Karnataka High Court
M/S Vinayaka C. N. C. Centre Pvt. Ltd vs The Presiding Officer-5 on 21 October, 2024
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WA No. 2835 of 2019
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF OCTOBER, 2024
PRESENT
THE HON'BLE MR JUSTICE V KAMESWAR RAO
AND
THE HON'BLE MR JUSTICE C M JOSHI
WA NO. 2835 OF 2019
BETWEEN:
M/S VINAYAKA C. N. C. CENTRE PVT. LTD.,
HAVING ITS REGISTERED ADDRESS AT: UNIT-1,
A-347, 9TH MAIN, 2ND STAGE,
PEENYA INDUSTRIAL ESTATE,
BENGALURU - 560 058,
REPRESENTED BY ITS DIRECTOR:
MR C.S.SUKUMARAN.
...APPELLANT
(BY SRI. K G RAGHAVAN, SENIOR ADVOCATE FOR
SRI. ANIRUDH M B., ADVOCATE)
AND:
1. THE PRESIDING OFFICER-5,
LABOUR DEPARTMENT,
VIKASA SOUDHA,
BENGALURU - 560 076.
2. THE ASSISTANT LABOUR COMMISSIONER,
BENGALURU SUB-DIVISION -1,
KARMIKA BHAVAN,1ST FLOOR,
ITI COMPOUND, BANNERGHATTA ROAD,
BENGALURU - 560 076.
3. TUMKUR JILLA COFFEE MATHU ETHARE
KARMIKARA SANGHA,
(CITU),
3RD CROSS, UNION OFFICE,
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WA No. 2835 of 2019
NAZARABADM TUMKUR -1,
REPRESENTED BY ITS GENERAL SECRETARY.
...RESPONDENTS
(BY SRI. DEVARAJ C H, GOVT. ADV. FOR R1 & R2,
MS. AVANI CHOKSHI, ADVOCATE FOR
SRI. A J SRINIVASAN FOR C/R3., ADVOCATE)
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT, 1961 PRAYING TO SET ASIDE THE JUDGMENT
AND ORDER DATED 12/07/2019 PASSED BY THE LEARNED
SINGLE JUDGE IN WP NO.5864/2018 AND CONSEQUENTLY
ALLOW THE SAME.
THIS WRIT APPEAL HAVING BEEN RESERVED FOR
JUDGMENT, COMING ON FOR PRONOUNCEMENT THIS DAY,
V KAMESWAR RAO J., DELIVERED THE FOLLOWING:
CORAM: THE HON'BLE MR JUSTICE V KAMESWAR RAO
AND
THE HON'BLE MR JUSTICE C M JOSHI
CAV JUDGMENT
(PER: THE HON'BLE MR JUSTICE V KAMESWAR RAO) The challenge in this appeal by the appellant M/s Vinayaka C.N.C. Centre Pvt. Ltd. is to an order dated 12.07.2019 passed by the learned Single Judge in WP No.5864/2018 whereby the learned Single Judge has dismissed the writ petition with cost of Rs.1,00,000/- on the appellant.
2. The appellant had filed the writ petition challenging the reference made by the appropriate -3- WA No. 2835 of 2019 Government under Section 10(1) of the Industrial Disputes Act, 1947 ('Act of 1947' for short) dated 03.11.2016 mainly on the ground that the same is bad in law in as much as the closure of an Industrial Establishment cannot and will not give rise to an industrial dispute.
3. The facts, as noted by the learned Single Judge for the decision in the writ petition are, the appellant's Industrial Establishment at Tumakuru was closed down permanently on 06.06.2016. The factory licence was also surrendered. All the machineries were subsequently sold and even the power connection has been surrendered.
4. The case of the appellant before the learned Single Judge was that, the appellant-Company had two functional units, one at Bengaluru and another at Tumakuru. The relationship between the management and the workmen at Tumakuru unit became strained since the year 2012, when the workmen, without prior notice to the appellant, conducted a tool-down strike for almost 76 days. The strained relationship also caused law and order situation. Under the aegis of the Deputy Commissioner, Tumakuru, a -4- WA No. 2835 of 2019 semblance of reproachment was brought about and an MOU was signed between the management and the workmen on 05.10.2012. It was the case of the appellant that the workmen did not keep up the promise made in the memorandum of understanding (MOU) and therefore, a show-cause notice was issued to the workmen calling upon them to improve productivity and refrain from hampering customer schedules. In any case, it was the case of the appellant that in the given background, the appellant decided to close down the Tumakuru Unit and accordingly, a communication dated 09.01.2016 was made to the Secretary, Department of Labour, Government of Karnataka. In the said notice, the appellant informed the appropriate Government that the Tumakuru Unit will be permanently closed down by 01.04.2016.
5. Even thereafter, the appellant-Management tried to bring about a resolution and improve the relationship with the workmen. In the process, the appellant missed the proposed date of closure, but eventually when the Management found it unviable and in fact, unsafe to -5- WA No. 2835 of 2019 continue the Unit, the appellant issued closure order dated 06.06.2016. It was the appellant's case that the workmen were informed in the closure notice that the closure compensation and other legal dues payable to the workmen will be credited to their respective bank accounts. The formalities of closure were completed by informing the Governmental Authorities in accordance with law.
6. It is noted that, on 08.06.2016, the workmen, through 3rd respondent-Union, made a petition before the 2nd respondent-Assistant Labour Commissioner seeking appropriate action on the ground that the factory unit was closed down in violation of Sections 25-O, 25-F and 25-G of the Act of 1947. The appellant filed its statement of objections before the 2nd respondent. The 2nd respondent explored the possibilities of an amicable settlement. Since conciliation failed, the 2nd respondent submitted failure report dated 25.07.2016 to the Government. The aforesaid resulted in the impugned reference dated -6- WA No. 2835 of 2019 03.11.2016 and the same reads as follows (English translation):
"Whether the management of M/s. Vinayaka CNC Centre Pvt. Ltd., Plot No. 7, 2nd Phase, Antarasanahalli Industrial Area, Tumkur 572106 is justified in not providing employment to workmen represented by the Secretary, Tumkur Zilla Coffee Mathu Ihare Karmikara Sangha (CITU), by closing down the establishment with effect from June 6, 2016".
7. The appellant had, before the learned Single Judge, placed reliance on the following judgments of the Supreme Court :
i. The Delhi Cloth and General Mills Co. Ltd.
