Avtec And Hindustan Motor Shramik ... vs Labour Department
2021 Latest Caselaw 6606 MP

                                        - : 1 :-



        THE HIGH COURT OF JUDICATURE FOR MADHYA
                PRADESH :BENCH AT INDORE

             (S.B.: HON'BLE Mr. JUSTICE VIVEK RUSIA)

                           Writ Petition No.5344/2020

 Petitioner No.1:-         Avtec & Hindustan Motors Shramik Sangh,
                           Pithampur, District Dhar Through- General
                           Secretary Mr. Vijay Patil, Address:- B/M150,
                           Housing Board Colony, Pithampur, District-
                           Dhar(M.P.)
 Petitioner No.2:-          Mr. Vishal Vairaghar S/o Late Shri Vishnupant,
                           Address-181, Sahakar Nagar, CAT square,
                           Indore (M.P.)
                           Versus
 Respondent No.1:-         State of M.P. through Principal Secretary,
                           Labour Department, Vallabh Bhawan, Bhopal
                           (M.P.)
 Respondent No.2:-         Labour Commissioner & Specified Authority for
                           retrenchment under Industrial Dispute Act, 1947,
                           Department of Labour, Moti Bungalow,
                           M.G. Road, Indore (M.P.)
 Respondent No.3:-          Avtec Limited, Through its factory Manager &
                            Vice-President, Avtec Limited, Sector-III,
                            Pithampur, District-Dhar (M.P.)
-----------------------------------------------------------------------------------------
           • Shri Brien DeSilva, learned senior counsel with Shri
               Dharmendra Kumar Sharma with Shri Shashank Sharma,
               learned counsel for the petitioner.
           • Ms. Archana Kher, learned Dy. A.G. for the respondent nos.1
             and 2.
           • Shri Jamshed Cama, learned senior counsel with Ms. Kirti
             Patwardhan, learned counsel for respondent no.3.
-----------------------------------------------------------------------------------------
                                   ORDER

(Reserved on 23.09. 2021) (Passed on 21.10 2021)

The petitioners have filed the present petition being aggrieved by the order dated 14.02.2020 passed by respondent no. 2 under section 25(N)(6) of the Industrial Dispute Act, 1947.

2. Facts of the case in short are as under: -

- : 2 :-

i. The petitioner No.1 is a Trade Union duly registered under the provisions of the Trade Union Act,1926. The members of the union are the workers who are engaged in the Engineering Industries within the local industrial area of Pithampur, District-Dhar. Shri Vijay Patil General Secretary is authorized to file the present writ petition on behalf of petitioner No.1. Petitioner no.2 is an individual worker working in the undertaking of respondent no.3 at Pithampur claiming to be affected by the impugned action.

ii. Respondent No.2 is the specified authority appointed by the appropriate government under the Industrial Dispute Act,1947. Respondent no.3 is a company registered under the Companies Act having its manufacturing unit within the Industrial Area, Pithampur, District- Dhar. Respondent no.3 being an employer filed an application dated 25.10.2019 section 25(N)(1) of the Industrial Dispute Act,1947 before respondent no.2 seeking permission to retrench 217 workers out of total 356 workers on the grounds of financial crises, lack of demand and production. Petitioner no.1 appeared before respondent no.2 with the intention to object retrenchment of its members, by way of filing an application dated 26.11.2019. Vide order dated 19.12.2019 the respondent no.2 has rejected the application filed by respondent no.3 with the liberty to file a fresh application in a proper format. The petitioner challenged the aforesaid liberty granted to respondent no.3, by way of writ petition no.247/2020 before this High Court.

iii. Meanwhile respondent no.3 had filed a fresh application under Section 25(N)(1) of the Industrial Dispute Act,1947. The petitioner appeared and contested the aforesaid application inter alia on the ground of maintainability of the subsequent application which is filed within one year.

