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1979 DIGILAW 237 (KER)

TATA OIL MILLS CO. LTD. v. THE WORKMEN OF THE KANNITTA ESTABLISHMENT

1979-10-15

GEORGE VADAKKEL

body1979
Judgment :- 1. The Management impugns the findings in Ext. P-2 award of the 4th respondent Industrial Tribunal, so far as it concerns Issue No.1 referred to the said Tribunal. The said issue reads: "(1) The seasonal closure of the copra purchase Depot, Alleppey." The finding thereon, entered by the Tribunal is that: "This action of the Management can never be considered to be just and reasonable and can never be accepted as one of the managerial functions". On that basis, the Tribunal passed an award directing that, "the Management shall grant them (workmen) continuity of service from the date of their entry into service". The Tribunal, also, by Ext. P2 award declared that, "the Management is not entitled to close their establishment at Alleppey intermittently as they have been doing in the past", and on that basis further directed that the Management "shall not impose the so-called seasonal closure with effect from the date of this award till they get the decision of the Government to that effect". 2. Ext. P-3 produced along with this writ petition shows that the Management used to close down the Copra Purchasing Depot at Alleppey intermittently. It will be advantageous to extract Ext. P-3 herein: "Statement showing the periods during which the Kannitta functioned and remained closed each year from 1962 onwards. Table:1 It is such intermittent closing that led to the reference of the issue to the Industrial Tribunal. Discussing that issue the Tribunal found that, as a matter of fact there had been closures during certain months in the year. According to the Tribunal such closure by the Management was on the plea that it was a seasonal closure. The Tribunal took the view that 'copra cannot be considered as a seasonal business at Alleppey.' In support of the aforesaid view, the Tribunal relied on the fact that several other kanittas in Alleppey are working throughout the year. On that basis the Tribunal was of the view that the closure as aforesaid by the Management was a deliberate act purposely done with the ulterior motive of defeating the rights of the workers. On that basis and taking into account the fact that the workmen could not be entitled to wages during the period the depot is closed, it held that the closure of the concern intermittently was quite unjustifiable and opposed to natural justice. On that basis and taking into account the fact that the workmen could not be entitled to wages during the period the depot is closed, it held that the closure of the concern intermittently was quite unjustifiable and opposed to natural justice. The Tribunal did not accept the reasons put forward by the Management for the intermittent closures, in so far as in its view such reasons were not genuine or true. However, the Tribunal found, as a matter of fact, the Management is closing the concern intermittently, though according to the Tribunal, it was at the Management's will and pleasure. The Tribunal did not accept the Management's contention that it is within their right to close down the depot intermittently. In passing the award, the Tribunal appears to have been influenced by the fact that it will be a travesty of justice on the part of the management to close down the depot, throwing out the workmen without employment for months together in an year. 3. The petitioner challenging the afore-said findings of the Tribunal raised two points before me, that is: (1) under S.25A(2) of the Industrial Disputes Act, 1947, the question as to whether an industrial establishment is of a seasonal character or whether work is performed therein only intermittently is a question to be decided by the appropriate government and not by the Industrial Tribunal; and (2) it is within the management's right to close down an industrial establishment. The second point is taken on the assumption, without conceding, that the Copra purchasing depot at Alleppey is not an industrial establishment of a seasonal character. So far as the first point is concerned, the learned counsel for the petitioner relied on the Division Bench decision of this Court in Dalmia International v. Industrial Tribunal (1974 (2) LLJ. 90). That decision, in my view, supports the contention advanced by the learned counsel for the petitioner - management. So far as the first point is concerned, the learned counsel for the petitioner relied on the Division Bench decision of this Court in Dalmia International v. Industrial Tribunal (1974 (2) LLJ. 90). That decision, in my view, supports the contention advanced by the learned counsel for the petitioner - management. The Division Bench in that case said that where it is necessary for the Tribunal to decide the question as to the seasonal character of the industrial establishment because that is a matter that arises on the pleadings of parties before it, that is a matter to be decided by the appropriate Government and, "it would have been open to the Tribunal, either to refer the question for decision by the appropriate Government, or to direct the parties to move the appropriate Government to give its decision; and postpone the decision of the question referred to the Tribunal till the Government had given its decision on the matter involved under S.25A(2)". 