-Vs.- Workmen and Others [AIR 1967 SC 469];
ii. Pottery Mazdoor Panchayat -Vs.- Perfect Pottery Co. Ltd. and Another [(1979) 3 SCC 762];
iii. Oshiar Prasad and Others -Vs.-
Employers in relation to Management of Sudamdih Coal Washery of M/s Bharat Coking Coal Ltd. [(2015) 4 SCC 71];
iv. Indian Hume Pipe Co Ltd. -Vs.- Workmen [AIR 1968 SC 1002];-7- WA No. 2835 of 2019
v. ANZ Grindlays Bank Ltd. -Vs.- Union of India and Others [(2005) 12 SCC 738]; vi. Rahman Industries Pvt Ltd. -Vs.- State of Uttar Pradesh and Others [(2016) 12 SCC 420];
vii. National Engineering Industries Ltd. -Vs.-
State of Rajasthan and Others [(2000) 1 SCC 371];
Reliance was also placed upon the judgment of this Court in P.V. Desai -Vs.- State of Karnataka [1990 SCC OnLine Kar 305] and Devesh Sandeep Associates and Others -Vs.- Regional Provident Fund Commissioner, Bangalore [1996 (3) Kar.L.J. 683]. The Counsel had also placed reliance on the judgment of Jharkhand High Court in Management, BASF India Ltd. -Vs.- State of Bihar and Others [2001 SCC OnLine Jhar 210] and the judgment of Bombay High Court in Association of Engineering Workers Trade Union -Vs.- Sewree Iron & Steel Co. and Others [1992 SCC OnLine Bom 568].
8. It was also their case that the averments made by the respondent-Union before the Assistant Labour -8- WA No. 2835 of 2019 Commissioner clearly evidences the fact that the respondent-Union admits in no uncertain terms that the Management has closed down the Tumakuru Unit permanently. It is therefore the contention on behalf of the appellant that the respondents having admitted that the Tumakuru Unit is permanently closed down, there remains no industrial dispute to be considered under the Act of 1947. In this regard, reference was made to the judgment in the cases of Indian Hume Pipe Co. Ltd. (supra), P.V. Desai (supra) and ANZ Grindlays Bank Ltd. (supra).
9. On the other hand, the case of the respondent- Union was that the reference made by the appropriate Government is based on the material contentions that the Industrial Units both at Bengaluru and Tumakuru constitutes one single establishment of the appellant- Company. The contention of the respondent-Union was that there were more than 100 workmen working on the date of alleged closure and the alleged closure is in contravention to Sections 25-O, 25-G and/or 25-FFA of -9- WA No. 2835 of 2019 the Act of 1947. The contention of the respondent was that the alleged closure is illegal, unjustified, malafide and not real closure. In this regard, they had placed reliance on the following judgments:
i. Annapurna Mistanna Bhandar -Vs.-
Industrial Tribunal (VIII) [LAWS (CAL) 1988 8 8];
ii. Secretary, K.J.H.S.W. Union -Vs.- Industrial Tribunal [1998 I-LLJ-574];
iii. The State of Madras -Vs.- C.P.Sarathy and another [AIR 1953 SC 53];
iv. The Associated Cement Companies Ltd., Chiabasa Cement Works, Jhinkpani -Vs.- Their Workmen [AIR 1960 SC 56];
v. Kalinga Tubes Limited -Vs.- Their Workmen [F.J.R. 1968 Vol. 34 393];
vi. Tatanagar Foundry Company Limited -Vs.-
Their Workmen [AIR 1970 SC 1960];
vii. Telco Convoy Drivers Mazdoor Sangh and Others -Vs.- State of Bihar and Others [MANU/SC/0605/1989];
viii. The Premier Automobiles Ltd. -Vs.-
Kamlekar Shantaram Wadke of Bombay and Others [MANU/SC/0369/1975].
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10. The learned Single Judge had, in paragraphs No.14 to 19, held as under:
"14. The thrust of the arguments for the learned Counsel for the petitioner-Management is that the respondents have unequivocally admitted in writing that the Tumakuru unit has been closed down consequent to issuance of a closure notice dated 06.06.2016 and it is also admitted that the employees have received closure compensation. When that being the case, there was substantial material before the Government that the industrial unit having been closed down, the relationship of Management and employees having been terminated legally, no industrial dispute remained to be decided or referred by the Government. On the question of maintainability, this Court agrees with the learned Counsel for the petitioner that High Court, under Article 226 of the Constitution can entertain a petition questioning the order of the appropriate Government making a reference under Section 10 of the I.D. Act.
15. However, what is important is that the employees, represented by the Union have specifically raised a contention that the closure is illegal, unjustified, malafide and not real closure. It is their contention that the Management continues to run the industrial unit in one form or the other. In this regard, reliance placed by the learned Counsel
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for the respondents on the decisions of the Apex Court in the case of The Associated Cement Companies Ltd., Chiabasa Cement Works, Jhinkpani Vs. Their Workmen, reported in AIR 1960 SC 56, Kalinga Tubes Limited Vs. Their Workmen, reported in F.J.R. 1968 Vol. 34 393; and Tatanagar Foundry Company Limited Vs. Their Workmen, reported in AIR 1970 SC 1960, to throw some light on the question raised for consideration. In The Associated Cement case (supra), the Hon'ble Supreme Court has held that the question of unity or oneness presents difficulties when the industrial establishment consists of parts, units, departments, branches, etc. If it is strictly unitary in the sense of having one location and one unit only, there is little difficulty in saying that it is one establishment. Where, however, the industrial undertaking has parts, branches, departments, units, etc. with different locations near or distant, the question arises as to what tests should be applied for determining what constitutes 'one establishment'. It has also been held that how the relationship between the units will be judged must depend on the facts proved, having regard to the scheme and object of the statute which gives the right of unemployment compensation and also prescribes a disqualification therefor. Admittedly, in the present case there were two units, one at Bengaluru and the other at Tumakuru. Whether there was unity or oneness or
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they were two independent establishments, are questions to be answered only on verifying cogent material and on proof of facts. Therefore, the same requires adjudication before the competent Court or Tribunal.
16. In Kalinga Tubes (supra), the Hon'ble Supreme Court has observed that in case of a closure, the employer does not merely close down the place of business but he closes the business itself finally. Similarly, in State of Madras Vs. C.P.Sarathy (supra), it is held that if the dispute was an industrial dispute as defined in the Act, its factual existence and the expediency of making a reference in the circumstances of a particular case are matters entirely for the Government to decide upon, and it will not be competent for the Court to hold the reference bad and quash the proceedings for want of jurisdiction merely because there was, in its opinion, no material before the Government on which it could have come to an affirmative conclusion on those matters. Therefore, if the Government, on the basis of the material is of the prima facie opinion that an industrial dispute exists, no fault could be found in the reference.
17. In the light of the above, this Court is of the opinion that the contention of the petitioner-
Management that since the employees/Union have admitted in writing that the Tumakuru unit was
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WA No. 2835 of 2019closed on 06.06.2016 and therefore when the unit itself is admittedly closed down, there remains no relationship of employer and Management and no industrial dispute exists for consideration, cannot be countenanced.
18. For the reasons stated above, the writ petition deserves to be dismissed and is accordingly dismissed.
19. At the instance of the petitioner, the proceedings before the Tribunal has been stayed. Therefore, this Court is of the considered opinion that costs are required to be imposed on the petitioner. Accordingly, costs of Rs.1,00,000/-
(Rupees One Lakh) is imposed on the petitioner/Management, which shall be paid to the respondent-Union before the Tribunal."
(emphasis supplied) Submissions:
11. The submission of Sri. K.G.Raghavan, learned Senior Counsel for the appellant is, by pointing to the reference made by the appropriate Government, that it indicates the unequivocal acknowledgement of permanent closure of Tumakuru Unit with effect from 06.06.2016.
