Case: M.D. Karnataka Forest Development Corporation Vs. Workmen Karnataka Pulpwood Limited &amp; Others

be borne by the Government. 13. We may, however, place on record that during the pendency of this SLP, a meeting was held on 21-6-2006 in regard to the claim of absorption of the workmen concerned wherein it was resolved: "Agreeing with the views of Sri. Sogadu Shivanna MLA and others, the Honble Minister instructed that the following action be taken immediately:-1) Necessary action to be initiated to withdrawn the SLOP filed before the Hobble Supreme Court on the High Court order dated 22-6-2005 by following necessary procedure without taking much time for the same and after this action to be initiated to absorb these 81 employees.Action: Managing Director, AFDC Limited and Principal Secretary, FEE"2) Arrears of differential salary on account of release of increments and D.A. be released to the employees at an early date.Action: Managing Director KFDC Limited and Principal Secretary, FEE3) Any dues to be settled to VRS opted such as difference in ex-gratia etc. be settled without giving scope for the APL employees to approach Court of law again.Action: Managing Director, AFDC Limited and Principal Secretary, FEEAll the officers present in the meeting assured their full Co-operation in solving these issues in a time bound manner." 14. We are informed by Mr. Sanjay Hegde, the learned counsel appearing on behalf of the Government of Karnataka that the question of absorption of the retrenched employees in the applicant-Corporation is pending before the Cabinet. We do not intend to make any observation as regards consequence arising there from. 15. Mr. Naveen R. Nath, learned Counsel appearing on behalf of the respondents would submit that the State of Karnataka as also the appellant Corporation had all along been representing to the workman that services of those employees who have been working under the company would be absorbed by the Corporation and in that view of the matter, this Court should not interfere with the impugned judgment.It was furthermore contended that the State as also the Corporation had allowed the order of the learned Single Judge dated 28-1-2005 passed in Writ Petition No.3530-3533 of 2005 to attain finality and in that view of the matter, there is absolutely no reason as to why the other workmen would not be treated at par with them. 16. It is unfortunate that the State of Karnataka as also Appellant-Corporation did not specifically take one stand or the other. It has been prevaricating its stand from state to stage. The provisions of the Industrial Disputes Act, 1947, govern the relationship between the company and the respondents being employer and workmen. The Management of an industrial undertaking is entitled to take recourse to closure of its undertaking in terms of the provisions of the said Act itself. Section 25-o of the said Act lays down the procedure for closing down an undertaking. Once the State Government had given the permission, all consequences would ensue. In terms of sub-Section (8) of Section 25-o, all the workmen would be entitled to receive compensation, which shall be equivalent to 15 days average, pay for every completed year of continuous service or any part thereof in excess of six months. Section 25-S provides that in relation to a closure of an undertaking governed by Chapter V-B, the provisions of Sections 25-B, 25-D, 25-E, 25-F, 25-G, 25-H and 25 would also apply. Section 25-J provides that the provisions of Chapter VA shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Indisputably in the event an undertaking is closed down, the only right, which accrues in favour of the workmen, is to obtain compensation as provided for. We may notice that sub-Section (4) of Section 25-o provides that an order of the appropriate Government is final and binding on the parties. 17. Before the Division Bench of the High Court as we have noticed here in before, the order of the State Government directing prior permission for effecting closure of the industrial undertaking has not been questioned. In fact even the learned Single Judge had made observations to the effect that the closure may be affected. Having regard to the fact those rights of the workmen flow from the provisions of the Industrial Disputes Act, a writ Court could not have issued any other direction. One of the questions, which had arisen for consideration before the Division Bench was as to whether the order of the State Government dated 24-10-1991, subsists. For considering the said question, it was not necessary for the High Court to ascertain the viewpoint of the State. In the year 1991, a decision was taken not to close down the undertaking of the company. The 1991 decision was modified by a subsequent order that the undertakings also as that of the company are merging with each other. No order of merger has been passed. No decision by a competent authority under the Companies Act had been taken Indisputably, the appellant and the company has not merged. In absence of any valid order of merger of two different entities, evidently the relationship of employer and employee between the respondents and the said company, as had been obtaining, continued. Furthermore, as soon as the closure of an undertaking became effective, it is trite that the said relationship ceased to exist.18. The right of the workmen therefore, was only to receive the amount of compensation. If the State is not in a position to take upon itself the financial burden of the appellant-Corporation for appointing the concerned workmen direction to continue their services could not be issued. There cannot be any doubt whatsoever that the said order dated 24-10-1991 has been superseded by necessary implication. Both merger of two undertakings and the closure of one undertaking do not stand, together. If the workmen, therefore, think that any other or further right has accrued to them in terms of the purported assurance given by the State, it may take recourse thereto before an appropriate forum but a writ petition was not maintainable.

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

Explanation:
1[ds]16. It is unfortunate that the State of Karnataka as alsodid not specifically take one stand or the other. It has been prevaricating its stand from state to stage. The provisions of the Industrial Disputes Act, 1947, govern the relationship between the company and the respondents being employer and workmen. The Management of an industrial undertaking is entitled to take recourse to closure of its undertaking in terms of the provisions of the said Act itself. Sectionof the said Act lays down the procedure for closing down anregard to the fact those rights of the workmen flow from the provisions of the Industrial Disputes Act, a writ Court could not have issued any otherthe year 1991, a decision was taken not to close down the undertaking of the company. The 1991 decision was modified by a subsequent order that the undertakings also as that of the company are merging with each other. No order of merger has been passed. No decision by a competent authority under the Companies Act had been taken Indisputably, the appellant and the company has not merged. In absence of any valid order of merger of two different entities, evidently the relationship of employer and employee between the respondents and the said company, as had been obtaining, continued. Furthermore, as soon as the closure of an undertaking became effective, it is trite that the said relationship ceased to exist.18. The right of the workmen therefore, was only to receive the amount of compensation. If the State is not in a position to take upon itself the financial burden of thefor appointing the concerned workmen direction to continue their services could not be issued. There cannot be any doubt whatsoever that the said order datedhas been superseded by necessary implication. Both merger of two undertakings and the closure of one undertaking do not stand, together. If the workmen, therefore, think that any other or further right has accrued to them in terms of the purported assurance given by the State, it may take recourse thereto before an appropriate forum but a writ petition was not maintainable.