Gujarat High Court
Rishiroop Rubber (International) Ltd vs State Of Gujarat & 5 on 18 February, 2014
Bench: Ks Jhaveri, A.G.Uraizee
C/LPA/1720/2005 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
LETTERS PATENT APPEAL NO. 1720 of 2005
In SPECIAL CIVIL APPLICATION NO. 15652 of 2005
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE KS JHAVERI
and
HONOURABLE MR.JUSTICE A.G.URAIZEE
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1 Whether Reporters of Local Papers may be allowed to see the YES
judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the fair copy of the judgment ? NO
4 Whether this case involves a substantial question of law as to the NO
interpretation of the Constitution of India, 1950 or any order made
thereunder ?
5 Whether it is to be circulated to the civil judge ? NO
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RISHIROOP RUBBER (INTERNATIONAL) LTD....Appellant(s)
Versus
STATE OF GUJARAT & 5....Respondent(s)
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Appearance:
MR NAVIN K PAHWA, ADVOCATE for the Appellant(s) No. 1
GOVERNMENT PLEADER for the Respondent(s) No. 1 4
MR MS MANSURI, ADVOCATE for the Respondent(s) No. 5
RULE SERVED for the Respondent(s) No. 1 4
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CORAM: HONOURABLE MR.JUSTICE KS JHAVERI
and
HONOURABLE MR.JUSTICE A.G.URAIZEE
Date : 18/02/2014
Page 1 of 12
C/LPA/1720/2005 JUDGMENT
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE KS JHAVERI) By way of filing this appeal, the appellant - original petitioner has challenged the order dated 27th September 2005 passed by the learned Single Judge in Special Civil Application No.15652 of 2005 whereby the learned Single Judge has dismissed the writ petition filed by the petitioner and has upheld the order of the State Government referring the dispute to the competent Tribunal.
2 The facts of the present case are that the appellant is a company engaged in the business of manufacture and export of chlorinated rubber using Carbon Tetra Chloride as main component. It is the case of the appellant that as CTC was found to be one of the main reason for depletion of ozone layer, the appellant company started facing severe trade adversities in the developed countries where the product of the appellant company was being exported. Thus, in view of the aforesaid circumstances, the production has gradually come down and therefore it shut down its manufacturing operations in its factory situate at Plot No.5807, GIDC Industrial Estate, Ankleshwar wef 6 th November 2004 after following procedure under the law. Respondent no.5Union has filed proceedings and has also approached this Court by filing Special Civil Application No. 14789/2004 agitating the questions of breach of provisions of Section 25(O) of the Industrial Disputes Act and Section 25FF of the Industrial Disputes Act. The Union also complained of breach of provisions of Section 9A of the said Act. When this petition was filed conciliation proceedings were already pending before the Conciliation Officer with respect to the disputes which ultimately culminated into impugned reference being made by the State Government. Special Civil Application No. 14789/2004 came to be disposed of by Learned Single Judge of this Court by an order dated 05 112004 directing the authorities to do the needful in the matter in Page 2 of 12 C/LPA/1720/2005 JUDGMENT accordance with law. It appears that by a communication dated 2411 2004, Labour Officer of Ankleshwar indicated to the respondent no.5 Union that there is no material to establish that the petitionerCompany has engaged more than 100 workers. Deputy Labour Commissioner also noted in his communication dated 04022005 that since the petitioner Company had not engaged more than 100 workers, no procedure is to be followed under section 25(O) of the Industrial Disputes Act.
3 The respondent no.5Union once again filed three petitions before this Court being Special Civil Application No.14550/2005 and allied matters. These petitions came to be disposed of by common order dated 08082005 passed by Learned Single Judge of this Court. The learned Judge stated without going into the legality and validity of larger question whether order passed by this Court in the earlier petition is complied with or not, Commissioner of Labour, Ahmedabad is directed to take an appropriate decision and consider the representations ( of the Union) dated 11122004 after giving an opportunity to the parties concerned and dispose of the same within a period of three weeks from the date of receipt of this order of the Court. Simultaneously, the efforts of the Union to agitate the demands was progressing before the Conciliation Officer. After making attempt, since the efforts for conciliation failed, the Conciliation Officer submitted his failure report on 20th October, 2004. Upon receipt of failure report from the Conciliation Officer, appropriate authority under the State Government examined the question whether industrial dispute is to be referred for its adjudication or not. The petitionerCompany as well as respondent no.5 Union were put to notice. Both sides participated in the proceedings and submitted their response. The documents were produced and representations were made. Ultimately the State Government issued a notification dated 10012005 deciding to refer the dispute for its Page 3 of 12 C/LPA/1720/2005 JUDGMENT adjudication by the Industrial Tribunal, Vadodara. That notification dated 10012005 has been challenged by the petitioner before the learned Single Judge by filing the writ petition.
