Case: M/S. Hindoostan Spg.&amp; Wvg. Mills Limited, Mumbai &amp; Others Vs. Hindustan Crown Mills Siddhivinayak Kamgar, Karmachari Sangharsha, Sanghatana &amp; Others

2. The factual matrix, not in dispute, taken from the impugned judgment are as under:3. The appellantMill is a business house of some antiquity belonging to the Thackersey family. The business activities were initially commenced in 1805 as a trader and were then expanded to cover the manufacture of cotton fabrics. The Mill was incorporated in 1882 or thereabouts as a Limited Company. The Crown Spinning and Manufacturing Company Ltd., which had also been incorporated in 1880, was amalgamated with the appellantMill with effect from 1st April 1975 by an order passed by this Court on 23rd July 1976 in the exercise of its Company jurisdiction. After amalgamation, the Mill had four manufacturing Units in Mumbai, two unitsUnits A and Bat Jacob Circle, Mahalaxmi, the Processing House Division at Prabhadevi and the Crown Mills Division at Dadar. There was a general strike in the cotton textile Industry in the City of Mumbai in 1982 which substantially eroded the position of the industry. The appellantMill overcame the adverse effects of the textile strike by 1989 and between the years98, a dividend of 20% was generally speaking declared by the Company. In addition to the issuance of bonus shares, the shareholders have received a dividend of Rs.1054 lakh. Inthe Mill altered the object clause in its Memorandum of Association so as to include inter alia, the carrying on of Real Estate business. Sometime in the yearthe Mill set up a textile unit at Karad. In March 2002, the Mill is stated to have closed down two units at Mahalaxmi. Since the workers, it is alleged, were persuaded to accept voluntary retirement, no permission of the State Government under SectionOn 29th December 2002, Voluntary Retirement Scheme (VRS) agreements were entered into by the Mill with Rashtriya Mill Mazdoor Sangh (RMMS)the recognised Unionin respect of Crown Mills and the Process House Division. The VRS agreements, inter alia; brought within their coverage, employees who had not completed 60 years of age as on the date of the submission of the application for voluntary retirement and who were on the muster rolls of theClause 2 of the agreement lays down the compensation that was payable and clause 3, the schedule of payment. The Company agreed to issuecheques but clause 3(g) laid down that in the event that the Company was unable to raise funds as visualized therein, due to unavoidable circumstances, after relieving the employees, the Company in consultation with RMMS would inform both RMMS and the employees individually, not to deposit the cheques in their Bank Accounts. In such cases, the employees would be paid interest at a rate 1% higher than what is payable by nationalized Banks for fixed deposits, on the delayed part of payment. The employees, it was provided, will not take recourse to any legal proceedings. Clause 4(k) of VRS Agreement is material for the present purposes, for it provided that employees who will not opt for voluntary retirement, would be redeployed by the Company, if necessary, byreorganizing and restructuringmanufacturing activities in any of the Industrial Units of the Company. Clause 4(k), inter alia, provided as follows:The remaining employees who will not opt for voluntary retirement under the Scheme will be redeployed and assigned work in any section, department or units of the Company without adversely affecting their service conditions. The employees and RMMS shall fully cooperate with the Company in the implementation of the Scheme andreorganizing and restructuringof its manufacturing activities in any of the Units, as per the requirement of the Company. The employees shall accept the work assigned to them and attend to it in the normal and peaceful manner and give the expected production every working day as per decision of the Company. Wherever required the employees will be given necessary training by the Company. After implementing the VRS the reorganization will be done in consultation with the RMMS.The Company, it was recorded, would be at liberty to dispose of excess or redundant plant and machinery including land and building for the purpose of raising funds for implementation of the VRS and for reorganizing and rationalizing its manufacturing activities in a more economic and viable manner. Immediately after the VRS agreements came to be signed, the Company by its letter dated 30th December 2002 furnished a schedule of payment to RMMS. The schedule of payment provided that the payment on account