The closure being real and bonafide, there is no industrial
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WA No. 2835 of 2019dispute which needs to be adjudicated, for which purpose the reference has been made. According to him, the Government has also erred, that while holding the Tumakuru Unit has been closed down permanently, it still proceeded to refer for adjudication of the alleged industrial dispute of not providing employment to the workmen of the appellant. In other words, it is his submission when the Government has accepted the fact that the appellant's Tumakuru Unit has been permanently closed down, the question of appellant providing employment to its workmen post-closure does not arise.
12. He also submitted that the learned Single Judge, in the impugned order, ought to have noticed that in the instant case, no further exercise is required to be undertaken to establish whether closure being real or not. In fact, the respondent-Union cannot now dispute the closure of the Tumakuru Unit. Therefore, it is not open to either parties to now seek the trial in the matter to prove the closure of Tumakuru Unit. Everything must proceed from the point that the Tumakuru Unit has been
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WA No. 2835 of 2019permanently closed down by the appellant. According to him, though respondent No.3 may have contended in the representations submitted to respondent No.2 that 'the management is running its show in full swing by way of producing Connecting Flange, RQV, Pump Barrel, etc., in one or other fashion', still the question of embarking upon any enquiry to find out whether closure is real or bonafide, does not arise.
13. He would heavily rely upon the judgment of the Supreme Court in the case of The Delhi Cloth and General Mills Co. Ltd. (supra) wherein according to him, the Supreme Court held that the Tribunal is not free to enlarge the scope of the dispute referred to it but must confine its attention to the points specifically mentioned and anything which is incidental thereto. He also relies on the said judgment for the proposition that when the closure is bonafide, the dispute is not an industrial dispute. Similarly, he relied upon the judgment in the case of Pottery Mazdoor Panchayat (supra) for a similar proposition.
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WA No. 2835 of 2019
14. He also challenged the order of the learned Single Judge by stating that the learned Single Judge has virtually expanded the order of reference of the appropriate Government by holding that the employees represented by the Union had specifically raised a contention that the closure is illegal, unjustified, malafide and not real closure, which is impermissible. According to him, if the reference proceeds on the premise that the Tumakuru Unit has been closed down, then the Industrial Tribunal is not permitted to inquire into the motive of the employer to close down the factory or the Industrial Establishment by virtue of the above observation by the learned Single Judge. He has also relied upon the judgments in the cases of Indian Hume Pipe Co. Ltd. (supra), P.V. Desai (supra).
15. On the other hand, Ms. Avani Chokshi, learned counsel appearing for respondent No.3-workmen would submit that the appropriate Government has rightly referred the dispute for adjudication of the Industrial Tribunal and the learned Single Judge was justified in
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WA No. 2835 of 2019dismissing the writ petition with cost. She submitted that the pleadings of respondent No.3-Union before the Conciliation Officer reveal that there are number of disputed factual aspects that require to be determined on the anvil of evidence. These include the averments that:
a) There is no real closure,
b) There is functional integrality between the two Units of the appellant,
c) Sections 25-O, 25-G and 25-F of the Act of 1947 have been violated,
d) Workers are entitled to reinstatement with continuity of service, full back wages and all consequential benefits.
In fact, she has drawn our attention to the initial dispute raised by the Union, wherein in paragraphs No.13 and 14, the following has been stated:
"13. That the illegal closure of the establishment under the guise of alleged prolonged labour unrest resulting in purportedly loss of productivity thereby Impacting the supposed profitability of the unit running the Tumkur unit into losses are illegal, unjustified besides malafide. The said action of the management is a clear violation of
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Section 25-0 of the Industrial Disputes Act, 1947. The action of the management is also in violation of Section 25-G and 25-F of the I.D. Act. That the management Is running its show in full swing by way of producing Connecting Flange, ROV, Pump Barrel etc., In one or other fashion...
14. The management if at all wants to close the establishment, they have to at, first instance has to obtain prior permission from the Government as per Section 25-O of the I.D. Act, since all the units (Unit-1, Unit-2 & Unit-3 as claimed by the management) of the company constitutes one establishment. That as per purported claim management they have adopted common standing orders and also erstwhile ventured to transfer the workmen from one unit to another and further there is both common balance sheet and unity of ownership and functional integrality. Since more than 100 workmen are working as on the date of alleged closure, the management ought to obtain prior permission from the government for closing any of their establishment."
16. According to her, it is the stand of the Union that the production activities of Tumakuru Unit are carried out at full swing at their Peenya Unit. Actually, only the place of employment is closed and not their entire business,
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WA No. 2835 of 2019hence the contention of the management that the Tumakuru Unit is closed permanently is incorrect and false. She stated that the entire case of the appellant is based on the surmise that factum of closure has been admitted. Similarly, all the citations relied upon by the Senior Counsel for the Management disallow reference in the context of admission pertaining to factum of closure. However, the pleadings of the respondent-Union in the instant case clearly make out that it is not so. She has relied upon the judgment of the Supreme Court in the case of Kalinga Tubes Ltd. (supra) and judgment of the Calcutta High Court in the case of Annapurna Mistanna Bandar -Vs.- Industrial Tribunal (VIII) (supra). That apart, it is her submission, the question of functional integrality of two units is a question of fact that need to be adjudicated before the Tribunal. In support of her submission, she has relied upon the judgment in the case of The Associated Cement Companies Ltd., Chiabasa Cement Works, Jhinkpani (supra).
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WA No. 2835 of 2019
17. That apart, it is her submission, if the reference is set aside, then the workers will be rendered remediless. The Act of 1947 is a welfare legislation enacted for the benefit of the working class. It provides a number of protections to workers and creates an intricate mechanism for resolution of Industrial Dispute. In fact, even the preamble of the Act notes that it is 'an act to make provision for the investigation and settlement of industrial disputes, and for certain other purposes'. According to her, it is also the settled law that if the industrial dispute relates to the enforcement of a right or an obligation created under the Act, then the only remedy available to the suitor is to get an adjudication under the Act. That apart, it is her submission that the Union is aggrieved by the violation of Sections 25-O, 25-G and 25-F of the Act by the appellant-Management and seeking adjudication of the same with a final relief of reinstatement, etc. Moreover, in terms of Section 25-O, where no application for permission is made, 'the closure of the undertaking shall be deemed to be illegal from the date of closure and
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WA No. 2835 of 2019the 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.
18. It is also her submission that the reference is an Administrative Act; the real dispute is to be determined by the Court with reference to pleadings and not solely on the basis of the reference. She has also relied upon the judgment of the Supreme Court in the case of Telco Convoy Drivers Mazdoor Sangh and Others (supra). She also refers to the judgment of Constitutional Bench of the Supreme Court in the case of State of Madras -Vs.- C.P. Sarathy (supra). She seeks dismissal of the appeal with heavy costs.
Analysis:
19. Having heard the learned counsel for the parties and perused the record, the short issue which falls for consideration is, whether the learned Single Judge is justified in dismissing the writ petition filed by the appellant herein challenging the reference made by the appropriate Government on 03.11.2016?
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WA No. 2835 of 2019
20. We have already reproduced the relevant paragraphs of the impugned order by which the learned Single Judge has dismissed the petition.