iv. After considering the grounds taken in the application and the objections submitted by the petitioners, respondent no.2 vide order dated 03.02.2020 has granted permission to respondents No. 3 to retrench 217 workers subject to the conditions of compliance of provisions of payment

- : 3 :-

of three months wages, retrenchment compensation benefits and other statutory benefits admissible under Section 23(N)(9) of the Industrial Dispute Act,1947.

v. After passing the order dated 03.02.2020, the petitioners have withdrawn the writ petition No.247/2020 having been rendered infructuous.

vi. The petitioner no.1 and its members have filed an application before respondent no.2. seeking reference of the industrial dispute of retrenchment of 217 workers to the Tribunal for adjudication. Vide impugned order dated 14.02.2020 respondent no.2 has declined to review the order as well as to refer the dispute for adjudication before the Industrial Tribunal. Vide another order dated 14.02.2020 an application filed by the three workers have also been rejected hence the present petition before this Court.

3. Shri Brien DeSilva, learned senior counsel appearing for the petitioners argued that respondent no.3 filed an application under Section 25(N)(1) of the Industrial Dispute Act,1947 on 25.10.2019 but it was rejected as no prior notices were given to the workers which amount to a rejection of application seeking retrenchment under Section 25(N)(3) of the Industrial Dispute Act,1947. The specified authority appointed by the appropriate government has no authority to give liberty after the rejection of the application. Therefore, in view of Section 25(N)(5) of the Industrial Dispute Act,1947 the second application could not have been filed before the expiry of one year from the date of the order dated 25.10.2019. Since under section 25(N)(3) of the Industrial Dispute Act,1947 the specified authority has no authority to grant liberty to file a fresh application, hence the subsequent proceedings undertaken on the second application are without jurisdiction and liable to be quashed. It is further submitted by learned senior counsel that even if the second application has been entertained there were no valid grounds to grant permission to retrench 217 workers when the undertaking was running into the profit. The retrenchment is nothing but victimization and termination by misusing the

- : 4 :-

provisions of law.

4. Shri Brien DeSilva, learned senior counsel has further argued that even though the permission has been granted to retrench vide order dated 03.02.2020 then on applications filed by the petitioners as well as by the workers for referring the dispute to the Industrial Tribunal ought to have been allowed. If the specified authority has declined its review order dated 03.02.2020 then the dispute ought to have been referred to the Industrial Tribunal for adjudication as the word 'or' is liable to be read as 'end' as held by the Apex Court in cases of Workmen of Meenakshi Mills Ltd. and others V/s Meenakshi Mills Ltd. and another reported in (1992) 3 SCC 336, Bharat Bank Ltd., Delhi V/s Employees of the Bharat Bank Ltd. And others reported in AIR 1950 SC 188 and Sarva Shramik Sanghatana (KV), Mumbai V/s State of Maharashtra and others reported in (2008) 1 SCC 494. It is further submitted by the learned senior counsel that rejection of the application for review as well as the reference of the dispute to the tribunal for adjudication amounts to rendering the petitioners and its members remedy less/ non-suiter which cannot be an intention of the Industrial Dispute Act. Hence, the impugned orders are liable to be set aside. Shri DeSilva has concluded his submission by placing reliance over the judgment passed by the Apex Court in the case of Orissa Textile & Steel Ltd. V/s State of Orissa and others reported in (2002) 2 SCC 578 in which the Apex Court has held that while considering the application filed under Section 25(O)(5) of the Industrial Dispute Act,1947 the specified authority performs the quasi-judicial function, hence word "MAY" occurring therein should be read as "SHALL". It has been further held that the provision of Section 25(O) and 25(N) of the Industrial Dispute Act,1947 is in substance akin to Section 25(N) of the Industrial Dispute Act,1947 as both are in chapter V of the ID Act . The object and reasons of these provisions are the same, therefore while exercising powers under Section 25(N) of the Industrial Dispute Act,1947 also the specified authority must act judicially.