of VRS,Encashment of Leave, Bonus for 2002 and Leave Travel Allowance would be paid in 25 installments initially between February and December 2003 when an installment of Rs.5,000/per month would be paid. Thereafter, between January 2004 and June 2004, an installment of Rs.10,000/per month would be paid, while the balance would be paid in equal installments between August 2004 and March 2005. In the event that the Company was unable to raise funds, it was stipulated, then in consultation with RMMS, the employees would be individually informed in which event they would be entitled to a higher rate of interest as provided in the agreement.5. The VRS agreements, as noted earlier, specifically provided that those employees who would not opt for voluntary retirement, would be redeployed and assigned work in any Section, Department or Unit of the Company. The employees agreed ton and restructuring of manufacturing activities. On 30th December 2002 at a meeting of the Board of Directors, the Chairman of the Board, informed the Board of the agreements for voluntary retirement and stated that he was hopeful that all the workmen would opt for VRS thus enabling the land development in Mumbai units as envisaged under the Draft Rehabilitation Scheme submitted to IDBI, the operating agency recently. The Chairman stated that in the event that all the workmen at the Crown Mills Unit and the Process House Division did not opt for VRS, it would not be possible to properly reorganize or restructure the working of any unit in Mumbai with the small group of workers who may not opt for VRS and it would be impossible to run such operations except at heavy cash losses. Therefore, opined the Chairman, the Company would have no alternative but to exercise an option of closure of all units in Mumbai i.e. A/B Units at Mahalaxmi, C Unit at Dadar and Process House at Prabhadevi. The Board thereupon passed a resolution authorising the making of an application for closure of the Mumbai Units under the Industrial Disputes Act, 1947.6. On 10th April 2003, the Company moved applications under Sectionof the Industrial Disputes Act, 1947 each in respect of the Crown Mills and the Process House Units before the Commissioner of Labour, Mumbai, which were treated as one application dated 2nd May, 2003 by consent of parties. The annexure annexed thereto gave full particulars and details of the first appellant and the process house and Crown Division Unit as per requirement of law. These particulars included, inter alia;Annual production for the preceding 3 years.Production figures,for the preceding twelveon of the Order book,al position of the appellant.The losses incurred by the Crown and Process House Units for the last three years.Percentage of wages of workmen to the total cost of production. Administrative, general and selling costs.Inventory position,al sales figures for the last 3 years. Reasons for proposed closure.Attempts made by the appellant to avoid closure.7. The respondentUnion, on 1st May 2003, filed their replies to the above applications made by the appellant to the Commissioner of Labour for closure of two subject units. Similarly, respondent No.3, RMMS also filed its reply to support the said applications.8. The Commissioner of Labour vide its order dated 30th June, 2003 granted permission under section 25(O)(2) of the I.D.Act for closure of two subject units for the details reasons recorded therein.9. The respondentUnion, on 2nd July, 2003, filed two applications for review under section 25 (O)(5) of the I.D.Act against the order dated 30th June, 2003. similarly, the appellant also filed two applications on 4th July, 2003 for review, inter alia; contending that the Commissioner of Labour had exceeded its jurisdiction by putting certain onerous conditions while granting permission for closure of subject units.10. The Commissioner of Labour by order dated 15th July, 2003, inter alia; referred matters to the Industrial Tribunal under section 25(O)(5) of the I.D.Act.11. The appellantMill filed its statement of claim wherein it stated that it was one of the oldest textile Companies in the country that had established a reputation in the domestic and export market. The operations of the Company were stated to be profitable and satisfactory untilThe profitability is stated to have deteriorated fromdue to several factors beyond the control of the Company such as high labour costs, high cost of utilities such as power and water in Mumbai, unfair competition from small scale/power loom sectors and various Government Policies favouring thesector. The Company sustained net losses of Rs.9.40 