Bombay High Court
Bon Limited vs Hindustan Liver Employees Union And ... on 18 September, 2007
Equivalent citations: 2008(1)MHLJ683
Author: D.B. Bhosale
Bench: D.B. Bhosale
ORDER D.B. Bhosale, J.
1. Heard learned senior counsel for the parties. Rule. Learned Advocate for the respondents waive service for the respondents. By consent, rule is made returnable forthwith and heard finally.
2. This writ petition under Article 226 of the Constitution of India raises the following questions of law for the consideration of this Court:
(i) Whether there could be a reference under Section 10 read with Section 25-O(5) of the Industrial Disputes Act, 1947 against an order of closure of an undertaking under Section 25-O(2) or it should be solely and exclusively under Section 25-O(5), and can never be referred to a tribunal under Section 10 read with Section 25-O(5)?
(ii) Whether after one year, from the date of an order of closing down an undertaking under Section 25-O(2) of the Industrial Disputes Act, 1947, the tribunal adjudicating a reference under Section 10 read with Section 25-O(5) would become functus officio and the adjudication proceedings would stand concluded or lapsed without any decision?
3. The order dated 24.7.2007 passed on the application at Exhibit U-57 of the respondent-Union, thereby keeping in abeyance, during pendency of the reference, an order of closure passed on the review (dated 26.7.2006 passed) under Section 25-O(5) of the Industrial Disputes Act,1947, (for short, "the ID Act") and the order dated 18.8.2007 passed on the applications at Exhibit C-46 and CA-13 instituted by the petitioner company in Reference (ID) No. 49 of 2006, inter alia, holding that the tribunal had not become functus officio upon expiry of the period of one year from the date of closure are under challenge in the present writ petition.
4. The petitioner, Bon Limited, had acquired the Bombay factory, a manufacturing undertaking at Sewri, Mumbai, (for short, "Bombay factory") by a Deed of Transfer with effect from 15.7.2005. The Bombay factory was transferred by respondent No. 2, Hindustan Lever Limited, to the petitioner in terms of the arrangement arrived at whereby the employees of the transferor company, Hindustan Lever Ltd, were given option to join services of the petitioner in an endeavour to revive the ailing Bombay factory undertaking. Consequently, services of all the workmen at their option were transferred to the petitioner company with effect from 5 pm on 17.7.2005, with continuity of service in terms of the proviso to Section 25FF of the Industrial Disputes Act, 1947 (for short, "ID Act"). All the workmen, except approximately 42, opted to join the services of the petitioner company. Thereafter, the petitioner on 17.1.2006 made an application to the appropriate Government/Specified Authority under Section 25-O(1) of the ID Act seeking permission to close down the Bombay factory on various grounds. The said application was rejected by the Specified Authority, that is, the Commissioner of Labour, by his order dated 16.3.2006. The petitioner company thereafter made an application seeking review of the said order, as provided for under Section 25-O(5) of the ID Act. The Competent Authority, by order dated 26.7.2006, allowed the review application made by the petitioner so also the application dated 17.1.2006 made by the petitioner under Section 25-O(1) of the ID Act seeking permission for closure of its Sewari Factory. The workmen, by letter dated 16.8.2006, addressed to the appropriate Government/Specified Authority, had made a prayer for reference. Respondent No. 1 - Union, representing the workmen concerned in the closure, had also challenged the order dated 26.7.2006, of the Specified Authority by filing a writ petition being Writ Petition No. 2056 of 2006. The learned Single Judge of this Court passed on orders on 22.8.2006 and 29.8.2006 directing the Specified Authority to refer the matter to the Industrial Tribunal for adjudication under Section 10 read with Section 25-O(5) of the ID Act as mentioned in the said order leaving it open to the petitioner to challenge the maintainability of the reference before the Industrial Tribunal. The Labour Commissioner, accordingly, made a reference order dated 4.9.2006. The petitioner company had carried the orders passed by the learned Single Judge dated 22.8.2006 and 29.8.2006 in Special Leave Petition, being No. 15665 of 2006 before the Supreme Court. The Supreme Court, however, disposed of the SLP vide its order dated 25.9.2006 and affirmed the order of the learned Single Judge.
