Voltas Employees Union vs Voltas Ltd. And N.J. Gajbhiye, ...
2002 Latest Caselaw 75 Bom

JUDGMENT

1. Rule, returnable forthwith. By consent of the parties, rule called out and heard. Respondent No.2 is not served and at the request of the petitioner, service on Respondent No.2 is dispensed with as Respondent No.2 is a formal party.

2. In this petition, the petitioner, which is a trade union, has challenged the order dated 20.12.2000 permitting closure of Cooling Appliances Business Division (for short, hereinafter referred to as CABD) of Respondent No.1 undertaking at Thane. The petitioner has also prayed for a stay of notice of closure dated 30.10.2001 and the permission granted for closure on 20.12.2001 till the reference which has been made to the Industrial Tribunal under 25-O(5) of the Industrial Disputes Act, 1947 (for short, hereinafter referred to as the said Act) is decided.

3. The facts giving rise to the petition are as under:

Respondent No.1 has a factory at Thane employing about 1000 workmen. About 161 workmen of these workmen are working in the CABD in the Thane factory. Over a period of time since 20.5.1994, the petitioner which is a trade union representing the workmen of Respondent No.1, and Respondent No.1 entered into several Memorandum of Understandings (MoUs) whereby the terms and conditions of the workmen employed in the Thane factory were not to be adversely affected despite the reestablishment of a factory at Dadra and shifting of the machinery of Respondent No.1 Thane factory to Dadra and other places. The petitioner had all along apprehended that on the setting up of Dadra establishment, the service conditions of the workmen at Thane would be adversely affected and, therefore, had insisted that Respondent No.1 enter into an understanding with them. The last of such understandings was signed on 22.1.1998 whereby it was agreed that there would not be any reduction in manpower at Thane factory.

4. In 1999, Voluntary Retirement Scheme (for short - VRS) was introduced by respondent No.1. This scheme was challenged by the petitioner by filing a complaint under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act,1971 (for short, hereinafter referred to as MRTU & PULP Act). The complaint was decided by the Industrial Court by an order dated 10.8.1999 declaring that respondent No.1 had committed an unfair labour practice under Items 9 and 10 of Schedule IV of the MRTU & PULP Act. Respondent No.1 was directed not to execute the VRS of 1999 and to honour the terms and conditions set out in various MoUs between the parties. The order of the Industrial Court was challenged by Respondent No.1 before this Court. An order was passed by this Court on 29.10.1999 staying that part of the order which directed respondent No.1 not to implement the VRS 1999.

5. On 18.6.1999, during the pendency of the earlier complaint, a notice was issued by respondent No.1 informing the workers that from 21.6.1999 second shift operation in all departments except Security and Transport were temporarily suspended and that the workers should not report for work until further notices. Respondent No.1 was restrained from acting upon this notice by the Industrial Court upon complaint (ULP) No.429 of 1999 being filed by the workmen. The petitioner on noticing that respondent No.1 was shifting the machinery to Dadra and Hyderabad, objected to it by filing complaint (ULP) No.126 of 1999 before the Industrial Court. In this complaint, the respondent made an application for removal of certain machines from the Thane factory to their establishments at Dadra and Hyderabad. After this application was rejected by the Industrial Court, respondent No.1 filed a writ petition before this Court. The Writ petition was rejected and the order of the Industrial Court, refusing permission to shift certain machines from the Thane factory to the other establishments of respondent No.1, was confirmed.

6. The Industrial Court in Complaint (ULP) No.532 of 2000 restrained respondent No.1 from shifting their manufacturing activities from Thane to Dadra. These successes of the petitioner were pyrrhic victories. On 8.10.2001, Respondent No.1 made an application to the State Government under Section 25-O of the said Act requesting permission to close down their business at CABD of the Thane factory. Objections to the application for closure were filed by the petitioner. Documents were also produced before the Commissioner of Labour who is the specified authority under section 25-O of the said Act to hear the application for permission for closure of an establishment. After hearing the parties, by an order dated 20.12.2001, the Commissioner of Labour passed an order allowing respondent No.1s application for closure. While allowing the application Respondent No.1 was directed to abide by certain conditions, namely, (i) the closure compensation payable to each workman should be paid at the enhanced rate of 30 days wages instead of 15 days wages as payable under section 25-FFF of the said Act or (ii) to grant the workmen the benefits of VRS dated 1.11.2000, whichever is higher. An application was made by the petitioner on 21.12.2001 for stay of the permission for closure granted on 20.12.2001. The Labour Commissioner refused to grant any stay as according to him, there was no provision in the said Act for such a stay to be granted. Immediately after the permission to close down the establishment was granted on 21.12.2001, Respondent No.1 issued a notice to each workman of suspension of operations of the CABD at Thane establishment from 21.12.2001 till 23.1.2002 on which date the closure is to come into effect. The notice also mentioned that the workmen should not report for duty during the interregnum and that full wages would be paid during that period.

