Madhya Pradesh High Court
Hindustan Antibiotics Ltd. vs Hindustan Antibiotic Workers Union on 21 February, 2013
HIGH COURT OF MADHYA PRADEESH JABALPUR
(Writ Appeal No. 984/2008)
Hindustan Antibiotics Ltd.
Vs.
Hindustan Antibiotic Workers Union and others
PRESENT :
HON'BLE THE CHIEF JUSTICE SHRI S.A. BOBDE
HON'BLE SHRI JUSTICE SANJAY YADAV
Counsel for Appellant Shri Rajneesh Gupta, Advocate
Counsel for respondent No. 1 Shri P.C. Chandak, Advocate
O R D E R
(21/2/2013)
PER S.A. BOBDE, C.J.
Appellant, Hindustan Antibiotics Ltd., has preferred this appeal against the judgment of the learned Single Judge dated 3.1.2002, by which the learned Single Judge has dismissed the appellant's wirt petition challenging the order of the Labour Court directing the appellants to reinstate the services of the workmen in question. The Labour Court had held that the reason of closure given by the appellant for terminating the services of the workmen was bad since the appellant was in fact attempting to shift the workmen from Jabalpur to other places. 2 W.A. No.984/08
2. Upon an industrial dispute having raised by the respondent Trade Union regarding the validity of the termination of workmen, the State Government referred the following dispute to the Labour Court for adjudication under Section 10 (1) of the Industrial Disputes Act, 1947:
"Whether the retrenchment of Shri Shiv Prasad Nair, Muralidhar Nair, Surinder Nath Ojha, K. Anilendran, H.P. Tiwari, Virendra Kumar Dubey, Ku. M.K. Vilasini, Ku. Meena D. Vachhani is valid and proper ? If not, then what relief should be granted and what instructions should be given to the employer in this regard."
3. Labour Court permitted the parties to lead evidence and came to the conclusion that the retrenchment of the services was not proper because the reason of closure given by the employer was not a genuine since there was no closure but an attempt to shift the employees from Jabalpur Unit to some other Unit and thereupon the Labour Court directed reinstatement of the workmen.
4. The appellant challenged the award by way of writ petition under Article 226 and 227 of the Constitution of India and prayed for a writ of certiorari for quashing the said award. The learned Single Judge has dismissed the petition on the ground that the finding of the Labour Court that there was no closure but shifting of employees was based on sound reasons and does not suffer from any infirmity. The learned Single Judge went on to hold that in fact it was a case where there cannot be said to be closure of an undertaking at Jabalpur but it was a case where Section 25 O applied. Since the workmen was sought to be transferred to 3 W.A. No.984/08 other units, the strength of all units taken together exceeding hundred. Against this the present appeal has been preferred.
5. Learned counsel for the respondent raised a preliminary objection as to the maintainability of the present appeal that the appeal is not maintainable under Section 2 (1) of Madhya Pradesh Uchcha Nyayalaya (Khand Nyayapeeth Ko Appeal) Adhiniyam, 2005, which reads as follows:
"2. Appeal to the Division Bench of the High Court from a Judgment or order of one Judge of the High Court made in exercise of original jurisdiction. (1) An appeal shall lie from a Judgment or order passed by one Judge of the High Court in exercise of original jurisdiction under Article 226 of the Constitution of India, to a Division Bench comprising of two judges of the same High Court :
Provided that no such appeal shall lie against an interlocutory order or against an order passed in exercise of supervisory jurisdiction under Article 227 of the Constitution of India.
6. According to the learned counsel for the respondents the original order was passed by the learned Single Judge under Article 227 of the Constitution of India and, therefore, such an order/judgment under Article 227 is not maintainable.
7. We see no merit in this contention. Since the appellant/ petitioner before the learned Single Judge has clearly invoked Article 226 and 227 of the Constitution of India and prayed for writ of certiorari, this petition was adjudicated under Article 226 and accordingly certain directions for reinstatement and back wages have been given. Thus, judgment and order is one under 4 W.A. No.984/08 Article 226 of the Constitution of India and the appeal is maintainable.
8. It is main contention of the learned counsel for the appellant that the learned Labour Court exceeded its jurisdiction in deciding the dispute referred to it by going beyond the question that was referred, namely, the question of validation of termination and proceeded to decide the questions of validity of the cause of the termination, viz., the closure. It is submitted by learned counsel for the appellant that the notice of closure was before the Labour Court and the order of the termination also narrated the fact of closure and the necessity of retrenchment. Thus, according to the appellant since the question referred to was only to the retrenchment, it was not proper for the Industrial Court to have gone beyond the question that was referred and decide it on the question of legality and validity of the cause of termination, namely, the closure.
9. Learned counsel for the respondents submitted on the contrary that the Labour Court had framed issue regarding the validity of the closure and was, therefore, entitled to consider that question. This submission of the learned counsel cannot be accepted in view of the settled law that the Labour Court cannot expand the scope of reference by framing questions or issues which are beyond the reference. We are of the view that since the question that was referred to was as to the validity of the retrenchment, it was not open for the Labour Court to expand the reference by framing an issue as to the validity of the closure. 5 W.A. No.984/08
10. Learned counsel for the appellant further submitted that the learned Single Judge committed an error in overlooking the aforesaid position and upholding the order of the Labour Court. In fact according to the learned Counsel for the appellant the learned Single Judge not only upheld the order of Labour Court but went further and declared that since there was functional integrity between the Unit at Jabalpur and rest of the Branches of the appellant in the State of Madhya Pradesh the number of workmen exceeded 100 and, therefore, Section 25 O of the Industrial Disputes Act, 1947 applied to the said closure; which was illegal since due permission had not been obtained under Section 25 O.
