NirvagamRamco Super Leather Footwear Division,Arani Road, Idanisathu, Bagayam, Vellore-2 v. The Presiding Officer, Industrial Tribunal Tamil Nadu, Chennai-104

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 03.12.2009CORAMTHE HONOURABLE MR.JUSTICE T. RAJAW.P.No.11996 of 2009NirvagamRamco Super Leather Footwear Division,Arani Road, Idanisathu, Bagayam, Vellore-2 ..Petitioner-vs-1. The Presiding Officer, Industrial Tribunal Tamil Nadu, Chennai-104.2. The workmen rep. by Thalaivar Thol Padhanidum Maturm Thol Porul Jananayaga Thozhilalar Sangam ..RespondentsPrayer: Petition filed under Article 226 of Constitution of Indiapraying to issue a writ of certiorari calling for the records of thefirst respondent with respect to the order passed in I.D. No.56 of2003 dated 10.11.2008 on the file of the first respondent IndustrialTribunal, Chennai and quash the same.For Petitioner : Mr. M.L. Ramesh for Ms. S. JayakumariFor Respondents: Mr. K.M. Ramesh for R2 R1 – Tribunal O R D E RThe petitioner Ramco Super Leather Footwear Division closed thefactory due to financial crisis. The Government, after consideringthe failure report, issued G.O.(D) No.1093, Labour and EmploymentDepartment, dated 20.11.2003 and referred the matter to the firstrespondent, the Industrial Tribunal. The Presiding Officer,Industrial Tribunal, Chennai answered Issue No.2, which was framedfor as hereunder: https://hcservices.ecourts.gov.in/hcservices/ "Issue No.2: The illegal lock out made bythe respondent/management from 15.04.2002 andmore than 100 workers are working in therespondent factories. Therefore, as per ChapterV-B of the Industrial Disputes Act, 1947 appliesand the respondent/management has to getpermission from the Government under Section 25-Mof the Industrial Disputes Act, 1947. Therespondent/management have not produced anybalance sheet to prove for fixing the bonus. Therespondent/company has not discharged theirburden to prove that they are not having anysufficient allocable surplus in their account topay the bonus. Since they have not produced theirprofit and loss account, I am of the view thatthe workers are entitled for bonus at 8.33% foryear in question."The Tribunal passed the award directing the petitioner to pay thewages from the month of December 2002 and also directed thepetitioner Management to pay bonus @ 8.33%. 2. The award passed by the Tribunal is based on two reasons.One is that the Management was not in a position to producesufficient evidence to disprove the claim of the employees in respectof payment/wages for the said period and the other reason is that theManagement has not produced any acceptable reason for fixing thebonus. It was also the finding of the Tribunal that when there aremore than 100 workers working in any factory, as per Chapter V-B ofthe Industrial Disputes Act, the Management has to get the priorpermission under Section 25-M of the Industrial Disputes Act, 1947.In the present case, the Tribunal found that the Management did notobtain prior permission from the Government under Section 25-M and assuch answered the reference in favour of the employees by holdingthat the workers are entitled to full wages and other benefits as perIndustrial Disputes Act 1947 and also held that the workers are alsoentitled to back wages from December 2002. It further held that theworkers are also entitled to payment of bonus at 8.33% for the year2002. The said order is under challenge before this Court. 3. The main contention raised by the learned counsel appearingfor the petitioner to set aside the impugned order passed by theTribunal is that the Tribunal has entertained the reference from theGovernment, which has been made based on the dispute raised by anunrecognised Union and relied upon a judgment of the Karnataka HighCourt reported in CDJ 2005 Karnataka High Court 403-The PresidentLabour Organization of HAL Versus The Management of HindustanAeronautics Ltd., wherein it has been held as follows: https://hcservices.ecourts.gov.in/hcservices/ "Section 2: A Industrial Dispute by Trade Unionscan be raised only by a recognised Trade Union –Only a recognised Union in an Industry canrepresent the workers of the said union – AnyIndustrial dispute touching the entire workers ofthe establishment could be raised only by arecognised Union and not by an unrecognisedunion."4. Further, the petitioner Management remained closed for theperiod from December 2002 onwards and as such, the