Calcutta High Court
Asansol Iron And Steel Workers' Union vs Union Of India (Uoi) And Ors. on 16 December, 2005
Equivalent citations: 2007(2)CHN209
JUDGMENT Arun Kumar Mitra, J.
1. Asansol Iron & Steel Workers' Union represented by its Vice-President has moved this writ petition challenging an order dated March 10, 2003 under Ref. No. EL/OD/6/444 issued by Assistant Manager (Personnel), O.D. Through the said circular the Assistant Manager directed inter alia to the extent that all those employees who do not opt for voluntary retirement within 31" March, 2003 would be eligible only for retrenchment compensation as per the Government of India O.M. No. 2(32)/97-DPE (W.C.) dated 5th May, 2000. The petitioner has challenged this memo taking it as termination of employment of those workers who do not opt for VRS.
Background
2. In the year 1870 Mr. James Erskine founded Bengal Iron Works. In 1880-81 Bengal Iron Works carried on operation in the name of Barakar Iron Works. In 1889 Barakar Iron Works was acquired by Bengal Iron and Steel Company Ltd. In 1892 Mannging Agency passed into the hands of M/s. Martin & Co. and in 1926 name of the company was changed into Bengal Iron Company Ltd. In 1936 Bengal Iron Company Ltd. merged with Indian Iron and Steel Company Ltd. In 1972 Management of Indian Iron and Steel Company Ltd. was taken over by Government of India on 14/07/ 1972.
3. On 30/04/1978 the company became subsidiary of Steel Authority of India Ltd. In 1994 the company became sick within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985 and it was referred to Board for Industrial and Financial Reconstruction (BIFR). The company was registered as Case No. 505/94 by the said Board. On 5th May, 2000 Voluntary Retirement Scheme was introduced in the company. On 01/01/ 2003 respondent authorities issued a circular by which they directed the workers of the company to submit their application for VRS to their respective heads of department for further processing. In this circular last date for submission of application for filing such VRS was stated to be 31/01/ 2003. Thereafter, on 31/03/2003 respondent authorities issued another memo informing that VR applications submitted by different workers are under finalization. On 02/04/2003 the Secretary of the petitioner informed the respondent authorities about the meeting of the Prime Minister and requested him to maintain status quo as on 31/03/2003 to avoid further complications. However, the subject-matter of challenge is the said order dated March 10, 2003 being Annexure 'P6' to the writ petition.
4. The petitioner prayed for writ of mandamus commanding the respondent authorities to rescind, withdraw and/or cancel the said memo and not to give any effect also to the said memo.
5. The petitioner also prayed for a writ of mandamus commanding the respondent authorities to revoke, rescind, withdraw and/or cancel any decision to terminate the service of the members of the petitioner.
6. The petitioner further prayed for a writ of mandamus commanding the respondent authorities not to sale the Kulti plant without re-absorbing the members of the petitioner in the other units of respondent Nos. 2 and 4.
7. Affidavit-in-opposition has been filed on behalf of the respondents. The respondent No. 4 affirmed the affidavit, challenged the maintainability of the writ petition and stated in the affidavit that the writ petition affirmed on 23rd April, 2003 by Sri Ajit Banerjee describing himself as the Vice-President of the petitioner (copy of which has been served on him) is not maintainable. There is no resolution annexed to the extent that who are the members of the petitioner Union or whether said Ajit Banerjee was the Vice-President of the Union at all or not and in fact the respondents denied the claim of Sri Ajit Benerjee that he is the Vice-President. The respondent authorities also said that Sri Ajit Banerjee, son of Late Gopal Das Banerjee is not at all an employee of Indian Iron and Steel Company Ltd. (IISCO), Kulti Works and he never working there.
8. The respondent authorities categorically denied that office address which has been shown being Qtr. No. JS/7 East Town, P.O.-Kulti insofar as the petitioner is concerned is not correct.
9. It has also been stated in the opposition that the petitioner claimed that they are representing 1500 workers but the list of such workers have not been given and in the said paragraph 5.3 of the opposition it has also been stated that almost all the workers have already been released from the services of the company as against VRS w.e.f. 31st March, 2003 barring a few who have been engaged for essential services.
