[Cites 4, Cited by 0]
Bombay High Court
Sarva Shramik Sanghatana vs M/S. Gupta Steel Industries And Ors. on 10 April, 2026
Author: Amit Borkar
Bench: Amit Borkar
2026:BHC-AS:17138
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AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.1321 OF 2004
WITH
CIVIL APPLICATION NO.2598 OF 2005
Sarva Shramik Sanghatana,
through the Divisional Secretary, Trade
Union Centre, 101, Shivaji Nagar,
ATUL Pune 411 005 ... Petitioner
GANESH
KULKARNI
Digitally signed
by ATUL GANESH
KULKARNI
Vs.
Date: 2026.04.10
12:29:58 +0530
1. Gupta Steel Industries,
979 Laxmi Bazar, Bhavani Peth,
Pune 411 042
2. The Manager, Gupta Steel Industries,
979 Laxmi Bazar, Bhavani Peth,
Pune 411 042
3. The Managing Director, M/s. Jolly
Steel Industries (P) Limited,
33 Bund Garden Road, Pune 411 001
4. The Managing Director, Jolly Torsteel
Industries Pvt. Ltd., 33 Bund Garden
Road, Pune 411 001
5. The Member, Industrial Court, Pune
PMT Building, Swar Gate,
Pune 411 042 ... Respondents
Mr. Nitin A. Kulkarni for the petitioner.
Mr. Rutwij Bapat for respondent Nos.3 and 4.
1
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CORAM : AMIT BORKAR, J.
RESERVED ON : APRIL 9, 2026.
PRONOUNCED ON : APRIL 10, 2026
JUDGMENT:
1. By way of the present writ petition instituted under Articles
226 and 227 of the Constitution of India, the petitioner seeks to
assail the Judgment and Orders dated 19 July 2000 and 29 July
2002 rendered by the Industrial Court at Pune in Complaint (ULP)
No.150 of 1993.
2. The facts giving rise to the present petition, as set out by the
petitioner, may be stated thus. Pursuant to a lease deed dated 9
April 1980 executed between M/s Jolly Steel Industries and M/s
Gupta Steel Industries, the industrial establishment situated at
Nagar Road came to be taken on lease by M/s Gupta Steel
Industries, who is respondent No.1 herein. In terms of the said
lease arrangement, the employees working under respondent
Nos.3 and 4 were requisitioned by respondent No.1, and
accordingly approximately 50 employees came to be transferred to
respondent No.1 with continuity of service and without any
interruption in their past service. It is further the case of the
petitioner that respondent No.1 independently engaged more than
50 additional employees apart from those transferred. The
petitioner-Union was, even prior to the execution of the lease
deed, functioning as a representative union of the said employees.
It is the contention of the petitioner that respondent Nos.1 and 2
did not permit the employees to resume duties with effect from 6
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March 1993. In these circumstances, the petitioner-Union
instituted a complaint against respondent Nos.1 and 2, asserting
that despite the employees being ready and willing to discharge
their duties in accordance with the terms of employment, the
respondents failed to provide work from the said date. It was
further alleged that the respondents failed to perform their
corresponding obligations under the contract of employment and
did not permit the employees to resume duties from 6 March 1993.
No notice of such action was issued either to the employees or to
the petitioner-Union. According to the petitioner, such conduct on
the part of respondent Nos.1 and 2 amounted to serious unfair
labour practices. Consequently, the petitioner-Union lodged
Complaint (ULP) No.150 of 1993 before the Industrial Court at
Pune under Item 9 of Schedule IV of the MRTU and PULP Act,
1971.
3. The complaint, in the first instance, was instituted only
against respondent Nos.1 and 2. The said respondents filed a joint
written statement opposing the complaint. It was contended
therein that M/s Jolly Steel Industries had locked the premises and
that disputes in that regard were pending before the High Court. It
was further contended by respondent No.1 that the electricity
supply to the establishment had been disconnected by the
Maharashtra State Electricity Board. Additionally, it was asserted
that the employees had resorted to an illegal strike with effect
from 6 March 1993. On these grounds, the allegations of unfair
labour practices were denied.
