Delhi District Court
Vedpal Singh vs M/S Suraj Cinema on 12 February, 2024
IN THE COURT OF RITU SINGH,
ADDL. DISTRICT & SESSIONS JUDGE,
PRESIDING OFFICER : LABOUR COURT - IV,
ROUSE AVENUE COURTS : NEW DELHI.
LIR No.1049/2020
CNR No.DLCT13-002827-2020
IN THE MATTER OF:-
Sh. Vedpal Singh
S/o Sh. Mukhtyar Singh
R/o H.No.275, Village Neelwal,
Post Office Tikri Kalan,
New Delhi-110041 ......Claimant
Versus
Suraj Cinema
Through its Manager Sh. Anand Prakash
At 26/5, Dhansa Road, Najafgarh,
New Delhi-110043 ....... Management
Date of institution of the case : 13.03.2020
Date of final arguments : 09.02.2024
Date of passing the Award : 12.02.2024
Decision : Award Passed
AWARD
1. Vide this Award, this Court shall decide the
Industrial Dispute which was referred by Jt. Labour
Commissioner, South-West District on a complaint filed by the
aforesaid claimant against the Management, vide reference no.
F.24(23)/Ref./2020/ SWD/Lab/191-194 dated 29.01.2020, u/s
10(1)(c) and 12 (5) of The Industrial Disputes Act, 1947, wherein
the following reference was to be answered :-
"Whether the services of workman Sh. Vedpal Singh
(Age-57) S/o Sh. Mukhtyar Singh, Mobile
No.9871568142 have been terminated illegally and/or
unjustifiably by the Management; if so, to what relief
is he entitled and what directions are necessary in
this respect?".
LIR No.1049/2020
Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 1 of 25
2. Notice of the reference was issued to the claimant.
Pursuant thereto, the claimant appeared and filed his statement of
claim claiming that he was in the continuous service of the
management since 02.07.1982 at the post of "Torchman and
Lineman" and his last drawn salary was Rs.15,400/- per month;
he worked honestly, efficiently, punctually and regularly and has
never given any chance of complaint to his superior or any
official of the management.
3. It is further stated in the statement of claim that the
management deprived the claimant/workman from legal facilities
such as leave encashment, bonus and full minimum wages
difference. Further, the claimant repeatedly demanded the above
legal facilities from the management and due to the said reason,
the management got annoyed and terminate the claimant illegally
and unjustifiably without issuing any notice/charge sheet and
without paying him any compensation. The claimant received a
letter dated 24.05.2019 issued by the management thereby
informing the claimant not to report for duties w.e.f. 31.05.2019.
It is further alleged that management have retained the employees
who were junior to the claimant. Aggrieved from the illegal
termination, the workman made complaint against the
management before the Labour Office. The claimant also issued
legal demand notice dated 27.08.2019 to the management for his
reinstatement and payment of back wages which was not replied
nor the services of the claimant was reinstated. The claimant has
also filed his claim petition before the Conciliation Officer, but
no settlement could be arrived at between the parties and hence
the present reference.
LIR No.1049/2020
Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 2 of 25
4. The claimant has claimed to be unemployed from
the date of his illegal termination and that the termination of
service of the claimant is illegal and unjustified as the
management violated the provisions of I.D. Act and thus an
award be passed in favour of claimant and against management
directing the management to reinstate him with consequential
benefits including full back wages, continuity in service and
litigation expenses to the tune of Rs.25,000/-.
5. Notice of the statement of claim was issued to the
management. Management appeared and filed the written
statement wherein management has stated that the workman was
working with the management only as a Torchman and did not
work continuously. It is further contended that the workman is a
quarrelsome person and used to fight almost with all the
employees of the Cinema and the work and performance of the
claimant was never satisfactory. It is alleged that the Cinema was
closed since last 5-6 years and management was paying salaries
to the workers from its own pocket. It is further alleged that letter
dated 24.05.2019 is self explanatory and cannot be considered as
termination letter as vide the aforesaid letter the management
conveyed the information of temporary closure of the Cinema. It
is further contended that earlier the matter got settled between the
parties and management/respondent offered the claimant to join
the duties and considered him in continuity in service. The management denied the other averments of the statement of claim and lastly prayed to dismiss the claim petition.
