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1. By this Letters Patent Appeal the Petitioners, employees of the respondent, have impugned the judgment and order dated 3rd March, 2006 passed by the learned Single Judge of this Court in Writ Petition No. 5845 of 1999 which came to be filed by the respondent employer challenging the decision of the Industrial Court, Pune in Complaint (ULP) No. 70 of 1999 holding that the employer had committed unfair labour practices under Item 9 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafer referred to as the MRTU & PULP Act, 1971) thereby directing the employer to continue the respondents employees 1 to 40 in their services and to pay each of the respondents Rs. 1000/-towards compensation and a further sum of Rs. 1000/-each towards cost. The Industrial Court, inter alia, held that Petitioner and the Respondent No. 2 were functionally integrated and together employed more than 100 employees and, therefore, the provisions of Chapter VB of the Industrial Disputes Act, 1947 were applicable and as the Petitioner has failed to obtain permission of the appropriate government, it has committed unfair labour practice under Item 9 of Schedule IV of the MRTU & PULP Act, 1971.

2. The complainant employees had filed a complaint against the respondent employer, namely, Shekoba Auto Private Limited and Neotronics (P) Ltd., It was their case that the respondent employers have two units registered under the Factories Act, 1948 located in the same building. Originally, the employer of the complainant employees had a manufacturing unit known as Electro Components Company in the same premises. It is somewhere on or about 24th September, 1978 the said M/s. Electro Components Company got bifurcated in two units and informed the employees that their services stood transferred to another unit with effect from 1st November, 1978 on the same terms and conditions without break. It is their case that Auto Components Company was changed to Shekoba Auto (P) Ltd., and the name of Electro Components Company was changed to Neotronics (P) Ltd., i.e., the original respondent No. 2 and the employees of Electro Components Company were absorbed in these two companies. According to the complainant employees both respondent Nos. 1 and 2 are very closely knit units and their production is interchangeable and the employees of respondent Nos. 1 and 2 are frequently asked to work in each other's factory Page 2705 and the wages are adjusted in their books. It is also their case that the sales and purchases are common. The directors are also common and there is one recognised union in both the respondents i.e. Sarva Shramik Sanghatana and that the negotiations and settlements for employees of both the units are held in common meeting though separate settlements are signed and, therefore, according to the complainant employees there is functional integrality between the respondent No. 1 and 2. It is their case that respondent No. 1 employs 40 employees and 4 staff whereas the respondent No. 2 employs 69 employees. Both of them taken together are more than 100 employees and, therefore, the provisions of Chapter VB of the Industrial Disputes Act, 1947 (hereinafter referred to as the I.D. Act) are applicable. The respondent No. 1 i.e. Shekoba Auto (P) Ltd., issued a letter dated 17th March, 1999 to all the complainant employees retrenching the complainants from 21st march, 1999 and this led to the challenge of their retrenchment by filing a complaint of unfair labour practice under Item 9 of Schedule IV of the MRTU & PULP Act, 1971.

21. Mr. Deshmukh assailed the impugned judgment on this very issue and submitted that the learned Single Judge has proceeded to examine the case merely on the basis of functional integrality which is one of the tests and cited decisions to demonstrate that in a given fact situation it may assume an important role for arriving at a decision as 80 to whether these two units were part of the same undertaking. However, Mr. C.U. Singh, the learned senior advocate appearing for the respondent employer, submitted that the learned Single Judge has examined the matter in detail and has come to the conclusion that the evidence on record clearly proved that these were two distinct units as the petitioner's product's trade mark was 'Borger' whereas the 'El-Ci-Ar' was the trade mark used by Respondent No. 41 i.e., the other unit Neotronics (P) Limited., and as they were producing different products, the Industrial Court has misdirected itself and has based its finding on excise certificate issued by the excise officers which also was not correct as Shekoba Auto Private Limpid was manufacturing plastic film capacitors whereas the Neotronics (P) Limited was manufacturing wire wound resistors and plastic film capacitors. What we find is that this fact has been dealt by the learned Single Judge in a very casual way by observing that "in any event the excise certificate is only for revenue purpose and has nothing to do with the specific types of capacitors or the end usage of the same and as the witness for the employer has explained the line of production in his cross-examination and even if it is assumed that they were manufacturing same and similar product, it would not mean that the petitioner and the respondent No. 41 were functionally integrated.

25. The question as to whether the industrial establishments owned by the same management constitute separate unit or one establishment has been considered by the Supreme Court on several occasions. In the case of Page 2726 Management of Wenger & Co. v. Their Workmen (1963) 2 S.C.R. 862, where the Supreme Court was examining as to whether wine shops are part of hotel establishment observed as under:

The question as to whether industrial establishments owned by the same managements constitute separate units or one establishment has been considered by this Court on several occasions. Several factors are relevant in deciding this question. But it is important to bear in mind that the significance or importance of these relevant factors would not be the same in each case; whether or not the two units constitute one establishment or are really two separate and independent units, must be decided on the facts of each case. Mr. Pathak contends that the Tribunal was in error in holding that the restaurants cannot exist without the wine shops and that there is functional integrality between them. It may be conceded that the observation of the tribunal that there is functional integrality between a restaurant and a wine shop and that the restaurants cannot exist without wine shops is not strictly accurate or correct. But the test of functional integrality or the test whether one unit can exist without the other, though important in some cases, cannot be stressed in every case without having regard to the relevant facts of that case, and so, we are not prepared to accede to the argument that the absence of functional integrality and the fact that the two units can exist one without the other necessarily show that where they exist they are necessarily separate units and do not amount to one establishment. It is hardly necessary to deal with this point elaborately because this Court had occasion to examine this problem in several decisions in the past, vide Associated Cement Companies Ltd. v. Their Workmen; Pratap Press, etc. v. Their Workmen; Pakshiraja Studios v. Its Workmen; South India Millowners' Association v. Coimbatore District Textile Worker'sUnion; Fine Knitting Co. Ltd. v. Industrial Court and D.C.M. Chemical Works v. Its Workmen.