5. Per contra Ms. Archana Kher, learned Dy. Advocate General

- : 5 :-

appearing on behalf of respondents nos.1 and 2. refuted the aforesaid arguments by submitting that issue involved in this writ petition is no more Res integra as in the case of Cable Corporation of India Limited V/s Addl. Commissioner of Labour and others reported in (2008) 7 SCC 680 the Apex Court has held that the word "or" in Section 25(N)(6) of the Industrial Dispute Act,1947 is a disjunctive and a plain reading of the provisions makes the position clears that two courses are open to the appropriate government either on its own motion or on an application made, review it's order or refer the matter to the Industrial Tribunal. Once the review has been dismissed then the authority has no jurisdiction to refer the matter to the tribunal. Hence, the authority has refused to review the order dated 03.02.2020 then the relief claimed by the petitioner seeking reference to the tribunal is not tenable. Hence, the writ petition is liable to be dismissed.

6. Shri Jamshed Cama learned senior counsel appearing for respondent no.3 submits that union is nothing but a group of workmen. Once the notice was served to the union and the union has filed the objection then it amounts to serving each and every worker as held by the Apex Court in the case of Madhi V/s Mahanbai And Others reported in AIR 1972 SC 1455. It is further by learned senior counsel submitted that Section 25(N)(3) of the Industrial Dispute Act,1947 gives power to the specified authority to adjudicate the issue of retrenchment after giving reasonable opportunity of being heard to the employers, the workmen concerned, and the person interested and after reasons to be recorded in writing grant or refuse to grant such permission. The first application was dismissed without adjudication as the application was not in a proper format hence there was no adjudication, therefore, the order cannot said to be passed under Section 25(N)(3) of the Industrial Dispute Act, 1947 refusing retrenchment. The fresh application has rightly been entertained as the liberty was granted and the bar of one year would not apply. In support of his contentions, learned senior counsel has placed reliance on the judgment passed by the Apex Court in the case of Sarva Shramik

- : 6 :-

Sanghatana (K.V)... vs State Of Maharashtra And Others reported in AIR 2008 SC 946. It is further submitted by the learned counsel that the petitioner has unsuccessfully challenged the order dated 19.12.2019 by filing writ petition W.P. No.247/2020 which he has withdrawn without liberty therefore, now this ground is no more available to the petitioner to be raised in this petition. It is further submitted that in view of the law laid down in the case of Cable Corporation of India Ltd. (supra) once the application for review or recall has been dismissed the appropriate authority cannot refer the dispute to the Industrial Tribunal for adjudication. Only two options are available to the specified authorities either to consider the review application to review its order or refer for adjudication to the Industrial Tribunal, after exercising one option another cannot be exercised. Hence, the petition is sans merit and substance and is liable to be dismissed.

I have heard the learned senior counsel for the parties and perused the record.

7. Respondent no.3 filed an application under section 25(N)(1) of the Industrial Dispute Act,1947 on 25.10.2019 seeking retrenchment of 217 workers. The said application was opposed by petitioner No. 1 with an specific objection that the copy of the application was not supplied to all 217 workers individually as per the requirement of the section. On such objection, the hearing was fixed for 18.12.2019. On 18.12.2019 arguments were heard, and the matter was reserved for the order. Respondent no.2 vide order dated 19/20.12.2019 has held that the provisions of Rule 76-A (3) of the M.P. Audyogik Vivaad Adhiniyam,1957 has not been followed therefore, prima facie application for retrenchment is not liable to be considered hence rejected however, liberty has been granted to file a fresh application after rectifying the defects.

