WP/2974/1998 １ IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.2974 OF 1998 Taida Trading & Industries Ltd., Thane ... Petitioner V/s. Kamgar Congress, Mumbai & Anr. ... Respondents Mr. S.K. Talsania with Mr. Navraj Jalota,Mr. Anupam Surve and Mr. Atman Mehta i/b. Haresh Mehta & Co. for the Petitioner. Mr. J.P. Cama for Respondent No.1. CORAM :SMT. NISHITA MHATRE, J. RESERVED ON :25 TH AUGUST, 2010. PRONOUNCED ON :23 RD DECEMBER, 2010. JUDGEMENT: 1. The challenge in this Writ Petition is to the order of the Industrial Court, Thane in Complaint (ULP) No.625 of 1993 passed on 31st March, 1998. By the impugned order, the Industrial Court has allowed the complaint filed by respondent No.1 herein. The Industrial Court has declared that the petitioner has committed an unfair labour practice under Item 9 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, (for short “the MRTU & PULP Act”), as it has breached the provisions of Section 25O of the Industrial Disputes Act, 1947, (for short “the Act”). A consequential direction has been passed by the Industrial Court to pay all monetary benefits to the employees as if the undertaking has not been closed with effect from the date of the alleged closure till the establishment is legally closed. 2. The petitioner is a partnership firm engaged in manufacturing paper for packaging industry as well as corrugated paper boxes. The petitioner-Firm was closed down in 1970 WP/2974/1998 ２ due to financial constraints. A partnership firm known as M/s. Manoj Agencies took over the undertaking and restarted the factory in 1982. The service conditions of the workmen employed with the petitioner-Firm were governed by a settlement dated 24th November, 1984. However, the Company failed in its attempt to revive and therefore it was sold to the present Management. The service conditions of the workmen in the Company were governed by a settlement of 21st January, 1992. According to the Company, the production levels fell drastically due to the severe recession and accumulated losses. The Company admittedly employed more than 100 workmen at the beginning of 1993. However, the strength of the employees declined. The Union, i.e. the respondent No.1 herein, protested against the practice adopted by the Company to reduce the work force by forcing employees to resign. A complaint was filed on 20th September, 1993 by the Union being Complaint (ULP) No.625 of 1993 apprehending a closure of the undertaking. The Company filed the complaint under Item 6 of Schedule II and Items 9 and 10 of Schedule IV of the MRTU & PULP Act. The Union had annexed a list of the workmen employed in the Company to the complaint. According to the Union, there were 107 workers employed in the Company when the Complaint (ULP) No.625 of 1993 was filed. Interim relief was sought by the Union. The Industrial Court granted ad-interim relief and restrained the petitioner from dismissing or discharging any of the employees mentioned in Annexure “A” to the complaint. The Company was also restrained from effecting a closure without complying with the provisions of Chapter V-B of the Act. The Company was further restrained from removing the plant and machinery from the factory premises. 3. The Company applied to the Court for vacating the ad-interim stay. Due to paucity WP/2974/1998 ３ of time, the Industrial Court was unable to hear the matter. It recorded an undertaking of the Union that it would not lodge any prosecutions for the alleged breach of the order dated 20th September, 1993 passed by the Industrial Court. While this complaint was pending, the Union filed another complaint, being Complaint (ULP) No.741 of 1993 on 23rd November, 1993. This complaint was also filed under Item 9 of Schedule IV of the MRTU & PULP Act complaining about the withdrawal of certain facilities to which the workmen were entitled. 4. On 10th December, 1993, pursis were filed by the Company and the Union agreeing to the modification of the ad-interim order in as much as the closure was not to be effected without following the due process of law. The Industrial Court, therefore, passed an interim order modifying its earlier order in consonance with the terms mutually agreed upon by the parties. 5. A notice of closure under Section 25FFA of the Act was issued on 7th January, 1994 indicating that the closure would take effect from 10th March, 1994. According to the Company, there were less than 100 workmen and therefore it was not necessary to obtain the permission for closure, as required under Section 25O of the Act. The closure was effected from 10th March, 1994. The workers were paid compensation in accordance with the provisions of Section 25F of the Act. On 4th April, 1994, the Union addressed a letter to the Deputy Commissioner of Labour contending that the Company had breached the provisions of law while effecting the closure as there were more than 100 workmen employed at the time of the closure. WP/2974/1998 ４ 6. A written statement was filed by the Company on 10th January, 1996, detailing the reasons for the closure. It also contended that since there were less than 100 workmen employed by it for the 12 months prior to the closure, there was no need to take permission in the appropriate manner prior to effecting the closure. Several documents were filed by the parties and on 9th February, 1996, an application for amendment of the complaint was filed by the Union. That application was granted. The amendment sought by the Union was to place on record its contention that there was a material suppression of facts by the Company while effecting the closure as there were more than 107 workmen employed on an average in the 12 months prior to the date of the closure. An application for production of certain documents was also filed by the Union. These included the ESIC Returns and the Provident Fund Returns for the period from 1990 to 1994, Bonus, Leave and Wage Registers and Muster Rolls for the period from 1990 to 1994, the Balance Sheets and Profit & Loss Account for the period from 1990 to 1994 as also the list of employees whose services had come to an end during the years 1993 and 1994 either by way of resignation or termination or in any other manner along with the details of payments made to such workmen. The Company contested this application and denied its duty to produce such documents. The Industrial Court passed an order on 8th march, 1996 directing the Company to produce the aforesaid documents. Several other documents were also filed by the Company. 