Case: Maharashtra General Kamgar Union Vs. State of Maharashtra &amp; Others

The appellants are the original petitioners. They are a Trade Union registered under the Indian Trade Unions Acts, 1926 and have their Registered Office at 252, Janata Colony, R.N. Narkar Marg, Ghatkopar,077. The workmen of respondents No. 3, namely, Indian Cork Mills Ltd. are members of the appellants since the year 1980.2. Respondent No. 3 gave a notice of retrenchment dated 31st August, 1983 for the purpose of retrenching 308 workmen plus 5 members of clerical staff. In the annexure to the notice of retrenchment reasons for proposed retrenchment were set out as under :"In view if heavy overhead and administrative expenses, the company is suffering losses. The companys profitability has dwindled considerably during the last few years. If appropriate action is not taken, then company may have to even face total closure. To avoid (sic) the business economically, retrenchment has become inevitable"A notice was serve on the same date to the Secretary, Government of Maharashtra, Industries, Energy and Labour Department, under sectionof the Industrial Disputes Act, 1947. Sectionof the Act requires notice in the prescribed manner being served on the appropriate Government or such authority as may be specified as provided in that section and permission of such authority being obtained under(2) as a condition precedent to retrenchment of workmen. In the notice it is set out that out of a total 451 employees of respondents No. 3, 308 workmen plus 5 members of clerical staff numbering in all 313 would be affected by the proposed retrenchment. Thereafter and enquiry was held by the respondents No. 2 under the provisions of sectionof the Industrial Dispute Act, 1947. At the enquiry the appellants filed and affidavit objecting to retrenchment. Respondents No. 3 also filed the affidavit and produced material as required by respondents No. 2 respondents No. 3 relied upon their balanced sheets and profit and loss account of the year2. Respondents No. 3 have two Division Plastic Division and Cork Division. In the yearboth these division made a profit and the total profit was of Rs. 17.43 lakhs. In the yearPlastic Division made a loss of Rs. 17.27 lakhs while Cork Divisions made profit of Rs. 18.70 lakhs, making a total profit of 1.43 lakhs. In the yearPlastic Division made a loss of Rs. 15.10 lakhs and Cork Division made a loss of Rs. 15.53 lakhs making total, loss of Rs. 30.63 lakhs. Respondent No. 3 contented that while their sale position had not improved during these 3 years, their wage bill had gone up. It was their contention that available workload was not sufficient for their labour force and the workmen were lying idle in the factory. They therefore applied for permission to retrench 313 workmen. The application was opposed by the applicants, who contended that respondents No. 3 had to diverted some of their profits to other allied concerns. They also raised various contentions.3. It is not necessary to examine all these contentions in details. The 2nd respondent after considering the material placed before him passed an order dated 1st February, 1984 in which reasons were set out in some detail. Respondent No. 2 granted permission to the 3rd respondent to retrench 111 workmen who were recruited by the Company in the years 1982 and 1981 and 5 clerical staff subject to the condition that in effecting retrenchment the principles laid down in Chapterof the Industrial Disputes Act, 1947 shall be followed scrupulously. While the proceedings were going on before respondent No. 2 the 3rd respondent had also offered to the workmen voluntary retirement under a scheme which was framed by them. Under this scheme 92 workmen during the pendency of proceedings had voluntarily retired. The permission given under the order offor retrenchment of 111 workmen is in addition to 92 workmen who have voluntarily retired.

Reasoning:
In our view, however, an enquiry under(2) has no relation to proceeding contemplated under) of sectionn (7) applies to a case where at the commencement of the Industrial Disputes (Amendment) Act, 1976 a dispute relating to retrenchment is inter alia pending before a conciliation officer. In such a dispute there should be an allegation that retrenchment is by way of victimisation, in the alternative in such a dispute the appropriate Government should form an opinion that such retrenchment would not be in the interest of Industrial Peace. In these special circumstances the appropriate Government under(7) has the power to withdraw the dispute from inter alia, the Conciliation Officer. The appropriate Government may by a notification transfer such a dispute to an authority specified in thatfor consideration. The decision of such an authority is made final and binding or the parties under that7. An enquiry to be held by the authority so appointed under(7) is a totally different enquiry from the enquiry to be made by Government for granting or refusing permission under(2). An enquiry under(2) cannot be considered as similar to an enquiry under(7) as contended by the appellants. In our view, at the stage of permission any elaborate judicial or quasi judicial enquiry is not contemplated. The very scheme of sectionpracludes such an elaborate enquiry. In the present case the 2nd respondents has taken into account relevant circumstance before granting permission. He has given a fairly detailed reasoning for granting permission to respondents No. 3 to retrench some of the employees as stated in order. The order is in consonance with the provision of(2).8. The appellants have contended that they have now come across certain document to show some that profits were diverted by the 3rd respondents an allied concern. The 3rd respondents have filed an affidavits denying this allegation by giving a cogent explanation of the document so relied upon by the appellants. We do not see how all these disputes relating to the detailed working of the company and involving a scrutiny of contracts entered into by the Company with third parties in the normal course of its work can be gone into orIt should be also be noted that granting of permission under sectiondoes not preclude either the industrial established or the workers from raising a dispute relating to such retrenchment and having it adjudicated upon before an Industrial Tribunal. Under Scheduled III, Item 10 of the said Act Industrial Tribunal has jurisdiction to deal with matters relating to retrenchment of workmen. This jurisdiction is not taken away by reason of the fact that an industrial establishment has obtained permission under sectionfor retrenchment of workers. Such permission is a condition precedent to retrenchment of workmen. Merits or demerits of the case can be adjudicated upon before the Industrial Tribunal. In view of this alternative remedy available to the appellants also, in our view it is not fit case where we should intervene in the order of 1st February, 1984. 10. Our attention was drawn to a decision of Division Bench of this Court in the case of (Workmen of Mukund Iron and Steel Works Ltd. v. Mukund Iron and Steel Works Ltd. and others)1, reported in (1982)1 L.L.J 140 (to which one of us was party). In that case permission to retrench granted under sectionwas set aside because the Assistance Labour Commissioner while granting permission did not take into account an extremely relevant fact, namely, that work was available in the establishment for workers who were to be retrenched. The establishment had merely contended that such workmen would be given work only if workmen agreed to give certain quantity production as per agreed norms. Since the decision to grant permission did not take into account this very relevant circumstance the decision was set aside. The question of the nature of enquiry to be held under sectionwas not considered at all by the Division Bench in that case nor was this question raised before the Division Bench. The judgment therefore, is not much assistance in the present case.