High Court · 2008

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED :: 11-01-2008CORAMTHE HONOURABLE MR.JUSTICE ELIPE DHARMA RAOANDTHE HONOURABLE MR.JUSTICE S.R.SINGHARAVELUWRIT APPEAL No.1271 OF 2001Shaw Wallace & Co.Ltd.,Glue & Acid Plant Employees Union,rep.by its General SecretaryMr.P.R.Viswambaram,Kaduvetti, Madras-600 077....Appellant/Petitioner-vs-1.The State of Tamil Nadu, rep.by Secretary to Government, Labour & Employment Department, Chennai-600 009.2.The Management of Shaw Wallace & Co. Ltd., Glue & Acid Plant, 154, Thambu Chetty Street, Chennai-600 001....Respondent/RespondentsAppeal under Clause 15 of the Letters Patent against theorder of this Court dated 5.3.2001 and made in WP.No. 12259 of1997.W.P.No.12259 of 1997:Petition presented to this Court under Article 226 of theConstitution of India, to issue a Writ of Mandamus directing theIst respondent Government to refer the deispute declined to bereferred under G.O.(D) No. 1126 dated 9.12.1996.For appellant : Mr.V.Prakash, Senior Counsel, for Mrs.G.Ramapriya. https://hcservices.ecourts.gov.in/hcservices/ For respondent 1 : Mr.P.Subramanian,Govt.Advocate.For respondent 2 : Mr.Manohar Gupta,for M/s.Gupta & Ravi.J U D G M E N T(Judgment of the Court was delivered by ELIPE DHARMA RAO,J.)This Writ Appeal is filed against the order, dated05.03.2001, made in W.P.No.12259 of 1997, whereby a learnedsingle Judge dismissed the Writ Petition, which was filedagainst the order of the Government, refusing to refer thedispute for adjudication, under G.O.(D).No.1126, dated09.12.1996.2. According to the appellant, they raised anindustrial dispute relating to the closure of the factory atKaduvetti and the said dispute was declined to be referred foradjudication, on the ground that the second respondentmanagement wanted to introduce contract labour system, whereindirect labour was employed pursuant to the settlement arrived atunder Section 18 (1) of the Industrial Disputes Act with anotherUnion; the said introduction of contract labour system wasobjected to by the appellant Union; thereafter, a Writ Petitionwas filed and eventually in Writ Appeal, it was held that thesettlement being under Section 18 (1) of the Act, it would bindonly the parties to the settlement and not the appellant, whowere not the parties; thereafter, the Management suspended itsoperation and the dispute relating to the suspension ofoperation was pending on the file of Industrial Tribunal,Madras, in I.D.No.114 of 1993; during the pendency of thedispute, the Management secured signatures from individualworkers bypassing the Union and entered into settlement; afterthe settlement, the Management closed down the factory and asagainst the said closure, the appellant Union raised anindustrial dispute and the Government refused to refer the saiddispute for adjudication.3. Per contra, the case of the second respondentManagement was that due to adverse trading condition andincrease in the establishment cost, the company was incurringloss and the steps taken by the Management to improve the https://hcservices.ecourts.gov.in/hcservices/ situation went in vain; hence, the Management suspended theproduction activities at the Acid Plant from 14.01.1992 and atthe Glue Factory from 12.01.1992 to arrest the mounting losses;the employees were informed vide notice dated 22.05.1992 thatwith effect from 01.06.1992, the principle of "No Work, No Pay"would apply; the appellant Union raised a dispute challengingthe suspension of the operations by the Management and the samewas referred to Industrial Tribunal; in the meanwhile, themanagement, vide its notice, dated 07.09.1992, introduced aVoluntary Retirement Scheme and 150 out of 160 workmen appliedfor the said Scheme and accepted the benefits payable to them infull and final settlement of their claims and that theemployees, who opted for Voluntary Retirement Scheme, alsoagreed that they would withdraw all the claim petitions filed bythem and they would not prosecute the Management.4. It was also the case of the Management that aftergiving 60 days notice to the workmen, the factory was closed;challenging the said closure, the dispute was raised by theappellant Union, in which there were only two employees and, insuch circumstances, the Government rightly declined to refer thedispute for adjudication.5. The rejection of the Writ Petition by the learnedsingle Judge was for the reasons that a Division Bench of thisCourt had held that 151 workmen of the appellant Union hadretired under Voluntary Retirement Scheme, agreeing to withdrawall their claims and that as per the management, at present,only two employees were in the appellant Union, which had notbeen refuted by filing any rejoinder.6. As against the said rejection, this Writ Appeal isfiled by the appellant Union, contending that they have raised adispute with regard to the closure of the respondent company, asit was closed contrary to Section 25 (o) of the IndustrialDisputes Act, which contemplates obtaining permission from thecompetent authority before closure.7. The issue remains for consideration is, whether theclosure is valid ?8. In the Writ Petition, the said issue was notconsidered by the learned single Judge. Therefore, the order ofthe learned single Judge, dismissing the Writ Petition, whichwas filed against the order of the Government, refusing to refer https://hcservices.ecourts.gov.in/hcservices/ the matter for adjudication, on the ground that on the date ofclosure of the factory, there were only eight workers and thesaid fact had not been disputed by the appellant Union, suffersfrom mala fides. In fact, it was not the issue to be consideredby the Government at the time of