Gujarat High Court
Glamour Dyeing And Printing Mills ... vs Harishbhai Muljibhai Rathod on 15 July, 2025
NEUTRAL CITATION
C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 4612 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4977 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4973 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 4779 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MRS. JUSTICE M. K. THAKKER
==========================================================
Approved for Reporting Yes No
==========================================================
GLAMOUR DYEING AND PRINTING MILLS (SURAT) PRIVATE LIMITED
Versus
HARISHBHAI MULJIBHAI RATHOD
==========================================================
Appearance:
MR DIPAK R DAVE(1232) for the Petitioner(s) No. 1
MR UT MISHRA(3605) for the Respondent(s) No. 1
==========================================================
CORAM:HONOURABLE MRS. JUSTICE M. K. THAKKER
Date : 15/07/2025
COMMON ORAL JUDGMENT
1. Since the issues raised in these petitions are similar in nature, they are being decided by a common judgment. Page 1 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025
NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined For the purpose of adjudication, the facts of Special Criminal Application No. 4977 of 2023 are being taken as the lead case.
2. Rule returnable forthwith. Learned advocate Mr.U.T.Mishra waives service of Rule on behalf of the respondent.
3. The present petition is filed under Article 226 of the Constitution of India, challenging the order passed by the learned labour court, Surat in (T) Application Nos. 248 of 2019, 249 of 2019, 250 of 2019, and 251 of 2019 below Exh.2. The said order was confirmed by the Learned Industrial Court, Surat in Appeal Nos. 7 of 2021, 8 of 2021, 9 of 2021, and 6 of 2021, corresponding respectively to Special Civil Application Nos. 4977 of 2023, 4779 of 2023, 4973 of 2023, and 4612 of 2023, vide order dated 28.09.2022, whereby the present petitioner has been directed to furnish a Bank Guarantee to the tune of ₹15,00,000/- before the learned labour court.
4. It is the case of the present petitioner that petitioner was engaged in the business of dyeing and printing and was operating a textile mill. Owing to an adverse economic Page 2 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined environment and prevailing recessionary conditions, it became commercially unviable for the petitioner to continue operations. Consequently, the petitioner permanently closed the said unit with effect from 30.11.2018. It is further submitted that intimation regarding the closure was duly furnished to various authorities on different dates. After closure of the industrial undertaking, the respondent-Union raised certain industrial disputes espousing the cause of some of the workmen, which were eventually resolved through settlement. However, with respect to three employees for whom the impugned reference was raised were employed in the capacity of Supervisors for the past eight years and, therefore, do not fall within the definition of "workman" as defined under the relevant labour legislations. It is the specific case of the petitioner that no settlement was arrived at between the petitioner and the said respondent-employees. Consequently, the respondents raised an industrial dispute under the provisions of the Gujarat Industrial Relations Act, 1946 (hereinafter referred to as the "GIR Act") before the learned labour court, inter alia alleging Page 3 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined that they were orally terminated from service with effect from 01.06.2019, in contravention of the provisions of Section 25 F of the Industrial Disputes Act, 1947 (hereinafter referred to as the "ID Act"). As per the provisions of the Act, approach letter was given prior to filing the dispute on 24.09.2019 and thereafter, (T) Application was filed under section 78 and 79 of the GIR Act wherein, petitioner appeared and filed detailed reply to the application. Thereafter, the respondent moved an application under Section 119D of the GIR Act, seeking appointment of a Court Commissioner and also prayed for interim relief. Subsequently, an application at Exh.2 came to be filed by the respondents, seeking a direction to the petitioner to furnish a Bank Guarantee to the tune of ₹15,00,000/-, which came to be allowed by the learned labour court. The said order was further challenged before the learned tribunal, although the tribunal has also rejected the appeal and confirmed the order passed by the learned labour court which is subject matter of challenge before this Court.
5. Heard learned advocate Mr.Dipak Dave for the petitioner and learned advocate Mr.U.T.Mishra for the Page 4 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined respondent.