11. Having examined the matter we find that the only issue that was referred to the Labour Court by the Government under Section 10 of the Industrial Disputes Act, 1947 was the validity of the retrenchment of the employees of the appellant's Unit. The retrenchment had been preceded by a closure notice. Since undisputedly the number of workmen at Jabalpur Unit was about 10 in number the order of retrenchment also contains recitals about closure and stated that it was, therefore, necessary for the employor to retrench the workmen.
12. In this background having regard to the question referred by the Government we are of the view that the Labour Court clearly exceeded its jurisdiction by going into the question of validity of the cause of the retrenchment. The Labour Court held that the closure was not genuine since it was used as a ruse to transfer the workmen to places other than Jabalpur such as 6 W.A. No.984/08 Indore and Bhopal and the workmen having refused to accept the said transfer the appellant purported to closedown the unit which was not valid and, therefore, the workmen are entitled to reinstatement.
13. In the first place the Labour Court was oblivious of the fact that the decision to close down an undertaking is purely within the discretion of the employer. In Workmen of the Indian Leaf Tobacco Development Co. Ltd., Guntur v. The Management of Indian Leaf Tobacco Development Co. Ltd., Guntur (AIR 1970 SC
860) where the Supreme Court has observed as follows:
"Industrial Tribunal even in a reference under Section 10(1) (d) can interfere with discretion exercised by a company in the matter of closing down some of its branches or depots. Even if such closure may not amount to closure of business of the Company, the Tribunal has no power to issue orders directing a Company to reopen a closed depot or branch, if the Company, in fact, closes it down and that closure is genuine and real. The closure may be treated as stoppage of part of the activity or business is an act of management which is entirely in the discretion of the Company carrying on the business. Of course, if a Company closes down a branch or a depot the question can always arise as to the relief to which the workmen of that branch or depot are entitled and, if such a question arises and becomes the subjectmatter of an industrial dispute, an Industrial Tribunal is fully competent to adjudicate on it, and it is competent for the Tribunal to decide whether the claim of the workmen that they should not be retrenched is justified.7 W.A. No.984/08
14. Secondly, the Labour Court travelled outside the scope of reference by examining whether the closure was in fact a closure or a ruse for transferring the employees out side the Jabalpur to the places such as Bhopal, Indore and far of places like Imphal. In our view the Labour Court was bound to adjudicate on the question whether the retrenchment is valid and legal and nothing else unless ofcourse the question of validity of closure was also referred to it by the Government. The learned Single Judge committed an error in upholding the said order by not only upholding the order of Labour Court which had exceeded its jurisdiction but further observed that the retrenchment was improper because this was the case of shifting of business from Jabalpur to Indore and that provisions of Section 25 O would apply to this case. The learned Single Judge wrongly relied on the decision in S.G. Chemicals and Dyes Trading Employees' Union v. S.G. Chemicals and Dyes Trading Limited and another [(1986) 2 SCC 624], which had no application to the present case at all. That judgment laid down the law regarding functional integrity of the undertakings of a establishment and may have been rightly applied, if the question of validity of the closure was involved
15. The learned Single Judge further committed an error in placing reliance on the judgment in Express Newspapers, Ltd. v. Their workers and staff and others (1962 II LLJ 227) where the question referred was entirely different and included the question of validity of the consequent lockout and close down as to "whether the strike of the workers and the consequent lockout 8 W.A. No.984/08 by the employer was justified or not". In fact learned Single Judge relied upon passages pertaining to closure and lockout.
16. As observed earlier if the question of the validity of the closure as decided was within the purview of the Labour Court, there is no occasion to go into the question of difference between the lockout and the closure and the questions such as genuineness of the closure or the difference between the closure and lockout.
17. In the result, we are of the view that the judgment of the learned Single Judge is liable to be set aside and is accordingly set aside. The award of the Labour Court dated 6.2.1989 passed by the Presiding Officer, Labour Court, Jabalpur in Case No. 38/ID Reference/86 dated 6.2.1989 is accordingly set aside.
18. At this juncture Shri P.C. Chandak, learned counsel for the respondent submitted that the matter is liable to be remitted since the main issue, namely, whether the retrenchment was valid or not or in accordance with the provisions of Industrial Disputes Act, 1947 was not tried. Shri Chandak also submits that neither did the employer follow the rule of last come first go and the respondents accepted the compensation in protest.
19. The submission of the learned counsel for the respondent must be accepted. Since the appellant has not been able to point out any of the finding of the Labour Court to the effect that retrenchment is otherwise legal or proper, in the circumstances, we are constrained to remand back the matter to Presiding Officer, Labour Court, Jabalpur (M.P.) for fresh decision in accordance with law. However, having regard to long pending 9 W.A. No.984/08 dispute the matter shall be decided as expeditiously as possible by the labour court and in any case not later than six months from the date parties appear before the Labour Court. The parties are directed to appear on 11th March 2013. Learned counsel for the appellant fairly submitted that the appellant is open to settlement of dispute. The parties may pursue settlement before the Labour Court. However, in the circumstance no order as to costs.
(S.A. BOBDE) (SANJAY YADAV)
CHIEF JUSTICE JUDGE
VT