6. Rejoinder to the written statement was also filed by the workman, workman has reiterated therein the contents of LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 3 of 25 statement of claim filed by the workman.
7. Vide order dated 16.02.2022, the following issues were framed in view of pleadings of the parties :-
ISSUES:
(1) Whether the services of the workman were terminated illegally and/or unjustifiably by the management and if so, to what consequential relief is the workman entitled for?OPW (2) In terms of reference (3) Relief.
The case was, thereafter, fixed for evidence of workman.
8. In order to prove the case, the workman has examined himself as WW-1 and adduced his evidence by way of affidavit Ex.CW1/A wherein he reiterated the contents of statement of claim on solemn affirmation. Besides this, he had also placed on record the following documents :-
(i) Ex.CW1/1: Copy of letter dated 24.05.2019 sent by management to the claimant;
(ii) Ex.CW1/2 : Copy of reply dated 01.06.2019 alongwith postal receipt sent by claimant to the management
(iii) Ex.CW1/34: Copy of legal notice dated 26.08.2019 alongwith postal receipt and online acknowledgment.LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 4 of 25
9. The management has examined three witnesses namely Sh. Anand Prakash as MW-1, SI Satinder Sharma as MW-2 and Sh. Amit Kumar as MW-3.
10. Sh. Anand Prakash has been examined on behalf of management as MW1, who adduced his evidence by way of affidavit Ex.MW1/A wherein he reiterated the contents of written statement and also proved on record the document Ex.MW2/1, Ex.MW1/5, Mark A, Mark B, March C and Mark D :-
11. MW-2 SI Satinder Sharma is a summoned witness, who proved on record the application of management regarding closure of Cinema for upgradation of the Cinema Hall alongwith the action taken by the department on the said application as Ex.MW2/1 and also proved the approval given by the Licencing Authority to the management on the said application which is Ex.MW2/2.
12. MW-3 Sh. Amit Kumar is also a summoned witness and proved on record the letter dated 22.03.2021 as Ex.MW3/1 which was issued under his signature to Sh. Chander Prakash, Owner of Suraj Cinema.
13. Sh. Neeraj appeared as MW4 and brought the summoned record i.e. Diary Register of Entertainment Branch for the period of 2018-2019 and deposed that there is no entry in the register regarding the receipt of the stated letter submitted by the management vide Mark B. LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 5 of 25
14. This Court has heard the final arguments addressed by AR for both the sides. I have also gone through the materials lying on record. My issue-wise findings are as under:
Issue No.1 "Whether the services of the workman were terminated illegally and/or unjustifiably by the management and if so, to what consequential relief is the workman entitled for?OPW;
& Issue No.2 "In terms of reference"
15. This Court proceeds to discuss both the Issue No.1 and 2 together as issue no.1 has been framed on basis of terms of reference itself. The onus to prove Issue no.1 is on workman and he is required to prove that his services with management were illegally or unjustifiably terminated by management.
16. The workman has testified in his evidence by way of affidavit Ex.WW1/A that he was in continuous and regular service as Torchman and Lineman with the management w.e.f. 02.07.1982. The management has not disputed the claim of workman that he was in employment of management as 'Torchman' in Cinema and there is no specific dispute to continuity of services of workman with management since stated date, i.e. 02.07.1982 is also not disputed, though with rider that he was a chronic litigant. Thus, employment of workman with management is admitted, from stated date, i.e. 02.07.1982.
LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 6 of 2517. The workman has testified in his evidence affidavit Ex.WW1/A that his services were terminated by the management without giving him any show cause notice but merely after giving him a letter dated 24.05.2019 and he further admits that in said letter dated 24.05.2019 issued by management to him he was directed by management not to report for duties w.e.f. 31.05.2019. He has further stated in his evidence, by way of affidavit Ex.WW1/A that the said management is still operating and displaying Cinema and that his co-employees and juniors have been retained by management in service. During his cross- examination, workman has admitted that no termination letter was issued to him by the management and only letter Ex.CW1/1 was issued to him. He has further deposed in cross-examination that he was not aware that management (Cinema) has been temporarily closed and further claimed that Cinema/management was still operational.