8. Petitioner No. 1 challenged the aforesaid order by way of WP No.247/2020 before this Court. Since there was no such stay in the said writ petition by this court, therefore, respondent no.3 had filed a fresh application after serving to all the 217 workers which has been finally

- : 7 :-

decided vide impugned order dated 03.02.2020. Once the petitioners have withdrawn the writ petition No. 247/2020, the issue of grant of liberty by respondents No.2 to respondents No.3 cannot be re-agitated in the present writ petition. The petitioners ought to have sought liberty in earlier writ petition no.247/2020 to challenge this question of liberty by way of the subsequent writ petition. Since the liberty was not obtained, therefore, the petitioners cannot be permitted to challenge the issue of liberty for granting filing of fresh application. In the case of Sarguja Transport Service vs. State Transport Appellate Tribunal, Gwalior and others reported in AIR 1987 SC 88 the Apex Court has laid down that if a writ petition filed in a High Court is withdrawn without permission to file a fresh writ petition, a second writ petition for the same relief is barred. Hence, the petitioners are barred to challenge this issue of liberty to file fresh application in this writ petition.

9. Shri Cama learned senior counsel for respondent no.3 has argued that that Section 25(N)(3) of the Industrial Dispute Act,1947 contemplates an enquiry in respect of retrenchment of a workman and after considering the material and other relevant factors by order and for reasons to be recorded in writing the authorities may grant or refuse to grant such permission. A complete adjudication is required under subsection (3) of section 35-N before taking a final decision of grant of permission or rejection. There was no adjudication in respect of grant or refusal to permission, therefore, that order dated 25.10.2019 cannot said to have been passed under Section 25(N)(3) of the Industrial Dispute Act,1947 hence, the principles of Res judicata would not apply and bar of one year under sub-section (5) would also not apply because there was no refusal of retrenchment after adjudication. Hence, the ground taken by Shri Desilva learned senior counsel is not tenable that subsequent application is not maintainable as the same was filed within one year from the rejection of the first application.

Now the sole issue which requires consideration as to whether respondent No.2 has committed an error of law in refusing to refer the

- : 8 :-

dispute to the Tribunal?

10. After passing the impugned order dated 03.02.2020 the petitioner No.1 has filed an application seeking reference of the dispute to the industrial tribunal. The relief claimed in the Annexure-P/7 is reproduced as below: -

"vr% Jheku ls fuosnu gS fd vkids }kjk ikfjr vkns'k fnukad 03- 02-2020 dks vkS?kksfxd fookn vf/kfu;e 1947 dh /kkjk 25&,u ¼6½ ds vUrxZr U;k;fu.kZ;kFkZ ekuuh; vkS?kksfxd U;k;f/kdj.k e/;izns'k bUnkSj dks lanfHkZr djus dk d"V djsaA bl gsrq vki iwoZ izLrqr ekuuh; loksZPp U;k;ky; ds U;k; n`a"Vkr mMhlk VsDlVkbZYl dk iqu% voyksdu djsaA "

Aforesaid application was considered by the specified authority as the petitioners are seeking review but the same was filed for seeking reference to the tribunal. Vide impugned order dated 14.02.2020 Respondent No.2 has not only dismissed the application filed for seeking reference and also declined to review. Another application was filed by three workmen namely Ravindra Mujhati, Umesh Kumar Singh and Nirbhay Singh Raghuwanshi seeking review of the order dated 03.02.2020 but they are not writ petitioners before this court. That vide order No.02/30/rhu/2019/9237-39 Indore, dated 14.02.2020 the respondent no.2 has rejected the same by passing a separate order dated 14.02.2020. Both applications were considered by registering two different cases. These three workmen have not filed the present writ petition before this Court. The present petitioners are not bound by the order No.02/30/rhu/2019/9237-39 Indore, dated 14.02.2020 passed in the case of the above three workers. Petitioner no.1 has filed an application seeking reference to the tribunal for adjudication not the review of order dated 03.02.2020 hence the application ought to have been considered only on the issue of reference to the tribunal.