7. The Union examined its Secretary General and two other workmen. The Company led the evidence of one witness. WP/2974/1998 ５ 8. The Industrial Court by its Judgment and Order dated 31st March, 1998 held that the Company had indulged in an unfair labour practice under Item 9 of Schedule IV of the MRTU & PULP Act as it had breached the provisions of Section 25O of the Act. The Industrial Court observed that the Union had not proved that the Company had indulged in unfair labour practices under Item 6 of Schedule II or under Item 10 of Schedule IV of the MRTU & PULP Act. The Industrial Court did not draw an adverse inference against the Company for non production of the letters of resignation allegedly submitted by several workers. It held that even if it was the intention of the Company to reduce the number of workers below 100, it would not amount to an unfair labour practice. It was further held that the factum of closure of the Company with effect from 10th March, 1994 was not disputed and that the closure notice of 10th March, 1994 indicated that there were only 80 workmen employed. The Industrial Court noted that the list of 100 workmen supplied by the Union did not disclose how many of those persons were working in the supervisory cadre. The Court observed that on the date of filing of the complaint i.e. on 27th September, 1993, 21 employees, whose names were mentioned in the list annexed at Annexure “A” to the Complaint (ULP) No.625 of 1993, had resigned. The Court then observed that there was no specific averment or pleading in the complaint or any documentary evidence on record showing that the average number of workers employed during the past 12 months were more than 100. It held that the documents produced including the muster rolls for the period from December, 1993 to February, 1994 did not disclose a complement of more than 100 workmen. The contention of the Union that the workers employed in the Canteen and 40 workmen who were employed through a contractor should also be included in the complement of 100 workers was not accepted. WP/2974/1998 ６ The Court further held that the burden of proof of the illegality of the closure is on the Company and, therefore, adverse inference would have to be drawn for non production of muster rolls. It noted that a settlement which was arrived at between the Union and the Company in 1992 indicated that there were 96 permanent employees. After making these observations, the Court held that the closure was illegal and that as there was a breach of the provisions of Section 25O of the Act. The workers were, therefore, entitled to all benefits under the law on account of an illegal closure. 9. Mr. Talsania, the learned Counsel appearing for the Company, has submitted that the order of the Industrial Court shows total non-application of mind as the complaint has been allowed although all the issues framed have been held in favour of the employer. According to the learned Counsel, when the Court had observed that there were less than 100 workers during the 12 months preceding the date of the closure, the Industrial Court had incorrectly placed the onus on the Company to prove that the closure was not illegal. According to him, when there was ample material on record to arrive at a definite conclusion, the burden of proof is inconsequential in such a case. He supported this contention by relying on the judgment of the Supreme Court in the case of National Insurance Company Ltd. vs. Rattani & Ors., reported in (2009) 2 SCC 75 . He then pointed out that there was no pleading in the complaint indicating that the number of workmen was more than 100 at the time of the closure. According to the learned Advocate, the absence of pleadings in the complaint goes to the very root of the matter. He relied on the judgments of the Supreme Court in the case of State Bank of India & Ors. vs. S.N. Goyal, reported in (2008) 8 SCC 92 , and Shankar Chakravarti vs. Britannia Biscuit Co. Ltd. & WP/2974/1998 ７ Anr., reported in AIR 1979 SC 1652 , in support of his submission that although technical rules of pleadings do not apply in labour matters, there must be some pleading in the complaint to indicate that the number of workmen employed during the preceding 12 months from the date of the closure was more than 100. He further pointed out that even after amending the Complaint (ULP) No.625 of 1993, the Union had failed to include an averment regarding the number of workers employed by the Company. He urged that the Industrial Court has passed a completely perverse order by requiring the Company to prove that the number of workmen employed on an average during the preceding 12 months from the date of the closure was less than 100 when there was ample material on record from which the Industrial Court could have drawn an inference that less than 100 workmen were employed during this period. 