5. During pendency of the reference, respondent No. 1-Union filed an application dated 21.6.2007 at Exhibit-U-57 seeking stay of the operation of the order of the Specified Authority dated 25.7.2006 until the Award in Reference (IT) No. 49 of 2006 is effective without other consequential benefits of reinstatement, work and wages. The Industrial Tribunal, after hearing the parties, was pleased to pass the first impugned order dated 24.7.2007 granting an application for interim relief instituted by the respondent-union and thereby ordered to keep the order of closure dated 26.7.2006 passed on the review under Section 25-O(5), granting permission to close down the Sewri factory by the Specified Authority in abeyance till the disposal of the reference. On 26.7.2007 the petitioners too had filed the applications at Exhibit-C-46 and CA-13 before the Industrial Tribunal contending that the order of the specified Authority had attained finality as per Section 25-O(4) of the ID Act after the period of one year was over, the Industrial Tribunal has become functus officio and lost its jurisdiction to continue the proceedings in the reference. The Industrial Tribunal passed the second impugned order dated 18.8.2007 rejecting the petitioners applications and directed the parties to appear before the Tribunal and proceed with the matter on day-to-day basis. It is against this backdrop the petitioners have impugned the orders passed by the Industrial Tribunal dated 24.7.2007 and 18.8.2007 passed on two different applications filed by the respondent-Union and the petitioner respectively.
6. At this stage, let me revert back to the earlier round of the petitions in this Court when writ petition Nos. 2056 of 2006 was disposed of. After disposal of that writ petition by the learned Single Judge by order dated 22.8.2006, the Supreme Court did not entertain the S.L.P. However, while disposing it of made it clear that the tribunal should decide the question as to whether the reference is maintainable in the first instance as a preliminary issue preferably on or before 31.1.2007. The tribunal considered the issue of maintainability of the reference and held it to be maintainable, which was once again challenged by the petitioner in writ petition No. 534 of 2007. That petition came to be disposed of by the learned Single Judge vide judgment dated 29.3.2007 refusing to interfere with the order passed by the tribunal. The learned Single Judge while disposing of the writ petition had placed reliance upon the judgment of the Division Bench of this Court in Cable Corporation 2005 (2) CLR 1033 to hold that the reference under Section 25-O(5) is maintainable. The order of the learned Single Judge dated 29.3.2007 was also challenged in the Supreme Court and the Supreme Court, vide its order dated 15.5.2007, refused to interfere at that stage keeping it open to the petitioner to avail as such remedy as is available in law. It is pertinent to note that the maintainability of reference, at that stage, was challenged on the ground that the competent authority did not have power to refer the matter to a tribunal after it had already taken decision in review while exercising its power under Sub-section (5) of Section 25-O. The contention of the petitioner was that the appropriate Government initially having refused to grant permission to the petitioner while exercising its powers vested in it by Sub-section (2) of Section 25-O and thereafter having reviewed its order on the application filed by the petitioner while exercising its power under Sub-section (5), it is not open to make reference under Sub-section (5). In short, after having reviewed the order it is not open for the appropriate Government to make reference by exercising its power under the very same Sub-section (5) of Section 25-O of the ID Act.
