Case: Pottery Mazdoor Panchayat Vs. Perfect Pottery Company Limited and Another

the opinion that the closure was not for business reasons but was a malafide decision taken in order to drive the Union out of existence and to cheat the workers of their lawful dues. 9. On June 28, 1967, the Managing Director of the respondent sent a reply to the Regional Labour Commissioner dealing with the contentions made by the Union in its letter of June 22, , 1967. The Managing Director contended that no industrial dispute existed or was apprehended and that the Conciliation officer had, therefore, no jurisdiction under the Act to hold any proceedings. In the order dated April 30, 1970, of the Industrial Tribunal-cum-Labour Court, Jabalpur, reference has been made to an affidavit which was filed on behalf of the workers for the purpose of securing an interim award. We have, looked at the affidavit for ourselves and are in agreement with the view expressed by the Tribunal tha t there is a clear and unequivocal admission on the part of the workers in that affidavit to the effect that the business was in fact closed by the respondent. The High Court has also referred to a statement dated June 16, 1967, in which it was stat ed on behalf of the workmen that since the establishment had already closed down, there was no necessity for making submissions on the point relating to the reduction in the number of employees and revision of the workload.Learned counsel for t he appellant relies upon a judgment of this Court in The Management of Express Newspapers Ltd. v. Workers and Staff Employed under it and others, ([1963] 3 S.C.R. 540, 548) in which it was observed that if, in fact and in substance, the closure of the business is a lock out and the business has been apparently closed for the purpose of disguising a lock out and a dispute is raised in respect of such a closure it would be an industrial dispute which an Industrial Tribunal is competent to deal with. There , can, with respect, be no quarrel with this proposition but the true question which arises for consideration is whether in the instant case there was any dispute at all, whether there was in fact a closure or whether the management purported to close the business as a cloak or disguise for what in fact and substance was a lock out. As we have shown earlier no such dispute was ever raised, the limited dispute which was raised by the appellant being whether the closure of the business was effected for a proper and a justifiable reason. 10. The appellants counsel also drew our attention to the definition of closure in section 2(8) of the State Act according to which closure to the extent material , means the closing of any place or part of a place of employment or the total or partial suspension of work by an employer or the total or partial refusal by an employer to continue to employ persons employed by him whether such closing, suspension or refusal is or is not in consequence of an industrial dispute. It may perhaps be that the concept of closure in the State Act is wider than what is commonly understood by that expression but we do not appreciate how the circumstance that even a partial closure of a business is closure within the meaning of the State Act can assist the appellant in its contention that under the terms of the present references, the Tribunals were entitled to enter into the question as to the fact of the closure. In this connection the provisions of section 82 of the state Act, to which Mr. Tarkunde appearing on behalf of the respondent drew our attention, are very significant. That section provides that the State Government may make a reference to a Labour Court or the Industrial Court for a declaration whether any proposed strike, lock- out, closure or stoppage will be illegal. If ever it was the case of the appellant that there was in fact no closure and there was really an illegal lock-out, the reference would have been asked for and made not under section 51 under which it was made, but under section 82.We are, therefore, of the view that the High Court was right in coming to the conclusion that the two Tribuna ls had no jurisdiction to go behind the references and inquire into the question whether the closure of business, which was in fact effected" was decided upon for reasons which were proper and justifiable. The propriety of or justification for t he closure of a business, in fact and truly effected, cannot raise an industrial dispute as contemplated by the State and Central Acts. 11. It is unnecessary to consider the second question as regards the payment of retrenchment compensation a nd we will, therefore, express no opinion as to whether the Tribunals had jurisdiction to go into that question. Happily, the parties have arrived at a settlement on that question under which, the respondent agrees to fix within a period of six months from today the retrenchment compensation payable to the retrenched workers in accordance with the provisions of section 25FFF of the Central Act, namely, the Industrial Disputes Act, 1947, without the aid of the proviso t o that section. After the retrenchment compensation is so fixed, a copy of the decision fixing the compensation payable to each of the workers will be sent by the respondent to the appellant Union. The workers or their legal representatives, as the case may be, will then be entitled to receive the retrenchment compensation from the respondent, which agrees to pay the same to them. The respondent will be entitled to set off of the amounts of retrenchment compensation already paid to the workers against the amounts found due to them under this settlement. On receiving the retrenchment compensation the workers concerned shall withdraw the applications, if any, filed by them for relief in that behalf. 12.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]Having heard a closely thought out argument made by Mr. Gupta on behalf of the appellant, we are of the opinion that the High Court is right in its view on the first question. The very terms of the references show that the point of dispute between the parties was not the fact of the closure of its business by the respondent but the propriety and justification of the respondents decision to close down the business. That is why the references were expressed to say whether the proposed closure of the business was proper and justified. In other words, by the references, the Tribunals were not called upon by the Government to adjudicate upon the question as to whether there was in fact a closure of business or whether under the pretence of closing the business the workers were locked ou t by the management. The references being limited to the narrow question as to whether the closure was proper and justified, the Tribunals by the very terms of the references, had no jurisdiction to go behind the fact of closure and inquire into the question whether the business was in fact closed down by the management.It is not necessary to rely exclusively on the terms of