18. The management has examined Sh. Anand Prakash, erstwhile Manager of management who has tendered his evidence by way of affidavit Ex.MW1/A wherein he has stated that management w.e.f. 31.05.2019 was temporarily closed due to various issues such as continuous huge losses since long, renovation and issue of land use pending before the Hon'ble LG of Delhi and that management was in state of closure since preceding 5-6 years and that salaries to workers were being paid from pocket of management as management being single screen Cinema was unable to generate revenue to meet its day-to-day expenses and was closed temporarily and management had sought assistance from staff and workmen vide letter dated LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 7 of 25 24.05.2019 by closing Cinema/management temporarily and that staff and workmen had themselves not sought salary after May 2019 and none of staff has been retained in service by management and no new workman has been engaged by management. MW1 has further deposed in his evidence affidavit that letter dated 24.05.2019 is not a termination letter but a letter giving notice to workman regarding temporary closure of management due to operational losses.
19. It is claim of workman that his services with management were terminated by management without giving him any show cause notice, chargesheet or without disciplinary enquiry and he further claims that it was by way of letter dated 24.05.2019 issued by management by virtue of which he was directed not to report on his duties with management w.e.f. 31.05.2019 and letter dated 24.05.2019 has been exhibited as Ex.WW1/1. On the contrary, the management has denied that letter dated 24.05.2019 Ex.WW1/1 was a termination letter and management has examined Sh. Anand Prakash (its erstwhile Manager) as MW1, who has deposed in his evidence by way of affidavit Ex.MW1/A that letter dated 24.05.2019 Ex.WW1/1 was only a letter sent to workman to inform him about 'temporary closure' of Cinema due to operational financial losses suffered by management and that similar notices/letters were issued to other workman which are Ex.MW1/6 (colly.) and that in the aforesaid letters Ex.MW1/6 (colly.) only information was given of temporary closure of management/Cinema hall.
LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 8 of 2520. However, perusal of letter dated 24.05.2019 Ex.WW1/1 shows that it has been clearly mentioned in "subject" of letter that "closure of Suraj Cinema due to financial losses"
and even in the subject-matter of letter it has been clearly mentioned that Cinema hall would be closed w.e.f. 30.05.2019 and there is no reference in aforesaid letter daed 24.05.2019 Ex.WW1/1 of "temporary closure" of Cinema/management. Thus, the contention of AR for management that vide letter dated 24.05.2019 Ex.WW1/1 information was given to workman regarding "temporary closure" of management, does not find any support from said letter. Instead, the said letter Ex.WW1/1 states in no unambiguous terms that "closure of Cinema w.e.f. 30.05.2019 due to financial losses". Thus clearly indicating complete closure of management/Suraj Cinema. It is also to be borne in mind that management/Suraj Cinema had simultaneously issued such notices of closure of management to its other workmen and notices issued to nine other such workman has also been relied upon by management itself, as Ex.MW1/6 (colly.). Perusal of these letters dated 24./05.2019 Ex.MW1/6 (colly.) shows that in all these letters the management has informed the workman regarding "closure of Suraj Cinema due to financial losses" and thus all the workman to whom these letters dated 24.05.2019 were issued by management, were given to understand by that management/Suraj Cinema was closing down due to financial issues and there was absolutely nothing in said letters dated 24.05.2019 given to workmen, to convey to them that it was only a temporary closure of management or that management was closing or restructuring/upgrading itself or that it would re-start after its restructuring/up-gradation was LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 9 of 25 complete.