21. The submission of Sri. Raghavan is primarily that closure cannot be the subject matter of an Industrial Dispute and as such, could not have been made part of reference. He qualifies his submission by stating that when the closure cannot be the subject matter of an industrial dispute, no further exercise is required to be undertaken to establish whether closure is real or not. In this regard, it is necessary to reproduce the English translation of the reference, which reads as under:
"Whether the management of M/s. Vinayaka CNC Centre Pvt. Ltd., Plot No. 7, 2nd Phase, Antarasanahalli Industrial Area, Tumkur 572106 is justified in not providing employment to workmen represented by the Secretary, Tumkur Zilla Coffee Mathu Ihare Karmikara Sangha (CITU), by closing down the establishment with effect from June 6, 2016".
22. It was his submission that everything must proceed from the point of view that the Tumakuru Unit
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WA No. 2835 of 2019has been permanently closed by the appellant. This according to him, even if the case of the respondent No.3- Union is that the Management is running its show in full swing by way of production, still the question of embarking upon an enquiry to find out whether closure is real or bonafide, does not arise.
23. On the other hand, the submission of learned counsel for respondent No.3-Union is that there is no real closure; there is a functional integrality between the two units of the appellant; Sections 25-O, 25-G and 25-F of the Act of 1947 have been violated and as such, the workers are entitled to reinstatement, continuity of service with full back wages and all consequential benefits; it is only the place of employment which is closed, and not the entire business.
24. Before we embark upon a decision on the rival submissions of the counsel for the parties, it is necessary to refer to the judgments on which they have relied upon.
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WA No. 2835 of 2019
25. Sri. Raghavan has relied upon the judgment in the case of The Delhi Cloth and General Mills Co. Ltd. (supra). In the said case, the Supreme Court has made reference on several aspects, one of which is, "whether the strike at the Delhi Cloth Mills and the lockout declared by the management on 24-2-1966 are justified and legal and whether the workmen are entitled to wages for the period of lockout?". The Supreme Court has, in paragraphs No.8, 9, 18 and 25, on which reliance has been placed by Sri. Raghavan, stated as under:
"(8) Proceeding in the order in which the arguments were addressed, we propose to deal with Issues 3 and 4 first. Under Section 10(1)(d) of the Act, it is open to the appropriate Government when it is of opinion that any industrial dispute exists to make an order in writing referring "the dispute or any matter appearing to be connected with, or relevant to, the dispute, ... to a Tribunal for adjudication".
Under Section 10(4) "where in an order referring an industrial dispute to a Labour Court, Tribunal or National Tribunal under this section or in a subsequent order, the appropriate Government has specified the points of dispute for adjudication, the Labour Court or the Tribunal or the National Tribunal, as the case may be, shall confine
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WA No. 2835 of 2019its adjudication to those points and matters incidental thereto."
(9) From the above it therefore appears that while it is open to the appropriate Government to refer the dispute or any matter appearing to be connected therewith for adjudication, the Tribunal must confine its adjudication to the points of dispute referred and matters incidental thereto. In other words, the Tribunal is not free to enlarge the scope of the dispute referred to it but must confine its attention to the points specifically mentioned and anything which is incidental thereto. The word "incidental" means according to Webster's New World Dictionary:
"happening or likely to happen as a result of or in connection with something more important; being an incident; casual; hence, secondary or minor, but usually associated:"
"Something incidental to a dispute" must therefore mean something happening as a result of or in connection with the dispute or associated with the dispute. The dispute is the fundamental thing while something incidental thereto is an adjunct to it. Something incidental, therefore, cannot cut at the root of the main thing to which it is an adjunct. In the light of the above, it would appear that the third issue was framed on the basis that there was a strike and there was a lockout and it was for the Industrial Tribunal to examine the facts and circumstances leading to the strike and the lockout and to come to
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a decision as to whether one or the other or both were justified. On the issue as framed it would not be open to the workmen to question the existence of the strike, or, to the Management to deny the declaration of a lockout. The parties were to be allowed to lead evidence to show that the strike was not justified or that the lockout was improper. The third issue has also a sub-issue, namely, if the lockout was not legal, whether the workmen were entitled to wages for the period of the lockout. Similarly, the fourth issue proceeds on the basis that there was a sit-down-strike in the Swatantra Bharat Mills on 23-2-1966 and the question referred was as to the propriety or legality of the same. It was not for any of the Unions to contend on the issues as framed that there was no sit-down strike. On their success on the plea of justification of the sit-down strike depended their claim to wages for the period of the strike.
xx xx xx xx xx
(18) So far as the fourth proposition is
concerned, Mr Chari argued that the Tribunal had to examine the pleadings of the parties to see whether there was a strike at all. In our opinion, the Tribunal must, in any event, look to the pleadings of the parties to find out the exact nature of the dispute, because in most cases the order of reference is so cryptic that it is impossible to cull out therefrom the
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various points about which the parties were at variance leading to the trouble. In this case, the order of reference was based on the report of the Conciliation Officer and it was certainly open to the Management to show that the dispute which had been referred was not an industrial dispute at all so as to attract jurisdiction under the Industrial Disputes Act. But the parties cannot be allowed to go a stage further and contend that the foundation of the dispute mentioned in the order of reference was non-existent and that the true dispute was something else. Under Section 10(4) of the Act it is not competent to the Tribunal to entertain such a question.
xx xx xx xx xx (25) In the result, the preliminary objection of the Management with regard to Issues 3 and 4 succeeds while it fails on Issue 1."
(emphasis supplied) In paragraph No.18, the Supreme Court held it was open to the Management to show that the dispute which had been referred was not an industrial dispute at all so as to attract jurisdiction under the Industrial Disputes Act. The Supreme Court also held that the parties cannot be allowed to go a stage further and contend that the
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WA No. 2835 of 2019foundation of the dispute mentioned in the order of reference was non-existent and that the true dispute was something else. It was also held that under Section 10(4) of the Act, it is not competent to the Tribunal to entertain such a question.
26. In the case of Pottery Mazdoor Panchayat (supra), the Supreme Court in paragraphs No.3, 5, 10, 11 and 16, has stated as under:
"3. Conciliation proceedings having failed, the Madhya Pradesh State Government, on June 26, 1960, referred an industrial dispute to the arbitration of the Industrial court under Section 51 of the State Act. The main questions referred to the Industrial court were:
"Whether the proposed closure by the management of the Perfect Pottery Co. Ltd., Jabalpur, of their pottery factory at Jabalpur, with effect from July 1, 1967, is proper and justified? and To what retrenchment compensation are the employees entitled, if it is decided that the proposed closure is proper and justified?"
xx xx xx xx xx
5. On July 1, 1967 the respondent purported to close down the business. We say "purported", because whether the business was, truly and in fact,
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closed or not is a matter on which the parties have joined issue. The case of the appellant is that respondent had closed the place of business and not the business itself. After the closure, or shall we say the 'alleged closure', the Central Government on September 16, 1967, made a reference under Section 10(1)(d) of the Central Act to the Central Government Industrial Tribunal-cum-Labour Court, Jabalpur, on the following question:
"Whether the employers in relation to the Poly Pather Clay Mines of Perfect Pottery Co. Ltd., Jabalpur, were justified in closing down the said mine and retrenching the following 81 workers with effect from July 1, 1967. If not, to what relief are the workmen entitled?"
xx xx xx xx xx
10. Two questions were argued before the High Court: Firstly, whether the tribunals had jurisdiction to question the propriety or justification of the closure and secondly, whether they had jurisdiction to go into the question of retrenchment compensation. The High Court has held on the first question that the jurisdiction of the Tribunal in industrial disputes is limited to the points specifically referred for its adjudication and to matters incidental thereto and that the Tribunal cannot go beyond the terms of the reference made to it. On the second question the High Court has accepted the respondent's contention that the question of
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retrenchment compensation has to be decided under Section 33-C(2) of the Central Act.