7. I have heard learned senior counsel for the parties at considerable length and with their assistance went through the entire material placed before me so also the judgments relied upon by them in support of the contentions urged by them. Mr. C.U. Singh, learned senior counsel for the petitioner, at the outset, invited my attention to the judgment of this Court in United White Metal Ltd. v. Bhartiya Kamgar Sena and Ors. reported in 2006 (2) L.L.N. 628 and submitted that where there is a reference under Section 25-O(5) and if it remains pending then in that event the reference must fail on expiry of the period of one year from the date of an order of closure as envisaged under Section 25-O(4) and cannot be proceeded with. He further invited my attention to the judgment of the Apex Court in Vazir Glass Works Ltd. v. Maharashtra General Kamgar Union and Anr. reported in 1996 (1) L.L.N. 430 and submitted that the judgment of the Division Bench in the case of Association of Engineering Workers v. Indian Hume Pipe Company Ltd. and Ors. reported in 1985 (2) L.L.N. 652, on which the Tribunal placed heavy reliance upon, cannot be treated as correct law. He submitted that the Division Bench judgment stands impliedly overruled by the judgment of the Supreme Court in Vazir Glass Works Ltd, as rightly held by the learned Single Judge in United White Metal Ltd. Mr Singh submitted that the judgment of the Supreme Court in Workmen of Meenakshi Mills Ltd and ors v. Meenakshi Mills Ltd and Anr. does not declare the law that the application in a situation, as arisen in the present writ petition, is maintainable under Section 10 read with Section 25-O of the ID Act. Mr. Singh, thereafter, invited my attention to the impugned order dated 18.8.2007 and submitted that the Tribunal has failed to observe the judicial propriety and has proceeded to overlook the judgment of this Court in United White Metal Ltd. He submitted that the order of the Specified Authority remains in force for only a limited period of one year from the date of the order and in the present case it was in force only upto 25.7.2007 and it then attained finality as per the express stipulation in the statute. According to Mr. Singh, after the period of one year the tribunal becomes functus officio and has no longer jurisdiction to continue the proceedings in reference. He submitted that right to close down an undertaking is a part of fundamental right to carry on business under Article 19(1)(g) of the Constitution of India. In view thereof, the legislature envisaged that the entire process contemplated by Section 25-O, including a decision on review or reference, should be completed within the time stipulated therein and the life of the order granting permission to close down an undertaking is confined to one year and there is no provision to extend this life, nor can it be extended by judicial fiat. He took me through the provisions contained in Section 10(2A) and Section 33(5) and submitted that both these provisions lay down the procedure for extension of time in a case where time limit was specified in the statute. At the same time, the new Section 25-O, which was introduced with these sections, no similar provision for extension of time was made. This shows, according to Mr. Singh, the provisions of Section 25-O was made inviolable and inflexible after considering all relevant factors, exigencies, delays, relative hardships to both the parties concerned. Therefore, now it is not open for the industrial tribunal to enlarge the scope of the restrictions placed by the parliament on the exercise of fundamental right under Article 19(1)(g) of the Constitution. He submitted that any extension of time would clearly be without jurisdiction and in violation of the express legislative mandate and a transgression into the domain reserved by law for the Executive wing of the Government.
8. Mr. Singhavi, learned senior counsel for the respondents, on the other hand, submitted that the judgment of this Court in United While Metal Ltd has no application to the facts of the present case. He submitted that in the present case apart from the order of this Court in Writ Petition No. 2056 of 2006 directing to make reference under Section 10 read with Section 25-O(5), the respondent-Union had consciously made an application seeking reference under those provisions and, accordingly, the reference was made by the appropriate Government. He, therefore, submitted that the reference would not fail on expiry of the period of one year as provided in Sub-section (4) of Section 25-O(5). He submitted that the application contemplated by Section 25-O(5), in a situation, as arisen in the present case, is maintainable if filed read with Section 10 of the ID Act. In support of this contention, Mr. Singhavi placed reliance upon the judgment of the Supreme Court in Meenakshi Mills Ltd. On the basis of the orders passed by this Court and the Supreme Court referred to earlier, Mr. Singhavi submitted that it is not open to the petitioner to impugn the orders in the instant proceedings under Article 226 of the Constitution of India. Mr. Singhavi, next invited my attention to the judgment of the Supreme Court in Orissa Textile and Steel Ltd. v. State of Orissa and Ors. (2002) 2 Supreme Court Cases 567, by which constitutional validity of Section 25-O of the ID Act had been upheld. He submitted that not providing the remedy of review or reference before the order of the appropriate Government becomes final, was a lacuna in the original Section 25-O. The Supreme Court in Excel Wear v. Union of India struck down Section 25-O, as originally enacted which had not provided such remedy of review or reference. He submitted that the aggrieved workmen would be left remedyless if the submissions of Mr. C.U. Singh, on the interpretation of the provisions contained in Section 25-O are accepted. The right conferred by the statute would be trumped by an employer who would succeed by merely delaying the matter as it happened in the present case. Mr. Singhavi then submitted that a basic difference between the two situations, namely, granting the application filed by the employer and refusing to grant permission for closure filed under Section 25-O(1) of the ID Act may be noticed. If the initial application filed under Section 25-O(1) is rejected and not reviewed or referred and not disposed of by the tribunal within the time stipulated therein, it would be open for the employer to make a fresh application after expiry of the period of one year under Sub-section (4) of Section 25-O, while the employees, if approached the appropriate Government seeking review or reference and if review or reference is not disposed of and stands lapsed after expiry of the period of one year, the employee will be rendered remedyless. He, therefore, submitted, seeking reference under Section 10 read with Section 25-O(5) is perfectly justified and legal and the limitation prescribed under Sub-section (4) of Section 25 would not apply in such situation and more particularly when the application seeking reference is also under Section 10 of the ID Act.