21. Instead, by virtue of these letter dated 24.05.2019 issued by management to its workmen including present workman i.e. Ex.WW1/1 as well as other workman, which is Ex.MW1/6 (colly.) the management of Suraj Cinema had effectuated discharge of its workmen (including workman Vedpal) as if there was complete closure of management, without complying with mandatory legal provisions u/s 25 FFF of Industrial Dispute Act. It is important to note that the act of management/Suraj Cinema in closing Suraj Cinema w.e.f. 31.05.2019 led to cessation of services of several workmen, including present workman Vedpal and therefore, this act of management tantamounts to termination of services of workman Vedpal and letter dated 24.05.2019 Ex.WW1/1 issued by management to workman Vedpal that Suraj Cinema was regarding closing of management due to economic losses and it was sufficient to convey to workman that business of management/Suraj Cinema had come to a standstill and there was no scope of management continuing with its business, any further. Therefore, this act of the management tantamounts to virtual closure and which resulted in discharge of its workmen. Reliance in this regard is placed on judgment of the Hon'ble Supreme Court of India in case of Armed Forces Ex Officers Multi Services Corporative Society Ltd. Vs. Rashtriya Mazdoor Sangh (NTUC) 2022 LiveLaw (SC) 614 wherein the services of '35' employees were retrenched through individual letters, on ground that appellant had closed its business and it was argued before Hon'ble Supreme Court of India on behalf of LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 10 of 25 management/employer that management did not effectuate any closure by termination letter dated 22.03.2007, but was merely re-organizing its business by "temporarily Shutting down" there transport activities and it was observed by Hon'ble Supreme Court of India that :
"With respect to the first submission of Shri C.U. Singh, that this is not at all a case of closure but a simple case of retrenchment, the Tribunal as well as the High Court have held that the method and manner by which the workmen were retrenched clearly demonstrates that it is virtually a closure. We have no hesitation in confirming these findings of fact. The act of terminating the services of all the drivers at the same time, coupled with the statement of the Appellant that the entire business is closed down, was sufficient to convey to the workers and the Union that the transport business had come to a standstill and that there was no scope of continuing the business any further. Further, we also concur with the findings of fact about the lack of bona fide in the Appellant's offers of re-employment on new terms and conditions, and without continuity of service. It is for these reasons that the Tribunal and the High Court held that it was virtually a case of closure and correctly so."
22. The term 'closure' is defined u/s 2 (cc) of ID Act as 'permanent closing down of a place of employment or part thereof'. The closure has to be genuine and bone fide in the sense that it should be a closure in fact and not a mere pretense of closure. Reliance is placed on the judgment of Tea District Labour Association Vs. Ex-Employees of Tea Districts Labour Association (1960) 3 SCR 207. The motive behind the closure is immaterial and what is to be seen is whether it is an effective one. Reliance is placed on a case titled as Andhra Prabha Ltd. Vs. Secretary, Madras Union of Journalists A.T.R. 1969 SC 90.
23. The Hon'ble Supreme Court of India in District Red Cross Society Vs. Babita Arora and others 2007 (7) SCC 366 LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 11 of 25 dealt with the effect of closure under Section 25FFF of the Industrial Disputes Act, 1947 resulting in the termination of all the workmen of the unit and it was observed as follows:
"Section 25 FFF deals with the compensation to workmen in case of closing down of undertakings. ............ It is, therefore, clear that in order to attract Section 25-FFF it is not necessary that the entire establishment of an employer should be closed."
24. In J.K. Synthetics Vs. Rajasthan Trade Union Kendra it has been observed that:
"The closure need not be of the entire plant. A closure can also be of a part of the plant. In Maruti Udyog Ltd. Vs. Ram Lal it was held as under in para 21 of the Report. 21. How far and to what extent the provisions of Section 25-F of the 1947 Act would apply in case of transfer of undertaking or closure thereof is the question involved in this appeal. A plain reading of the provisions contained in Section 25-FF and Section 25-FFF of the 1947 Act leaves no manner of doubt that Section 25-F thereof is to apply only for the purpose of computation of compensation and for no other. The expression as if used in Section 25-FF and Section 25-FFF of the 1947 Act is of great significance. The said term merely envisages computation of compensation in terms of Section 25-F of the 1947 Act and not the other consequences flowing therefrom. Both Section 25-FF and Section 25-FFF provide for payment of compensation only, in case of transfer or closure of the undertaking. Once a valid transfer or a valid closure comes into effect, the relationship of employer and employee does not survive and ceases to exist. Compensation is required to be paid to the workman as a consequence thereof and for no other purpose."
25. During the course of arguments, Ld. AR for the management had raised objections that discharge of the workman from the services of the management pursuant to the closure of the management/Suraj Cinema is not "termination" of the workman and has further relied on notice dated 24.05.2019 Ex.WW1/1 to buttress his contention that the aforesaid notice LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 12 of 25 Ex.WW1/1 addressed to the workman Vedpal Singh is completely silent on the issue of termination of the workman and therefore, it cannot be deemed as letter of termination.
