court in paragraph-13 of its decision. The Labour Court has noted the fact that when the closed envelop was opened, it contained notice sent to the Respondent dated 26th April, 1999. In that sense, the factum of forwarding notice to the respondent on his last known address has been established by the Petitioner. Besides the fact that the Respondent did not accept the said notice is established on this finding. It would necessarily follow that the notice was duly served on the Respondent in which case, the termination would take effect in terms of the said notice. The fact that the respondent did not accept said notice cannot absolve the Respondent of the consequences of the said notice. All these factual matrix ought to have been considered by the Labour Court in the first place. That however, has not been done in the present case. The Labour Court has not addressed to the crucial aspects asserted paragraph-1(a) of the Written Statement and in particular the evidence 8 which has come on record including the admission of the respondent that the manufacturing activities of the Petitioner were closed long back. If the manufacturing activities were closed, the question of issuing order of reinstatement against such establishment is doubtful. All these aspects will have to be considered by the Labour Court afresh on its own merits in accordance with the law. 5. In the circumstances, without expressing any opinion on merits of the contention available to both the parties, the parties will have to be relegated before the Labour Court for fresh consideration on the relevant issues in the context of the stand taken on behalf of the Petitioner in paragraph-1(a) and the admitted facts on record including the factum of despatch of notice of termination dated 26th April, 1999, which is established from the record. 6. According to Mr.Ganguli, admission of the Respondent sought to be relied upon by the Counsel for the Petitioner in paragraph-6 of the further cross-examination at page 56 does not support the stand that the Respondent has admitted closure of manufacturing activities as such. The said statement reads thus: 9 ". It is true that excepting Mr.Mopkar a Clerk other workers viz.Gawade, Gurav, Yadav, Gosavi, Thombre have resigned and collected their legal dues. It is not correct to say that alongwith the above said workers I accepted to resign however, did not tender the resignation." 7. According to Mr.Ganguli the Respondent in his evidence has clearly stated that he was not aware whether the manufacturing activities were already stopped. All those aspects will have to be carefully considered by the Labour Court alongwith the other relevant materials which are already referred to above. 8. Suffice it to observe that the impugned decision will have to be set aside and the parties relegated before the Labour Court for afresh consideration of all points in issue on its own merits in accordance with law. Accordingly, the impugned Judgment is set aside and the matter restored to the file of the Labour Court for fresh consideration on merits. 9. The parties to appear before the Labour Court on 3rd March, 2008 on which date the labour court may proceed with the matter or fix some other date for 10 hearing of the proceeding while ensuring that the matter is finally disposed of not later than 2nd May, 2008. 10. It will be open to the Petitioner to seek appropriate orders in relation to the amount already deposited by the Petitioner in this Court in terms of the order dated 25th July, 2007, after final decision of the labour court, which application will be considered on its own merits. 11. Petition disposed of accordingly. 12. In view of the order passed in the Writ Petition, nothing survives in the Motion. Disposed off accordingly. (A.M.KHANWILKAR,J) (A.M.KHANWILKAR,J) (A.M.KHANWILKAR,J)