9. In order to consider the questions raised in this writ petition and to appreciate the submissions urged by the learned Counsel for the parties, it would be advantageous to reproduce the relevant subsections of Section 25-O of ID Act, which read thus;
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 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.
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 the application made by the employer or any workman, review its order granting or refusing to grant permission under 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.
10. Upon perusal of Section 25-O, one can see that it creates an embargo on an employer employing more than 100 workmen in an industrial undertaking from closing it down without express permission of the appropriate Government. It provides a calender of the order in which the entire procedure has to be completed, showing the days dedicated for every stage starting with an application of the employer to be made 90 days before the date of intended closure seeking permission of the appropriate Government to close down an undertaking as provided for in Sub-section (1). It is evident from the scheme of various Sub-sections of Section 25-O of the ID Act that whenever an application for closure of an industrial unit is made by an employer, the appropriate Government before whom such application is made, is required to dispose of such application within 60 days from the date of making the application and communicate its decision within the said period of 60 days so that an employer does not suffer any hardship on account of failure on the part of the appropriate Government to dispose of such application for permission for closure expeditiously. Sub-section (3) of Section 25-O further provides that if such application is not disposed of expeditiously not exceeding 60 days, the provision has been made that if the decision of the appropriate Government on such application is not communicated the decision of the appropriate Government on the application for permission to close an industrial unit, it will be deemed that such permission has been granted. The legislature has incorporated Sub-section (5) providing review by the appropriate Government of its decision on the application for closure on its own motion or on the basis of the application to be made by the aggrieved party.
11. In the present case, we are mainly concerned with Sub-sections (4) and (5) of Section 25-O of the ID Act. Upon perusal of Sub-section (4), it is clear that an order of the appropriate Government granting or refusing to grant permission is final and binding on all the parties and it remains in force for one year from the date of such order. However, it is made subject to the provisions of Sub-section (5) which provide that the appropriate Government may, either on its own motion or on the application made by the employer or any workman, "review" its order granting or refusing to grant permission under Sub-section (2) or "refer" the matter to a tribunal for adjudication. Proviso to Sub-section (5) states that where a reference has been made to a tribunal under this sub-section, it shall pass an award within a period of 30 days from the date of such reference. The period of one year as provided under Sub-section (4) of Section 25-O begins to run from the date of an order of the appropriate Government, granting or refusing to grant permission under Sub-section (2), and in the event of review under Sub-section (5) from the date of the order of review since the order granting or refusing to grant permission would merge in the order of review. Before I proceed further to interpret the provisions contained in Section 25-O(5), it would be more appropriate to consider the judgments of the Supreme Court and of this Court in order to know how Section 25-O of ID Act has travelled so far and the interpretation put by the Supreme Court and High Court on the language of this section.
