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"9. Failure to implement award, settlement or agreement."

It was the case of the Union that the aggregate number of workmen employed in the three Divisions of the Company exceeded one hundred and, therefore, for the purposes of the said section 25-O, it was the aggregate strength of the workmen of the Company employed in all its three Divisions which was to be taken into account as there was functional integrality amongst all the three Divisions, and, therefore, under section 25-O of the Industrial Disputes Act, the Company was bound to apply to the appropriate Government for prior permission for such closure at least ninety days before the date on which such closure was to become effective. According to the Union, as such prior permission was not applied for, the closure of the Chemicals and Dyes Division Office of the Company at Churchgate was illegal and such closure, therefore, amounted to an unfair labour practice as it amounted to a failure to implement the said Settlement dated February 1, 1979. On the examination of the evidence led before it, the Industrial Court held:

"(6) Where no application for permission under sub-section (1) is made within the period specified therein, or where the permission for closure has been refused, the closure of the undertaking shall be deemed to be illegal from the date of closure and the workmen shall be entitled to all the benefits under any law for the time being in force as if the undertaking had not been closed down.
"(8) Where an undertaking is permitted to be closed down under sub-section (2) or where permission for closure is deemed to be granted under sub-section (3), every workman who is employed in that undertaking immediately before the date of application for permission under this section, shall be entitled to receive compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months".

It is not possible to accept as correct the view taken in the said case. It is an implied condition of every agreement, including a settlement, that the parties thereto will act in conformity with the law. Such a provision is not required to be expressly stated in any contract. If the services of a workman are terminated in violation of any of the provisions of the Industrial Disputes Act, such termination is unlawful and ineffective and the workman would ordinarily be entitled to reinstatement and payment of full back wages. In the present case, there was a Settlement arrived at between the Company and the Union under which certain wages were to be paid by the Company to its workmen. The Company failed to pay such wages from September 18, 1984, to the eighty-four workmen whose services were terminated on the ground that it had closed down its Churchgate Division. As already held, the closing down of the Churchgate Division was illegal as it was in contravention of the provisions of section 25-0 of the Industrial Disputes Act. Under sub-section (6) of section 25-0, where no application for permission under sub-section (1) of section 25-0 is made, the closure of the undertaking is to be deemed to be illegal from the date of the closure and the workmen are to be entitled to all the benefits under any law for the time being in force, as if the undertaking had not been closed down. The eigty-four workmen were, therefore, in law entitled to receive from September 18, 1984, onwards their salary and all other benefits payable to them under the Settlement dated February 1, 1979. These not having been paid to them, there was a failure on the part of the Company to implement the said Settlement and consequently the Company was guilty of the unfair labour practice specified in Item 9 of Schedule IV to the Maharashtra Act, and the Union was justified in filing the Complaint under section 28 of the Maharashtra Act complaining of such unfair labour practice.

In the result, this Appeal must succeed and is allowed and the order dated July 26, 1985, passed by the Industrial Court, Maharashtra, Bombay, dismissing the Complaint (ULP) No. 1273 of 1984 filed by the Appellant Union against the Respondents is set aside and the said Complaint is allowed and it is declared that the closure of the Churchgate Division of S.G. Chemicals and Dyes Trading Limited was illegal and the workmen whose services were terminated on account of such illegal closure continued and are continuing in the employment of the Company on and from September 18, 1984, and are entitled to receive from the Company their full salary and all other benefits under the Settlement dated February 1, 1979, entered into between the Company and the Appellant Union, from September 18, 1984, until today and thereafter regularly until their services are lawfully terminated according to law. If any workman whose services were purported to be terminated by the closing down of the Churchgate Division of the Company has received retrenchment compensation from the Company, the amount of back wages will be set off against such retrenchment compensation and if after such setting off any balance of retrenchment compensation still remains, it will be adjusted by deducting twenty per cent from the periodic salary payable to such workmen.