4 It was the case of the petitionerCompany that Government erred in law in making the reference. Primarily, it is contended that there is no industrial dispute existing or apprehended and the State Government could not have therefore, made the reference. It is also contended that the petitionerCompany has closed down its business by following legal formalities. Such closure took place on 06112004. It is therefore, contended that in view of the subsequent developments which the State Government has not taken into consideration, the reference is bad in law. By the impugned order, learned Single Judge rejected the writ petition by upholding the order of the State Government referring the dispute to the competent Tribunal. Hence, the present appeal.
5 Ms Sangita Pahwa, learned advocate for the appellant contended that the learned Single Judge has committed an error in not considering the fact that the Labour Officer of Ankleshwar as well as Deputy Labour Commissioner have noted that since the petitionerCompany had not engaged more than 100 workers, there is no requirement to comply with the provisions of Section 25(O) of the Act. She further submitted that since there was no challenge to the factum of closure, the dispute which has been referred by the competent authority is not a dispute in existence. She further contended that the dispute which was raised on 10th January 2005 refers to the dispute whether the employees were employed prior to 26.4.2004 should be restored to their original position which was prevailing as on 26.4.2004 and whether they are entitled for compensation. Ms Pahwa has also contended that the learned Single Judge has committed an error in rejecting the petition and declining the Page 4 of 12 C/LPA/1720/2005 JUDGMENT factum of notice of closure published on 4 th November 2004 and corresponding payment which was made and the same was received by way of cheque by each of the employees.
6 Ms Pahwa next contended that the notification is bad in law since the State Government did not have power or authority to refer the matter for adjudication in facts of the present case. It was contended that the industry has been closed down legally and validly w.e.f. 0611 2004. Such closure has become final and has not been challenged by any one. It was therefore, contended that there cannot be any dispute against the closed industry. It was further contended that for making a reference, the State Government must be convinced that there is existing or apprehended dispute. It was contended that a dispute can be envisaged only with respect to the existing industry and not a closed industry. It was contended that entire concept of employeremployee relationship and existence of industrial dispute presupposes that industry is in existence. When the industry itself is closed down their cannot be any industrial dispute existing or apprehended. According to her therefore, the reference was bad in law. It was also contended that State Government did not take into consideration relevant materials and thereby committed a legal error. It was contended that this Court has jurisdiction to examine the legality of the decision of the State Government especially when it is found that the State Government misdirected itself by not considering relevant materials though brought to its notice. Reliance was placed on the decision of Hon'ble Supreme Court in the case of Pipraich Sugar Mills Ltd. v. Pipraich Sugar Mills Mazdoor Union reported in AIR 1957 SC 95 to contend that once the industry is closed down bona fide, there cannot be any industrial dispute between the industry and its erstwhile employees. The decision of the Hon'ble Supreme Court in the case of National Engineering Industries Page 5 of 12 C/LPA/1720/2005 JUDGMENT Ltd. v. State of Rajasthan and others reported in (2000) 1 Supreme Court Cases 371 was relied upon to contend that High Court can entertain a writ petition impugning a reference on the ground of non existence of an actual or apprehended industrial dispute. The decision of the Hon'ble Supreme Court in the case of M/s. Maruti Udyog Ltd. v. Ram Lal and others reported in AIR 2005 Supreme Court 851 was relied upon to canvas that closure of the industry brought about by the petitioner was legal, proper and bona fide.
7 On the other hand, learned advocate Mr Mansuri appearing for respondent no.5Union has supported the decision of the learned Single Judge as well as the State Government. It was contended that industrial dispute did exist and rightly referred for adjudication by the Government. It was contended that the closure of the petitioner Company has not achieved finality and Union has been for long questioning the legality of such a closure. It was also contended that unless it is shown that the State Government while making a reference has taken into consideration any irrelevant factor or has not taken into consideration relevant and material factor, decision of the State Government cannot be interfered with by the High Court in exercise of power under Article 226 of the Constitution of India.