referring the dispute.9. Learned Senior Counsel for the appellant relied upon adecision of the Hon'ble Supreme Court in Oswal Agro Furane Ltd.and Another v. Oswal Agro Furane Workers Union and Others, 2005(3) Supreme Court Cases 224, wherein it has been held as under : "Having regard to the maxim "ex turpicausa non oritur actio", an agreement whichopposes public policy as laid down in termsof Sections 25-N and 25-O of the Act wouldbe void and of no effect. The Parliamenthas acknowledged the governing factors ofsuch public policy. Furthermore, theimperative character of the statutoryrequirements would also be borne out fromthe fact that in terms of sub-section (7)of Section 25-N and sub-section (6) ofSection 25-O, a legal fiction has beencreated. The effect of such a legalfiction is now well known. The consequencesflowing from such mandatory requirements ascontained in Sections 25-N and 25-O must,therefore, be given full effect".10. Learned Senior Counsel for the appellant alsorelied upon a Division Bench decision of this Court inManagement of EID Parry (India) Ltd., Pugalur, v. Government ofTamil Nadu, 2007 (4) L.L.N.847, to which one of us (ElipeDharma Rao,J.) was a party, wherein a decision of the SupremeCourt in Shaw Wallace and Company Ltd. v. State of Tamil Nadu,1988 (1) L.L.N.172, was brought to the notice for reference, inwhich it was held that (1) the Government would normally referthe dispute for adjudication and (2) the Government may refuseto make reference, if – (a) the claim is very stale; (b) theclaim is opposed to the provisions of the Act; (c) the claim isinconsistent with any agreement between the parties; (d) theclaim is patently frivolous; (e) the impact of the claim on thegeneral relations between the employer and the employees in the https://hcservices.ecourts.gov.in/hcservices/ region is likely to be adverse and (f) the person concerned isnot a workman as defined by the Act.11. As per guideline 2 (b), the Government may refuse tomake reference if the claim is opposed to the provisions of theAct. But, in this case, the Government cannot say that the claimis opposed to the provisions of the Act, on the ground that onlytwo workmen raised an industrial dispute, when the disputeraised by the workmen is with regard to Section 25 (O), whichprovides for obtaining prior permission before closure of theinstitution, which has to be considered by the IndustrialTribunal, for reference. Therefore, both the Government and thelearned single Judge have not properly appreciated the issueraised by the appellant.12. However, learned counsel for the respondent cited adecision of the Supreme Court reported in Nedungadi Bank Ltd. v.K.P.Madhavankutty and others, 2000 (2) L.L.N.21, wherein it hasbeen held in para 6 as follows :"6. Law does not prescribe any time-limit for the appropriate Government toexercise its powers under Section 10 of theIndustrial Disputes Act,1947. It is not thatthis power can be exercised at any point oftime and to revive matters which had sincebeen settled. Power is to be exercisedreasonably and in a rational manner. Thereappears to be no rational basis on which theCentral Government has exercised powers inthis case after lapse of about seven years oforder dismissing the respondent from service.At the time reference was made, no industrialdispute existed or could be even said to havebeen apprehended. A dispute which is stalecould not be the subject-matter of referenceunder Section 10 of the Act. As to when adispute can be said to be stale would dependon the facts and circumstances of each case.In fact, it could be said that there was nodispute pending at the time when thereference in question was made. Demandraised by the respondent for raising https://hcservices.ecourts.gov.in/hcservices/ industrial dispute was ex facie bad andincompetent."But, in this case, as has already been stated supra, it cannotbe said that there is no dispute so as to be referred foradjudication. Merely on the ground that, at present, only twoemployees are raising the dispute, it cannot be said that thereis no dispute at all. Therefore, when such a dispute was pendingadjudication, the above judgment cannot be made applicable tothe facts and circumstances of this case.13. No doubt, in view of Shaw Wallace case (citedsupra), the Government has got discretion to refer or not torefer the dispute. However, if we apply the principles laiddown in Workmen of Sundaram Industries Ltd. v. SundaramIndustries Ltd., 1997 (3) L.L.N.346, the Government has totallymisconstrued the dispute while refusing to refer the same,raised by the appellant under Section 25 (O). Section 25 (O)does not contemplate number of workers in a factory, as has beenwrongly interpreted by the Government. On the other hand, itcontemplates obtaining prior permission before closure of thecompany. Moreover, even as per Section 2-A (2), the appellanthas got a right to straightaway approach the Tribunal, raisingthe industrial dispute, without approaching the Government. Onthe said ground also, we hold that the order of the learnedsingle Judge is liable to be set aside. Hence, theGovernment/first respondent is directed to refer the matter tothe Industrial Tribunal within a period of twelve weeks from thedate of receipt of a copy of this order.14. Writ Appeal is allowed. No costs. dixitSd/Asst. Registrar/true copy/Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ To1.The Secretary to Government,The State of Tamil Nadu,Labour & Employment Department,Chennai-600 009.•One cc to Mr. Gupta and Ravi, Advocte SR 1595•One cc to P. Chandrasekaran Advocate sR 20323•Oe cc to Govt Pleader SR 1993•BV (co)sg 01/02/08W.A.No.1271 OF 200111-01-2008