crore inwhich increased to Rs.46.60 crore inand as of 30th September 2002, the cumulative losses were stated to be Rs.185 crore. The Company, it was stated, had to make a reference to the BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985 since as of 31st March 2001 its net worth stood eroded. The BIFR had declared the Company as a Sick Industrial Undertaking on 4th December 2002. In support of its proposal to close down the undertakings, the Company claimed that many composite mills at Mumbai including the appellantMill had become sick and had closed down or were proposing closure due to the following reasons:(a) Government policies: The Company claimed that the decentralized sector has been a recipient of several concessions and exemptions in fiscal, trade and labour policies. The excise duty structure and quota policy were alleged to be biased towards the small scale and decentralized sectors;(b) Attempts to rectify anomalies in Government policies were alleged not to have borne fruit. As a result, the share of fabric production of the composite mill sector was reduced to less than 4% inFiscal policies of the State Government and the Municipal Corporation were alleged to be against the interest of the textile industry in Mumbai and municipal charges for water, a major input for textile production, were stated to be highest in the world;(d) Unfair competition from the unorganized sector which has enjoyed concessions and also resorted to evasive practices;(e) High labour cost, low level of productivity and high input cost in Mumbai Mills;(f) Constraints to modernization on account ofOver capacities in the globalaffecting the margins for exports;(h) Increased debt burden due to interest liabilities and funding of cash losses.12. The Company contended that it had attempted to avoid closure during the previous two or three years by discussing and trying out various alternatives in theand marketing/supply chain. The Company, it was stated, attempted financial restructuring with the help of financial institutions and in order to reduce the interest burden but this could not result in improving the position. The promoters were stated to have brought in funds to improve liquidity and some funds were raised by development of property in Mumbai. According to the Company, the Bombay Textile Research Association had carried out afeasibility study and had recommended closing down of all operations of textile units in Mumbai. Finally, it was stated that following the VRS agreement dated 29th December 2002, 347 employees at the Crown Mills Unit and 242 employees at the Process House Unit had not opted for voluntary retirement and since the majority of the employees had opted for VRS, it was impossible to continue operations except at heavy cash losses. The Company claimed that with this small group of employees, it was not possible to properly reorganize or restructure the working of the unit and run the same viably.13. The respondentUnion filed their written statement to the statement of claim made by the appellantMill to oppose prayer for grant of permission under section 25(O)(2) of the I.D.Act. The details of which are given in the later part of this judgment.14. Evidence was adduced before the Industrial Tribunal both on the part of the management as well as on behalf of the Union. By its Award dated 21st February 2004, the Industrial Tribunal came to the conclusion that the Company had established a case for closure under SectionThe Industrial Tribunal, directed that the closure compensation shall be paid within a period of 30 days and that workmen would be granted the closure compensation or payment due under the VRS agreement dated 29th December 2002, whichever was more beneficial. The Industrial Tribunal also directed that VRS payments due to employees, who were still to be paid, should similarly be discharged and paid within a period of 30 days.Not satisfied with the aforesaid award of the Industrial Tribunal, both appellantMill as well as Union filed writ petitions in this Court referred to in the opening part of the judgment. The learned single Judge, vide his judgment and order dated 21st February, 2005, was pleased to set aside the award of the Industrial Tribunal and the petitions came to be disposed of in terms ofof the said judgment.Being aggrieved by the aforesaid judgment and order of the learned single Judge, the appellantMill filed two appeals being Appeal Nos.364/2005 and 458/2005 setting up various legal and factual challenges dealt with hereinafter, whereas respondentUnion also filed an appeal bearing No.441/2005 to claim higher financial reliefs.

