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NEHA 2026.04.06 17:53 I attest to the accuracy and integrity of this document Punjab and Haryana High Court, Chandigarh CWP-6740-2003 (O&M) -2-

2. Learned counsel for the petitioners inter alia submitted that the Irrigation Department had a unit known as the Underground Water Survey Division. Subsequently, respondent No.2- Haryana State Minor Irrigation (Tubewell) Corporation (HSMITC) was established in the year 1970, under the Companies Act, 1956. Notably, 100% of the shares of respondent No.2- HSMITC are held by the State Government. He further submitted that the assets and staff of the Underground Water Survey Division were transferred from the Irrigation Department to respondent No.2-HSMITC as well. However, the said Division was renamed as- 'Ground Water Directorate' in respondent No.2-HSMITC. It would be relevant to mention that respondent No.2-HSMITC was concerned with research, study and exploration related to groundwater, including stoppage of wastage caused by seepage in unlined water courses. It also sought to provide irrigation facility to farmers along with design fabrication and creation of lift irrigation pumps etc.

4. Thereafter, the Managing Director, HSMITC sent a report dated 15.03.2002 (Annexure P-6) to the Government, recommending closure of respondent No.2-HSMITC, except for the Ground Water Directorate and Tubewell Drilling Cell, as the staff of the HSMITC was sitting idle. On the basis of the said recommendation, in the meeting dated 25.03.2002 (Annexure P-7), headed by the Chief Minister, a decision was taken to close HSMITC, however, the aspect of retention of staff of the Ground Water Directorate was overlooked. Subsequently, a meeting of the Board of Directors of the respondent-HSMITC was convened on 18.04.2002 (Annexure P-8) wherein it was decided that steps be taken to downsize the existing apparatus and adjust the staff before closure of the Corporation.

7. Learned counsel for the petitioners further submitted that the NEHA 2026.04.06 17:53 I attest to the accuracy and integrity of this document Punjab and Haryana High Court, Chandigarh CWP-6740-2003 (O&M) -5- petitioners have served the respondent-Corporation with utmost dedication for all these years and due to their dedicated efforts, the respondent No.2-HSMITC played a vital role in providing irrigation to the farmers of the State and also water conservation. Instead of acknowledging the efforts of the petitioners, the respondent No.2-HSMITC has abdicated its responsibility towards the petitioners, who have become overage to seek employment elsewhere, having served the respondent No.2-HSMITC in their twilight years. Further still, the State Government is the real employer of the petitioners as they control 100% shares of the respondent No.2-HSMITC and additionally, the Groundwater Directorate was ordered to be merged into the Irrigation Department. The State Government cannot take the shelter of the corporate veil merely because the respondent No.2-HSMITC has been established and registered the Companies Act, 1956. Further, he relied upon the judgment of the Hon'ble Supreme Court in S. Govinda Rajulu vs. The Andhra Pradesh State Constitution Corporation Ltd. AIR 1987 SC 1801 and submitted that the surplus staff was required to be absorbed in other government departments post-closure. The judgment in S. Govinda Rajulu (supra) was also followed by a Division Bench of this Court in Haryana Tanneries Employees Union Regd Jind Haryana vs. State of Haryana and others CWP-9469-1988.

10. The respondent No.2-HSMITC had sustained losses in 27 out of the 31 years of its existence. The claim of the petitioners that the losses incurred are majorly due to waiving off lining charges of Rs.113 crore are unfounded as neither were they waived off, nor were these charges the only source of loss. Moreover, the respondent No.2-HSMITC did not have sufficient source of income to pay salary to its 3916 employees. It was only after thoroughly examining the possibility of saving the respondent No.2-HSMITC that a decision was taken to close the same. The Appropriate Authority had allowed the application for closure as per law and the services of the employees of the respondent No.2-HSMITC were also lawfully dispensed with. Learned counsel also categorically denies the assertion that the Groundwater Directorate was functioning under the aegis of the Irrigation Department. Consequent to the formation of respondent No.2-HSMITC, the assets and liabilities relating to Groundwater Directorate were also transferred to the HSMITC. The Groundwater Directorate was not an exclusive Research and Development unit of the Irrigation Department and, formed a part of the HSMITC and thus is covered under the closure carried out under the Industrial Disputes Act, 1947.