12. The constitutional validity of Section 25-O, as originally enacted, fell for consideration of the Supreme Court in Excel Wear v. Union of India (supra). This section was struck down as unconstitutional, inter alia, also on the ground that the order passed by the authority was not subject to any scrutiny by any higher authority or tribunal either in appeal or revision and the order could not be reviewed either. The constitutional validity of the re-enacted Section 25-O was also considered by the Supreme Court in Orissa Textile and Steel Ltd (supra). After having considered the scheme of Section 25-O and more particularly Sub-section (5), the Supreme Court has observed that "in exercising the powers of review, the appropriate Government would be performing quasi-judicial functions. Sub-section (5) of Section 25-O provides that the award should be passed within a period of 30 days from the date of reference. Even though it does not provide any timeframe within which the review is to be disposed of, it is the settled law that the same would have to be disposed of within reasonable period of time. In our view, a period of 30 days would be a reasonable period for disposing of a review also. This review and/or reference under amended Section 25-O would be in addition to a judicial review under Article 226 or Article 32 of the Constitution" Further, the Supreme Court has made reference to its judgment in Meenakshi Mills Case (1992) 3 Supreme Court Cases 336, and has reiterated that the exercise of power of review being quasi judicial, the remedy of judicial review under Article 226 or Article 32 was an adequate protection against arbitrary action in the matter of exercising power by the appropriate Government.
13. Section 25-O, as originally enacted, and which was struck down by the Supreme Court in Excel Wear v. Union of India (supra), had not provided "review or reference" before the order of the appropriate Government became final. In Orissa Textile and Steel Ltd case (supra), the Supreme Court found this as a lacuna in the original Section 25-O. The lacuna was cured in the re-enacted Section 25-O and the Supreme Court in Orissa Textile and Steel Ltd case by interpreting the word "may" to be read as "shall", has held that providing review or reference is mandatory. Under Sub-section (5) the appropriate Government shall review the order on its own motion or on an application in that behalf is made by the employer or the workman. Similarly, if so required by the employer or the workman, it shall refer the matter to a tribunal for adjudication. In exercising powers of review or making a reference the appropriate Government would be performing quasi-judicial functions. To provide a remedy to a party aggrieved by the order of the appropriate Government by way of a review or reference under Section 25-O(5) is of utmost importance and is made available to a party before the order of the appropriate Government becomes final. The intention of the legislature in making such provision in Sub-section (5) is to provide adjudication forum to the applicant who is aggrieved by the refusal or grant of permission for closure. The questions, therefore, may arise are whether such an important and crucial remedy can lapse merely because of expiry of period of one year from the date of the order of the appropriate Government?; whether such an interpretation of Section 25-O(5) would make the mandatory provisions of review/reference superfluous?; and whether the aggrieved workman would thus not have any remedy under the statute and if such interpretation is accepted the right conferred by the statute is likely to be defeated by an employer by merely delaying the matter?
14. A heavy reliance was placed on the judgments of the Supreme Court in Vazir Glass Works Ltd (supra) and of this Court in United White Metal Ltd (supra). In Vazir Glass Works Ltd case, the Supreme Court was considering the case where an application of the company for closure under Section 25-O(1) of the Act was rejected. In the review application filed by the employer, the State Government instead of reviewing the order of rejection, made a reference to the industrial tribunal for adjudication of the case of closure made by the company. The proceedings before the Supreme Court were arising from this order. Upon perusal of Vazir Glass Works Ltd and particularly paragraph 31 thereof it is clear that the Supreme Court held that the order by way of review must be made within one year otherwise right to make fresh application for permission to close after expiry of one year from the date of rejection of the permission of closure will loose its relevance. The reasonings of the Supreme Court were in relation to an application where the permission was rejected and that the employer would make a fresh application after one year and, that too, looking at the practical part of it. The same reasoning would not apply when permission is granted and the employers actually enforce the closure. In such case the question of making a fresh application would not arise. Take a case, as present, where a reference is made against the closure at the instance of workmen and if it remains pending after one year, the workman would be rendered remedyless. The very object and reason of introducing such provision against the backdrop of striking down Section 25-O as it was originally enacted, would be defeated. The remedy of review or reference is mandatory and is in addition to judicial review under Article 226 or under Article 32 of the Constitution of India. The provisions cannot be construed in such a way that the parties are deprived of a remedy, as is available in law, just by the efflux of time without taking it to its logical conclusion. For better appreciation the relevant paragraph Nos. 31, 32 and 33 in Vazir Glass Works Ltd may be reproduced, which read thus:
