Karnataka High Court
The Management Of vs The Secretary on 4 February, 2020
Author: S.Sujatha
Bench: S.Sujatha
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4th DAY OF FEBRUARY, 2020
BEFORE
THE HON'BLE MRS.JUSTICE S.SUJATHA
WRIT PETITION No.40009/2018 (L - RES)
BETWEEN:
THE MANAGEMENT OF
M/s RAMKUMAR MILLS PVT. LTD.,
PO BOX NO.1044
RAJAJINAGAR, BENGALURU-560010
REP BY ITS DIRECTOR
Mr. SHIVAKUMAR A. YADALAM ... PETITIONER
[BY SRI S.S.NAGANAND, SENIOR COUNSEL FOR
SRI K.R.ANAND, ADV.]
AND:
1. THE SECRETARY
DEPARTMENT OF LABOUR
GOVERNMENT OF KARNATAKA
VIKAS SOUDHA
Dr. AMBEDKAR VEEDHI
BENGALURU-560001
2. THE TEXTILE LABOUR ASSOCIATION(INTUC)
NO.826/A, FIRST FLOOR
5TH MAIN, SERVICE ROAD
VIJAYANAGAR, BENGALURU-560040
REP BY ITS PRESIDENT
Mr. K.T.GOVINDE GOWDA
3. RAMKUMAR MILLS KARMIKARA SANGHA(R)
NO.138, 9TH CROSS, 4TH MAIN
CHAMARAJPET,
-2-
BENGALURU-560018
REP BY ITS GENERAL SECRETARY
Mr. V.PRAKASH ...RESPONDENTS
[BY SMT.A.R.SHARADAMBA, AGA FOR R-1;
SRI ANANTHARAM T.S., ADV. FOR C/R-3; R-2 IS SERVED.]
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 &
227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE
ORDER DATED 29.06.2018 VIDE ANNEXURE-A AND ORDER
DATED 25.08.2018 VIDE ANNEXURE-L PASSED BY THE R-1
AUTHORITY.
THIS PETITION HAVING BEEN HEARD AND RESERVED,
IS COMING ON FOR PRONOUNCEMENT OF ORDER THIS DAY,
THE COURT PASSED THE FOLLOWING:
ORDER
The petitioner has assailed the orders dated 29.06.2018 and 25.08.2018 passed by the first respondent - Authority as well as the order dated 14.02.2019 (wrongly typed as 14.02.2018) inter alia seeking a direction to the first respondent to grant permission to close its industrial undertaking situated in the present address, under section 25[O] of the Industrial Disputes Act, 1947 ['Act 1947' for short].
2. The petitioner is a company incorporated under the Companies Act, 1956 and engaged in the -3- manufacture of dyeing, printing and bleaching of cotton fabrics having its factory at Rajajinagar, Bengaluru. It is submitted that the petitioner is governed under the Provisions of Air [Prevention and Control of Pollution] Act, 1981 ['Act 1981' for short] and the Water [Prevention and Control of Pollution] Act, 1974 ['Act 1974' for short] in addition to and apart from being covered under various other labour enactments including the ESI Act, 1948 etc.,
3. It is submitted that the petitioner in the normal course, applied for consent/approval of the Karnataka State Pollution Control Board after installation of several facilities under the said Acts and the Rules framed thereunder. The Karnataka State Pollution Control Board has issued the consent refusal orders under Section 21[4][b] of the Act, 1981 and 25 [4][b] of the Act, 1974.
-4-
4. The petitioner has filed an application under Section 25[O][1] of the Industrial Disputes Act, 1947 ['Act 1947' for short] seeking for closure of the industrial unit before the Secretary to Government, Labour Department, Government of Karnataka - respondent No.1 herein. The said application has been rejected vide order dated 29.06.2018. Further, an application dated August 2nd, 2018 was submitted by the petitioner requesting to accord permission for closure of the industrial unit before the respondent No.1. The said application also has been rejected vide order dated 25.08.2018. Hence, the present writ petition.