6. Learned Advocate Mr. Dave, appearing on behalf of the petitioner, has vehemently submitted that the claim raised by the respondent is barred by limitation and, therefore, does not deserve to be entertained. It is submitted by the learned advocate Mr.Dave that the application filed by the respondent under Sections 78 and 79 of the GIR Act is not maintainable, as there is no provision under the Act for condonation of delay, which is a settled legal position. Learned advocate Mr.Dave submits that as per the case put forth by the respondent, the alleged termination from service took place on 01.06.2019, whereas the approach letter, which is mandatorily required to be issued within three months from the date of alleged termination, came to be served only on 24.09.2019. Learned advocate Mr.Dave submits that in order to bring the case within the period of limitation, the respondent has falsely stated the date of termination in the approach letter. Learned advocate Mr.Dave submits that from the record of the case, petitioner has succeeded in establishing that the company has closed with effect from November, 2019 Page 5 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined therefore, there was no question of terminating the service from 24.09.2019 as alleged by the present respondent.
6.1. Learned advocate Mr.Dave further submits that without recording the prima facie case, impugned order was passed and therefore, the same is required to be set aside. Learned advocate Mr.Dave submits that the respondent does not fall within the definition of "workman" as envisaged under Sections 3(13) of the GIR Act. It is submitted that the respondent was a master and was engaged on a contractual basis, and as such, the relationship of employer and employee did not exist between the parties. However, present proceedings have been initiated solely with a view to exert undue pressure on the petitioner and to extract a settlement. Learned advocate Mr.Dave submits that the learned labour court has no power to order the bank guarantee under section 119 D of the ID Act. Learned advocate Mr.Dave submits that the said order is in the nature of an attachment before judgment, and such a drastic power is to be exercised with great circumspection. Reliance is placed on the settled principles under Order 38 Rule 5 of the Page 6 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined Code of Civil Procedure, which prescribe that before exercising such powers, the Court must be satisfied that the party against whom such relief is sought is attempting to dispose of or remove its assets with a view to defeat the outcome of the proceedings. Learned advocate Mr.Dave submits that without establishing the prima facie case in favour of the respondent, the learned labour court has directed the present petitioner to provide bank guarantee to the tune of Rs.15,00,000/- and therefore, same is required to be interfered with by setting aside the impugned award. Learned advocate has relied on the decision rendered by the Apex Court in the case of Raman Tech. & Process Engg. Co. & Anr. Versus Solanki Traders reported in 2008 (2) SCC 302 as well as decision rendered by Gujarat High Court in the case of TATA Chemicals Limited Versus TATA Chemicals Mazdoor Sangh & 1 cited in 2015 LawSuit(Guj) 2332.
7. In response, learned Advocate Mr. Mishra, appearing for the respondent, has opposed the petition on the ground of maintainability. It is submitted that the impugned order has been passed at an interlocutory stage, and the Page 7 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined main application concerning alleged illegal termination is still pending for adjudication before the learned labour court. It is submitted by the learned advocate Mr.Mishra the respondent was employed with the petitioner establishment since the year 2002 and had rendered continuous service for approximately 17 years, until the closure of the establishment in 2019. It is submitted that the closure was abrupt and carried out without disbursing any legal dues. Learned advocate Mr.Mishra submits that the said aspect has been admitted by the petitioner in its written statement filed below Exh.12. Learned advocate Mr.Mishra submits that the report submitted by the Commissioner indicates that the petitioner has already disposed of its immovable property. This, according to the learned advocate Mr.Mishra, is a clear attempt by the petitioner to frustrate or defeat the execution of any award that may be passed in favour of the respondent. In light of these facts, it is submitted that the direction issued by the learned labour court, and affirmed by the Tribunal, requiring the petitioner to furnish a Bank Guarantee in the sum of ₹15,00,000/- is just and proper. Therefore, no Page 8 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined interference is warranted by this Court in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India. Learned advocate Mr.Mishra has relied on the decision rendered by the decision rendered by the Apex Court in the case of Dena Bank Versus D.V. Kundadia reported in 2011 (15) SCC 690.