Tribunal ought notto have given direction to pay back wages for the period during thesaid period. The Tribunal had erroneously proceeded on the footingthat the closure of the business for a short period of time cannot bewrongly appreciated as closure of the entire business in anestablishment, which is not correct. The intention of the petitionerManagement was to close the factory for a temporary period, sincethey were not able to run the factory due to financial constraintcaused by the recession experienced not only in the State of TamilNadu but all over the world. While canvassing the other point thatthe workman cannot insist on payment of bonus for the year 2002,which period the petitioner Management had remained closed and didnot earn profit, the Tribunal has wrongly proceeded to issuedirection directing the petitioner management to pay bonus @ 8.33% tothe workman for the year 2002 which is not justified. In entirety, itis contended that the Tribunal, while analysing the issues framed foradjudication has not legally analysed the issues. Therefore, counselappearing for the petitioner management prayed to set aside theimpugned order passed by the Tribunal on the ground that thepetitioner Management is making all efforts to revive the industrysoon and only thereafter it will be in a position to recover from thefinancial problem and therefore learned counsel prayed for settingaside the impugned order, by allowing this petition. 5. On the other hand, learned counsel appearing for the 2ndrespondent/workman has brought to the notice of this Court Section 2Kof the Industrial Disputes Act and contended that to improve thefinancial condition of the company, the petitioner management shouldhave declared holiday and even now the petitioner management istrying to revive the factory and therefore the leave declared by thepetitioner management would show their good intention to reopen thecompany. It is further stated that the union was not a recognised oneand hence the provisions of Section 2K of Industrial Disputes Actwill not be attracted. Further, learned counsel appearing for the 2ndrespondent also submitted that the petitioner Management has closedthe factory without seeking prior permission as contemplated underSection 25-N and 25-O of the Industrial Disputes Act, which Sectionsspecifically contemplate that the employer who intends to close thefactory shall apply for prior permission atleast ninety days beforethe date on which the intended closure is to take place. In support https://hcservices.ecourts.gov.in/hcservices/ of this submission, the judgment reported in 2005 3 SCC 224-OswalAgro Furane Ltd. and another -vs- Oswal Agro Furane Workers Union andothers was relied upon wherein the Apex Court has held that Section25-O of the Industrial Disputes Act provides for the procedure forclosing down an industrial undertaking with prior permission atleastninety days before the date on which the closure is to take place.Therefore, the findings of the Industrial Tribunal directing thepetitioner Management to pay the salary to the employees for theperiod during which the establishment remained closed cannot be foundfault with. On the question of payment of bonus the Tribunal heldthat the respondent Management has not produced any balance sheet forfixing the bonus and has not discharged their burden to prove thatthey are not having any sufficient allocable surplus in their accountto pay the bonus. Further, the petitioner Management also have notproduced their profit and loss account so as to decide the factum ofbonus to the employees for the year 2002. 6. In view of the aforesaid reasons as found by the Tribunal,this Court finds that the action of the petitioner is not justifiedand the workers are entitled for full wages and bonus as per theIndustrial Disputes Act, 1947 and are also entitled for payment ofbonus @ 8.33% for the year 2002. In view of the fact that the matterhas been decided on the basis of the evidence produced before theTribunal, in the absence of any error, indicated in the award passedby the Tribunal, this Court is not inclined to entertain the WritPetition and the same is dismissed. No costs. Sd/Asst.Registrar/true copy/Sub Asst.RegistrarvgaTo The Presiding Officer, Industrial Tribunal Tamil Nadu, Chennai-104.+ 1 c.c. to Mr. M.L. Ramesh, Advocate. S.R.No.65962.+ 1 c.c. to Mr. K.M. Ramesh, Advocate. S.R.No.65858.W.P.No.11996 of 2009KGK (CO)GSK 26.02.2010.