5. Learned Senior Counsel Sri.S.S.Naganand representing the petitioner would submit that the order dated 29.06.2018 at Annexure-A is a non-speaking order. A detailed synopsis was submitted by the petitioner putting-forth the case for closure of the industrial establishment. Ignoring the same, the order at -5- Annexure-A has been passed in a perfunctory manner. The order of the Pollution Control Board refusing the CFO envisages that there shall not be any bypass/discharge of untreated/treated effluent outside the premises under any circumstances and the Regional Officer has recommended to issue directions to the authorities of the industry not to operate at the present location later than 30.06.2019. The aforesaid aspects would indicate the impossible situation for the petitioner to continue the functioning of the industrial establishment in which they are engaged in. The petitioner has explained the inability to install ZLD Plant, also changing over fuel from FO/Agro Based Fuel [husk] to LPG as the industry cannot function in the present location beyond 30.06.2019.
6. It was argued that the subsequent application dated 02.08.2018 at Annexure-K ought to have been construed as the Review Petition under -6- Section 25[O] [5] of the Act, 1947. The order passed on the said Review Petition without assigning reasons is ex- facie illegal and void ab initio. The said [Review] application has been rejected vide communication/order dated 25.08.2018 signed by the Presiding Officer, Labour Department who had no jurisdiction to adjudicate upon the application submitted by the petitioner. It was submitted that about Rs.2.5 Crores has been paid to the workmen towards three months wages, compensation in terms of the interim order passed by this Court subject to outcome of the writ petition.
7. Learned counsel has placed reliance on the judgment of the Hon'ble Apex Court in the case of Kranti Associates Private Limited and Another V/s. Masood Ahmed Khan and Others, reported in [2010] 9 SCC 496, in support of his contention of giving reasons by the authority in arriving at a decision, a relevant factor, failing which, such an order would render -7- invalid. Further placing reliance on the judgment of the Hon'ble High Court of Delhi in the case of D.C.M Ltd., V/s. Lt. Governor, Delhi and Others, reported in 1989 [II] LLJ 250, learned Senior Counsel contended that this Court exercising the powers under Article 226 of the Constitution of India has to direct the authority to grant permission for closure forthwith, considering the facts and circumstances of the case.
8. Learned counsel Sri.Anantharam.T.S., appearing for the workmen drawing attention of the Court to Section 25[2] of the Act, 1947 submitted that on the application submitted for permission of closure, the appropriate Government having analysed to the genuineness and adequacies of the reasons stated by the employer keeping in mind the interest of the general public and all other relevant factors after making such enquiry providing reasonable opportunity of being heard to the employer, the workmen and the persons -8- interested, has refused to grant such permission by passing the order impugned recording the reasons thereof. Emphasizing on the phrase "genuineness and adequacy", it was argued that the order of refusal of closure passed by the Government on considering all these aspects is a reasonable order.
9. It was contended that the subsequent application dated August 2nd, 2018 cannot be construed as review petition. The said application at Annexure-L neither indicates the relief sought for the review of the order dated 29.06.2018 nor it refers to the provision of the Act invoked under Sub-section [5] of Section 25[O] of the Act, 1947. If such review petition was filed by the petitioner, the State Government would have exercised the power under Section 25[O][5] of the Act, 1947 either to review its order passed under Sub-section [2] of 25[O] of the Act, 1947 or the matter would have been referred to a Tribunal for adjudication.
-9-
10. Referring to sub-section (4) of section 25[O] of the Act, 1947 it was argued that an order of granting or refusing to grant permission shall be final subject to review which is binding on all the parties and shall remain in force for one year from the date of such order. As such, the order dated 29.6.2018 ceases to remain in force at present. Learned counsel has referred to host of cases which shall be discussed infra.
11. Learned AGA appearing for the respondent No.1 supporting the arguments advanced by the learned counsel for the workmen made an endeavour to justify the orders impugned.
12. I have carefully considered the submissions of the learned counsel appearing for the parties and perused the material on record.