8 Mr Mansuri has also contended that the petition suffers from the vice of suppression of material fact that the appellant has filed reply in the Reference which has been pointed out in the affidavitinreply, but no rejoinder was filed to the same. He contended that while deciding whether the industrial dispute is to be referred for its adjudication or not, State Government cannot decide the lis itself and such a task has to be left open for the forum under the Industrial Disputes Act to be performed. Reliance was placed on the decision of the Hon'ble Supreme Page 6 of 12 C/LPA/1720/2005 JUDGMENT Court in the case of State of Madras v. C.P. Sarathy reported in Supreme Court Labour Judgement (Vol.7), 1312. The observations of the Hon'ble Supreme Court that in making a reference under section 10(1) of the Industrial Disputes Act, the Government is doing an administrative Act and the fact that it has to form an opinion as to the factual existence of an industrial dispute as a preliminary step to the discharge of its function does not make it any the less administrative in character was relied upon. It was pointed out that the Hon'ble Supreme Court observed that the Court cannot canvass the order of reference closely to see if there was any material to support its conclusion as if it was a judicial or quasijudicial determination.
9 We have heard learned counsel for the parties. It is required to be noted that the employees have to approach this Court to redress their grievances twice prior to this Reference by filing Special Civil Application No.14789 of 2004 and Special Civil Application No.14550/2005 and allied matters. These petitions came to be disposed of by common order dated 08082005 passed by Learned Single Judge of this Court. After considerable time, the dispute was referred on 10 th January 2005 and even thereafter no progress could be made because of pendency of these proceedings. After considering the rival contentions of the parties, the learned Single Judge has observed as under:
"10. Having considered the rival submissions, it can be seen that what is under challenge in this petition before this Court is an order passed by the State Government deciding to make a reference for adjudication of an industrial dispute raised by respondent no.5Union. As noted earlier conciliation proceedings were undertaken by Conciliation Officer. Since it was not possible to reconcile the disputes between the parties, Conciliation Officer submitted his failure report. Acting on the failure report, State Government involved both the sides, to present before the Government necessary material to enable the State to take Page 7 of 12 C/LPA/1720/2005 JUDGMENT appropriate decision. The Government took into consideration the material and passed the order in question. The question is whether this decision was tainted by any illegality on account of either irrelevant material being taken into consideration or not taken into account any relevant material as contended by the learned advocate for the petitioner. Subsidiary question also arose whether there was any industrial dispute existing or apprehended and whether dispute can be referred once industry was decided to be closed down.
After having considered the case law on the point, the learned Single Judge summarized the same as under: "1. The appropriate government would not be justified in making a reference under S.10 of the Act without satisfying itself on the facts and circumstances brought, to its notice that an industrial dispute exists or apprehended and if such a reference is made it is desirable wherever possible, for the government to indicate the nature of dispute in the order of reference;
2 The order of the appropriate Government making a reference under S.10 of the Act is an administrative order and not a judicial or quashjudicial one and the Court, therefore, cannot canvass the order of the reference closely to see if there was any material before the Government to support its conclusion, as if it was a judicial or quasijudicial order;
3 An order made by the appropriate government under S.10 of the Act being an administrative order no lis is involved, as such an order is made on the subjective satisfaction of the Government.
4 If it appears from the reasons given that the appropriate government took into account any consideration irrelevant or foreign material, the Court may in a given case consider the case for a writ of mandamus and;
5 It would, however, be open to party to show that what was referred by the Government was not an industrial dispute within the meaning of the Act."
Page 8 of 12C/LPA/1720/2005 JUDGMENT Thereafter, the learned Single has further observed as under:
"12. Reverting to the facts of the present case as noted earlier one finds that the State Government after taking into consideration all the relevant aspects of the matter found that industrial dispute exists and is required to be referred for adjudication before the Industrial Tribunal. It is not been pointed out that any irrelevant material was taken into consideration by the State Government before arriving at such a conclusion. I am also unable to agree with the contention of the learned advocate for the petitioner that relevant material was not taken into consideration by the State Government. I am also unable to agree that no industrial dispute existed or that such an industrial dispute could not have been referred once the industry was closed down. The reason for reaching the above conclusions are as follows :