11. Having heard a closely thought out argument made by Mr Gupta on behalf of the appellant, we are of the opinion that the High Court is right in its view on the first question. The very terms of the references show that the point of dispute between the parties was not the fact of the closure of its business by the respondent but the propriety and justification of the respondent's decision to close down the business. That is why the references were expressed to say whether the proposed closure of the business was proper and justified. In other words, by the references, the Tribunals were not called upon by the Government to adjudicate upon the question as to whether there was in fact a closure of business or whether under the pretence of closing the business the workers were locked out by the management. The references being limited to the narrow question as to whether the closure was proper and justified, the Tribunals by the very terms of the references, had no jurisdiction to go behind the fact of closure and inquire into the question whether the business was in fact closed down by the management.
xx xx xx xx xx
16. We are, therefore, of the view that the High Court was right in coming to the conclusion that the
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two Tribunals had no jurisdiction to go behind the references and inquire into the question whether the closure of business, which was in fact effected, was decided upon for reasons which were proper and justifiable. The propriety of or justification for the closure of a business, in fact and truly effected, cannot raise an industrial dispute as contemplated by the State and Central Acts."
(emphasis supplied) Suffice to state that the Supreme Court held that the Tribunal has no jurisdiction to go behind the reference and inquire into the question whether the closure of the business, was in fact effected. It also held, the propriety of or justification for the closure of a business, in fact and truly effected, cannot raise an industrial dispute as contemplated by the State and Central Acts.
27. In Oshiar Prasad and Others (supra), in paragraph No.22, the Supreme Court has stated as under:
"22. It is thus clear that the appropriate Government is empowered to make a reference under Section 10 of the Act only when "industrial dispute exists" or "is apprehended between the parties". Similarly, it is also clear that the Tribunal while answering the reference has to confine its
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inquiry to the question(s) referred and has no jurisdiction to travel beyond the question(s) or/and the terms of the reference while answering the reference. A fortiori, no inquiry can be made on those questions, which are not specifically referred to the Tribunal while answering the reference."
From the above it is clear that the Supreme Court held, the Tribunal while answering reference, has to confine its inquiry to the question(s) referred and has no jurisdiction to travel beyond the question(s) or/and the terms of reference while answering the reference.
28. For a similar proposition that upon closure of Industrial Establishment, no dispute can arise, Sri. Raghavan has also relied upon the judgment in the case of Indian Hume Pipe Co. Ltd. (supra), more specifically paragraphs No.6, 7 and 8, which we reproduce as under:
"6. In our opinion, it was not open to the Tribunal to go into the question as to the motive of the appellant in closing down its factory at Barakar and to enquire whether it was bona fide, or mala fide with some oblique purpose, namely to punish the workmen for the union activities in fighting the appellant. It has been laid down by this Court in a series of decisions that it is not for Industrial
- 33 -WA No. 2835 of 2019
Tribunals to enquire into the motive to find out whether the closure is justified or not. As far back as 1957, it was observed by this Court in Pipraich Sugar Mills Ltd. v. P.S.M. Mazdoor Union [(1957) 1 LLJ 235 at 239] that:
"where the business has been closed and it is either admitted or found that the closure is real and bona fide any dispute arising with reference thereto would, as held in K.M. Padmanabha Ayyar v. State of Madras [(1954) 1 LLJ 469] , fall outside the purview of the Industrial Disputes Act. And that will a fortiori be so, if a dispute arises if one such can be conceived after the closure of the business between the quondam employer and employees".
The use of the expression "bona fide" in the above quotation does not refer to the motive behind the closure but to the fact of the closure. The question about the bona fides of the closure had to be examined in the case of Tea Districts Labour Association, Calcutta v. Ex-employees of Tea Districts Labour Association [(1960) 3 SCR 207] . There two agencies of the appellant at Koraput and Berhampur were closed by the appellant and that was the finding of the Tribunal. This Court held that once it was established that the agencies had in fact been closed the finding about the mala fides of the closure would not "justify the conclusion that the said two agencies should be deemed to continue"
and allow the Tribunal to make an award on that basis.
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7. In Hatisingh Manufacturing Co. Ltd. v. Union of India [(1960) 3 SCR 528 at 537] it was observed that:
"Loss of service due to closure stands on the same footing as loss of service due to retrenchment, for in both cases, the employee is thrown out of employment suddenly and for no fault of his and the hardships which he has to face are, whether unemployment is the result of retrenchment or closure of business, the same. If the true basis of the impugned provisions is the achievement of social justice, it is immaterial to consider the motives of the employer or to decide whether the closure is bona fide or otherwise."
Reference may also be made to Express Newspapers (P) Ltd. v. Workers [AIR 1963 SC 569] . In this case the main question was whether there was a closure or a lockout and it was observed by this Court (at p.
573):
"If the action taken by the appellant is not a lockout but is a closure, bona fide and genuine, the dispute which the respondents may raise in respect of such a closure is not an industrial dispute at all. On the other hand, if, in fact and in substance it is a lockout, but the said action has adopted the disguise of a closure, and a dispute is raised in respect of such an action, it would be an industrial dispute which industrial adjudication is competent to deal with."
The question of the motive of the employer in closing an establishment had to be examined by this Court again in Andhra Prabha v. Madras Union of Journalists [(1967) 3 SCR 901] . It was pointed out
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WA No. 2835 of 2019there that there might be more than one motive working in the mind of the employer leading him to close his establishment and it was not for the Industrial Tribunal to examine that question meticulously and decide on the bona fides of the motive.
8. In view of these decisions, our conclusion is that once the Tribunal finds that an employer has closed its factory as a matter of fact it is not concerned to go into the question as to the motive which guided him and to come to a conclusion that because of the previous history of the dispute between the employer and the employees the closure was not justified. Such a closure cannot give rise to an industrial dispute."
(emphasis supplied)
29. Similarly, the reliance placed on the judgment in the case of P.V. Desai (supra), the learned Single Judge of this Court has held that where an industry is closed, license is surrendered and closure compensation has been received by workmen, no industrial dispute exists.
30. He referred to ANZ Grindlays Bank Ltd. (supra) more specifically paragraphs No.14, 15 and 16 in
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WA No. 2835 of 2019support of his contention that this Court in exercise of powers under Articles 226 of the Constitution of India, can interfere with the terms of reference made, which reveal that there is no industrial dispute in existence nor is there any apprehended dispute between the parties.
