Madras High Court Management Of Cholamandalam Software ... vs Presiding Officer, I Addl. Labour ... on 16 May, 1995 Equivalent citations: 1995(2)CTC54 ORDER 1. This writ petition condng on for hearing on Thursday, January 12, 1995, upon perusing the petition and the affidavit filed in support thereof the order of the High Court, dated February 19, 1993, and made herein and the counter affidavits filed herein and the records relating to the order in I.D. Nos. 813 to 827 of 1989 dated September 25, 1992, on the file of the Ist Respondent comprised in the return of the respondent to the writ made by the High court, and upon bearing the arguments of Mr. P. Chidambaram, Senior Advocate for Mls. T.S. Gopalan, P. Ibrahim Kalifulla and P. Ravindran, Advocates for the petitioner, and of Mr. T. Fenn Waiter, Advocate for the Respondents 3 to 17 and the second respondent not appearing in person or by Advocate and having stood over for consideration till this day, the Court made the following Order : This petition is directed against the common award dated September 25, 1992 made by the First Additional Labour Court, Madras in I. D. No. 813 to 82711989 by which the nonemployinent of Respondents 3 to 17 by the petitioner was held to be not justified and the employer was directed to reinstate them with continuity of service and backwages. 2. The case of the respondentworkmen before the Labour Court was that they had been employed by Respondent No. 2 Tiam House Services Limited and were later transferred to the petitioner company Cholamandalam Software Limited; that to the shock and surprise of the workmen, the management resorted to illegal lock out from April 4, 1989 and thereafter sent a letter captioned as cessation of employment was in fact, the termination of the services of the workmen in an illegal manner. It was also alleged that persons junior to these workmen have been retained ignoring the principle of 'last come first go' and that the termination was without reasonable cause. 3. The petitioner in answer to the claims so made filed a counter statement in which it was not denied that the respondent workmen had earlier been employed by Respondent 2 herein. Petitioner has stated that these workmen with their consent were absorbed in the services of the petitioner company and that the petitioner had (sic.)agreed to protect their past services under Respondent 2. 4. The petitioner company, it was stated, was formed in the year 1982 with the object of rendering computer services to its customers relating to collection and maintenance of information and to develop computer software application to suit the special requirements of the customers; that in March 1983, the petitioner set up a data processing division which undertook data processing services such as preparation of pay rolls, and preparation of financial accounting and inventory control related statements; that subsequently there was a sharp decline in demand for the services of the data processing division of the petitioner due to the easier availability of indigenously manufactured computers and that by the year 1989, the division became unviable and the petitioner was forced to close down the data processing operations. It was further stated by the petitioner that as on January 4, 1989, 46 persons were employed in the data processing divisions and that on that day all these workmen were informed of the decision to close down the data processing operations. On January 30, 1989 notice under Sec. 25FFA of the Industrial Disputes Act was sent to the State Government intimating the Government that the data processing operations would be closed with effect from April 3, 1989. 5. Petitioner also averred that on April 3, 1989 the services of the workmen of the data processing unit were terminated consequent to the closure of the data processing operations and that by October 1989, the software division of the petitioner was also closed. It was asserted that the company was not carrying on any activity as on the date it filed the statement is as on Decernber 18, 1989 and that prior to the said date the services of all 71 of its employees had been terminated, after paying them closure compensation in accordance with the provisions of the Industrial Disputes Act. 6. The second respondent in its statement denied any liability on the ground that the workmen had ceased to be its employees long prior to the cessation of their employment under the petitioner by virtue of their resignation and that therefore, it was not answerable for the claims of the petitioner. 7. The Labour Court after considering the evidence adduced before it by the parties, rejected the contention putforth by the petitioner in oral argument that the petitioner was not a factory. It held that the petitioner employed more than 100 persons at the time the services of the workmen were terminated a