Reasoning:
let us examine whether any attempt was made by the respondentUnion to prove their stand or defence taken by them in the written statement. The burden of proof was on the respondentUnion since their case was that the heavy losses were incurred by the Mill because of substandard quality of finished product and that the adverse market conditions were the direct result of theof the appellantMill (Management) themselves. The burden to prove these facts was incurred by the respondentUnion because of their pleadings in the written statement wherein they admitted the caseof the appellantbut tried to hold theThe above two witnesses were the star witnesses of the respondent Union. They did not prove case pleaded by the Union in its written statement wherein serious allegations of financial mismanagement, playing with quality of end product,of machineries or spare parts; huge borrowings resulting in debt trap were made. There was no whisper in the evidence of these two witnesses in this behalf.Reading of the above evidence unequivocally show that the Union did not discharge burden of proof incurred by it. Since it failed to prove its assertion made against themanagement of thethe admissions given in the written statement shall very much; bind the respondentUnion. In the wake of failure to discharge burden of proof it is futile to say that thefailed to prove its case. Admission is a best evidence which binds the party giving it.Mr. Tidke denied all the adverse suggestions given to him in hisby the Union. However, case sought to be made out in the written statement by the Union making allegations against the appellantMill was never put to Mr. Tidke when he was underThe law in this behalf is clear. Wherever the opponent has declined to avail himself of the opportunity to put his essential and material case in the cross examination, it must follow that he believed that the testimony could not be disputed at all. It is wrong to think that this is essentially a technical rule of evidence. It is rule of essential justice. It serves to prevent surprise at trial and miscarriage of justice because it gives notice to the other side of actual case that is going to be made out when the turn of the party on whose behalf theis being made comes to give and lead evidence by producing witnesses. It has been stated on high authority of the House of Lords that this much a counsel is bound to do whilethat he must put to each of his opponents witnesses in turn, so much of his own case as concerns that particular witness or in which that witness has any share. If he asks no question with regard to this, then he must be taken to have accepted the opponents case in its entirety.It was also expected rather necessary on the part of theine Mr.Tidke and to challenge each and every statement made by him on oath to demonstrate its falsify and to confront him with their defence. But themiserably failed to challenge Mr.Tidkes evidence. It could not succeed in demolishing the caseof the appellantIt could not establish its defence. Even no suggestions of their defence were given to Mr.Tidke. With the result, the evidence of Mr. Tidke practically went unchallenged. As a matter of fact, in theadverse material is brought on record by the Union which advanced the caseof the appellantMr.Ghaisas reiterated in his evidence that the financial position of the Mill had been deteriorating as set out in the applications. The Companys net worth by December, 1999 was eroded to the extent of 50% and fully by March, 2001 as such Company was declared as a Sick Unit by B.I.F.R. vide its order dated 4.12.2002. That the company had no capacity to raise financial resources for modernization to revive the working of the units. He further deposed that Karad Unit alone could not serve and pay the huge outstanding loans exceeding Rs.200 crore borrowed from the secured lenders from time to time. He further deposed that the adverse situation could not have been allowed to continue since it was neither in the interest of workers nor the financial institutions. That is how he deposed in support of prayer for permission to close down two subject units.88. Mr.Ghaisas wasby the respondentUnion on the contents of the Balance sheets and Auditors report and the statements made there under. This trend ofultimately, resulted in proving those documents. The law in this behalf is well settled. In the case of Ram Janki Devi v. Juggilal Kalamapat, AIR 1971 SC 2551  the contention that in absence of scribe, the account books were not provedwas held unacceptable. One of the reasons was that the account books were shown to the witness in theand questions were asked on the same. The Supreme Court treated those account books as proved. Similar is the situation in case at handbalance sheets, profit and loss accounts, and other financial statements are concerned. Each of them were shown and used in theby the Union. It is, thus, not open to the respondentUnion to complain lack of proof of those documents. All those documents were rightly read by the Industrial Tribunal in evidence.89. The case sought to be made out in the written statement which throws entire blame on thefor creating adverse situation was never put to these witnesses, when they were underas already stated hereinabove.90. The legal position is well settled. A person who says house is benami must satisfy the Court of this fact. Where a person claims right of way, he must prove that he acquired that right and it is not for the other side to show that he does not have such right. Thealleged and desired to prove mismanagement, reckless borrowings, substandard production affecting the health of the Mill with deliberate intention to exploit real estate of the Mill but could not prove the same by cogent evidence. The burden of proof to prove these facts was on the Union, who desired the Court believe existence of such facts. The Supreme Court in