references for coming to this conclusion. The history of the dispute and the various documents on rec ord of the references themselves indicate that the dispute between the parties related not to the question as to whether the business, in fact, was closed by the management but whether there was any justification or propriety on the part of the management in deciding to close down the business. On June 22, 1967, the General Secretary of the appellant Union addressed a letter to the Regional Labour Commissioner, Jabalpur, by which the present dispute was raised. The first paragraph of that letter says: "that the Company had notified is decision to close down the mine with effect from July 1, 1967, that some of the workers were served with notices of retrenchment individually but that retrenchment compensation was not paid by the management which was illegal and violative of the provisions of the Industrial Disputes Act". This grievance assumes the validity of the decision to close down the business and proceeds to make a claim arising out of a valid closure namely, a claim for retrenchment compensation. The second paragraph of thethe aforesaid letter begins by saying that "the closure of the mine and the factory is malafide". The reasons for the closure are then set out in that paragraph which winds up by saying that the Union was of the opinion that the closure was not for business reasons but was a malafide decision taken in order to drive the Union out of existence and to cheat the workers of their lawful duesOn June 28, 1967, the Managing Director of the respondent sent a reply to the Regional Labour Commissioner dealing with the contentions made by the Union in its letter of June 22, , 1967. The Managing Director contended that no industrial dispute existed or was apprehended and that the Conciliation officer had, therefore, no jurisdiction under the Act to hold any proceedings. In the order dated April 30, 1970, of the Industrial Tribunal-cum-Labour Court, Jabalpur, reference has been made to an affidavit which was filed on behalf of the workers for the purpose of securing an interim award. We have, looked at the affidavit for ourselves and are in agreement with the view expressed by the Tribunal tha t there is a clear and unequivocal admission on the part of the workers in that affidavit to the effect that the business was in fact closed by the respondent. The High Court has also referred to a statement dated June 16, 1967, in which it was stat ed on behalf of the workmen that since the establishment had already closed down, there was no necessity for making submissions on the point relating to the reduction in the number of employees and revision of thed counsel for t he appellant relies upon a judgment of this Court in The Management of Express Newspapers Ltd. v. Workers and Staff Employed under it and others, ([1963] 3 S.C.R. 540, 548) in which it was observed that if, in fact and in substance, the closure of the business is a lock out and the business has been apparently closed for the purpose of disguising a lock out and a dispute is raised in respect of such a closure it would be an industrial dispute which an Industrial Tribunal is competent to deal. There , can, with respect, be no quarrel with this proposition but the true question which arises for consideration is whether in the instant case there was any dispute at all, whether there was in fact a closure or whether the management purported to close the business as a cloak or disguise for what in fact and substance was a lock out. As we have shown earlier no such dispute was ever raised, the limited dispute which was raised by the appellant being whether the closure of the business was effected for a proper and a justifiable reasonThe appellants counsel also drew our attention to the definition of closure in section 2(8) of the State Act according to which closure to the extent material , means the closing of any place or part of a place of employment or the total or partial suspension of work by an employer or the total or partial refusal by an employer to continue to employ persons employed by him whether such closing, suspension or refusal is or is not in consequence of an industrial dispute.It may perhaps be that the concept of closure in the State Act is wider than what is commonly understood by that expression but we do not appreciate how the circumstance that even a partial closure of a business is closure within the meaning of the State Act can assist the appellant in its contention that under the terms of the present references, the Tribunals were entitled to enter into the question as to the fact of the closure. In this connection the provisions of section 82 of the state Act, to which Mr. Tarkunde appearing on behalf of the respondent drew our attention, are very significant. That section provides that the State Government may make a reference to a Labour Court or the Industrial Court for a declaration whether any proposed strike, lock- out, closure or stoppage will be illegal. If ever it was the case of the appellant that there was in fact no closure and there was really an illegal lock-out, the reference would have been asked for and made not under section 51 under which it was made, but under section 82.We are, therefore, of the view that the High Court was right in coming to the conclusion that the two Tribuna ls had no jurisdiction to go behind the references and inquire into the question whether the closure of business, which was in fact effected" was decided upon for reasons which were proper and justifiable. The propriety of or justification for t he closure of a business, in fact and truly effected, cannot raise an industrial dispute as contemplated by the State and Central ActsIt is unnecessary to consider the second question as regards the payment of retrenchment compensation a nd we will, therefore, express no opinion as to whether the Tribunals had jurisdiction to go into that question. Happily, the parties have arrived at a settlement on that question under which, the respondent agrees to fix within a period of six months from today the retrenchment compensation payable to the retrenched workers in accordance with the provisions of section 25FFF of the Central Act, namely,the Industrial Disputes Act, 1947, without the aid of the proviso t o that section. After the retrenchment compensation is so fixed, a copy of the decision fixing the compensation payable to each of the workers will be sent by the respondent to the appellant Union. The workers or their legal representatives, as the case may be, will then be entitled to receive the retrenchment compensation from the respondent, which agrees to pay the same to them. The respondent will be entitled to set off of the amounts of retrenchment compensation already paid to the workers against the amounts found due to them under this settlement. On receiving the retrenchment compensation the workers concerned shall withdraw the applications, if any, filed by them for relief in that behalf