"12.1 As noted earlier the legality of the closure of the industry has not yet been finally concluded. The respondent no.5Union has been agitating against such an action even before it was taken. After the action of employer to close down the industry, respondent no.5Union has been agitating the issues with the State Authorities as well as before this Court. Upon direction by this Court in its order dated 08082005 passed in Special Civil Application No. 14550/2005 and allied matters, the issue is being examined by the authorities of the State Government. In any case the closure took place according to the petitioner on 06112004. Even if it is held to be valid and legal,the event took place much after the cause of action for seeking the reference arose. The terms of reference itself makes it clear that dispute of the Union pertains to a period starting from 26th April 2004 onwards. In that view of the matter between 26th April 2004 and till 26th November, 2004 atleast the dispute was existing and referable. In that view of the matter it is not possible to accept the contention of the learned advocate for the petitioner that the reference must fail on the ground of irrelevant material having been taken into consideration by the Government. In the decision of Pipraich Sugar Mils Ltd. v. Pipraich Sugar Mills Mazdoor Union(Supra) the Hon'ble Supreme Court did observe that it cannot be doubted that entire scheme of the Act assumes that there is in existence an industry and then proceeds on to provide for various steps being taken when a dispute arises in that industry. Thus, the provisions of the Act Page 9 of 12 C/LPA/1720/2005 JUDGMENT relating to lock out, strike, layoff, retrenchment, conciliation and adjudication proceedings, the period during which the awards are to be in force have meaning only if they refer to an industry which is running and not one which is closed. In the said decision however, it was held that power of the State Government to make a reference must be determined with reference not to the date on which it is made but to the date on which the right which is the subject matter of the dispute arises, and that the machinery provided under the Act would be available for working out the rights which had accrued prior to the dissolution of the business. In doing so the Hon'ble Supreme Court negatived the contention of the employer that the notification issued by the Government referring the dispute for adjudication would be incompetent as the industry has been closed before that date and there was no relationship for employer and employee at that point of time. In other words, the contention of the employer was that the power of the State to make a reference under Section 3 will depend, not only on the dispute having arisen in the existing industry but further on the continued existence of that industry on the date of notification. This contention was negatived observing that any other construction would result in serious anomalies and grave injustice. It was further observed that if a workman improperly dismissed raised an industrial dispute and before action is taken by the Government industry is closed, what happens to the right which the Act gives him for appropriate relief, if the Act vanishes into thin air as soon as the industry is closed. It was observed that if the contention of the employer is correct, there is nothing to prevent an employer who intends for good and commercial reason, to close his business from indulging on a large scale in unfair labour practices,in victimisation and in wrongful dismissals, and escaping the consequences thereof by closing down the industry. In para.9, the Hon'ble Supreme Court made following observations :
'(9) In the light of the principle stated above, we must examine the nature of the dispute which is the subject matter of the reference under the impugned notification. The claim of the workmen is that the promise made by the management in its letters dated 311951 and 1011951 is a binding agreement and that they are entitled to be paid in accordance therewith. Now, if this contention is well founded, the dispute relates to a claim which arose while the industry was in existence and between persons who stood in the relationship of employer and employees, and Page 10 of 12 C/LPA/1720/2005 JUDGMENT that would clearly be an industrial dispute as defined in the Act. But it is argued for the appellant that even so the notification dated 16111951 would be incompetent as the industry had been closed before that date, and there was therefore no relationship of employer and employee at that point of time. In other words,the power of the State to make a reference under S.3 will depend, according to the appellant, not only on the dispute having arisen in an existing industry but further on the continued existence of that industry on the date of the notification. We do not find anything in the language of S.3 of the Act to warrant the imposition of this additional limitation on the power of the State to make a reference. That section only requires, apart from other conditions, with which we are not concerned, that there should be an industrial dispute before there can be a reference, and we held that it would be an industrial dispute if it arises out of an existing industry. If that condition is satisfied,the competence of the State for taking action under that section is complete, and the fact that the industry has since been closed can have no effect on it. Any other construction would, in our opinion, result in serious anomalies and grave injustice. If a workman improperly dismissed raises an industrial dispute, and before action is taken by the Government the industry is closed, what happens to the right which the Act gives him for appropriate relief, if the Act vanishes into thin air as soon as the industry is closed? If the contention of the appellant is correct, what is there to prevent an employer who intends, for good and commercial reason, to close his business from indulging on large scale in unfair labour practices in victimisation and in wrongful dismissals, and escaping the consequences thereof by closing down the industry? We think that on a true construction of S.3, the power of the State to make a reference under that section must be determined with reference not to the date on which it is made but to the date on which the right which is the subjectmatter of the dispute arises, and that the machinery provided under the Act would be available for working out the rights which had accrued prior to the dissolution of the business."
10 Having submitted to the jurisdiction of the Industrial Court and having filed their reply and not disclosing the said fact before this Court Page 11 of 12 C/LPA/1720/2005 JUDGMENT is a serious suppression of material fact though the same has not been considered by the learned Single Judge. It is clarified that the Tribunal will decide the questions which are referred to it by the Conciliation Officer. We see no reason to interfere with the order passed by the learned Single Judge. The appeal being devoid of merits, deserves to be dismissed and the same is accordingly dismissed. Interim relief stands vacated. No order as to costs.
Sd/ (K.S.JHAVERI, J.) Sd/ (A.G.URAIZEE, J.) mohd Page 12 of 12