31. In Rahman Industries Pvt. Ltd. -Vs.- State of Uttar Pradesh and Others [(2016) 12 SCC 420] on which reliance was placed by Sri. Raghavan was a case wherein the Supreme Court held that it is only when Court finds that refusal by Government to make reference is unjustified, on irrelevant factors, may Court issue direction to Government to make a reference and not otherwise as in that case by the impugned judgment, the direction to the Government to refer dispute for adjudication is unsustainable and liable to be set aside.
32. In National Engineering Industries Ltd.'s case (supra) on which reliance has been placed by Sri. Raghavan, the Supreme Court has, in paragraph No.24, held as under:
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"24. It will be thus seen that the High Court has jurisdiction to entertain a writ petition when there is an allegation that there is no industrial dispute and none apprehended which could be the subject-matter of reference for adjudication to the Industrial Tribunal under Section 10 of the Act. Here it is a question of jurisdiction of the Industrial Tribunal, which could be examined by the High Court in its writ jurisdiction. It is the existence of the Industrial Tribunal (sic dispute) which would clothe the appropriate Government with power to make the reference and the Industrial Tribunal to adjudicate it. If there is no industrial dispute in existence or apprehended the appropriate Government lacks power to make any reference. A settlement of dispute between the parties themselves is to be preferred, where it could be arrived at, to industrial adjudication, as the settlement is likely to lead to more lasting peace than an award. Settlement is arrived at by the free will of the parties and is a pointer to there being goodwill between them. When there is a dispute that the settlement is not bona fide in nature or that it has been arrived at on account of fraud, misrepresentation or concealment of facts or even corruption and other inducements it could be the subject-matter of yet another industrial dispute which an appropriate Government may refer for adjudication after examining the allegations as there is an underlying assumption that the settlement
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reached with the help of the Conciliation Officer must be fair and reasonable. A settlement which is sought to be impugned has to be scanned and scrutinised. Sub-sections (1) and (3) of Section 18 divide settlements into two categories, namely, (1) those arrived at outside the conciliation proceedings, and (2) those arrived at in the course of conciliation proceedings. A settlement which belongs to the first category has a limited application in that it merely binds the parties to the agreement but the settlement belonging to the second category has an extended application since it is binding on all the parties to the industrial disputes, to all others who were summoned to appear in the conciliation proceedings and to all persons employed in the establishment or part of the establishment, as the case may be, to which the dispute related on the date of the dispute and to all others who joined the establishment thereafter. A settlement arrived at in the course of conciliation proceedings with a recognised majority union will be binding on all workmen of the establishment, even those who belong to the minority union which had objected to the same. The recognised union having the majority of members is expected to protect the legitimate interest of the labour and enter into a settlement in the best interest of the labour. This is with the object to uphold the sanctity of settlement reached with the active assistance of the Conciliation Officer and to
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discourage an individual employee or a minority union from scuttling the settlement. When a settlement is arrived at during the conciliation proceedings it is binding on the members of the Workers' Union as laid down by Section 18(3)(d) of the Act. It would ipso facto bind all the existing workmen who are all parties to the industrial dispute and who may not be members of unions that are signatories to such settlement under Section 12(3) of the Act. The Act is based on the principle of collective bargaining for resolving industrial disputes and for maintaining industrial peace. "This principle of industrial democracy is the bedrock of the Act," as pointed out in the case of P. Virudhachalam v. Lotus Mills [(1998) 1 SCC 650 : 1998 SCC (L&S) 342] . In all these negotiations based on collective bargaining the individual workman necessarily recedes to the background. Settlements will encompass all the disputes existing at the time of the settlement except those specifically left out."
(emphasis supplied)
33. He stated that when there is no industrial dispute, nor apprehended, which could be the subject matter of a reference for adjudication, then the High Court has jurisdiction to entertain a writ petition.
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34. Similarly in Management of BASF India Ltd.'s case (supra), the Jharkhand High Court on a similar issue of closure, wherein a reference was made by the State Government to the Industrial Tribunal as to whether the closure of the appellant Undertaking/Establishment was justified or not, the Court was of the view that when the material on record and unimpeachable documentary evidence that has been produced before the Court by the appellant which has not been controverted by the respondents, other reference was not called for.
35. Sri. Raghavan has also relied upon the judgment of this Court in the case of Devesh Sandeep Associates (supra) to contend that test of functional integrality is viewed on whether the subsequent unit could survive on closure of the first unit.
36. Insofar as judgments relied upon by learned counsel for respondent No.3-Union are concerned, in Premier Automobiles Ltd. (supra), the counsel has relied upon paragraph No.23, which is reproduced as under:
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"23. To sum up, the principles applicable to the jurisdiction of the civil court in relation to an industrial dispute may be stated thus:
(1) If the dispute is not an industrial dispute, nor does it relate to enforcement of any other right under the Act the remedy lies only in the civil court.
(2) If the dispute is an industrial dispute arising out of a right or liability under the general or common law and not under the Act, the jurisdiction of the civil court is alternative, leaving it to the election of the suitor concerned to choose his remedy for the relief which is competent to be granted in a particular remedy.
(3) If the industrial dispute relates to the enforcement of a right or an obligation created under the Act, then the only remedy available to the suitor is to get an adjudication under the Act.
(4) If the right which is sought to be enforced is a right created under the Act such as Chapter V-A then the remedy for its enforcement is either Section 33-
C or the raising of an industrial dispute, as the case may be."
The submission is that, if the industrial dispute relates to the enforcement of a right or an obligation created under the Act, then the only remedy available is to get an adjudication under the Act.