26. Considering the aforesaid contentions raised by Ld. AR for the management, it is pertinent to mention here that the Constitution Bench of Hon'ble Supreme Court of India in Hathising Manufacturing Company Ltd. Vs. Union of India AIR 1960 SC 923 had observed that "closure of an industrial undertaking leads termination of employment of many employees and throws them into rank of unemployed and loss of service due to closure stands on same footing as loss of service due to retrenchment as in both cases the employee is thrown out of employment suddenly and of not of fault of his and the hardships are the same whether unemployment is result of retrenchment or closure of business."
27. Thus it is clear from aforesaid observation of Constitution Bench of Hon'ble Supreme Court of India in Hathising Manufacturing Company Ltd. Vs. Union of India (Supra) which has been relied upon in subsequent judgment of Punjab Land Development and Reclamation Corporation Ltd., Chandigarh Vs. Presiding Officer, Labour Court, Chandigarh 1990 SCC (3) 682, that unemployment/discharge of the workman which results from closure of Industrial Undertaking is "termination" of his services for the purposes of Industrial Disputes Act, 1947.
28. In the case at hand, the continuity of services of workman with management w.e.f. 02.07.1982 is admitted by LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 13 of 25 management and therefore, it is admitted fact that workman Vedpal was in continuous service of management since 02.07.1982, that is, more than 35 years before date of closure. Therefore, the mandatory statutory provisions of Section 25 FFF of Industrial Disputes Act which are required to be complied by the industrial undertaking, which is proposed to be closed was discussed and categorically observed by the Constitution Bench of Hon'ble Supreme Court of India in Hathising Manufacturing Company Ltd. Vs. Union of India (Supra) which was again cited in Punjab Land Development and Reclamation Corporation Ltd., Chandigarh Vs. Presiding Officer, Labour Court, Chandigarh 1990 SCC (3) 682 and relevant extract is being reproduced herein:
"...By the plain intendment of Section 25-FFF (1), the right to notice and compensation for termination of employment flows from closure of the undertaking; the clause does not seek to make closure effective upon payment of compensation and upon service of notice or payment of wages in lieu of notice. An employer proposing to close his undertaking may serve notice of termination of employment and if he fails to do so, he becomes liable to pay wages for the period of notice. On closure of an undertaking, the workmen are undoubtedly entitled to notice and compensation in accordance with Section 25-F as if they had been retrenched, i.e. the workmen are entitled beside compensation to a month's notice or wages in lieu of such notice, but by the use of the words "as if the workman had been retrenched the legislature has not sought to place closure of in undertaking on same footing as retrenchment under Section 25-F."
30. Therefore, in the light of the above-cited judicial precedents and statutory provisions of Section 25 FFF of Industrial Disputes Act, it has been well settled proposition of law that industrial undertaking or establishment, which proposed LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 14 of 25 to close, has to serve on its workmen notice of one month or wages in lieu of such notice and addition to pay compensation to the workman, computed in terms of Section 25-F of Industrial Disputes Act and though the closure of such Industrial Undertaking or establishment is itself not dependent on compliance of Section 25-FFF of Industrial Dispute Act, but the termination of the workman, which results from such closure of the industrial undertaking, has to be in accordance with Section 25-FFF of Industrial Disputes Act.
31. It is pertinent to note that Sec.25 FFF of ID Act contains specific provisions regarding compensation payable to the workman in case of closure of undertaking and relevant part of the aforesaid provision is being reproduced herein :
"(1) Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub-section (2), be entitled to notice and compensation in accordance with the provisions of Section 25F, as if the workman had been retrenched:
Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be-paid to the workman under Clause (b) of Section 25F shall not exceed his average pay for three months.
