THE HON’BLE SRI JUSTICE C.V.RAMULU W.P.Nos.3599, 3600 of 2000 & W.P.No.20226 of 2001 COMMON ORDER: In all these (3) writ petitions, common questions of law and fact arises for consideration, therefore they are being disposed of by this common order. It appears, the members of the petitioner-Union were the employees of erstwhile Allwyn Watches Limited, which is one of the State Sponsored Organization. Since the said Company was suffering losses continuously, the management sought for closure of the company. After considering various aspects, the Government issued G.O.Rt.No.174 Labour, Employment, Training and Factories (Lab.I) Department dated 25.1.2000, whereunder the Government accorded permission to close down the Industry under Section 25-O of the Industrial Disputes Act, 1947 and also accorded permission to implement Voluntary Retirement Scheme (VRS) to the eligible employees of Allwyn Watches Limited since October, 1998 onwards and more than 90% of the employees have opted and left the establishment under VRS and the remaining 133 employees have refused to avail the said scheme. Therefore, the respondent- management was further directed to pay compensation to the workers as specified in Section 25-O of I.D. Act before affecting closure. Being aggrieved by the said order of closure, the present writ petition is filed firstly on the ground that the Government has not applied its mind for closure of the Industry and no tenable reasons were furnished for granting permission for closure; and secondly the management of Allwyn Watches Limited has not followed the provisions of Section 25- FFF of I.D. Act read with Section 25-O of I.D. Act while terminating the services of employees on the closure of the Industry. Among the petitioners who are 133 in number, 100 are the regular employees of company, whereas petitioners in the present writ petition were all contract labour doing sweeping and scavenging works. When their services were not regularized, they have filed W.P.No.27679 of 2006 and the said writ petition was allowed by order dated 31.7.1997 and the Writ Appeal and Special Leave Petition preferred by the management were dismissed and ultimately the services of the petitioners were regularized vide proceedings dated 1.11.1999 with effect from 31.7.1997. However, as on the date of closure of industry, on 29.2.2000, petitioners in all the writ petitions, i.e. 133 in number are the regular employees of Allwyn Watches Limited. The closure was ordered vide G.O.Rt.No.174 dated 25.1.2000 with effect from 29.2.2000. However, petitioners were relieved by paying compensation on 19.6.2000 as required under Section 25-FFF of I.D. Act. In fact, on the date of closure i.e. 29.2.2000, petitioners were supposed to be paid compensation as required under Section 25-FFF of I.D. Act, whereas the same was paid only on 19.6.2000, therefore on this ground alone, it must be deemed that termination/reliving orders with effect from 29.2.2000 passed by the respondents on 19.6.2000 is arbitrary and illegal. The learned counsel appearing for respondent No.1 categorically admitted that the services of the petitioners were terminated without following the provisions of Section 25-FFF of I.D. Act, which was one of the pre-condition of closure of the company. Thus, petitioners contended that in view of the fact that the provisions of Section 25-FFF are violated, which is one of the pre-condition for permission granted under G.O.Rt.No.174 dated 25.1.2000 for closure of the company with effect from 29.2.2000, the closure permission granted by the Government is arbitrary and illegal. I have given my earnest consideration to the respective submissions made by the learned counsel on either side and perused the impugned order and other material made available on record. The fact remains that 90% of the employees opted for Voluntary Retirement Scheme and left the organization. The Voluntary Retirement Scheme was introduced in view of the fact that the management was intending to close down the factory since it was suffering heavy losses viz. Rs.100/- crores every year. Taking this into consideration, the impugned G.O. was passed, therefore, it cannot be said that the impugned G.O. granting permission to close down the Industry by the Government is arbitrary or illegal. While granting such permission to close down, it was indicated as to protection of service conditions of employees, which does not mean that the G.O. is invalid. Therefore, I am of the opinion that the permission accorded by the Government for closure of the Industry vide G.O.Rt.No.174 dated 25.1.2000 cannot be said to be either arbitrary or illegal. The said G.O. stands good and valid. Insofar as termination of services of petitioners on the ground of closure on 29.2.2000 without complying with the provisions of Section 25-FFF of I.D. Act amounts to illegal termination or not is to be examined. The facts are not in dispute. The Company was closed on 29.2.2000 and the services of the petitioners were also terminated/relieved with effect from 29.2.2000, but the compensation as contemplated under G.O.Rt.No.174 dated 25.1.2000 or as contemplated under Section 25-FFF of I.D. Act, which is one of the pre-condition was not paid. Admittedly, compensation was paid only on 29.6.2000. In this context, it is necessary to notice Section 25-FFF and 25-O of I.D. Act, which reads as under: 25FFF. Compensation to workmen in case of closing down of undertakings (1) Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub-section (2), be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched: Provided that the prior payment of compensation to the workman shall be a condition precedent to the closure of any undertaking. Provided further that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workman under clause (b) of section 25F, shall not exceed his average pay for three months. 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 for other construction work. (2) Where an application for permission has been made under sub-section (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) 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 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 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.] From a reading of the above, it is clear that dispensing with the services of its employees by Allwyn Watches Limited without following the provisions of Section 25FFF of I.D. Act on the ground of closure is arbitrary and illegal. The relieving orders passed by the management on 29.2.2000 amounts to illegal termination from service. Under those circumstances, it is declared that termination/relieving of the petitioners from service on 29.2.2000 without following the provisions of Section 25-F read with Section 25- FFF of I.D. Act is arbitrary and illegal. In the result, petitioners are entitled for all consequential benefits, such as, reinstatement into service etc. It is needless to mention that the G.O.Rt.NO.174 dated 25.1.2000 issued by Government has been held valid. The writ petition is accordingly disposed of. No order as to costs. ______________ C.V.RAMULU, J Date: 4.8.2010 DA THE HON’BLE SRI JUSTICE C.V.RAMULU W.P.Nos.3599, 3600 of 2000 & W.P.No.20226 of 2001 4.8.2010 IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH AT HYDERABAD THE HON’BLE SRI JUSTICE C.V.RAMULU W.P.Nos.3599, 3600 of 2000 & W.P.No.20226 of 2001 Date: 4th August, 2010 W.P.No.3599 of 2000 Between: Allwyn Watch Mazdoor Sangh, rep. by its President and another. .. Petitioner And The Special Chief Secretary to Government, Labour, Employment, Training and Factories (Lab.I) Department, Secretariat, Hyderabad and others. .. Respondents W.P.No.3600 of 2000 Between: The Allwyn Watches Division, C.C.H.K. Workers Union, rep. by its General Secretary. .. Petitioner And Government of Andhra Pradesh, rep. by its Special Chief Secretary to Government, Labour, Employment, Training and Factories (Lab.I) Department, Secretariat, Hyderabad and others. .. Respondents W.P.No.20226 of 2001 Between: S.Narasimha Reddy .. Petitioner And Government of A.P., rep. by its Special Chief Secretary, Labour, Employment, Training and Factories (Lab.I) Department, Secretariat, Hyderabad and others. .. Respondents