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WA No. 2835 of 2019
37. The reliance has also been placed on the judgment in the case of Annapurna Mistanna Bhandar (supra), wherein in paragraph No.5, the Calcutta High Court held as under:
"5. Mr. Sengupta also cited the decision in the case of Walford Transport v. State of West Bengal and Ors. 1970 LIC.70. In that case Division Bench of this Court held where the closure of the workshop by the company raises as industrial dispute the question whether the closure of the workshop was real and what relief the workmen were entitled to relates to the matter connected with the dispute and specified in Schedule 3 Item 10 of the Industrial Disputes Act. Therefore, it was held that the reference of the question to the tribunal by the Government under Section 10(1)(d) of the Industrial Disputes Act would be valid and the Tribunal would be competent to adjudicate it. The material facts before the Division Bench inter alia were that on 11th December, 1972 the appellant company had given to the State Government 60 days notice of the intended closure of its workshop at 22/1, Darga Road, Calcutta and joint conference of the appellant company and its workmen represented by one of their union was convened in the chamber of Additional Labour Commissioner, Government of West Bengal on 17th March, 1973 but the company
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did not attend the same. The Government of West Bengal thereafter under Section 10 of the Industrial Disputes Act made a reference to the 5th Industrial Tribunal in respect of the following issue: Whether the closure of the Darga Road Workshop of the company is real, what reliefs are the workmen entitled. The appellant company challenged the said reference by a writ petition and a rule was issued but rule was ultimately discharged by the learned Single Judge. Thereafter an appeal was preferred wherein the Division Bench dismissed the said appeal holding that such a reference would be valid and the Tribunal would be competent to adjudicate as the issue under reference relates to a matter connected with the dispute and specified in Schedule 3 Item 10 of the Industrial Disputes Act. While arriving at the said decision the Division Bench referred to the judgment in the case of Workmen of the Indian Leaf Tobacco Development Co, Ltd. v. Management of Indian Leaf Tobacco Development Co. Ltd (I970-I-LLJ-343). Referring to the said Supreme Court decision the Division Bench observed as follows:
"The Supreme Court in the said case recognised that no Industrial Tribunal even in a reference under Section 10(1)(d) of the Industrial Disputes Act can interfere with the discretion exercised by a company in the matter of closing down some of its branches and depots and that the Tribunal has no power to issue orders directing re- opening of a closed depot or branch. But at the same time, the Supreme Court in the said case obseved that the Tribunal can
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determine whether a closure was genuine or real. Secondly, the Industrial Tribunal would be fully competent to adjudicate upon the relief to which the workmen of a branch which had been closed down, might be entitled to. If such a question arises and becomes subject matter of an industrial dispute, the Tribunal, can go into it and decide whether the claim of the workmen that they should not be retrenched was justified. In the instant case, we have already set out the order of reference under Section 10. The Tribunal had been asked to determine whether or not the closure of the appellant company was real and what relief, if any, the workmen concerned were entitled to and the learned Advocate also cited the case of Sahu Minerals and Properties Ltd. v. Presiding Officer, Labour Court , which also fully supports the submission of the learned Advocate for the respondent No. 3 that the reference made to the Tribunal involved an industrial dispute and therefore the Industrial Tribunal was competent to adjudicate whether the case before it was a case of retrenchment and compensation or the proviso to Subsection (1) of Section 25- FFA was attracted on closure of the establishment. The Tribunal may determine whether a so-called closure was no closure at all". "
38. Similarly, in the case of Secretary, K.J.H.S.W. Union (supra) on which reliance has been placed by respondent No.3-Union that the order making a reference is an administrative act and it is not a judicial or quasi judicial act and the Court cannot therefore canvass the
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WA No. 2835 of 2019order of reference closely to see if there was any material before the Government to support its conclusion, as if it was a judicial or quasi judicial determination. In other words, when a reference has been made, the determination on the reference on merits must be left to the Tribunal.
39. In The State of Madras -Vs.- C.P.Sarathy and another (supra), learned counsel has relied upon paragraph No.15 thereof, which we reproduce as under:
"15. Moreover, it may not always be possible for the Government, on the material placed before it, to particularise the dispute in its order of reference, for situations might conceivably arise where public interest requires that a strike or a lockout either existing or imminent should be ended or averted without delay, which, under the scheme of the Act, could be done only after the dispute giving rise to it has been referred to a Board or a Tribunal [vide Sections 10(3) and 23]. In such cases the Government must have the power, in order to maintain industrial peace and production, to set in motion the machinery of settlement with its sanctions and prohibitions without stopping to enquire what specific points the contending parties are quarrelling about, and it would seriously, detract
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from the usefulness of the statutory machinery to construe Section 10(1) as denying such power to the Government. We find nothing in the language of that provision to compel such construction. The Government must, of course, have sufficient knowledge of the nature of the dispute to be satisfied that it is an industrial dispute within the meaning of the Act, as, for instance, that it relates to retrenchment or reinstatement. But, beyond this no obligation can be held to lie on the Government to ascertain particulars of the disputes before making a reference under Section 10(1) or to specify them in the order."
40. The aforesaid is in support of her contention that the Government while making reference, should have knowledge of the nature of dispute, so as to be satisfied that it is an industrial dispute within the meaning of the Act, for instance that it relates to retrenchment, reinstatement or termination of the workers because of closure, but beyond that, there is no obligation lie on the Government to ascertain the particulars of the dispute before making reference under Section 10 or to specify them in the order.
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WA No. 2835 of 2019
41. Similarly, reliance has been placed on the judgment in the case of The Associated Cement Companies Ltd., Chiabasa Cement Works, Jhinkpani (supra) in paragraph No.11 thereof, the Supreme Court has stated as under:
"11. The Act not having prescribed any specific tests for determining what is 'one establishment', we must fall back on such considerations as in the ordinary industrial or business sense determine the unity of an industrial establishment, having regard no doubt to the scheme and object of the Act and other relevant provisions of the Mines Act, 1952, or the Factories Act, 1948. What then is 'one establishment' in the ordinary industrial or business sense? The question of unity or oneness presents difficulties when the industrial establishment consists of parts, units, departments, branches etc. If it is strictly unitary in the sense of having one location and one unit only, there is little difficulty in saying that it is one establishment. Where, however, the industrial undertaking has parts, branches, departments, units etc. with different locations, near or distant, the question arises what tests should be applied for determining what constitutes 'one establishment'. Several tests were referred to in the course of arguments before us, such as, geographical proximity, unity of ownership,
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management and control, unity of employment and conditions of service, functional integrality, general unity of purpose etc. To most of these we have referred while summarising the evidence of Mr Dongray and the findings of the Tribunal thereon. It is, perhaps, impossible to lay down any one test as an absolute and invariable test for all cases. The real purpose of these tests is to find out the true relation between the parts, branches, units etc. If in their true relation they constitute one integrated whole, we say that the establishment is one; if on the contrary they do not constitute one integrated whole, each unit is then a separate unit. How the relation between the units will be judged must depend on the facts proved, having regard to the scheme and object of the statute which gives the right of unemployment compensation and also prescribes disqualification therefor. Thus, in one case the unity of ownership, management and control may be the important test; in another case functional integrality or general unity may be the important test; and in still another case, the important test may be the unity of employment. Indeed, in a large number of cases several tests may fall for consideration at the same time. The difficulty of applying these tests arises because of the complexities of modern industrial organisation; many enterprises may have functional integrality between factories which are separately owned; some may be integrated in part
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with units or factories having the same ownership and in part with factories or plants which are independently owned. In the midst of all these complexities it may be difficult to discover the real thread of unity. In an American decision (Donald L. Nordling v. Ford Motor Company [(1950) 28 AIR, 2d 272] ) there is an example of an industrial product consisting of 3800 or 4000 parts, about 900 of which came out of one plant; some came from other plants owned by the same Company and still others came from plants independently owned, and a shutdown caused by a strike or other labour dispute at any one of the plants might conceivably cause a closure of the main plant or factory."
The aforesaid is primarily on the integrality of two units, the Supreme Court held that the same need to be judged depending on the facts proved.
42. Insofar as reliance placed on Kalinga Tubes Limited (supra) is concerned, the Supreme Court has held as under:
"............ ............
Before the tribunal the main controversy
centered on the question whether there was a closure of its undertaking by the appellant or whether there was a refusal to employ the workmen
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WA No. 2835 of 2019which would fall within the expression "Lockout" as defined by Section 2(e) of the Act. The tribunal found:
(i) Since the morning of October 3, 1967, there had been no production by the factory of the appellant and the operatives had not been employed;
(ii) By September 30, 1967, there was absolutely no idea to close down the undertaking or business as the annual general meeting of the Company had taken place on that date and there was no evidence that there was any meeting of the Board of Directors or of the shareholders between the annual general meeting and the issue of notice of October 3, 1967 to workmen which would show that any decision had been taken to close down the undertaking.