7. The petitioner then filed an application for review/reference under section 25-O(5) of the said Act and also prayed for interim stay of the closure pending disposal of the review application or pending the award of the Industrial Tribunal on a reference being made to it. This review application was disposed of by the Labour Commissioner by an order dated 11.1.2002 which was received by the petitioner some time later. The Labour Commissioner refused to review his order and held that as the matter required judicial scrutiny, a reference should be made. He, therefore, referred the dispute for adjudication by passing the following order: "The matter in the application of M/s.Voltas Ltd., 2, Pokhran Road, Thane dated 23.10.2001 seeking permission to close down the Cooling Appliances Business Division Undertaking of Thane Main Plant under sub-section (1) of Section 25-O of the Industrial Disputes Act, 1947 is hereby referred under sub-section (5) of Section 25-O of the said Act of adjudication of the Industrial Tribunal, Thane consisting of Shri V.D. Nandekar."

8. Mr.Singh, learned Counsel for the respondent, has raised a preliminary objection regarding the maintainability of this writ petition. He submits that since there is an alternate, efficacious remedy available to the petitioner, the present writ petition should not be entertained. He relies on the judgments in the cases of Dalpat Kumar and Anr. v/s. Prahlad Singh & Ors. , India United Mills No.2 v/s. Ram Murat Haridwar Kurmi & Ors. [(1996) II CLR 716], State of Punjab v/s. Labour Court, Jullundur & Ors. , Durga Prasad v/s. Naveen Chandra & Ors.

,  C.A.    Abraham  v/s.     I.T.
Officer, Kottayam  &  Anr.    , The

Bombay Gas Public Co. Ltd. v/s. Shri Papa Akbar & Ors. [(1990) I CLR 102], Engineering Employees Union V/s. M/s.Devidayal Rolling & Refineries Pvt. Ltd. & Anr. [1986 I CLR 81] in support of this submission. He submits that once a reference has been made, the petitioner can get all the reliefs that are sought for in this writ petition before the Tribunal and, therefore, no interference is called for from this Court. He urges that the petitioner having invoked the alternate remedy successfully since a reference is made to the Tribunal on 11.1.2002 whatever orders that may be required for protection of the interests of the workers can be obtained from the Tribunal instead of rushing to this Court under its writ jurisdiction. He further submits that a reference having been made on 11.1.2002 by the Commissioner of Labour, the Tribunal has issued notices to the parties and it would, therefore, be appropriate for the petitioner to make an application before the Tribunal. The matter is now fixed on 30.1.2002 for filing a statement of claim by respondent No.1.

9. In reply to this, Mr.Cama, learned Counsel for the petitioner, submits that the reference although made on 11.1.2002, a copy of the same was not received by them till 16.1.2002. Moreover, the notice of the Industrial Tribunal had not been received by them. In any event, submits the learned Counsel, the statement of claim would have to be filed by respondent No.1 and it is only thereafter that the Tribunal could proceed with the matter. He, therefore, submits that there is no alternate or efficacious remedy available to the petitioner and in any event, no remedy was available to it when the petition was filed. The learned Counsel relies on the judgment of the Constitution Bench of the Apex Court in the case of Workmen of Meenakshi Mills Ltd. Etc. v/s. Meenakshi Mills Ltd. & Anr. reported in 1992 I CLR 1010, wherein the Apex Court was considering provisions of Section 25N. In that judgment, according to the learned Counsel, the Apex Court has held that the jurisdiction exercised by the government under 25-N of the said Act granting permission for retrenchment is quasi-judicial in character and not administrative in nature and therefore, a writ petition under Article 226 impugning that order was maintainable. He submits that the powers conferred under sub-section (2) of section 25-N is similar to the exercise of the power of the appropriate government under section 25-O(2) and, therefore, it is always open for the petitioner to approach this Court for any order wherein there is a challenge to the order of the appropriate government which is a quasi-judicial order.