Explanation- An undertaking which is closed down by reason merely of financial difficulties (including financial losses) or accumulation of undisposed of stocks or the expiry of the period of the lease or the licence granted to it where the period of the lease or the licence expires on or after the first day of April, 1967 shall not be deemed to have been closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of proviso to this sub-section."LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 15 of 25
32. Admittedly in the present case, the management/ Cinema Hall had closed w.e.f. 31.05.2019 and notice regarding the aforesaid closure of the management was issued to the workmen including the present workman Vedpal Singh on 24.05.2019 and therefore, it is clear that the mandatory legal provision of Section 25-FFF Industrial Disputes Act, regarding one month's notice of closure or payment of wages of one month, in lieu thereof, has not been complied with by the management in the present case. There is also no dispute to the fact that no compensation u/s 25-FFF of Industrial Disputes Act, computed in terms of Section 25-F of Industrial Disputes Act, has been paid to the workman Vedpal Singh by the management, till date.
33. Therefore, in the light of the aforesaid observations and discussions, this Court is of the considered opinion that termination of the workman Vedpal Singh, which resulted due to closure of management/Cinema Hall, was effected without compliance of mandatory statutory provisions of Section 25-FFF of Industrial Dispute Act and therefore, his termination is illegal and accordingly, the present issue is decided in favour of the workman and against the management.
"Relief"
34. The claimant herein has sought the relief of reinstatement in the service with full back wages along with the continuity of service and all the consequential benefits alongwith interest @ 18% p.a. and litigation expenses of Rs.25,000/.
35. The term "reinstatement" has not been elucidated in LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 16 of 25 the Industrial Disputes Act, 1947. The Shorter Oxford English Dictionary, Vol. II, 3rd Edition stated that, the word "reinstate" means to reinstall or reestablish (a person or thing in a place, station, condition etc.); to restore to its proper and original state; to reinstate afresh and the word "reinstatement means the action of reinstating; reestablishment. "As per Black's Law Dictionary, 6th Edition, "reinstatement" means 'to reinstall, to reestablish, to place again in a former state, condition, or office, to restore to a state or position from which the object or person had been removed'.
36. It has been held by Hon'ble Supreme Court of India in Pipraich Sugar Mills Ltd. Vs. Pipraich Sugar Mills Mazdoor Union, (1956) SCR 872 and Workmen of Indian leaf Tobaco Development Company Ltd. Vs. Management of Indian Leave Tobaco Development Company Ltd., AIR 1970 SC 860 that in a reference under Industrial Disputes Act, Tribunal cannot direct a company or a industrial undertaking to reopen a closed depot or branch, if the company infact closes it down and the Tribunal cannot ask the company to reinstate the workman because there was no business for which workman could have been required and that in these circumstances, all that the workman could claim was compensation for loss of their service and the quantum of compensation would dependent whether the case of closure would be covered u/s 25-FFF (1) of Industrial Disputes Act or the proviso therein.
LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 17 of 2537. Further the Hon'ble Supreme Court of India in Workmen of Indian leaf Tobaco Development Company Ltd. Vs. Management of Indian Leave Tobaco Development Company Ltd., AIR 1970 SC 860 has settled the legal position that closure of an undertaking which is "genuine and real" is immune from interference at the hand of Labour court or Industrial Tribunal and in such cases that only relief that would be available to the workman of such an undertaking, would be by way of compensation, the quantum whereof would depend on whether the case would fall within main part of Section 25FFF (1) of Industrial Dispute Act, or the proviso thereto. No direction for reinstating of the workman employed in an undertaking, which was closed, could be issued.
38. Therefore, in view of the aforesaid judicial precedents, no directions for reinstating the workman employed in an undertaking, which has been closed could be issued and therefore, in present case, there can be no directions for reinstatement of workman in management in present case.
39. The Hon'ble High Court of Delhi in case titled as Indian Hydraulic Industries Pvt. vs Kishan Devi And Bhagwati Devi (2007) IIILLJ 55 Del has held as under:
"5. It is now settled law that even if the termination of a person is held illegal, the Labour Court is not supposed to direct reinstatement along with full back wages and the relief can be moulded according to facts and circumstances of each case. The Court has to adopt a pragmatic approach and take into account the allegations made by the work women, the nature of contribution by the workwomen to the industry, the time gap and averments made about the LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 18 of 25 unemployment and proof of unemployment as the relevant factors to be considered in such cases. The Labour Court can allow compensation to a workman instead of reinstatement and back wages. Undisputably, both the workwomen were considered as parttime employees by the Tribunal. Both were working for two hours per day for cleaning and sweeping of floors. Obviously, the rest of the time of the day was being utilized by the workwomen for similar work at other places. They could not be said to be unemployed in the sense as of a full time worker is rendered unemployed.