31. Since the decision made on an application for permission for closure is to remain operative only for a year, in our view, it will be only proper to hold that an order by way of review either on the aggrieved partys application or on own motion, of the State Government, must be made within the said period of one year. Otherwise, the right to make a fresh application for permission to close after the expiry of one year from the date of rejection of permission for closure will lose its relevance. It also appears to us that an anomalous situation may arise if the application for review, when presented within the said time frame of one year is allowed to be decided even after the expiry of the said time frame of one year when the order passed by the State Government has already ceased to be operative. An an illustration, it may be indicated that a party aggrieved makes an application for review of the order of the State Government within a year during which the order is operative, but for some reasons, such application is not disposed of within one year. After the expiry of one year, the aggrieved party makes a fresh application for permission to close and on such application an order is made by the State Government or the party obtains a deemed order. This order on a fresh application, subject to any review of the same, will remain in force for one year. If the State Government is permitted to pass order on the review application made against the first order when the right to make fresh application and to obtain an order has already accrued, any order on review to be enforceable must conform to the order passed or deemed to have been passed on subsequent application for permission to close. Any other order is not conceivable because an order by way of review supersedes the order reviewed but not the subsequent order on a fresh application made and such subsequent order being operative for the next one year cannot be passed by any order of review of the earlier order.
32. Although it has not been expressly indicated within what period a review application validly made is to be disposed of the provision that order on an application for closure would remain in force for one year and in the absence of any embargo to make fresh application for such permission after the expiry of one year even if a review application remains pending makes it abundantly clear that in the scheme of Section 25-O, the review application is to be made before the expiry of the said time frame of one year and such application is to be disposed of within such time frame otherwise such review application will become infructuous. The argument that a party should not be made to suffer simply on account of the failure on the part of a statutory authority to dispose of review application within a time frame and thereby rendering it infructuous, is not tenable because after the expiry of the said time frame of one year, the party aggrieved has a right to make a fresh application by incorporating all the material factors germane for consideration of its application for permission to close including the factors indicated in review application. Neither the general principle of retaining jurisdiction to dispose of review application validly made nor the principle that an authority if clothed with the power of review will not become functus officio after the expiry of the time frame of one year, but it will retain its authority to dispose of the pending review application will arise in the context of the scheme of Section 25-O.
33. It also appears to us that the reference to the Industrial Tribunal for adjudication of the application for permission to close an industrial unit is made under Section 25-O(5) of the Act and such reference is not under Section 10(1) of the Act. Hence, although it was mentioned in the order of the State Government that the reference to the Industrial Tribunal for adjudication of the application for permission for closure was made under Section 25-O(5) read with Section 10(1) of the Act, such reference has in law been made under Section 25-O(5) of the Act without the aid of Section 10(1) of the Act.
15. In United White Metal Ltd (supra), the learned Single Judge was considering a case arising from the application filed by the employer under Section 25N of the ID Act seeking permission of the authority of the State Government to retrench 116 workmen. Such permission was granted and all the workmen were retrenched. The Union sought review of the said order which the Specified Authority refused to review but referred the matter to the industrial tribunal. The learned Single Judge of this Court in United White Metal Ltd, after considering the judgment of the Apex Court in Vazir Glass Works Ltd., in paragraph 9 held thus:
9. The view taken by the Apex Court is that once the period of one year has expired and even if review application is pending then the said review application does not survive. While considering the review application the Apex Court has also considered the case where there is a reference to the Industrial Tribunal for adjudication that once there is a reference under Section 25-O(5) and not under Section 10(1) then in that event the reference must fail on expiry of period of one year and cannot be proceeded with. In the present case also reference is under Section 25N and not under Section 10(1) and thus the reference must fail on the expiry of period of one year.