10. Mr. Cama, the learned Counsel appearing for the Union, pointed out that there were adequate pleadings on the number of workmen employed and on the violation of the provisions of Chapter V-B of the Act in the complaint. He relied on the judgment of a learned Single Judge of this Court (Bharucha, J., as he then was) in the case of Varsha Vishwanath Kolambkar v/s. Ravindra Hindustan Platinum Pvt Ltd. and Ors., reported in 1987 1 CLR 3, in support of his contention that the onus lies on the Company to prove that there were less than 100 workmen. He then pointed out that the Court has drawn adverse inference against the Company because there was no evidence on record to support the Company’s contention that the Union or its members had misappropriated the muster rolls and other registers. According to him, the Company had not produced the record from September, 1993 to March, 1994 and therefore the contention of the Company WP/2974/1998 ８ that it had produced all the documents in its possession is not correct. Mr. Cama concedes that the Company had declared another closure on 15th February, 1999, which has not been challenged by the Union. 11. The first question which will have to be considered is whether the burden of proof on the illegality or otherwise of the closure is on the Union or the employer. In the case of Hindoostan Spinning and Weaving Mills Ltd., Mumbai vs. Hindustan Crown Mills Siddhivinayak Kamgar Karmachari Sangharsha Sanghatana & Ors. decided in Appeal No.364 of 2005 and other connected matters on 11 th June, 2007 , the Division Bench of this Court has held that the burden of proof would lie on the party who substantially asserts the affirmation of the issue and not upon the party who denies it. The party on whom the onus of proof lies must establish its own case and cannot take advantage of the defect or loopholes in the testimony of the witnesses of his adversary. Similarly, in the case of Rajasthan State Ganganagar S. Mills Ltd. vs. State of Rajasthan & Anr., reported in (2004) 8 SCC 161, the Supreme Court has held that when the workman contends that his termination from service is illegal because of the non compliance of the provisions of Sections 25F and 25N read with Section 25B(2)(a)(ii), the burden of proof with respect to the completion of 240 days of continuous service in a year is on the workman. 12. In the case of Varsha Vishwanath Kolambkar (supra), it has been held that it is for the employer to prove that he employs less than 100 workmen. The learned Single Judge of this Court (Bharucha, J., as he then was), has observed as follows : WP/2974/1998 ９ “6. The Model Standing Orders apply “to every industrial establishment wherein 100 or more workmen are employed or were employed on any day of the preceding 12 months”. A workman-complainant before the Industrial Court would, ordinarily, have no knowledge and would find it well-nigh impossible to prove that on any day or days in the preceding 12 months his employer had employed more than 100 employees. It is unlikely that the workman-complainant would know the definition of a workman under the Industrial Disputes Act. Even if he did, he could not reasonably be expected to depose to the functions of all his co-employees so as to establish that they were workmen under the definition in the Industrial Disputes Act. How many employees are employed at any given point of time, whether on permanent or temporary basis, is within the special knowledge of the employer. What their functions are is also within the special knowledge of the employer. It is for the employer to satisfy the Industrial Court that it did not at the relevant times employ 100 workmen, (emphasis added).” 13. This judgment has been considered by the Division Bench of this Court in the case of Arvind Anand Gaikwad vs. Uni Abex Alloy Products Ltd. & Ors., reported in 1988 1 CLR 26. The Division Bench has observed thus : “We do not read the observation of the learned Judge as concluding that the burden in such cases is on the employer. Indeed, it is not possible to conclude that the burden is on the employer because the issue was raised by the employee and when the employer disputed that fact, then the burden to establish the negative fact cannot be lead at the door-step of WP/2974/1998 １０ the employer. Mr. Ganguli urged with reference to the decision of the Supreme Court in the case of Gopal Krishnaji Kelkar vs. Mohamed Haji Latif and Ors. reported in A.I.R. 1968 S.C. 1413 that the facts and material as to how many workers were engaged was within the custody of the employer and, therefore, the burden should have been cast on the shoulder of the Company. We are unable to accede to the submission because the Company examined Mr. Gopalkrishnan before the Labour Court and it was open for the appellant to call upon the Company to produce the relevant documents to substantiate the claim. The appellant not only did not seek the documents and the record, but did not even bother to cross-examine Gopalkrishnan on this aspect. It is futile in these circumstances to claim that the oral word of the appellant should be accepted as a gospel truth. The appellant, according to his own claim, was active member in the Union and was fully conscious of the record maintained by the Company and nothing prohibited him from demanding production of the record before the Labour Court. In our judgment, the finding recorded by the Labour Court on this aspect is in consonance with the evidence produced and should not be disturbed in writ jurisdiction.” 