10. He further submits on merits, respondent No.1 company had all along given assurances to the petitioner and its members that the service conditions of the workmen in the Thane establishment would not be adversely affected by their establishing of the Dadra plant or by shifting of any machinery to that plant. He submits that it is on the basis of these MoUs that the petitioner withdrew various cases which were pending before the Industrial Court and Labour Court against Respondent No.1. He further submits that the order that he is seeking today is only confined to a stay of the closure which is to take effect from 23.1.2002 pursuant to the notice of closure. He submits that the workmen would be left without any remedy whatsoever if the Tribunal were to hear the reference without any interim orders being passed. In any event, submits the learned Counsel, since the reference is to be decided within a period of 30 days by the Industrial Tribunal, no prejudice would be caused to Respondent No.1 if for this period respondent No.1 is directed to keep their business running or the status-quo were to be maintained. He submits that in any event, there is a suspension of operations and no great prejudice would be caused to respondent No.1 if the stay as prayed for is granted.

11. On the other hand, the learned Counsel for respondent No.1 has vehemently opposed the granting of any interim order by way of staying of the closure. He submits that this would in fact pre-judge the issue and the Tribunal would not be in a position to decide the reference effectively. He further submits that reliance placed on the MoUs is contrary to the judgment of this Court in the case of Mumbai Mazdoor Sabha & Ors. v/s. S.A. Patil & Anr. [(1994) I L.L.N. 95] wherein this Court took the view that such MoUs would be contrary to public policy.

12. He further submits that the workmen could be adequately compensated if it is found that the closure, which they will effect on 23.1.2002, is illegal. He submits that in any event, the workmen have been paid their wages for the months of December, 2001 and January, 2002 together with a closure compensation as directed by the Labour Commissioner though some of the workmen have been paid under the VRS as it was more beneficial. He submits that about 161 workers have been paid all legal dues. 38 of these workmen have encashed the cheques issued to them. Out of these 38 workmen, 36 workmen have accepted amounts under the VRS and two have been paid closure compensation on the basis of 30 days per year of service. He, therefore, submits that the prejudice that would be caused to respondent No.1 would be much more as they are incurring heavy losses every day. He submits that, in effect, there has been no work since January, 2001 and the workmen in fact are being paid idle wages. He also submits that in any event, once the period of 60 days from the making of the application for closure elapses, the application for closure is deemed to be granted and, therefore, the closure would come into effect from 23.1.2002. He further submits that if the Tribunal in the reference were to come to the conclusion that the permission to close down is wrongly given, it would always be open for the Tribunal to compensate the workmen by appropriate orders at the final hearing of the reference. He relies on the judgments reported in the case of India United Mills No.2 and Dalpat Kumar & Anr. (supra) for the proposition that no interim relief should be granted as this would cause prejudice to the petitioner whereas the workmen could be adequately compensated. He further submits that under section 25-O(4) of the said Act, the order of the appropriate government (Labour Commissioner) granting permission has become final and binding upon all parties and, therefore, there is no question of staying such an order and the order automatically comes into effect on 23.1.2002. He urges that the order granting permission cannot become null and void merely because a reference has been made, nor does it cease to exist the moment the reference is made. He further submits that this would lead to absurdity as proceedings before the appropriate government under section 25-O(2) would be rendered nugatory.

13. On the question of maintainability of the writ petition, I do not find any substance in the said objection raised by respondent No.1. It is true that the Industrial Tribunal can pass interim orders, if necessary, on the basis of applications made by the parties. This has been held so by the Apex Court in the case of Lokmat Newspapers Pvt. Ltd. v/s. Shankarprasad [1999 II CLR 433]. However, in the present case, although a Reference has been made for adjudication on 11.1.2002, the order was received by the petitioner only on 16.1.2002. It is not known as to when the reference was sent for adjudication to the Tribunal. Assuming that the reference was sent to the Tribunal immediately, the petitioner has not received the notice from the Tribunal. Unless the Tribunal is seized of the matter merely making a reference would not, in any event, be an adequate and / or efficacious remedy. The petitioner can approach the Tribunal only when the Tribunal receives the reference for adjudication. I, therefore, see no reason why the petition should not be entertained under Article 226 of the Constitution of India.