11. In the case of Cable Corporation of India Ltd. (supra) the Apex Court has held that once the authority has declined to review the order then the order for reference cannot be passed to the tribunal for adjudication because the word "OR" used in it. It is correct that the

- : 9 :-

authority in the exercise of power under Section 25(N)(6) of the Industrial Dispute Act,1947 either on its own motion or application made by the employer/or any workmen review its order granting or refusing to grant permission of retrenchment or refer the matter to the Tribunal for adjudication as may be. If the application for review is dismissed, then the authority would be denuded with the power to refer the dispute to the Tribunal or vice verca. In the present case, the petitioners did not seek the review of the order granting permission to retrench the 217 workers and only prayed for reference to the Industrial Tribunal for adjudication. then authority vide order No.02/30/three /2019/9246-47 Indore, dated 14.02.2020 has wrongly passed the order for rejecting review as well as reference both. Once the petitioners have sought only reference then the authority ought to have considered the prayer for reference alone not the review of its order. Under section 25(N)(6) the option is available to the workmen/ trade union as well as to the employer either to seek review or the reference. Once either party has chosen to reference then the application ought to have been considered for reference alone.

12. The learned Authority has rejected the application for reference only on the ground that the order dated 03.02.2020 has been passed considering all the materials as well as objections by the petitioner and no ground for reference or review is made out. This court has perused the order dated 03.02.2020 by which the permission of retrenchment was granted to respondent No.3. In this order also by recording the contentions of both the parties and the authority has simply held that respondent no.3 has successfully established that the company is going into losses, reduction of production and if the permission of retrenchment is not given then the stage of closure would arise rendering all the workers jobless. In my considered opinion authority did not Act judicially, the dispute is liable to be examined by the Tribunal as it involves the retrenchment of 217 workers.

13. The constitutional bench of Apex Court in the case of Orissa Textile and Steel (supra) has held that the word "MAY" in Section 25(O)

- : 10 :-

of the Industrial Dispute Act,1947 means "SHALL" thus the appropriate authority shall review the order if an application is filed on behalf is made by the employer or the workmen. Similarly, if so, required the employer or the workmen authority shall refer the matter to the tribunal for adjudication. In exercising the power of review the appropriate government would be performing the quasi-judicial function. In this judgment, the Hon'ble Apex Court has also held that section 25(O) of the Industrial Dispute Act,1947 is in substance akin to section 25(N) of the Industrial Dispute Act,1947.In the case of Meenakshi Mills Ltd.(supra) Hon'ble the Supreme Court of India has held that Section 25(O) of the Industrial Dispute Act,1947 has been enacted to give effect the directive principles of the constitution and the language of section 25(O)(5) of the Industrial Dispute Act,1947 (amended) and Section 25(N)(6) of the Industrial Dispute Act,1947 (amended) are identical and an appropriate government on an application for reference shall refer to the tribunal.

14. In my considered opinion this issue requires adjudication by Industrial Tribunal because this is a question of loss of employment of 217 workers on the ground of company going into losses and adjudication by the tribunal is required in this matter, therefore, impugned order dated 17.02.2020 is hereby set aside and the respondent no.2 is directed to refer the dispute to the tribunal for adjudication. Accordingly, this writ petition is allowed.

No order as to cost.

(VIVEK RUSIA) JUDGE Ajit

AJIT Digitally signed by AJIT KAMALASANAN DN: c=IN, o=HIGH COURT OF MADHYA PRADESH BENCH INDORE, ou=HIGH COURT OF MADHYA PRADESH BENCH INDORE, postalCode=452001, st=Madhya

KAMALASA Pradesh, 2.5.4.20=156c9cedca1b74d671db9f220a5e3ed6cba241e ffad892107d95ef0a1afc55b4, pseudonym=CFDFD9C36711CA738F527A5D61A1EE901 C09EF29,

NAN serialNumber=7F0BEE2D78BD57DA058F3247441C87E7 E0817FB61F5E2ABCAEE63CAAA7B3B9FF, cn=AJIT KAMALASANAN Date: 2021.10.21 16:57:51 +05'30'