Orissa High Court
Orissa State Commercial Transport ... vs Orissa State Transport Corporation ... on 15 May, 1998
Equivalent citations: (1999)IILLJ651ORI
Author: S.N. Phukan
Bench: S.N. Phukan, C.R. Pal
JUDGMENT S.N. Phukan, C.J.
1. This writ petition has been filed on behalf of the employees of the Orissa State Commercial Transport Corporation through their union against the decision of the Government to close down the Orissa State Commercial Transport Corporation Ltd. (for short, "the Corporation") with effect from May 30, 1998.
2. The Corporation is an instrumentality of the State coming under Article 12 of the Constitution. In the year 1961, the State Government formulated an integrated scheme under which ores were to be mined from different mines of Orissa, transported to Paradip Port and exported to overseas countries. On September 7, 1961, there was high level meeting in which it was decided to form Orissa Mining Corporation for the purpose of raising and despatching minerals from the mines and also to form a separate transport organisation for the purpose of transporting ores from the mine-heads to Paradip Port. Accordingly, Paradip Transport Department was established in the year 1961 and it undertook the work of transportation of ores from the mine-heads to Paradip Port. In the year 1964, the present Corporation was incorporated which took over all the assets and liabilities of Paradip Transport Department. The Corporation was registered as a Government Company under the Companies Act. 1956 with the object of transporting ores from different mine-heads to Paradip Port. It has been alleged by the petitioner that the opposite parties have now decided to close down the Corporation. Such a decision is illegal and mala fide. If this is done, 325 persons who have put in 7 to 37 years of service, will be rendered jobless as there is no alternative proposal for their employment in any other Government sector.
3. On February 26, 1998, the Corporation applied to the State Government for grant of permission to close down the undertaking with effect from May 30, 1998. While making the application, opposite party No. 1 indicated as follows: -
"The Orissa State Commercial Transport Corporation Ltd. (O.S.C.T.C.) was incorporated in the year 1964 by the Government of Orissa as a fully owned public sector undertaking under the administrative control of the Commerce Department with the sole aim and object of transporting mineral resources of the Orissa Mining Corporation Ltd. (O.M.C.). However, the O.M.C. did not rise to the occasion due to their internal problems, as per the schedule of programme for transport export of mineral resources through Paradip Port. As a result, the O.S.C.T.C.'s entire high-pay load vehicles imported from Japan remained idle for years together till 1974 when the Ore Handling Plant of O.M.C. started operating. Thus the O.S.C.T.C. at the inception stage itself started incurring loss heavily due to remaining idle of its fleet of vehicles. After few years, the O.M.C. back-trecked and inducted private agencies in the field of transportation work ana asked the O.S.C.T.C. to participate in the open tender. The private agencies tried to oust the O.S.C.T.C. from the lucrative transport contracts leaving the O.S.C.T.C. into loss margin of profit transportation of short distance operations, which was of a very limited period in each year. Due to lack of work in hand and lack of business contracts from O.M.C. and lack of financial support from Government for the O.S.C.T.C. it was just impossible to run the O.S.C.T.C., as its over head is quite high, lack of business and lack of working capital.
2. The total cumulative loss of the O.S.C.T.C. as on March 31, 1997 is Rs. 12.42 crores.
3. Besides its market liabilities is about 8 crores which is to be cleared by the Corporation.
4. However, a decision was taken by the Government on the recommendation of the Cabinet Sub-Committee for merger of the Corporation with O.M.C. But due to delay in updating of audit of accounts of O.S.C.T.C. this merger of O.S.C.T.C. with O.M.C. was ruled out by Government and finally the Chief Minister in high level meeting held on January 19, 1997 has decided for closure of the O.S.C.T.C. under Section 25O of the I.D. Act."