14. A learned Single Judge of this Court in the case of Maharashtra General Kamgar Union vs. Indian Gum Industrial Ltd. & Ors., reported in 2000 II CLR 509 has, by relying on the judgment in the case of Arvind Anand Gaikwad (supra), observed that the burden of proof is on the Union which claims protection for the workers under Chapter V-B and Section 25K of the Act. It was held that the two crucial factors namely employment of not less than 100 workmen and such employment being, on an average, per working day for the preceding 12 months, must be proved by the workmen. In the present case, WP/2974/1998 １１ undisputedly, the Union had approached the Court apprehending a closure. The closure was effected on 10th March, 1994, during the pendency of the complaint. Therefore, the relevant period which will have to be considered is between April, 1993 to March, 1994. The Union in its complaint had pleaded that there are more than 100 workmen employed in the factory. They had later amended the complaint after the date of the closure and contended that the work force was reduced by the employer deliberately in order to avoid the clutches of the provisions of Section 25O of the Act. The Union had sought an order from the Court for a direction against the Company to produce certain documents. The Court allowed the said application partly. The Company was directed to produce the muster rolls. The Company has failed to do so. 15. The judgment of the Division Bench in Gaikwad’s case in fact supports the case of the Union in as much as the Court has observed that the workman in that case ought to have demanded the production of certain records before the Labour Court and having failed to do so, he could not avail of the judgment in Varsha Kolambkar’s case. In the present case, the submission of Mr. Talsania that the judgment of Varsha Kolambar will not apply cannot be accepted. It was in order to prove that the petitioner employed more than 100 employees, that these documents were required. The documents were in the custody of the employer. Besides that, it was within the special knowledge of the employer as to the status of the employees working with it and their functions. The only reason mentioned by the Company for not producing the relevant documents, though directed to do so by the Industrial Court, is that the workmen had ‘misappropriated’ those documents. The Industrial Court has not believed this statement because there was no evidence on WP/2974/1998 １２ record to prove this fact. 16. Mr. Talsania has relied on the judgment of the Supreme Court in the case of Rajasthan State Ganganagar S. Mills Ltd. vs. State of Rajasthan & Anr., reported in (2004) 8 SCC 161, in support of his submission that the burden of proving that a workman is in continuous service of 240 days in a year is on the workman. The Court has observed that merely because the muster rolls were not produced for a particular period, it was not sufficient for the Labour Court to hold that the workman had worked for 240 days, as claimed. On the basis of the evidence on record, the Court observed that even considering the period for which the muster rolls were not produced, the requirement of completion of 240 days, prima facie, had not been fulfilled. In these circumstances, the matter was remanded to the Labour Court by the Supreme Court in order to arrive at a definite conclusion whether the workman had worked for 240 days. In my opinion, this judgment has no application to the present case. The analogy tried to be drawn by Mr. Talsania in a case of closure and a case of an individual worker completing 240 days is misplaced. It was in the facts of the case before it, that the Supreme Court was of the view that a mere statement without any documentary proof would not be sufficient to establish that the workman had completed 240 days. 17. Mr. Talsania has also relied on the judgment of the Division Bench of this Court in the case of M/s. Hindoostan Spinning and Weaving Mills Ltd. (supra). In paragraph Nos.68 and 69, the Court has considered the concept of burden of proof. The Court has observed that “under Section 101 of the Evidence Act, the party who desires a Court to deliver a WP/2974/1998 １３ judgment in his favour in respect of any legal right or liability which is dependant on the existence of certain facts, which he asserts, must prove those facts. The burden of proof lies on a party who substantially asserts the affirmative of a particular issue and not on a party who denies it. He cannot take advantage of the weaknesses of his adversary’s case”. The Court observed that the fact that 100 workmen were employed in the 12 months preceding the notice of closure can be proved in one of several ways. It could be proved by the workers either by positive evidence from the record or by an application made by the workers for production of documents from the Company which is in possession of those documents, in order to establish the worker’s case. The workmen in the present case had done so and, therefore, the Industrial Court has rightly drawn adverse inference in the matter. 18. Mr. Talsania has then relied on the judgment of the Supreme Court in the case of National Insurance Company Ltd. (supra) in support of his submission that when there is sufficient material on record to arrive at a particular conclusion, it matters little as to who is required to discharge the burden of proof. According to Mr. Talsania, the Industrial Court ought to have held that there were less than 100 workmen employed, when in the earlier paragraphs of the order it had arrived at such a definite conclusion. A perusal of the order of the Industrial Court does indicate, at first blush, that the strength of the workmen on the date of the notice of closure was less than 100. However, the number of workmen on the date of the notice of closure is not material. What is to be taken into account is the number of workmen