the case of Kalwa Devaderttam v. Union of India, AIR 1964 SC 880  , held that where no evidence is led on the question in dispute by the party on whom burden lies to prove certain facts then it must fail. Failure to discharge burden in this behalf left the substantive evidence in the form of unexplained and unrebutted admissions in the field binding on the maker of the admission, viz.; theThe appellant on this count alone was entitled to succeed.91. Thus, looking to the evidence of these two witnesses on the well established legal principles; it is not possible for us to conclude that thedid not produce evidence to prove their case for closure of the subject units. The findings recorded by the learned single Judge in this behalf are liable to be set aside.If the entire evidence available on record is considered in its proper perspective, the appellantMill has made out its case for closure of the subject units.93. With the aforesaid pleadings and evidence on record, the Industrial Court in reference,confirmed the permission for closure granted by the Commissioner of Labour by its order dated 30th June, 2003.With the aforesaid pleadings and evidence on record, the Industrial Court in reference,confirmed the permission for closure granted by the Commissioner of Labour by its order dated 30th June, 2003.The Award was passed by the Tribunal taking into account the evidence of the parties with which no fault can be(i) The appellant had innovated the VRS scheme and was ready to utilize the assets for paying the liabilities of the workers and other institutions and that this was a genuine reason for grant of permission.(ii) The figures which were given in the statement of Accounts and the Balance Sheets of the Appellant were figures from public documents and the figures were proved by the of the Appellant through the evidence of Mr. Ghaisas;(iii) RespondentUnion could not substantiate its allegations that the figures of losses are bogus.(iv) RespondentUnion could not suggest a concrete plan to profitably run the subject Units.(v) The appellant had borrowed money from financial institutions and all these financial institutions wanted to recover money. The public money of the financial institutions was required to be saved;(vi) It was the duty of the Tribunal to consider the plus and minus factors while granting or refusing the permission. The reasons given, in totality favoured grant of permission.(vii) The figures of profit and losses given in the chart and the Balance Sheets and the Annual Statementsof the appellantwere required to be appreciated, it being the figures of the account maintained in the due course of business and there being nothing on record to disbelieve the same, as such the same could not be ignored;(viii) Having given an opportunity of hearing to the appellant, the workmen and the persons interested, the genuineness and adequacy of the reasons of the closure could not be doubted;(ix) RespondentUnion could not offer any evidence pertaining to the profits gained by both the units;(x) The evidence ofcould not contradict the reasons offered by the Appellant for closure of the Units;(xi)failed to prove that the closure was a pretense to determine their services and to fetch more profits from the real estate business;(xii)was relying upon the figures of the profits and loss account right from 1990 onwards and, therefore, it would not be proper to accept the submission of thethat these figures were not giving the position of both the Units.(xiii) The figures of the balance sheet and the annual statement were required to be accepted in its entirety;(xiv) The production of the three accounting years prior to the date of the closure applications i.e. April 1999, December 1999,02 given by the Appellant showed that the production of both the units had gone down everyTo continue with the manufacturing activities was not possible in the given situation;(xvi) There was nothing wrong with the fact that the balance sheets of both the Units were not prepared separately, since a common balance sheet was prepared by the Appellant as per practice prevailing past several years;(xvii) The analysis of the Balance sheet showed that both the Units were running into losses;(xviii) The primary intention was to meet the liabilities and not to fetch the profits from the sale of the lands;(xix) The shortage of working capital for Karad Unit could be met if the closure application was allowed;(xx) Both the Units were at no return situation and RespondentUnion could not establish on the record that both the Units were running profitably.(xxi) The figures of the proposed assets and liabilities clearly showed that nothing would be left out after meeting the liabilities of theThe public interest was not likely to suffer due to closure of the said Units;(xxiii) The appellant had given reasons and information in the prescribed form along with documentary evidence in support of closure.(xxiv) The oral evidence of the RespondentUnion showed that the witnesses produced by it did not know anything directly and that they had failed to make out a case that the closure was a camouflage and not bona fide;(xxv) The Appellant had proved that continuing the manufacturing activities was not possible in the present situation;(xxvi) Figures of profit and losses and thegiven by the Appellant could not be disbelieved and/or ignored.94. Having examined the rival pleadings, rival evidence and findings recorded, it can not be said that the findings of the Tribunal in the award were based on no evidence as held by the learned Single Judge in the impugned order.At the meeting of the Monitoring Committee thespecifically informed the Monitoring Committee that these workers have no objection for going on with the process of satisfying the dues of the workers who have taken VRS, from the sale proceeds that will be received from the development of the Mahalaxmi Unit.106. At the second thought, in the meeting of the Monitoring Committee, theThe Monitoring Committee clarified that unless theobtained an order from the Court/Authority, the Monitoring Committee could not accede to the request of the RespondentUnion. The Monitoring Committee, however, adjourned the matter to 18th August 2004 to enable theto take further appropriate steps which Union failed to take.Writ Petition No.462 of 2005 filed bybefore Division Bench of this Court challenging the Order of A.A.I.F.R. dated 23rd December, 2004 confirming the order dated 1st April, 2004 sanctioning the rehabilitation scheme by the BIFR, which came to be dismissed by an order dated 1st August, 2006; i.e., subsequent to the impugned judgment of the learned Single Judge; wherein learned Division Bench,noted that the steps taken by the Appellant pursuant to the said Rehabilitation Scheme, including the fact that the Appellant had made full payments to the workers of Units AB and substantial amounts to the workers of units C and D including the member workers ofThe fact that Appellant had acted on the Agreement with M/s.K.Raheja Corporation and from amounts received therefrom paid the workers substantial amount was also noted by the Court.The above judgment of the learned Division Bench is acceptedon since no further challenge to the said Judgment and order was set up by them. This judgment is binding on theThe orders of B.I.F.R. and A.A.I.F.R have become final and conclusive and binding on the Union on theThe orders of the authorities constituted under the S.I.C.A. having become final, it is not possible for any Court much less this Court to put the clock back and direct resumption of manufacturing activities. As a matter of fact, the learned Single Judge also found it difficult to issue any such direction contrary to the order of the B.I.F.R. and A.A.I.F.R.It is, thus, clear that restarting of the MillUnits is now out of question. The findings recorded by B.I.F.R. have achieved finality and Scheme has been substantially implemented. There is no possibility of revival at all of these two subject Units. The machineries are sold. The landed properties of the Mill are also transferred, may be partially, to other three developers as mentioned herein above. In view of this scenario, both orders i.e. order of B.I.F.R. and order of learned Single Judge refusing to permit closure has resulted in creating a conflicting situation. By no means, both orders can go hand in hand. Implementation of one order negates another. In view of this conflicting situation the order of B.I.F.R. will have the overriding effect. On this count also appellant is entitled to succeed, though the appellant has independently established their case for closure as found by us. By no means, it can be said that in the case in hand the appellant has not made out a case for closure of subject Units under Sectionof the I.D. Act. In view of this positive findings, it is not necessary to consider other submissions made by Mr.Dada leading to the interpretation of Section(7) of the I.D. Act.Act.119. The Commissioner of Labour has also found the reasons assigned by the appellantMill as cogent, adequate and genuine. For all these reasons, it cannot be said that the decisionof the appellantMill for closure of the subject units was not bona fide and genuine. No fault can be found either with the order of the Commissioner of Labour or the Industrial Tribunal granting permission for closure of the subject units under sectionof the I.D.Act. Since the subject unitsof the appellantMill were unviable and in the light of its huge liabilities which cannot be satisfied even if the subject units are made operative, though as on date that has become impossible in view of implementation of the scheme of reconstruction made by the B.I.F.R.120. The submission of Mr.Ganguli that the application made by the appellantMill under sectionof the I.D.Act seeking closure of the subject units is in violation of Article 14 and 19 (1)(g) of the Constitution of India cannot be accepted. There is also no merit in the submission of Mr.Ganguli that theill by its Management is a cause for bringing bad days to the subject units. Not a single piece of evidence is available on record warranting this conclusion or that the appellantMill could have made better use of their resources when it wantedfar as public interest is concerned, one cannot overlook heavy debts incurred by the appellantMill which made the company sick. The implementation of scheme resulting in closure of subject units will result in generating liquidity which can be used to satisfy debts of the Mill and dues of workers and residue can be used to pump money in the Karad Unit which, after expansion, is bound to generate more employment and give more production to contribute to the national wealth.122. The implementation of B.I.F.R. Scheme will pull out the company from its sickness and make it a viable company. It is, no doubt, true that some of the workers, who were working in subject units at Mumbai, may face problem of unemployment; which they are already facing as on date; but at the same time Karad Unit on generation of more employment will provide more employment opportunities to the society at large. Sometimes, in order to make one limb safe and strong, other part of the body is required to be sacrificed. Therefore, while considering the question of public interest, little larger view is required to be taken into account so as to struck equitable balance between the two competing interests of the society. Considered from this angle, no fault can be found with the order of the Industrial Tribunal granting permission for closure of the subject units. The impugned order is, thus, liable to be set aside. In this view of the matter the petition filedby the respondentss to mention that they would only be entitled to statutory compensation as prescribed under section