40. It was held by the Hon'ble High Court of Delhi in Dal Singar & Ors. Vs. Material Movement Pvt. Ltd. AIRONLINE 2018 DEL 1175 that :
"As a result, in case the answer to the query at (I) supra is in the affirmative, i.e. if the closure of the undertaking is found to be "genuine and real", the Labour Court/Industrial Tribunal would next have to examine whether the workers would be entitled to compensation under subsection (1) of Section 25 FFF, or under the proviso thereto. This, in turn, would require examining whether the closure was "on account of unavoidable circumstances beyond the control of the employer". As such, this would be the next query, which the Labour Court, or Industrial Tribunal, would have to address, and answer.
(iv) In case the closure is merely on account of any of the circumstances enumerated in the Explanation to Section 25 FFF (1), it cannot be regarded as "on account of unavoidable circumstances beyond the control of the employer". If, however, these circumstances, in conjunction with other factors, have resulted in the undertaking having to close down, then the Labour Court, or Industrial Tribunal, would have to examine, and decide, on facts, whether the reason for closure could still be regarded as "on account of unavoidable circumstances beyond the control of the employer", or not.
(v) In case the closure is "on account of unavoidable circumstances beyond the control of the employer", only reduced compensation, as per the proviso to Section 25 FFF (1), would be payable.LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 19 of 25
(vi) If the closure, however, cannot be attributed to "unavoidable circumstances beyond the control of the employer", Section 25 F would apply, mutatis mutandis, i.e., the workmen would be entitled to notice, as well as compensation, as if they had been retrenched."
41. Therefore, in drawing guidance from aforesaid guidelines of Hon'ble High Court of Delhi in order to decide the relief and directions to which workman is entitled in present case, this Court has to consider, whether closure of management/Suraj Cinema was "on account of unavoidable circumstances beyond control of employer", as without determination on this aspect the computation of compensation to which workman is entitled, in terms of Section 25 FFF Industrial Dispute Act, cannot be assessed. In case the closure of management is attributable to 'unavoidable circumstances beyond control of management', only a limited compensation as contemplated by proviso to Section 25 FFF (1) of Industrial Dispute Act would be payable to workman. On the other hand, if closure of management is not attributable to merely unavoidable circumstances beyond control of management, the workman would be entitled to compensation of 25 FFF (1) of Industrial Dispute Act.
42. The question "whether closure of management was due to unavoidable circumstances beyond control of management" is a question of fact and therefore, the evidence adduced by workman and management has to be sifted thoroughly to decide this question. The workman has deposed in evidence affidavit Ex.WW1/A that management/Cinema Hall is LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 20 of 25 still running and operating and that it has retained other co employees and during his crossexamination, he had deposed that he was not even aware that Cinema Hall (management) has been only temporarily closed. The management has relied on letters dated 24.05.2019 Mark MW1/6 (colly.) issued to its employees and MW1 has deposed in his evidence affidavit Ex.MW1/A that management/ Cinema hall was proposed to be closed temporarily for upgradation, whereas in its letter Mark MW1/6 (colly.) management had given impression of complete closure to its workmen and that also on ground of financial losses and it was no where mentioned in these letters dated 24.05.2019 Mark MW1/6 (colly.) issued to workman that management/Suraj Cinema was closing temporarily and only for upgradation. It is only in the Court, in its written statement that management has taken this plea of "temporary closure" of management/Cinema Hall for the first time. The management has pleaded in its written statement that management was closed temporarily due to various issues such as huge financial loss since long, renovation and issue of landuse pending before Government. Management had examined SI Satendra Sharma, Licencing Unit, Delhi Police, who had proved the letter sent by management to Joint Commissioner of Police, Licensing Unit, Delhi on 27.05.2019 by which management had given information regarding closure of Cinema for up-gradation of Cinema hall and said letter is Ex.MW2/1 and he further proved approval letter dated 17.06.2019 of aforesaid Licensing Authority issued to management to close Cinema Hall. It is important to note here that abovesaid letter dated 27.05.2019 was sent only after letter LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 21 of 25 dated 24.05.2019 was issued to workman and this letter gives a information of closure of Cinema Hall for up-gradation, which is contrary to information given to workman vide letters Mark MW1/6 (colly.).