10. The respondent authorities stated that it is not acceptable that the writ petitioners are entitled to represent and/or are actually representing the workmen employed by IISCO, Kulti Works.
11. Apart from the maintainability point, the respondent authorities denied the allegations made in the writ petition categorically and paragraphwise. It has been stated that Kulti Works has an old and obsolete plant without any modernization which has suffered continuous losses over the years and has now become unviable.
12. It has further been stated in the opposition that from the allegations of the writ petitioner itself it is clear that Kulti Unit has been suffering the loss immensely for years together for which the authorities approached the Kulti Workers to accept VRS and almost all the workers, as has been stated earlier, have been released from the services of the company as against VRS.
13. Kulti Works has been incurring loss since 1985-86 and in the opposition it has been categorically stated that Kulti Works never received any order worth Rs. 76 crores as has been wrongly canvassed in the writ application and as such earning on such order is nothing but an imaginary statement which has no basis at all. Voluntary Retirement Scheme for IISCO, Kulti Works was implemented as part of the rehabilitation proposal approved by the Government of India for which a sum of Rs. 186 crores as grant has been sanctioned. This grant of Rs. 186 crores was issued only in respect of Kulti Works. It has also been mentioned in the said letter that this a time bound programme. In the circular/order impugned it has only been stated that who are not interested to accept VRS within 31st March, 2003 will be allowed retrenchment compensation. The respondent authorities denied that this is termination of service of the employees of Kulti Iron Works.
14. It has been stated in paragraph 5.10 of the opposition that the respondent No. 4, Indian Iron and Steel Company Limited has not received any communication from the Ministry of Steel, Govt. of India regarding the viability of Kulti Works after the meeting of MPs and the Hon'ble Prime Minister which is stated to have been held on 13th March, 2003. It has been alleged in the said paragraph that the petitioners have misunderstood or misread the provisions of circular dated 31" March, 2003 which is Annexure 'P8' to the writ petition.
15. It is stated in the opposition that on the basis of the representation made by some of the Hon'ble MPs to the Hon'ble Prime Minister for revival of Kulti Works of IISCO a few MPs met the Hon'ble Prime Minister and had a discussion with him regarding the revival of Kulti Works of IISCO. After a thorough examination of the matter the Ministry of Steel, Govt. of India had on or about 7th May, 2003 commented as follows:
a) IISCO is a sick unit and is under BIFR since 1994 but the Government has considered its revival in its entirety. It is apparent even though Burnpur Works and collieries and mines can be revived Kulti Works are not viable owing to high fixed cost besides as well as competition from substitute products which have been corroding the demand and profitability of C.I. spun pipes. On account of introduction of continuous casting in SAIL plant, demand for ingot moulds and bottom plates has come down putting an additional stress on the viability of those works.
b) Taking an overall view of the best interest of the company it has been considered prudent to make efforts for revival of Burnpur Works and collieries and mines where returns are assured. SAIL is therefore, formulated rehabilitation package.
c) The examination proposal has been examined by IDBI and M/s. Dasturco. and has been found in order.
d) Ministry of Steel has already released Rs. 186 crores for the VRS of Kulti Works and VRS has been launched and all but 34 employees have applied for VRS. 1705 employees (16 executives and 1689 non-executives) have already been released till date. After this only a few employee will be left on rolls of Kulti Works who will be not sufficient for any operation of Kulti.
e) The entire process of formulation of the rehabilitation proposal was based on Cabinet's approval. The proposal is at the final stage of approval by BIFR and any change in the Cabinet's decision at this stage may affect the final approval of the rehabilitation proposal of IISCO by BIFR.
16. It has further been stated that the Chief Personnel Manager, Kulti issued the circular on 31st March, 2003 inter alia stating that since most of the employees have submitted VRS and had requested for their release it was necessary to retain some employees for discharging essential services like water supply, maintenance of equipments etc.
17. It has also been stated that grant of retrenchment compensation to the employees in view of the closure of establishment is provided in the Industrial Disputes Act and hence taking action in this regard is not only in violation of any provision of law but in strict compliance of statutory provisions.