8. Having heard the learned advocates appearing for the respective parties and upon perusal of the reasoning assigned by the learned labour court, Surat, it transpires that the industrial dispute in question has been raised under Sections 78 and 79 of the GIR Act, wherein the respondent workman has sought reinstatement in service along with all consequential benefits. During the pendency of the proceedings in the (T) Application, an interim application at Exh.2 came to be preferred by the respondent seeking an order for attachment and a direction to the petitioner to furnish a bank guarantee. The said application was premised on the apprehension that the petitioner was in the process of selling off its machineries, and in the event the said application was not allowed, it would frustrate or delay the execution of any award that may ultimately be passed in favour of the Page 9 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined respondent. Before the learned labour court, the petitioner had contended that the industrial unit had been permanently closed owing to recessionary market conditions, and in support of the said contention, various documents were produced, which are also part of the record before this Court. These include:
(a) Communication dated 06.11.2020 addressed to the Regional Officer, Gujarat Pollution Control Board, intimating that the unit had been completely and permanently shut down with effect from 30.11.2018;
(b) Letter dated 14.02.2019 addressed to the Environmental Engineer informing that the production in the plant has been closed since Diwali of 2018;
(c) Communication dated 24.07.2019 to the Deputy Director, Boiler Office, stating that the boiler had been non-operational since 01.11.2018;
(d) Communication dated 03.02.2021 addressed to the Zonal Officer, South Zone, Surat Municipal Corporation, confirming permanent closure of the Page 10 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined Mill with effect from 31.03.2019;
(e) Letter dated 13.12.2018 addressed to the Manager, Torrent Power Limited, requesting disconnection of electricity on account of closure of the unit;
(f) Communication dated 01.05.2019 addressed to the competent authority under the Factories Act, informing that the operations and the incidental employment of the Unit has been shut down with effect from 31.03.2019;
(g) Closure proforma dated 01.05.2019 indicating that all activities and employment had been permanently discontinued with effect from 01.03.2019;
(h) Communication dated 01.05.2019 addressed to the office of the Assistant Labour Commissioner intimating the closure of the Unit with effect from 31.03.2019;
(i) Communication dated 01.05.2019 addressed to the competent authority under the Payment of Gratuity Act, intimating the closure of the Unit with effect from 31.03.2019;
(j) Notice of closure dated 01.05.2019 declaring that Page 11 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined all dues had been settled with employees who were on the rolls;
(k) Communication dated 01.05.2019 addressed to the Authority under the Payment of Bonus Act intimating closure of the establishment with effect from 31.03.2019.
9. The learned labour court, after considering the report submitted by the Court Commissioner dated 17.04.2021, has observed that, as per the said report, all departments of the petitioner's unit are found to be closed, and except for the physical structure of the factory, no machinery was found to be lying at the site. Relying on these observations, the learned labour court directed the petitioner to furnish a bank guarantee in the sum of ₹15,00,000/- to secure the potential benefits that may be awarded to the respondent in the event the claim is allowed.
9.1. Upon perusal of the (T) Application filed by the respondent, it is alleged therein that wages were paid by the petitioner to the respondent in cash during the period from November 2018 to May 2019, and that the services of the respondent were terminated with effect Page 12 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined from 01.06.2019. While issuing notice, this Court, vide order dated 21.03.2023, made the following observations:-
"1. This petition is filed challenging an inter locutory order dated 28.09.2021, passed by Labour Court, Surat in T Application No.248 of 2019 and confirmed by Industrial Court, Surat under order dated 28.09.2022, in Appeal No.7 of 2021.