43. Management has examined Sh. Amit Kumar, Assistant Director, Planning Zone-2 DDA, Delhi who has proved letter dated 22.03.2021 Ex.MW3/a and perusal of aforesaid letter Ex.MW3/1 shows that this letter was sent by DDA in response to letter dated 02.12.2020 of management addressed to Vice- Chairman DDA on subject of "continuance of existing temporary Suraj Cinema, by change of land use from 'Built-Up Residential' to Commercial (Cinema Complex). Management has not filed any documents on record to show that management of Suraj Cinema had initiated requisite formalities for up-gradation/land- use change, before date of closure of Suraj Cinema, which admittedly is 31.05.2019, so as to plead such land-use change as additional ground of closure of management. The aforesaid letter dated 22.03.2021 i.e. Ex.MW3/1 which has been relied by management, only reveals that one letter dated 02.12.2020 of management regarding "continuous of Suraj Cinema by land-use change" was sent by it to DDA and apparently this letter dated 02.12.2020 was sent much later, after closure of management was effected on 31.05.2019. Therefore, there is nothing on record to support contention of management that on date of its closure on 31.05.2019, it had already applied for land-use change to appropriate authority, so as to take this plea as one of grounds of closure, as on date of its closure that is 31.05.2019. Surprisingly, management has chosen not to file any document on record to show as to when management had applied for permission from LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 22 of 25 concerned authority or DDA for land-use change of premises of management, even when these are documents would have been in possession of management for reasons best known to management.
44. Next, management has pleaded that due to financial losses and renovation of Cinema Hall, it had to be closed temporarily. According to proviso to Section 25-FFF (1) of Industrial Disputes Act, financial losses alone cannot be considered as "unavoidable circumstances beyond control of employer" and renovation is voluntary and discretionary act of employer and does not constitute "unavoidable circumstances beyond control of management." Therefore, in absence of any satisfactory and reliable evidence, to show that closure of management was due o 'unavoidable circumstances beyond control of employer" the act of closure of management is well covered by Section 25 FFF of Industrial Disputes Act and proviso to Section 25-FFF of Industrial Disputes Act has no application, to such closure.
45. Accordingly, in terms of Section 25FFF r/w Section 25F of Industrial Disputes Act, the claimant is entitled to wages for one month of notice period and compensation as computed in terms of Section 25F of Industrial Disputes Act, from the management.
46. The claimant is accordingly, granted following reliefs:
LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 23 of 25(i) Vedpal Singh, S/o Sh. Mukhtyar Singh is entitled for closure compensation in terms of Section 25 FFF (1) of Industrial Disputes Act, as computed in terms of Section 25F of Industrial Dispute Act which amounts to Rs.2,52,000/ (Rupees two lakh and fifty two thousand only).
(ii) Additionally a sum of Rs.15,400/ (Rupees fifteen thousand and four hundred only) as one month's salary in lieu of notice period of one month as provided u/s 25 F of Industrial Dispute Act, as per the last drawn wages @ Rs.15,400/ per month w.e.f. the admitted date of the employment of the workman with the management i.e. 02.07.1982 till the date of closure of the management i.e. 31.05.2019.
47. The management is directed to pay the above said amount of Rs.2,52,000/ (Rupees two lakh and fifty two thousand only) and a sum of Rs.15,400/ (Rupees fifteen thousand and four hundred only) to the workman within 30 days of publication of this award, failing which, the amount shall also be carrying an interest @ 8% per annum till the date of its realization. Issue No.3 is disposed off accordingly.
48. Award is passed and reference is answered accordingly.
49. Award be uploaded on the website of RADC. Signed copy of the award be sent to the concerned Dy. Labour Commissioner for publication as per rules.
LIR No.1049/2020 Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 24 of 2550. File be consigned to the Record Room after necessary compliance.
Announced in the open (RITU SINGH),
Court on 12.02.2024 Addl. District & Sessions Judge,
Presiding Officer Labour Court- IV,
Rouse Avenue District Courts
LIR No.1049/2020
Sh. Vedpal Singh Vs. M/s Suraj Cinema Page 25 of 25