18. In the opposition the respondent authorities denied that providing VRS to the employees' tantamounts to terminating the services; no question of threat is there.
19. It has further been stated in the opposition that the deponent of the writ petitioner Sri Ajit Banerjee is not working at all in Kulti Works, he never worked in Kulti Works. It has again been denied that the petitioner is representing 1500 workers.
20. In the opposition the allegations made in paragraphs have been categorically denied and disputed. The respondent authorities further denied that the said Kulti plant is capable of earning greater revenue per unit investment than any other unit of respondent No. 4 as alleged.
21. It has been categorically stated in paragraph 11 of the opposition that Kulti Works has been incurring loss for the last several years and the salaries and other expenses of the said unit are being made by financial assistance from other units of IISCO and after considering the pross and cons of the entire matter in particular and after considering the huge loss year after year the Central Government has decided to close down the operation of Kulti unit of IISCO and granted 186 crores for releasing the employees/ workers in Kulti Works on Voluntary Retirement Scheme. The respondents annexed a copy of the letter as Annexure 'R-l' which shows that the Government has resolved to close down the Kulti Works. The circular which has been challenged was issued in terms of the clear guidelines of DPE and in issuing the said circular the respondent No. 4 has not violated any of the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985.
22. It has been further stated that most of the employees have accepted voluntary retirement, only a few employees are trying to maintain this writ petition with a mala fide intention.
23. In the opposition the grounds made out in the writ petition have been disputed.
24. The opposition speaks of dismissal of the writ petition.
25. Reply to the opposition has been filed in which the allegations made in the opposition had been denied and the statements made in the writ petition had been reiterated.
26. In the reply it has been stated that it is true that deponent Sri Ajit Banerjee is not working as an employee of IISCO, Kulti Works but he is the Vice-President of the Asansol Steel Workers' Union, Kulti whose Registration No. is 536 and which has a membership strength of 1500 workers of Kulti prior to 31st March, 2003. It has been stated that due to some typographical mistakes in the affidavit portion of the writ petition it was printed that the deponent is working for gain at IISCO Kulti Wroks which was overlooked by both the deponent and the learned Advocate on record at the time of affirming the said affidavit and the mistake was done unwillingly for which the petitioner prayed for unconditional apology. In the reply it is also stated that it is true that being the Vice-President the petitioner is using Qtrs. No. JS/7 at East Town, Kulti as his office as and when required and the said quarter has been allotted to one Sri B.N. Pandey, who is the Treasurer of the petitioner Union and an employee of IISCO, Kulti Works. In the last meeting of the BIFR held in New Delhi on 14/02/2003 it was mentioned that the office of the above Union is situated at Qtrs. No. JS/7 at East Town, Kulti and BIFR accepted the same and sent the minutes of the proceedings to the same address.
27. It has been stated in the reply that it is a fact that IISCO, Kulti Works is old plant established in 1870 and rendered tremendous performance for more than 100 years and served the country as a whole being the oldest iron and steel factory as a whole being the oldest iron and steel factory in Asia. It was the mother unit of IISCO as a whole.
28. It has also been stated that due to the conspiracy and step-motherly attitude of IISCO Management the interest of Kulti has been ignored with a plan to close down Kulti Works.
29. It has further been stated in the reply that it is learnt that due to some extraneous consideration taking by some higher officials IISCO Management, from few other private companies the IISCO Management is conspiring to close down Kulti Works. Although there are ample order of foundry products and spun pipes supply the IISCO Management in connivance with other private companies is planning to close the Kulti Unit.
30. It has further stated in the reply that due to non-supply of raw material from Burnpur and shortage of manpower Kulti has been experiencing a loss of production and failed to achieve any profit for the last few years only but it is not that Kulti alone but excepting Gua Ore Mine every other works of IISCO are incurring huge losses and as a result the respondent IISCO was referred to BIFR in 1994.
31. It is stated that on behalf of the petitioner/Union a proposal was submitted before the BIFR to the effect that IISCO Kulti Works can easily be made viable by way of investment of Rs. 20 to 30 crores only and the petitioners did not accept the closure of Kulti Works. After hearing all the parties BIFR directed IDBI (operating agency) to discuss the proposal submitted by IISCO Management in a joint meeting within six weeks from the date of the said hearing and to submit a status report along with a draft rehabilitation scheme and minutes of joint meeting duly signed by all the participants in full with designation list by 31st March, 2003.
32. The petitioners also stated in the reply that surprisingly till date no joint meeting was held. The petitioner also stated that in the meantime by virtue of circular dated 10th March, 2003 issued by the Chief Personnel Manager, IISCO, Kulti Wroks the Management threatened the employees to submit their voluntary retirement within 31st March, 2003 by saying that if they do not do so, then they will be retrenched.
33. The petitioners further stated in the reply that there is clear violation of the directive of BIFR and said that some employees have been transferred to Kulti Works from Ujjayani plant, Chasnalla, Jitpur, Ramnagar Colliery in order to thrush upon the Kulti Works additional financial burden so that Kulti might incur more and more financial losses.
34. The petitioners further annexed a letter being Annexure 'R-3' written by Sri Borjomohan Ram, MP addressed to the Cabinet Secretary but no positive step has been taken as yet.
35. Now, this is the position of Kulti Iron Works. It is relevant or pertinent to mention in this context that an application for vacating the interim order passed by Hon'ble Justice Amitava Lala to maintain statua quo was filed being G.A. No. 3775 of 2003. The said application for vacating was heard and this Court passed an order that the employees whose VRS have been accepted will not be permitted to withdraw and the company was directed to release the voluntary retirement amounts to the said employees, if not already paid. This application for vacating was disposed of in this manner. At certain point of time the matter went up to Supreme Court and the Hon'ble Apex Court observed to the extent that since it is submitted that most of the employees have accepted voluntary retirement the petitioners should approach the Trial Court for hearing of the main matter insofar as the rest of the employees are concerned. The Hon'ble Apex Court also granted liberty to raise the point of maintainability before the learned Single Judge Bench.
36. Heard the learned Counsel for the parties.
37. The admitted position is that in or about 1994 Indian Iron and Steel Company became sick within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter termed as said Act). Thereafter, it was referred to BIFR. It may be mentioned in this context that the Government took over the management of the company in 1972 followed by taking over of IISCO shares in 1976 by an act viz. Indian Iron and Steel Company Acquisition Act, 1976. In 1978.79 the shares of IISCO were transferred to Steel Authority of India Ltd. and IISCO became a wholly owned subsidiary of SAIL. It is also submitted on behalf of the petitioners that in spite of sickness of respondent No. 4 authorities the said Kulti plant has bagged orders worth Rs. 76 crores. In this context it may be mentioned that on behalf of the petitioners as well as the respondents written notes of submission have been filed as well as the arguments have been advanced by their learned Counsels.
38. It is also submitted that the plant of Kulti is capable of earning greater revenue per unit investment than any other unit of the respondent authorities. The said plant of the respondent authorities manufactures components and spare parts for iron and steel plants of all types and also spun pipes which are widely used by Government authorities and on Municipalities and/or Municipal Corporations. In the said plant there is a general casting shop, a pattern shop, machine shop, a non-ferrous foundry, a steel foundry, a light castings foundry, two spun pipe plants, maintenance deptt., inspection deptt, for the products of the said plant, a material deptt., laboratory etc. The products of the said plant include ingot moulds, bottom plates, slag pot, spun pipes, various foundry products for iron and steel plant.
39. It is further submitted that BIFR has already framed a scheme for rehabilitation on 20/11/2003 against which the petitioner Union has preferred an appeal before the AIFR which is still pending. Thereafter, news items were published from which the members of the petitioners understood that SAIL/IISCO Management has prepared revival package of IISCO which has been approved by the Cabinet for submitting the same before BIFR.
40. Thereafter, the memo dated 01/01/2003 and direction from the respondent authorities to submit voluntary retirement. Then again by virtue of circular dated 31/01/2003 referred to above, the last date of submission of voluntary retirement was extended up to 15/02/2003. Then again the date was extended till 31/03/2003 and now, according to the petitioners there was threat of retrenchment if voluntary retirement is not accepted.