13. The relevant provisions of Section 25[O] of the Act, 1947 are extracted hereunder:
- 10 -
"25[O]. Procedure for closing down an undertaking.-
(1) An employer who intends to close down an undertaking of an industrial establishment to which this Chapter applies shall, in the prescribed manner, apply, for prior permission at least ninety days before the date on which the intended closure is to become effective, to the appropriate Government, stating clearly the reasons for the intended closure of the undertaking and a copy of such application shall also be served simultaneously on the representatives of the workmen in the prescribed manner: Provided that nothing in this sub-section shall apply to an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for other construction work.
(2) Where an application for permission has been made under sub-section (1), the appropriate Government, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen and the persons interested in such closure may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the general public and
- 11 -
all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen.
(3) Where an application has been made under sub-section (1) and the appropriate Government does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days. 1 Subs. by Act No.46 of 1982 (w.e.f. 21.8.1984). Sec. 25Q The Industrial Disputes Act, 1947 35 (4) An order of the appropriate Government granting or refusing to grant permission shall, subject to the provisions of sub- section (5) be final and binding on all the parties and shall remain in force for one year from the date of such order.
(5) The appropriate Government may, either on its own motion or on application made by the employer or any workman, review its order granting or refusing to grant permission under
- 12 -
sub-section (2) or refer the matter to a Tribunal for adjudication:
Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference.
(6) Where no application for permission under sub-section (1) is made within the period specified therein, or where the permission for closure has been refused, the closure of the undertaking shall be deemed to be illegal from the date of closure and the workmen shall be entitled to all the benefits under any law for the time being in force as if the undertaking had not been closed down.
(7) xxxcxx (8) xxxxxx"
14. The thrust of arguments of the learned senior counsel for the petitioner inasmuch as the consent refusal orders passed by the Karnataka State Pollution Board directing the industrial establishment not to bypass/discharge of untreated/treated effluent outside the premises under any circumstances and the
- 13 -
recommendation made by the Regional Officer to issue directions to the authorities of the industry not to operate at the present location later than 30.6.2019 and the reasons assigned for the proposed closure said to have been made available before the respondent No.1 are the same. In that context the financial unavailability of making investment for up-gradation of the existing effluent treatment plant and installation of reverse pasmosis system to establish zero liquid discharge in order to locate the industrial establishment out of BBMP limits was expressed. However such financial constraints expressed by the petitioner relates to the directive/instructions issued by the Pollution Control Board vis-à-vis possibilities of improvement in economical viability.
15. It is well settled law that the authority must record reasons in support of its conclusions. Reasons facilitate the process of judicial review by superior
- 14 -
courts. The issue considered and decided by the respondent No.1 was related to the directions of the Pollution Control Board to re-locate the establishment or not to function in the present location after 30.6.2019. It is obvious that on the date of the consideration of the application submitted by the petitioner seeking permission under Section 25(0)(1) of the Act, 1947 it was premature. In such circumstances, observing so, the permission sought for closure of the establishment was rejected. However, there is no inhibition for the petitioner to seek permission for closure of the establishment by submitting a fresh application.
16. The Hon'ble Apex Court in the case of Sarva Shramik Sanghatana (KU), Mumbai Vs. State of Maharashtra and others reported in 2008-II-LLJ- 501 has held that filing of fresh application even if the earlier application was withdrawn without seeking
- 15 -
liberty or permission for filing fresh application is maintainable. In the present case, post 30.6.2019 scenario would be a good reason to file a fresh application subject to genuineness and adequacy.
17. As regards the contention of the learned senior counsel that no reasons are assigned in the order rejecting the review petition appears to be misplaced. Sub-section (5) of Section 25[O] of the Act, 1947 contemplates that the appropriate Government either on its own motion or on the application made by the employer or any workman can review its order granting or refusing to grant permission or refer the matter to a Tribunal for adjudication. Where such reference has been made to a Tribunal under the said provision, the Tribunal is required to pass an award within a period of 30 days from the date of such reference. The application for renewal said to have been made by the petitioner on 02.08.2018 does not whisper
- 16 -
about the review sought of the order dated 29.6.2018 passed under Section 25[O][2] of the Act, 1947. It is in the nature of representation to reconsider the application dated 7.5.2018 seeking permission for closure of the industrial unit. If the petitioner has invoked sub-Section (5) of 25[O] of the Act, 1947, the Government was obligated to pass an order in exercise of its power of review or make a reference. Upon a reference, the Industrial Tribunal has to adjudicate upon the issue then finally a conclusion would have been arrived on its wisdom as to whether the ingredients of Section 25[O][2] of the Act, 1947 are satisfied or not. Merely submitting a representation/repetitive application would not come within the ambit of section 25[O][5] of the Act, 1947.