16. In Ambika Silk Mills Co. Ltd v. Maharashtra General Kamgar Union and Anr. 1998 (1) C.L.R. 425, the learned Single Judge of this Court has distinguished the judgment of the Supreme Court in Vazir Glass Works Ltd case while considering the issue whether the provisions of Section 25-O(5) and more particularly proviso to the said sub-section, held that the said provision is directory and not mandatory and the Award passed by the Industrial Tribunal after 30 days from the date of reference would not be rendered bad in law on that count. In that case, the Award was made after one year and eight months. The learned Judge while distinguishing Vazir Glass Works Ltd case noticed that the Supreme Court did not deal with the question where the application for review was made within one year from the date of decision of the State Government on the application under Section 25-O(1) and the State Government made the reference of the matter to the tribunal for adjudication also within one year of its decision but the tribunal passed the Award beyond 30 days from the date of such reference and beyond one year from the date of such decision of the State Government under Section 25-O(1). In short, it was held that the period of 30 days as also the period of one year was directory and did not make the tribunal functus officio. It appears that this judgment in Ambica Silk Mills Co. case was either not brought to the notice of the learned Single Judge in United White Metal Ltd case or it was not noticed by the learned Single Judge.
17. In the present case, the situation that falls for my consideration and the situation that fell for the consideration of the Supreme Court in Vazir Glass Works Ltd is exactly contrary to each other. In Vazir Glass Works Ltd, as pointed out earlier, the application of the employer under Section 25-O was rejected and the review was sought and instead of reviewing the order of rejection a reference was made to the tribunal after the period of one year stipulated under Section 25-O(4). While in the present case, initially the application was rejected and the order was reviewed at the instance of the employer well within time so also the application made by the union seeking reference under Section 10 read with Section 25-O of the ID Act. The Supreme Court in paragraph 31 of the judgment in Vazir Glass Works Ltd has considered an illustration and has reached observed that any order on the review passed by the appropriate Government is not conceivable because an order by way of review supersedes the order reviewed but not the subsequent order on a fresh application made and such subsequent order being operative for the next one year cannot be passed by any order of review of the earlier order. Let me consider an illustration exactly opposite to one that was taken by the Supreme Court. If an application seeking closure of an undertaking is allowed, as in the present case, either at the very inception under Section 25-O(2) or on the review under Section 25-O(5) the party aggrieved would be only workmen who have a remedy of either seeking review of such an order or to seek reference to a tribunal for its adjudication. If a review or reference, though made within the time stipulated, is not disposed of within one year as contemplated by Sub-section (4) of Section 25-O, the proceedings would lapse if the contention urged on behalf of the petitioner is accepted. In that case the employee will be either rendered remedyless or for no reason will have to apply afresh under Sub-section (4) of Section 25-O and pursue a new beginning, which does not appear to be the intention of the legislature. Such interpretation put on the language of Section 25-O(4) and (5) cannot be accepted to render the remedies available to the workmen infructuous.
18. Upon plain reading of Section 25-O it is clear that none of the sub-sections, except Sub-section (7), is prefaced by non obstante provision overriding the other provisions in the ID Act. It is true that Section 25-O is a special provision but that does not exclude the remedy available to the workmen to apply for reference against the order of closure, passed under Sub-section (2), under Section 10 read with Section 25-O(5) of the ID Act. If a reference made at the instance of workmen, as in the present case, is not decided within one year that would close the doors for the workmen and they would not have any remedy available in law. The basic proposition that a party cannot be rendered remedyless has to be borne in mind while interpreting a provision such as the one that falls for my consideration in the present case. At the highest, Section 25-O is a special procedure seeking permission to close if the predicates set out therein are satisfied. So read, a balance would be struck between the special provision seeking permission to close and general remedy to the workmen under Section 10 to raise an industrial dispute before the Tribunal to look into all aspects of the legality or otherwise of closure. The test, which the tribunal has to consider while adjudicating an industrial reference, can be different from those which the appropriate Government consider while granting permission to close under Section 25-O(2) of the ID Act.