Submissions:
41. The arguments advanced on behalf of the petitioners is that if the three circulars are placed ad seriatim it would evolve that by circular dated 31/01/2003 the time for last date of submission of application for voluntary retirement was extended up to 15th February, 2003. Since the last date lapsed on 15th February and it was not in existence on 10/03/2003 therefore the last date cannot be extended by another circular issued at a later date i.e. on 10/03/2003 and in this March 10, 2003 circular the word 'retrenchment' was used and the same was used as threat, duress and coercion to obtain voluntary retirement from the employees. Voluntary Retirement Scheme was introduced and the word 'retrenchment' was used in a circuitous way to create pressure on the workmen so that they can succumb to Voluntary Retirement Scheme. The learned Counsel submitted that the word 'voluntary' etymologic ally means unconstrained by interference, unimpelled by another's influence, spontaneous acting of oneself. The learned Counsel derived these definitions from Black's Law Dictionary.
42. The learned Counsel submitted that if the scheme is voluntary the employer cannot compel the employee to opt for such Voluntary Retirement Scheme. In the instant case the workmen were somewhat compelled by the said circular dated 10/03/2003 whereby the company had no option but to opt for Voluntary Retirement Scheme otherwise a threat of retrenchment was given.
43. The learned Counsel for the petitioners submitted that as the IISCO Management did not use the word 'retrenchment' in any other previous circulars; therefore it is evident that they used the word for threatening the workers through impugned circular dated 10/03/2003. In support of his contentions the learned Counsel submitted that Black's Law Dictionary, 6th Edition has defined threat in the manner as follows:
"Threat"- Threat means a communicated intent to inflict physical or other harm on any person or a property. A declaration of an intention to injure another or his property by some unlawful act. In determining whether the words were uttered as a threat the context in which they were spoken must be considered.
Now the learned Counsel submitted that the definition of 'coercion' is as follows:
"Coercion"- means compulsion, constraint; compelling by force or arms or threat. It may be actual, direct or positive as where physical force is used to compel act against one's will, or implied, legal or constructive, as where one party is constrained by subjugation to other to do what his free will would refuse. Thus in normal circumstances a person could have refused to opt for Voluntary Retirement Scheme had there be no threat of retrenchment;.
44. The learned Counsel then defined the word 'duress' in the manner as follows:
"Duress"- means any unlawful threat or coercion used by a person to induce another to act or refrain from acting in a manner he or she otherwise would not. Subjecting person to improper pressure which overcomes his will and coerces him to comply with demand to which he would not yield if acting as free agent.
45. The learned Counsel from the above definitions tried to clarify that from the aforesaid meaning of those three words it is easily presumed that use of the word 'retrenchment' was clearly a threat, duress and coercion.
46. The learned Counsel for the petitioners submitted that the attitude of the IISCO Management was discriminatory and hence violative of Article 14 of the Constitution of India; since for any other unit they did not use the word 'retrenchment'. The IISCO as a whole became sick and unviable. He submitted that it is not the respondent's case in their affidavit-in-opposition that the Kulti alone is sick and unviable. Further, he submitted that no one has made any assessment that Kulti is unviable and sick till issuance of that particular impugned circular. The IISCO as a whole is in BIFR. To revive the IISCO, as a whole, it cannot be said that the workers of Kulti had to sacrifice to save the workers of its Burnpur Unit. There are instances where even after the impugned circular some of the workmen who are company's favoured were transferred to Burnpur Unit.
47. The learned Counsel submitted that the Industrial Disputes Act, 1947 contains various provisions for closure and retrenchment. Section 25 and its different sub-sections enunciate such provisions. The procedure laid down in the said statute for closure or retrenchment was not at all followed by the IISCO Management. No application was preferred before the Central Government seeking permission for closure. No such copy was ever handed over to the Workmen's Union.
48. The learned Counsel then submitted that from the affidavit-in-opposition used by the IISCO Management it would appear that they have taken shield of the Central Government Memo dated 05/05/2000 whereby the Central Government directed to rationalize surplus man-power. The said circular was totally misinterpreted since it did not talk about the complete closure of the unit.
49. The learned Counsel then referred to various provisions such as provisions of Section 25(n), Section 25(o)(3), Section 25(o)(8), Section 25FFF, Section 25(s) of Industrial Disputes Act, 1947 and submitted that these provisions were not at all complied with by the IISCO Management and as such their entire action was vitiated.
50. The learned Counsel submitted that it is well-established that a citizen can do anything unless he is prohibited by any law whereas the statutory authority or the State can only do such things which is permitted by the statute.
51. The learned Counsel for the petitioners submitted that closure means a closure of business but not closure of a particular place of business. When the IISCO as a whole is sick there cannot be any justification to close down one unit of IISCO and there should be sufficient and adequate reasons in good-faith in favour of such decision and such decision should not be unfair and prejudicial to public interest. In this context the learned Counsel relied on the decisions reported in 2002 Vol. (2) LLJ 1166, Ramaratnam v. Labour Court and Anr. and 2002(2) LLJ 735 MAMC Sramajibi Union v. Union of India and Ors.
52. The learned Counsel submitted that when the authority exercises its discretionary power either in excess or in abuse the same is always interfered with by the Courts of Law under its scanner of judicial review. The learned Counsel submitted that if the source of authority relied upon is statutory, the Courts begin by determining whether the power has been exercised in conformity with the express words of the statute and may then go or to determine whether it has been exercised in a manner that complies with certain implied legal requirements. The learned Counsel in support of his such contention referred to Smith's Judicial Review of Administrative Action, 4th Edition by J.M. Evan.
53. The learned Counsel in support of his case relied on the decisions reported in:
1) 1936 FLR(6) 219- (Management of Murugesa Naicker Co. Madras v. Presiding Officer Labour Court Madras and Ors.) The learned Counsel referring to this judgment of Madras High Court submitted that in this judgment it has been observed that benefit of doubt must go to the weaker section. This judgment, according to the learned Counsel was later upheld by the Hon'ble Apex Court.
2. (Workmen v. Williamson Magor & Co. Ltd. and Anr.). The learned Counsel relied on the observations made by the Hon'ble Apex Court in paragraph 12 of this judgment.
3) 1988 Vol.(1) CLJ 83 (State Bank of India and Ors. v. Amal Kumar Sen and Ors.). The learned Counsel relied on the observations made in paragraph 6 of this judgment which is quoted hereinbelow:
6. In this set-up, therefore, the new juristic principle that is to be evolved to enable our forensic machinery to rise up to the challenge for 'social justice' is that whenever the weaker or the poorer section is pitted in forensic combat against the stronger or the richer section, then if two interpretations are reasonably possible, whether of the facts or the laws involved, the interpretation in favour of the former is to be adopted so that 'social justice' i.e. justice to the weaker or the poorer section of the society, is ensured. We have adverted to all these as in the case before us, the workers are pitted against their employer and are seeking, intervention of the Court to prevent attempted wage-cut by the letter.
4) 1992(1) LLN 772, State of West Bengal and Ors. v. Phanindra Kumar Das. Referring to this decision the learned Counsel laid stress upon the word 'social justice' and submitted that if two views are possible, view towards weaker section should be followed.
5) 1980(1) LLJ 137, Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha. In this celebrated judgment the Hon'ble Apex Court observed "recall the faces of poorest of workers before taking any decision.
54. The learned Counsel appearing for the respondents submitted that when the writ petition was filed all but 321 employees had already been separated under Voluntary Retirement Scheme (VRS). On the writ petition an interim order of status quo was passed. Subsequently, an application vacating was filed by IISCO. On the said application the earlier interim order of status quo was modified by an order dated 22/12/2003 restricting the status quo order to the remaining employees only numbering 31. The appeal of the writ petitioners against the said order was unsuccessful. Special leave petition was filed from the order of the Division Bench and also did not succeed and the scope of challenge in the writ petition was restricted to only 31 employees who did not submit applications for voluntary retirement. Accordingly, in the present writ petition the alleged right of 30 employees is in issue (one having died in course of proceeding).