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4. The Industrial Court at Pune, upon hearing the parties and
upon consideration of the material placed on record, passed its
order dated 29 July 2002 and partly allowed the complaint. Being
aggrieved thereby, the petitioner has preferred the present writ
petition, inter alia challenging the order dated 19 July 2000 passed
below Exhibit U-2, whereby the application seeking impleadment
of respondent Nos.3 and 4 came to be rejected, as well as the
order dated 27 July 2002, whereby the claim of the employees for
payment of full wages for the period from 6 March 1993 to 7
September 1996, being the period during which they were not
permitted to resume duties and possession of the industrial
establishment was handed over, came to be rejected.
5. Mr. Kulkarni, learned Advocate appearing on behalf of the
petitioner-Union, submitted that the petitioner had clearly
established that the employees were not permitted to resume their
duties with effect from 6 March 1993 and were also not paid
wages thereafter. It was contended that all the respondents were
jointly and severally liable for denying employment to the
workmen and for failure to pay full wages along with
consequential benefits for the period from 6 March 1993 to 7
September 1996. According to him, the finding recorded by the
Trial Court that the respondents were unable to provide work on
account of disconnection of electricity supply by the Maharashtra
State Electricity Board is erroneous and unsustainable. He
submitted that under the contract of employment, the obligation to
provide work squarely rested upon the respondents as employers,
and any failure in that regard would entail liability to pay full
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wages as if the employees had duly performed their part of the
contract. It was further urged that the responsibility to restore
electricity supply was that of the respondents alone, and the
employees could not be made to suffer on that account.
6. Learned counsel further submitted that the employees were,
at all material times, ready and willing to resume their duties and
to perform their contractual obligations. It was contended that the
failure of the respondents to permit the employees to resume work
necessarily imposed a corresponding obligation upon them to pay
full wages for the period from 6 March 1993 to 7 September 1996.
He submitted that the Trial Court has misread and misappreciated
the evidence on record in observing that the factory was closed on
6 March 1993, particularly when no such case was pleaded by
respondent Nos.1 and 2. On the contrary, it was pointed out that in
their written statement, respondent Nos.1 and 2 had asserted that
efforts were being made to restart the manufacturing activities at
the earliest. In such circumstances, it was submitted that the Trial
Court ought to have awarded full wages for the aforesaid period
during which the employees were kept out of employment despite
their readiness and willingness to work. Learned counsel further
placed reliance upon the definition of "closure" as contained in
Section 2(cc) of the Industrial Disputes Act, 1947, which defines
closure to mean the permanent closing down of a place of
employment or a part thereof.
7. It was further submitted that the Trial Court itself has
recorded a finding in paragraph 13 of its judgment that the failure
of respondent Nos.1 and 2 to provide work to the employees
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amounted to an unfair labour practice under Item 9 of Schedule IV
of the MRTU and PULP Act, 1971. In view of such a finding, it was
contended that the Trial Court ought to have granted appropriate
relief by directing the respondents to pay full wages to all the
employees for the period from 6 March 1993 to 7 September 1996,
during which period the employees were not permitted to resume
their duties.
8. Though duly served, none appears on behalf of respondent
Nos.1 and 2. It is further noted that respondent Nos.3 and 4 came
to be deleted by the petitioner before the Industrial Court.
9. I have considered the entire material placed before this
Court, the submissions of learned counsel for the petitioner, and
also the record of the proceedings as referred in the earlier
paragraphs. It is seen that the complaint was founded on a clear
case that the employees were not permitted to resume duties from
6 March 1993, although they were ready and willing to work and
that after that date no wages were paid to them. The grievance of
the Union is that the employer, namely respondent Nos.1 and 2,
failed in the basic duty of providing work and because of that
default the workmen were kept out of employment for a long
period ending on 7 September 1996. The whole claim rests on the
assertion that the employees were not at fault, and that they were
available for work, but the management did not take them back
and did not discharge its obligation under the contract of
employment.
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10. When this Court comes to clause 5(j), the clause is speaking
about liability at the time when employees are separated from the
Respondent Nos. 3 and 4. This refers to that stage when the
employees stopped being in service of the Respondent Nos. 3 and 4
and were shifted or transferred to another employer. So the
meaning has to remain around that moment only. It cannot be
understood that once employees are transferred still after many
years even when Respondent Nos. 3 and 4 have no control no
supervision and no connection with day to day work, they will
continue to remain responsible for everything that happens later.
11. This position becomes more clear when clause 5(j) is read
together with clause 5(i). Both clauses are part of same agreement,
and they must be read side by side. Clause 5(i) clearly says that
responsibility of paying wages and continuing employment is of
respondent No.2. This shows that after transfer respondent No.2
steps into the role of employer. Now if clause 5(j) is read in a very
wide manner, then it will disturb this balance. Because then one
side, that is respondent No.2, will enjoy benefit of labour and
control over business but Respondent Nos. 3 and 4 will be forced
to carry future risks like retrenchment or closure. The actual
conduct of respondent No.2 after the agreement also gives support
to this understanding. It is seen that respondent No.2 accepted the
employees, continued their services, and treated them as its own
workers. It did not act as if employees still belonged to Respondent
Nos. 3 and 4. In such a situation, later on it cannot turn around
and say that for retrenchment or for closure also Respondent Nos.
3 and 4 must take responsibility. That will mean respondent No.2
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takes benefit of labour when business runs, but shifts burden when
difficulty comes. Law does not support such separation of benefit
and burden in this manner.
12. Further, the consent terms relied upon by the Respondent
Nos. 3 and 4 also carry importance. These consent terms entered
into after dispute had already started. So, they show a clear and
conscious understanding between parties at that later stage. From
these terms it appears that respondent No.2 agreed to remain in
possession as agent of the Court Receiver and also agreed to hand
over possession within a fixed time. More importantly, it accepted
responsibility to clear liabilities connected with running of the
business. This expression "running of business" is includes paying
wages to workers, managing daily operations and also facing
consequences if business cannot continue or has to stop. Therefore
when respondent No.2 agreed to bear such liabilities, it cannot
later avoid them by shifting burden back to Respondent Nos. 3 and
4.
13. The complaint before the Industrial Court was that the
respondents had failed to allow the workers to resume duties and
had thereby committed unfair labour practice under Item 9 of
Schedule IV of the MRTU and PULP Act. The petitioner's stand is
that once such a finding is accepted, the natural and legal result
must be payment of full wages for the entire period during which
the employees remained idle without any fault on their part. The
petitioner says that no work was offered, no proper notice was
given, and no lawful reason was shown for keeping the workers
away. That submission carries substance, because employment
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relation does not permit an employer to simply keep a workman
waiting and then deny wages for that period.
14. The argument that the disconnection of electricity by the
Maharashtra State Electricity Board prevented the respondents
from giving work also does not fully answer the grievance of the
employees. A factory or industrial establishment may face many
difficulties. Yet such difficulty by itself does not erase the
employer's responsibility towards its workmen. If the management
was unable to run the factory, it was still required to take lawful
steps, give proper notice, and protect the service rights of the
employees. The mere fact that electricity was disconnected cannot
by itself shift the burden on the employees. They were not the
persons responsible for the supply arrangements. The obligation to
restore or arrange the electricity, for the purpose of running the
undertaking, was clearly on the employer. Therefore the finding
that because of disconnection of electricity the respondents could
not provide work cannot be treated as a complete answer to the
claim for wages.
15. The submission of learned counsel for the petitioner that the
employees were all along ready and willing to resume duties also
deserves acceptance on the material before the Court. No
convincing material is shown to hold that the workers abandoned
service or refused to work. On the contrary the complaint itself
proceeds on the basis that they were kept out of work by the
respondents. In labour disputes, when the employee is ready to
work and the employer does not permit him to work, the normal
rule is that the employee should not suffer loss of wages for that
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period. This is so because the workman was willing to render
service, but the contract was prevented from being performed by
the side which had control over the establishment. In such a
situation, equity and law both lean in favour of the workman,
unless the employer proves some clear legal justification.
16. The plea that the factory was closed on 6 March 1993 also
does not appear to be supported in the manner required. Learned
counsel for the petitioner is right in saying that this was not the
stand taken by respondent Nos.1 and 2 in the written statement.
Their own case was that they were making attempts to restart the
manufacturing activity at the earliest possible time. That statement
is not the same as a plea of permanent closure. Section 2(cc) of the
Industrial Disputes Act, 1947 which defines closure as permanent
closing down of a place of employment or part thereof makes the
legal position rather plain. A temporary stoppage, an interruption,
or a difficulty in operation is not the same thing as closure in law.
Therefore, when the respondents themselves were speaking of
restarting the factory the Trial Court should have been slow in
treating the matter as if there was a permanent closure so as to
deny wages for the entire disputed period.
17. The finding recorded by the Industrial Court in paragraph 13
of the judgment, that failure to provide work to the employees
amounted to an unfair labour practice under Item 9 of Schedule IV
of the MRTU and PULP Act also cannot be ignored. Once the Court
itself came to the conclusion that there was unfair labour practice
in not allowing the employees to work, the relief ought to have
followed the finding in a proper way. A declaration without full
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consequential relief in the facts of this case would make the
finding empty. If the employer was found guilty of keeping the
workmen away without lawful cause then full wages for the
relevant period was the just consequence. The employees should
not have been made to suffer for a situation which was found to be
the result of the respondents' own failure.
18. It is also material that the period in question is not a short
one. It runs from 6 March 1993 to 7 September 1996. During this
time, the employees were not allowed to resume duties, although
the petitioner says they remained willing to work. Such long
exclusion from work cannot be ignored. In labour matters, delay
and denial of work for years together has serious civil
consequences. The workman depends upon wages for survival.
When the employer keeps the workman out of work, it is not
proper to say that the workman should bear the whole loss. Unless
the respondents could show a clear legal impediment or
misconduct on the part of the employees, the burden of that period
ought to fall on the management.
19. The Trial Court therefore appears to have approached the
matter with undue emphasis on the disconnection of electricity
and on the supposed closure of the factory, while not giving proper
weight to circumstance that the employees were not allowed to
join duties despite readiness on their part. The written statement
of the respondents does not help them on the point of permanent
closure. Rather it shows an attempt to revive the work. That itself
indicates that the establishment was not treated by them as finally
shut down. In such a setting denial of full wages becomes difficult
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to sustain. The legal position is that where work is withheld by the
employer and the employee is willing to work wages normally
follow. The respondents cannot escape this consequence by taking
shelter under internal difficulty in running the factory.
20. For these reasons, the submission of the petitioner that the
employees were entitled to full wages for the period from 6 March
1993 to 7 September 1996 deserves acceptance. The respondents
failed to allow them to resume duties failed to establish any lawful
ground for such refusal, and also failed to show that the factory
had permanently closed within the meaning of law. The Industrial
Court rightly noticed the unfair labour practice, but it did not carry
that finding to its proper end. Therefore, the impugned part of the
order denying full wages cannot be sustained. The petitioner has
thus made out a case for interference in writ jurisdiction. The
workmen were kept out of service without their fault, and in law
and justice they ought to be compensated by payment of full
wages for the said period, along with all consequential benefits as
may follow in accordance with the service record and applicable
law.
21. In the result, the writ petition succeeds.
(i) The impugned Judgment and Orders dated 19 July
2000 and 29 July 2002 passed by the Industrial Court, Pune
in Complaint (ULP) No.150 of 1993 are hereby quashed and
set aside to the extent they deny full wages and
consequential benefits to the employees for the period from
6 March 1993 to 7 September 1996;
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(ii) It is declared that respondent Nos.1 and 2 have
engaged in unfair labour practice under Item 9 of Schedule
IV of the MRTU and PULP Act, 1971 by not allowing the
employees to resume duties during the aforesaid period;
(iii) Respondent Nos.1 and 2 are jointly and severally
directed to pay full wages to the concerned employees for
the period from 6 March 1993 to 7 September 1996, along
with all consequential benefits arising therefrom, as if the
employees had continued in service without interruption;
(iv) The said amount shall be computed and paid within a
period of twelve weeks from the date of this order, failing
which the amount shall carry interest at the rate of 9 percent
per annum from the date it became due till realization;
(v) Rule is made absolute in the above terms. No order as
to costs.
22. In view of disposal of the writ petition, all pending interim
applications stand disposed of accordingly.
(AMIT BORKAR, J.)