(iii) The trade results of the business carried on by the Company during the year 1966-67 would never have induced any business man to close down the undertaking. The Company had earned a net profit of 2.27 lakhs of rupees after making payment of 20 lakhs of rupees of loan to the Industrial Financial Corporation of India and incurring a loss of Rs 63,720 in the disposal of certain loan bonds.
Orders for manufacturing pipes had been received till October 2, 1967 for more quantities than were in stock. Similarly orders had been received for manufacturing poles. Therefore the management
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WA No. 2835 of 2019could not have intended the closing down of the undertaking till the notice was issued.
(iv) The closure of the factory of place of work was a direct consequence of the alleged illegal activities of the workmen and of the refusal by the officers and supervisory staff to carry on their normal work and not due to shortage of raw materials, fuel or power.
............ ............
xx xx xx xx xx
............ ............
All that has been laid down is that in case of a closure the employer does not merely close down the place of business but he closes the business itself finally and irrevocably vide Express Newspapers Ltd. v. Workers Staff [(1962) 2 LLJ 227, 232] . The closure has to be genuine and bona fide in the sense that it should be a closure in fact and not a mere pretence of closure. (Tea Districts Labour Association, Calcutta v. Ex-Employees of Tea District Labour Association [(1960) 3 SCR 207, 213] .
............ ... ... ... ..."
(emphasis supplied)
43. Similarly in Tatanagar Foundry Company Limited (supra), the Supreme Court has held as under:
"... ... ... ... ... ... ... ... It was pointed out in that case that in the case of a closure the employer does not merely close down the place of business but he
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closes the business itself finally and irrevocably. A lock-out on the other hand indicates the closure of the place of business and not closure of the business itself. In the present case the totality of facts and circumstances would lead to the conclusion that the undertaking at Jamshedpur was closed down completely and was a final and irrevocable termination of the business itself. The Tribunal has come to a finding that the closure of the business was not bona fide but the closure was done in order to victimise the workmen. As regards the financial position the Tribunal took the view that on the whole the financial condition of the company in 1966 has not worsened to such an extent as to reasonably constitute a good ground for closing the business altogether. It might have been a ground for reorganising the company or rationalising it by retrenchment or otherwise but it could not be a ground for winding up the business altogether. In our opinion the finding of the Tribunal on this point is defective in law. It is now well established that in the case of a closure the employer does not merely close down the place of business but he closes the business finally and irrevocably. The closure has to be genuine and bona fide in the sense that it should be a closure in fact and not a mere pretence of closure. (See the decision of this Court in Tea District Labour Association v. Ex-Employees of Tea Districts Labour Association [(1960) 3 SCR 207 at p 213] ).
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The motive behind the closure is immaterial and what is to be seen is whether it is an effective one. (See the decision of this Court in Andhra Prabha Ltd. v. Secretary, Madras Union of Journalists [(1967) 3 SCR 901] and Kalinga Tubes Ltd. v. Workmen [AIR 3 SC 90] ). Taking into account the entire set of circumstances and facts in the present case we are of opinion that there has been in fact a closure of the Jamshedpur business and the finding of the Tribunal that there was a lock-out is defective in law and must be set aside"
44. In Telco Convoy Drivers Mazdoor Sangh and Others (supra), in paragraph No.13, the Supreme Court has held as under:
"13. Attractive though the contention is, we regret, we are unable to accept the same. It is now well settled that, while exercising power under Section 10(1) of the Act, the function of the appropriate Government is an administrative function and not a judicial or quasi-judicial function, and that in performing this administrative function the Government cannot delve into the merits of the dispute and take upon itself the determination of the lis, which would certainly be in excess of the power conferred on it by Section 10 of the Act. See Ram Avtar Sharma v. State of Haryana [(1985) 3 SCC 189 : 1958 SCC (L&S) 623 : (1985) 3 SCR 686] ;
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M.P. Irrigation Karamchari Sangh v. State of M.P. [(1985) 2 SCC 103 : 1985 SCC (L&S) 409 : (1985) 2 SCR 1019] ; Shambhu Nath Goyal v. Bank of Baroda, Jullundur [(1978) 2 SCC 353 : 1978 SCC (L&S) 357 : (1978) 2 SCR 793] ."
45. Having noted the judgments relied upon by the counsel for the parties, the principles that can be deduced on a reading of the said judgments can be summed up as under:
i. The motive for closure cannot be gone into by the Tribunal.
ii. The Tribunal must look to the pleadings of the parties to find out the exact nature of the dispute.
Because, in most of the cases, the order of reference is so cryptic that it is impossible to cull-out therefrom various points about which the parties are at variance, leading to the dispute.
iii. The Tribunal has the jurisdiction to determine as to whether there is a closure or there is no closure at all.
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iv. The High Court, in its jurisdiction, can determine whether the reference made by the appropriate Government in the facts, more so relatable to closure is maintainable or not within the parameters of law laid down by the Supreme Court.
46. In this case, though it is the submission of Sri. Raghavan that the closure cannot be a matter of dispute and the Tribunal must proceed on the premise that the closure has been effected, but keeping in view the submissions made by Ms. Chokshi on behalf of the respondent-Union which includes that there is no real closure/there is functional integrality between two units of the appellant and provisions of Sections 25-O, 25-G and 25-F of the Act have been violated which entails the workers to be reinstated with continuity of services, full back wages and all consequential benefits, we, for the reasons stated by the learned Single Judge and for our own reasons, keeping in view the position of law, are of the view that the impugned order of the learned Single Judge cannot be interfered with. This we say so, though
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WA No. 2835 of 2019Sri. Raghavan's submission that closure cannot be the subject matter of an Industrial Dispute looks appealing on a first blush, but on a deeper consideration of the stand taken by the respondent No.3-Union, more particularly that there is a functional integrality between two Units of the appellant and the provisions of the Act having been violated, the reference, as made, has to be decided by the Industrial Tribunal is appealing. No doubt the reference which has been made by the appropriate Government, the English translation of which we have reproduced above, proceeds on the premise that closure having been effected, which means the appellant is justified in not providing employment, but still, the reference has to be decided on the grounds urged by the Union that there is functional integrality between the two units and in that sense, even one establishment/Unit is closed, the appellant is still be required to provide employment to the workmen in the other. In any case, the Supreme Court in the case of The Delhi Cloth and General Mills Co. Ltd. (supra), has held that the Tribunal in any event, has to
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WA No. 2835 of 2019look to the pleadings of the parties to find out the exact nature of the dispute, because in most cases, the order of reference is so cryptic that it is impossible to cull-out therefrom the various points about which the parties were at variance, leading to the dispute. So, we accordingly hold that the impugned order of the learned Single Judge need no interference.
The appeal, being without merit, is dismissed. There shall be no order as to costs.
Sd/-
(V KAMESWAR RAO) JUDGE Sd/-
(C M JOSHI) JUDGE PA