55. It is submitted by the learned Counsel for the respondents that the writ petition is not maintainable in the absence of a due authorization by the Union to make the present writ petition. Sri Ajit Banerjee has affirmed the affidavit accompanying the writ petition claiming himself to be an employee of IISCO and the Vice-President of the petitioner Union. Such claim is incorrect and baseless as has been pointed out in the affidavit-in-opposition.
56. The learned Counsel on behalf of the respondents also filed written notes on submissions and submitted that the writ petition does not disclose any cause of action. No legal right of the petitioner Union or any of the members has been affected by the impugned circular dated 10/03/2003. Introduction of VRS was not under the said circular but by a different circular dated 01/01/2003 which is not under challenge. By the circular dated 10/03/ 2003 only the date of submission of VR was extended. The other aspect mentioned in the circular was to intimate the employees of the imminent closure in which event they would only be entitled to retrenchment compensation. This intimation was given bona fide by IISCO as a model employer in the public sector to forewarn its employees in order that they may not be caught on the wrong foot later on. No. legal right of theirs is infringed. The circumstances in which said forewarning was necessary have been mentioned.
57. The learned Counsel submitted that the second part of the circular dated 10/03/2003 is not an act of coercion, duress or threat by IISCO as has been argued by the petitioners and this is totally misconceived. The expression of impending closure and the normal statutory consequences thereof cannot be branded as such. Such expression cannot be faulted.
58. It has further been submitted by the learned Counsel for the respondents that it is legally recognized that for closure first an administrative decision is to be taken and then legal decision follows. In this context the learned Counsel relied on a decision reported in 2000(9) SCC 247 and the learned Counsel mainly relied on the observations made in paragraph 4 of this judgment.
59. The learned Counsel referring to the impugned circular submitted that retrenchment compensation refers to a Government of India Memorandum dated 05/05/2000. The learned Counsel referred to paragraphs 1 and 12 of this memo and argued that this memo cannot apply to Kulti but applies only to a going concern for rationalization of man-power.
60. The learned Counsel submitted that the writ petitioners overlooked that the proceeding before BIFR till then, including the draft Rehabilitation Scheme was exactly for the purpose of rationalization of man-power of IISCO as a company and in doing so what was prescribed was the closure of Kulti Unit. Closure of one of its units does not take away the character of IISCO as a going concern.
61. The learned Counsel for the respondents then submitted that it has been argued on behalf of the petitioners that closure of Kulti Unit had not taken effect since the procedure under Section 25(n) of the Industrial Disputes Act was yet to be taken. It was argued that until closure takes effect, there can be no retrenchment but the law is quite clear.
62. The learned Counsel submitted that what has been missed by the petitioners is that IISCO never claimed in its circular dated 10/03/2003 that closure and/or retrenchment is taken place. It is not a fact and even the allegation that the payment of salary to these 31 employees was stopped and the retrenchment compensation was over. On the contrary they were still in employment and IISCO recognized this fact both factually and legally by making payment of salaries to them regularly. The mention of retrenchment compensation in the circular dated 10/03/2003 is a fair warning of a situation which was about to come for the reasons that draft rehabilitation scheme decided for closure of Kulti Unit and this was recorded in BIFR order dated 14/02/2003.
63. The learned Counsel submitted that whether closure was legally taken effect under Section 25(o) of the Industrial Disputes Act or not and whether Section 25(o)(8) has become applicable or not is beyond the scope of the present writ petition and subsequent development, if any, has not been challenged by way of amendment of the writ petition or otherwise.
64. The learned Counsel for the respondents therefore, submitted that the writ petition should be dismissed in limine not being maintainable either on technicality or on merit.
Decision:
65. Heard the learned Counsel for the parties, considered their respective oral submissions as well as written notes on submissions. At the outset I am to decide whether the instant writ petition is maintainable or not and the Hon'ble Apex Court has also issued direction in the same line. The question of maintainability has been raised by the respondents on the counts as follows:
1) Sri Ajit Banerjee is not an employee of Kulti Unit of IISCO though he has affirmed the writ petition stating that he is an employee of Kulti Unit of IISCO and he is the Vice-President of the Union and the Union has authorized him to verify the petition or to affirm the affidavit.