The said letter is available at Annexure-1 to the writ petition. On September 19, 1997 in a high level meeting presided over by the Chief Minister, the merger as suggested was not accepted and ultimately it was decided to close down the Corporation by complying with the provisions of Section 25O of the Industrial Disputes Act, 1947, (for short, "the Act"). Approval for closure was granted by the State Government by order dated March 26, 1998 vide Annexure-3 by exercising powers under Sub-section (2) of Section 25O of the Act for the following reasons:-
"1. The establishment is incurring loss continuously from its inception, i.e. 1964.
2. The total cumulative loss as on March 31, 1997 is Rs. 12.42 crores.
3. The lack of working capital, lack of business contracts and lack of financial support has made it impossible to run the Corporation.
4. There is no possibility of earning profit without any scope of economic revival."
4. The only question to be decided is whether the decision of the Government to close down the Corporation is legal or not.
5. Reference has been made at the Bar to the decision of the Apex Court in Excel Wear v. Union of India and of ers (1978-II-LLJ-527) (SC) wherein it has been, inter alia, held that Section 25O(2) of the Act does not require giving of reasons in the order. Yet, by the closure, the interest of labour is bound to suffer for the time being because it makes a worker unemployed. Such a situation, as far as reasonably possible, should be prevented. Public interest and social justice do require the protection of the labour. The Apex Court posed the following questions:-
"1. Is it possible to compel the employer to manage the undertaking even when they do not find it safe and practicable to manage the affairs?
2. Can they be asked to go on facing tremendous loss (sic) even at the risk of their person and property?
3. Can they be compelled to go on incurring losses year after year?
The Apex Court considered the above questions in paragraph 25 of the judgment with reference to Section 25FF of the Act and held that while asking for closure, it has to be ascertained whether the grounds are reasonable or not It was held that nobody has got a right to carry on business if he cannot pay even the minimum wages to the labour and he must be allowed to retire from business. But, to tell him to pay and not to retire even if he cannot pay would amount to punishment to an extreme.
6. In Vazir Glass Works Ltd. v. Maharashtra General Kamgar Union and Anr., (1996-I-LLJ-962) (SC) the Apex Court considered the power of review and held that a reference to the Industrial Tribunal for adjudication of the application for permission to close an industrial unit is made under Section 25O(5) of the Act and such reference is not permissible under Section 10(1) of the Act. In other words, the State Government can refer the question of closure of an unit to the Industrial Tribunal under Section 25O(5) of the Act.
7. Against the order of closure issued under Sub-section (2) of Section 25O there is a power of review by the State Government, either on its own motion or on an application made by the employer or any workman as provided under Sub-section (5) of Section 25O. Admittedly, no such review petition was filed and the union has straight come to this Court. Mr. Ratho, learned counsel for the petitioner, has urged that there is no point in filing a review before the concerned Minister as the decision of closure was taken in the meeting presided over by the Chief Minister. We are unable to accept the contention as, in our opinion, while exercising power of review, the appropriate Government shall decide the matter judicially, and it cannot be influenced by any administrative decision in this regard. That apart, the reference can be made to the Industrial Tribunal under the said Sub-section (5) of Section 25O as laid down in the case of Vazir Glass Works Ltd. (supra).
8. In this connection, we may mention that the union had approached this Court earlier by filing a writ petition which was registered as O.J.C. No. 4595 of 1996. The said writ petition was disposed of on January 12, 1998. A Bench of this Court noted the policy decision of the Government to close down the Corporation and the fact that steps were being taken to make payments to the employees of the Corporation as admissible under the law within a period of three months. In the above background the writ petition was disposed of with direction to make payment of Rs. 5000/- to each of the employees on ad hoc basis out of the total amount to be payable to them on account of the closure.
9. We are not expressing any opinion on the merits of the case as it may prejudice the concerned authorities if a review petition is filed or the matter is referred to the Industrial Tribunal. We may also state here that Mr. Ratho on behalf of the petitioner has prayed that some interim direction may be given. But, we are not willing to do so as such a prayer can be made while filing an application under Sub-section (5) of Section 25O of the Act or while making a reference to the Industrial Tribunal.
10. For the reasons stated above, the writ petition in dismissed. No costs.
C.R. Pal, J.
I agree.