14. This takes me to the question as to whether any interim relief should be granted pending the reference before the Tribunal. I am unable to accept the submission made by the learned Counsel for the respondent that due to the deeming fiction contained in section 25-O(3) the closure becomes effective on the completion of 60 days from the date of application made by them and that therefore, no interim relief should be granted. This deemed fiction would arise only when the appropriate government does not decide the matter within the specified period of 60 days. In the present case, the appropriate government has decided the matter within the period of 60 days and thereafter has also referred the matter for adjudication rather than reviewing the same and, therefore, the submission of the learned Counsel on this ground is not tenable.

15. The further submission advanced on behalf of the respondent that merely by making a reference, the earlier order passed on 20.12.2001 by the Labour Commissioner allowing the closure does not cease to exist also cannot be accepted. The provisions of Section 25-O(4) are very clear and provide that the order of the appropriate government granting or refusing permission for closure is subject to the provisions of the sub-section (5). The appropriate government has in this case exercised its jurisdiction under sub-section (5) and referred the matter to the Tribunal for adjudication. What is referred for adjudication is "the matter in the application of M/s.Voltas Ltd. seeking permission to close down the Cooling Appliances Business Division Undertaking of Thane Main Plant under sub-section (1) of section 25O of the Industrial Disputes Act, 1947". Therefore, the application for closure itself has been referred and not merely the order passed by the appropriate government. The Tribunal would have to, therefore, consider the application of Respondent No.1 for closure, de novo.

16. The submission of the learned Counsel for the respondent regarding the equities in this matter also cannot be accepted. It is true that the workmen have been disbursed large amounts towards their wages for the months of December, 2001 and January, 2002 together with either closure compensation or compensation under VRS. However, this would not, in my view, be of any assistance to the workmen if the Tribunal finds that the closure is illegal. In the present case, as there has been suspension of operation of work since 21.12.2001, in my view, if this suspension of operations is continued till the award of the Tribunal under section 25-O, no great prejudice would be caused to Respondent No.1. The Tribunal in any event, under the Act has to dispose of the reference within 30 days and directing the respondent No.1 to continue their suspension of operation for a further period of 30 days would not in any way vitally prejudice them.The petition, therefore, is disposed of with the following order:

ORDER

(i) The Tribunal shall dispose of the Reference (IT-25-O) No.1/2002 between the parties in accordance with the provisions of Section 25O(5) and the proviso thereto.

(ii) The members of the petitioner who have received cheques from Respondent No.1 which include the wages from 1.12.2001 to 23.1.2002 and also the closure compensation and/or the VRS shall retain only the wages for the period from 1.12.2001 to 23.1.2002.

(iii) The workmen, who have not encashed the cheques issued by the company shall return the same to the company by 24.1.2002.

Fresh cheques for the wages payable to these workmen from the period 1.12.2001 to 23.1.2002 shall be issued by Respondent No.1 on or before 25.1.2002.

(iv) Those workmen who have encashed the cheques may retain the amount of wages from 1.12.2001 to 23.1.2002 and pay back the balance to Respondent No.1, if they so desire on or before 28.1.2002.

(v) Till such time as the Tribunal disposes of the reference, that is, till 1.3.2002, Respondent No.1 will continue with the suspension of operation of work in the CABD of Thane factory.

(vi) The plant and machinery which is today at the Thane plant shall not be shifted till the disposal of the Reference.

(vii) The members of the petitioner will not claim wages for the period during which the Tribunal is seized of the matter in case the petitioner fails in the reference.

(viii) Parties to appear before the Tribunal on 28.1.2002 and the Tribunal will hear the matter on a day to day basis, if necessary, to dispose of the same on or before the 1.3.2002. The parties shall cooperate with the Tribunal and shall not seek any adjournment.

(ix) Parties can urge such points as are available to them on questions of facts and law.

Issuance of Certified copy of this order is expedited.

Parties to act on an ordinary copy of this order duly authenticated by the Court Associate.