19. It is true that the right to close down an undertaking is an integral part of the fundamental right to carry on business under Article 19(1)(g) of the Constitution of India. The workman also has a the right to raise an industrial dispute with regard to the said closure. In this connection, provisions of Section 2(k), 7A and the Third Schedule Item 10 of the ID Act may also be noticed. Section 2(k) defines "industrial dispute" to mean any dispute or difference between employers and employees, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any persons. Under Section 7A, the Appropriate Government is empowered to constitute Industrial Tribunals for the adjudication of an "industrial disputes" relating to any matter, whether specified in the Second Schedule or the Third Schedule and for performing such other functions as may be assigned under the ID Act. The Third Schedule of the ID Act and Item 10 therein clearly shows that closure of establishment is a matter within the jurisdiction of Industrial Tribunal which is empowered under Section 7A to adjudicate the industrial dispute. Taking in view Section 2(k), 7(A) and the Third Schedule Item 10 of the ID Act, it is clear that the workmen has a right to raise an industrial dispute with regard to "closure".
20. Section 25-O creates an embargo on the power of the employer to close his factory. This section, inter alia, provides that if a factory employs more than 100 workmen then the employer shall not close the factory without obtaining prior permission of the appropriate Government. Once the the permission to close is granted by the appropriate Government, I do not see any reason as to why the closure cannot become an industrial dispute under Section 2(k) and as to why the workmen cannot have a right to seek a reference for resolution of such dispute under Section 10 of the ID Act. If the provisions of Section 25-O(4) and (5) are not interpreted to mean this it would render the workmen without any remedy and the apprehension expressed that the employer would succeed by delaying the proceedings and rendering the remedies infructuous would turn into reality.
21. It is pertinent to note that the learned Single Judge while disposing of the earlier Writ Petition No. 2056 of 2006 vide order dated 22.8.2006 had specifically directed that the Government should make a reference under Section 10 read with Section 25-O of the ID Act. The Government in its order of reference specifically stated that the reference was under Section 10 read with Section 25-O(5) pursuant to the directions of the learned Single Judge. The submission that Section 10 read with Section 25-O(5) ought to have been mentioned in the Schedule, in my opinion, is not tenable inasmuch as it is never done in any reference and the Schedule always contain the dispute and not the Section under which it is referred. The learned Single Judge in order dated 22.8.2006 has also made it clear that the reference application made by consensus of the parties without prejudice to the rights of the employer to contend before the industrial tribunal that the reference was not maintainable. As indicated earlier, the maintainability at that stage was challenged on altogether different grounds and not on the ground that falls for my consideration in the present writ petition. It may also be noticed that the reference, in our case, had been consciously asked for under Section 10 read with Section 25-O(5) by the employees. In my opinion, if the employees are not allowed to seek reference under Section 10 in a situation, as in the present case, they would be rendered remedyless. Merely because Section 25-O is a special provision would not mean that it excludes the remedy available under Section 10. This is, of course, subject to the right of employer, whose application under Section 25-O(1) has been rejected, to file fresh application under Section 25-O(1) offer one year as held by the Supreme Court in Vazir Glass Works Ltd. Since I have held that there could be a reference under Section 10 read with Section 25-O(5) of the ID Act, the judgments on which a heavy reliance was placed by the petitioner in United White Metal Ltd and Vazir Glass Works Ltd are of no avail to the petitioner and in any case the law laid down therein would not apply to the facts of the present case. In this view of the matter, I do not deem it necessary to deal with every contention urged by Mr. Singh, learned senior counsel for the petitioner. In the circumstances thereof, the first question stands answered in the affirmative while the second question stands answered in the negative. Both the judgments impugned in this petition accordingly stand confirmed. In the result, the rule stands disposed in the terms of this judgment with the direction to the Tribunal to dispose of the reference, in any event, within the time extended by this Court earlier. No costs.