2. Heard learned advocate Mr.Dipak Dave for the petitioner. He submitted that the order passed in Appeal No.7 of 2021 is without jurisdiction, perverse and an abuse of process of law. He submitted that in respect of oral termination of service w.e.f. 01.06.2019, the approach letter under section 42 read with rule 53, of Gujarat Industrial Relations Act was given by the respondent only on 24.09.2019. The petitioner-company is closed since 2018 and notice of intimation was sent to the appropriate authority. Taking best case of respondent, he is only entitled for closure compensation and Gratuity, and the said amount would not be more then Rs.2,50,000/- for each employee. There are five employees for which separate petitions are filed. Therefore, the Bank Guarantee directed to be furnished of Rs. 15,00,000/- to secure the dues of each of respondent is excessive and unreasonable. He submitted that without prejudice to the rights contentions raised in the present petition, the petitioner is ready to furnish bank guarantee of Rs.2,50,000/- for each of the workman, before the Labour Court within a period of one week from the copy of receipt of this order.
3. As the petitioner is ready to furnish bank guarantee of Rs. 2,50,000/- for the respondent workman within one week, as assured by learned advocate for the petitioner, issue Notice Page 13 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined returnable on 20.04.2023.
4. Needless to say that Notice in this case is issued as the petitioner is ready to furnish bank guarantee of Rs. 2,50,000/- for each workman. If the bank guarantee as directed is not furnished within one week, no notice be issued and petition be listed for further orders on 03.04.2023. Further, the notice in this petition is issued only on the ground of bank guarantee directed to be furnished by labour court being excessive and unreasonable. The furnishing of balance amount of bank guarantee is stayed till next date of hearing. Direct service is permitted."
9.2. This Court has carefully considered the decisions relied upon by the learned advocate for the petitioner, particularly the judgments of the Apex Court in Raman Tech. & Process Engg. Co. & Anr. (supra) and TATA Chemicals Limited (supra). In both cases, the issue before the Apex Court pertained to the challenge of orders passed under Order 38 Rule 5 of the Code of Civil Procedure, which deals with attachment before judgment, and the legal parameters for grant of such interim relief. In the present case, the application filed below Exh.2 was preferred under Section 119D of the GIR Act, seeking an interim direction either for attachment of the property or, in the alternative, for furnishing of a bank guarantee. The legal position, as enumerated by the Apex Court in the aforementioned Page 14 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined decisions, is that interim orders such as arrest or attachment before judgment, temporary injunctions, or appointment of receivers are extraordinary remedies intended to prevent the ends of justice from being defeated. The Court should be satisfied that the plaintiff has a prima facie case and if the averment in the plaint and document produced in support of it do not satisfy the court about existence of prima facie case, the court will not go to the next stage of examining whether interest of the plaintiff should be protected by exercising the power under Order 38 Rule 5. It is also held by the Apex Court that the existence of a just or valid claim does not, by itself, entitle a party to an order of attachment before judgment, unless it is shown that the defendant is attempting to dispose of or remove assets with an intent to defeat the execution of any decree that may be passed against him.
10. Upon referring to the impugned order, such satisfaction is found to be lacking. The learned Court has primarily relied upon the report of the Court Commissioner, which indicates that no machinery was found at the premises and that all departments of the petitioner's unit stood Page 15 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined closed. The case of the present petitioner is same before the learned court is that the Unit has already closed and all the plants were shut down permanently from November, 2018 onwards. Learned court could have tested this submission of the respondent about illegal retrenchment from June, 2019 with the documentary evidence which was placed on record by the petitioner.
11. So far as the contention with regard to the non maintaining the Writ Petition at the interim stage is concerned, this Court has referred the decision rendered in Special Civil Application No.10497 of 2015 wherein, after considering the decision rendered in the case of Dena Bank (supra), the observation made are as under:
"7. Before we proceed to examine the matter on merits, we would like to deal with the preliminary objection raised by Mr. Clerk, the learned counsel appearing for the employees, as regards the maintainability of the present petition. Mr. Clerk has heavily relied upon the decision of the Supreme Court in the case of Dena Bank (supra), to fortify his submission that this petition is not maintainable as the same is against an interim order of the Industrial Tribunal.