18. It is trite that genuine and adequate reasons requires to be tested in the light of the directive principles of the State policy considering the interest of
- 17 -
the general public and relevant factors involved depending on the facts and circumstances. However, the bonafide of the employer is a relevant factor, it is for the Government or the Industrial Tribunal, as applicable, to probe into the issue to arrive at a decision. In such circumstances, in the absence of any review petition filed as contemplated under sub-Section (5) of 25[O] of the Act, 1947, the communication dated 25.8.2018 (Annexure-L) issued by the concerned Authority communicating the rejection of the application cannot be found fault with.
19. Though the orders impugned dated 29.6.2018 and 02.08.2018 have been challenged before this Court by filing the writ petition on 06.09.2018, well within the period of one year from the date of passing of the orders impugned, in the absence of any interim order of stay of the same, by efflux of time, the said orders would not remain in force in terms of sub-section
- 18 -
(4) of 25[O] of the Act, 1947. Even on this count, the challenge made to the orders impugned deserves to be negated.
20. In the case of Maharashtra General Kamgar Union Vs. Vazir Glass Works Limited and others reported in 1998 [III] LLJ (Supp) 231, the Hon'ble High Court of Bombay referred to the case in The Workmen Employed in Associated Rubber Industry Limited., Bhavnagar Vs. Associated Rubber Industries Limited., Bhavnagar (1986-I LLJ
142)(SC) wherein the Hon'ble Apex Court has observed as under:
"It is the duty of the Court, in every case where ingenuity is expended to avoid taxing and welfare legislations, to get behind the smoke-screen and discover the true state of affairs. The Court is not be to satisfied with form and leave well alone the substance of a transaction."
- 19 -
In the said judgment, following observations from the case of Ramsay, 1981 1 Allahabad 865 has been approved.
"The fact that the Court accepted that each step in a transaction was a genuine step producing its intended legal result did not confine the Court to considering each step in isolation for the purpose of assessing the fiscal results. Avoidance of welfare legislations is as common as avoidance of taxation and the approach in considering problems arising out of such avoidance has necessarily to be the same."
21. As discussed above, the reasons for closure now would stand on a different footing post June 2019, the matter requires to be analysed afresh considering the genuineness and adequacies. As such, neither remanding the matter for reconsideration or directing the Government to accord permission for closure of industrial establishment at this stage would not arise.
- 20 -
22. In the judgment of the Hon'ble High Court of Delhi in the case of DCM limited, supra, referred to by the learned senior counsel for the petitioner, at the first instance, the Full Bench of the Hon'ble High Court of Delhi while considering the closure of undertaking because of mandatory provision of master plan to stop operations and the settlement arrived at between the management and the workmen directed the Lt. Governor to re-determine afresh the application of the management for closure of the Mill. The Lt. Governor had again rejected the permission for closure. In the second round, in view of the undertakings given before the court in the scheme of settlement for payment of compensation to the workmen and the terms and conditions as set out in the agreement, it has been observed that the High Court in exercise of its power under Article 226 of the Constitution of India has jurisdiction to direct public authorities to exercise its discretion in a particular manner. The said judgment
- 21 -
would not be applicable to the facts and circumstances of the case.
For the aforementioned reasons, writ petition stands dismissed with liberty to the petitioner to file a fresh application under Section 25[O] of the Act, 1947 to seek closure of the industrial establishment, if so advised.
In view of the aforesaid, the order dated 14.02.2019 (wrongly typed as 14.02.2018) issued by the respondent No.1 approving the sanction to initiate proceedings under Section 34 of the Industrial Disputes Act, 1947 at Annexure-M does not call for any interference. However, given the circumstances, the same shall be kept in abeyance for two months.
Sd/-
JUDGE NC./Dvr: