Case: Sarva Shramik Sanghatana (K.V.)Mumbai Vs. State Of Maharashtra

Respondent No. 3, Century Industries Textiles Limited, is a company registered under the Indian Companies Act, 1956. It had about 7500 employees in its textile mill at Mumbai which suffered heavy loss due to high increase in the cost of production and competition both in the domestic as well as international market. With the object to reduce its operational cost, agreements dated 6.7.2004 and 5.9.2005 were entered into by the company with its recognized union for reducing the workforce through an offer of Voluntary Retirement Scheme (hereinafter in short VRS). However, there was hardly any success in this exercise, and only about 800 employees opted for the VRS which left with 6700 employees still on its roll. Finally, a highly upgraded VRS was offered to the employees unilaterally by the respondent-company on 13.11.2006 which offer was valid till 12.12.2006. There was an overwhelming response to the said VRS and more than 6300 employees opted for the new VRS, and were accordingly relieved from service on payment of VRS benefits and all other legal dues. Only about 275 employees did not accept the abovementioned VRS and 230 of these were the petitioners before the Highrespondent-company further alleged that its manufacturing activities in its textile mill came to an end on 13.12.2006 since it was left with only 275 workers. All supervisors and departmental heads had left after taking the VRS. In these circumstances, the respondent-company was constrained to file an application seeking permission for closure under Section 25-O of the Industrial Disputes Act (hereinafter in short the Act) vide application datedthe aforesaid application under Section 25-O could be decided, the respondent-company received a letter dated 5.4.2007 from the Deputy Commissioner of Labour, Mumbai, a copy of which is Annexure P-1 to this appeal. This letter states that as per the directions of the Honble Minister for Labour, Maharashtra Government, a meeting has been convened for discussing the matter in dispute at 11.00A.M. on 9.4.2007 in the Chambers of the Honble Minister in Vidhanresponse, the respondent-company wrote a letter to the Honble Minister for Labour dated 11.4.2007 stating that it was willing to discuss the matter in dispute and would attend the meeting. However, in the same letter dated 11.4.2007 the respondent-company also mentioned that under Section 25-O(3) of the Industrial Disputes Act, an application under Section 25-O(1) has to be decided within 60 days, otherwise it would be deemed to have been allowed. Since the application was made on 13.2.2007, the 60 days limitation was shortly about to expire and then the application would be deemed to have been allowed. However, in order to create a conducive atmosphere for discussing the problems of the remaining employees who had not taken VRS, the respondent-company was withdrawing its application under Section 25-O(1), but reserving its right to move fresh application under Section 25-O as and when necessary. Accordingly, the Commissioner of Labour, Mumbai by his order dated 12.4.2007 allowed the respondent-company to withdraw its application under Section 25-O (1). The respondent-company alleged that it could have very easily pretended to discuss the matter with the workers Union and bided its time till 13.4.2007 and then claimed the benefit of deemed grant of permission for closure. But, instead of doing so, the respondent-company decided to bona fide explore the possibility of an overall settlement with the remaining employees. Since that could not have been done within the remaining 4 days, the respondent-company withdrew its application under Section 25-O(1) so that an attempt for settlement could be made. Thus, the respondent-company alleged that its conduct was bona fide in seeking withdrawal of its closureappears, however, that the effort for an amicable settlement failed. Hence the respondent-company filed fresh application under Section 25-O(1) on 11.5.2007 before the Commissioner of Labour,appellant, which represents the workmen concerned, opposed the very entertainment of the second closure application under Section 25-O on the ground that the first application was withdrawn but without liberty from the concerned authority to file a fresh application. The appellant filed a writ petition under Article 226 of the Constitution before the Bombay High Court praying that the Deputy Commissioner of Labour should be directed not to take any further proceedings in relation to the closure application dated 11.5.2007 under Section 25-O. Since that writ petition was dismissed, hence this appeal by way of Special Leave Petition.

Court's reasoning:
In the present case, we are satisfied that the application for withdrawal of the first petition under Section 25-O(1) was made bona fide because the respondent-company had received a letter from the Deputy Labour Commissioner on 5.4.2007 calling for a meeting of the parties so that an effort could be made for an amicable settlement. In fact, the respondent-company could have waited for the expiry of 60 days from the date of filing of its application under Section 25-O(1), on the expiry of which the application would have deemed to have been allowed under Section 25-O(3). The fact that it did not do so, and instead applied for withdrawal of its application under Section 25-O(1), shows its bona fide. The respondent-company was trying for an amicable settlement, and this was clearly bona fide, and it was not a case of bench hunting when it found that an adverse order was likely to be passed against it. Hence, Sarguja Transport case (supra) is clearly distinguishable, and will only apply where the first petition was withdrawn in order to do bench hunting or for some other mala fideagree with the learned counsel for the appellant that although the Code of Civil Procedure does not strictly apply to proceedings under Section 25-O(1) of the Industrial Disputes Act, or other judicial or quasi-judicial proceedings under in any other Act, some of the general principles in the CPC may be applicable. For instance, even if Section 11 of the CPC does not in terms strictly apply because both the proceedings may not be suits, the general principle of res judicata may apply vide Pondicherry Khadi & Village Industries Board vs. P. Kulothangan and another 2004 (1) SCC 68. However, this does not mean that all provisions in the CPC will strictly apply to proceedings which are not suits.