9. Having gone through the entire judgment of the Supreme Court, we have noticed that it is not clear as to what HC-NIC Page 25 of 31 Created On Sun Feb 28 06:33:49 IST 2016 C/SCA/10497/2015 JUDGMENT were the facts of that case and Page 16 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined what was the nature of the interim order passed by the Tribunal, which was the subject matter of challenge. It is true that the remedy under Article 226 or 227 of the Constitution cannot be permitted to be availed of for the purposes of frustrating the welfare legislation or allow to be an appeal in disguise. The remedy under Article 226 or 227 of the Constitution is not intended to circumvent the statutory procedure, if available in law. In a case where the petitioner is shown to have remedy of challenging the final order by way of appeal, ordinarily the High Court would not exercise its jurisdiction under Article 226 of the Constitution, as, if the High Court decides to interfere with the interim orders passed by the Labour Court or the Industrial Tribunal, the same is likely to frustrate the provisions of the Act, which are intended to achieve a social object as is evident from the statement of object and reasons. Under the Industrial Disputes Act, 1947, there is no provision of appeal against an interim award or final award, which may be passed by the Tribunal. The only remedy available with the aggrieved party would be to approach the High Court invoking the supervisory jurisdiction under Article 227 of the Constitution of India. At the same time, it is also true that there is no absolute bar on the exercise of writ jurisdiction by the High Court in any case, but before exercising such jurisdiction, self-imposed restraints are required to be taken note of. The Court may decide to exercise its jurisdiction where it is found that the order impugned was without jurisdiction or apparently contrary to settled position of law or was likely to result in miscarriage of justice or tantamount to abuse of process of Court HC-NIC Page 26 of 31 Created On Sun Feb 28 06:33:49 IST 2016 C/SCA/10497/2015 JUDGMENT or had been obtained by suppression of material facts or any circumstance, which shocks Page 17 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined the conscience of the Court.
10. In our view, the decision of the Supreme Court relied upon cannot be construed as laying down an absolute proposition of law that in all circumstances, a writ Court cannot interfere with the interim orders made by the Industrial Tribunal. In a given case, where the Court may find that the order impugned is without jurisdiction or apparently contrary to certain position of law or is likely to result in miscarriage of justice, then in such circumstances, the High Court can entertain a petition filed under Article 227 of the Constitution of India against an interim order made by the Industrial Tribunal. Therefore, the learned counsel for the respondent may not be correct in saying that the petition is not maintainable as the same is directed against an interim order of revision of wages passed by the Industrial Tribunal."
12. However, instead of discussing further, when the petitioner has shown willingness to furnish the bank guarantee of Rs.2,50,000/-, the ends of justice would meet if the interim directions would maintain.
13. Resultantly these petitions are partly allowed. 13.1. In view of the foregoing, the impugned order passed by the learned labour court, Surat in (T) Application Nos. 248 of 2019, 249 of 2019, 250 of 2019, and 251 of 2019 which was confirmed by the Learned Industrial Court, Surat in Appeal Nos. 7 of 2021, 8 of 2021, 9 of 2021, and 6 of 2021, corresponding respectively to Page 18 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025 NEUTRAL CITATION C/SCA/4612/2023 JUDGMENT DATED: 15/07/2025 undefined Special Civil Application Nos. 4977 of 2023, 4779 of 2023, 4973 of 2023, and 4612 of 2023, vide order dated 28.09.2022 stands modified to the extent of ₹2,50,000/-. 13.2. As the bank guarantee has already been furnished by the petitioner, no further directions are called for. 13.3. Rule made absolute to the above extent.
(M. K. THAKKER,J) NIVYA A. NAIR Page 19 of 19 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Sat Jul 19 2025 Downloaded on : Mon Jul 21 21:27:12 IST 2025