2) In the absence of authority Sri Ajit Banerjee cannot move the writ petition on behalf of the Union.
3) Said Sri Ajit Banerjee is not the Vice-President of Asansol Steel Workers' Union having office at Qtrs. No. JS-7, East Town, P.P.-Kulti, Dist-Burdwan.
66. The answer to all the three points can be given in the following manner:
Said Sri Ajit Banerjee in his affidavit-in-reply on oath has stated that it was a typographical mistake and/or clerical error by which it was written that he is an employee of Kulti Unit of IISCO. He also affirmed in his reply stating that he is the Vice-President of the Union concerned and the office address which has been given i.e. JS/7, East Town is the quarter allotted to one Sri B.N. Pandey, who is the Treasurer of the petitioner Union as well as an employee of IISCO, Kulti Wroks. Any person can be an office bearer that is Vice-President of any Union, even if he is not an employee of the said particular factory and there is no such bar under the Trade Union Act. Since Ajit Banerjee has admitted that by mistake it was written that he is an employee of Kulti Unit of IISCO though he asserted that he is the Vice-President of the Union and the quarter which has been shown as office of the Union is the quarter of Sri B.N. Pandey, the Treasurer of the Union, the respondents also, however, from any document could not establish that Sri Ajit Banerjee is not the Vice-President or the quarter does not belong to Sri B.N. Pandey, Treasurer of the Union where office of the petitioner Union is situated. In my view, a Union representing so many workers, if loses its strength because of acceptance of voluntary retirement by most of the workers still then the writ petition can be maintained by the rest of the petitioners. In that view of the matter the writ petition cannot be said to be not maintainable.
67. Nextly, on the merit it is on record or it admittedly appears from the writ petition as well as other documents that 30 workers are yet to accept Voluntary Retirement Scheme and most of the workers have accepted voluntary retirement. Now, the question is whether the letter dated 10/03/ 2003 can be termed as a threat of retrenchment or not. Though, the learned Counsel for the petitioners has laid stress on the definitions of 'threat', 'duress' and 'coercion' and has demonstrated definitions from Black's Law Dictionary still then it cannot be said that the authorities gave a threat of retrenchment. It is late in the day to say that Kulti is not suffering loss. The petitioners from any balance sheet or any document could not establish that Kulti Unit of IISCO is running on profit or not suffering loss. In fact, the petitioners could not establish from any document or could not even plead giving statistics unit wise that Kulti Unit is running on profit and other units are running at a loss. In the absence of such foundation or documentation it cannot be said that Kulti Unit is not running at a loss; even if before the BIFR the petitioners could not prove that Kulti Unit is running at a profit and it should not be wound up. The respondent authorities offered Voluntary Retirement Scheme and extended the date from time to time and lastly, the respondent authorities had to give an ultimatum to the extent that if the employees who are still there to accept voluntary retirement have not yet accepted voluntary retirement will be given retrenchment compensation that means they will be given an amount which is equivalent to retrenchment compensation. In any event they cannot claim that when the entire IISCO is wound up a separate scheme can be prepared for one of its units. The letter dated 10/03/2003 in any event cannot be termed as illegal. But still then in my view, that does not absolve the company IISCO from taking responsibility of these 31 employees who had "been working for so long and one of whom has already expired.
68. Now, it is to be seen as to what they are entitled. In my view, 30 employees who are still left if they so like can accept voluntary retirement and the IISCO authorities are directed to pay them the voluntary retirement amount which they have offered to other employees. The date for such acceptance of voluntary retirement, for the sake of equity is extended for a period of three months from date. The company will also pay the same amount to the legal heirs of the deceased employee accepting that the deceased employee had accepted voluntary retirement from service. This extension of time for three months is on the question of equitable relief and the time is peremptory.
69. The respondent authorities are also directed to consider in the alternative as to whether these 30 employees can be absorbed in other units of IISCO on its revival.
70. With the aforesaid directions and/or observations the writ petition is disposed of.
71. There will be no order as to costs.
72. Urgent xerox certified copy, if applied for, will be given to the parties as expeditiously as possible.