4. The question referred to the Tribunal related to the seasonal closure of Copra purchasing depot at Alleppey. On the pleadings of parties the issue arose as so whether the industrial establishment at Alleppey was of a seasonal character or not. In that view the appropriate Government and that Government alone has jurisdiction to decide that question. The Tribunal should have adopted one or the other of the methods stated by this Court in Dalmia International v. Industrial Tribunal (1974 (2) LLJ. 90). 5. The Tribunal has taken the view that the establishment at Alleppey is not of a seasonal character and thereafter proceeded to hold that the intermittent closure every year by the management of their depot at Alleppey was unjust and unreasonable. On this point, it should be noticed, that where the factum of closure is admitted or established, it is not for the Tribunal to go into the question as to the motive of the management to close down the establishment. This is clear from the decisions of the Supreme Court in Workmen, Straw Board Mfg. Co. v. Management (1974 (1) LLJ. 499); Kalinga Tubes v. Their Workmen (1969 (1) LLJ. 557); Indian Hume Pipe Co. v. Their Workmen 1969 (1) LLJ. 242); and Andhra Prabha Ltd. V. Madras Union of Journalists (1968 (1) LLJ. This is clear from the decisions of the Supreme Court in Workmen, Straw Board Mfg. Co. v. Management (1974 (1) LLJ. 499); Kalinga Tubes v. Their Workmen (1969 (1) LLJ. 557); Indian Hume Pipe Co. v. Their Workmen 1969 (1) LLJ. 242); and Andhra Prabha Ltd. V. Madras Union of Journalists (1968 (1) LLJ. 15) as also the unreported decision of that court in Workers of Pudukkottah Textile Mills v. Management (judgment in Civil Appeal No. 1005 of 1963) referred to and followed in Kalinga Tubes v. Their Workmen (1969(1) LLJ. 557). In the first of the decisions referred to above Workmen, Straw Board Mfg. Co. v. Management (1974 (1) LLJ. 499) the Supreme Court pointed out as follows: "The workmen cannot question the motive of the closure once closure has taken place in fact. The matter may be different if under the guise of closure the establishment is being carried on in some shape or form or at a different place and the closure is only a ruse or pretence. Once the Court comes to the conclusion that there is closure of an undertaking, the motive of the employer ordinarily ceases to be relevant. No employer can be compelled to carry on his business if he chooses to close it in truth and reality for reasons of his own." In Indian Hume Pipe Co. v. Their Workmen (1969(1) LLJ. 242) also the Supreme Court said that: "...Once the tribunal finds that an employer has closed its factory as a matter of fact it is not concerned to go to into the question as to the motive which guided him and to come to a conclusion that because of the previous history of the dispute between the employer and the employees the closure was not justified." It was further pointed out in that decision that, "such a closure cannot give rise to an industrial dispute". To the same effect is the other decision in the same Volume of the Journal Kalinga Tubes v. Their. Workmen (1969(1) LLJ. 557). To the same effect is the other decision in the same Volume of the Journal Kalinga Tubes v. Their. Workmen (1969(1) LLJ. 557). After referring to the decision of the court in Workers of Pudukkottah Textile Mills v. Management (Civil Appeal No. 1005 of 1963) the Supreme Court said as follows therein: "The discussion of the above decisions yields the result that the entire set of circumstances and facts have to be taken into account while endeavouring to find out if, in fact, there has been a closure and the tribunal or the court is not confined to any particular set of facts or circumstances. In one case the management may decide to close down an undertaking because of financial or purely business reasons. In another case it may decide in favour of closure when faced with a situation in which it is considered either dangerous or hazardous from the point of view of the safety of the administrative staff or members of the management or even the employees themselves to carry on the business. The essence of the matter, therefore, is the factum of closure by whatever reasons motived." 6. Learned counsel for the petitioner is also well-founded in his submission that it is the managerial right to decide as to whether it should close an industrial establishment or not and in the matter of exercising such right the Tribunal cannot interfere. In Excel Wear v. Union of India (1978 (2) LLJ. 527) considering the constitutional validity of S.25-0 of the Industrial Disputes Act, 1947, the Supreme Court pointed out as follows: "Mr. Desmukh's argument that a right to close down a business is a right appurtenant to the ownership of the property and not an integral part of the right to carry on the business is not correct. We have already said so. The properties are the undertaking and the business assets invested therein. The owner cannot be asked to part with them or destroy them by not permitting him to close down the undertaking. In a given case for his mismanagement of the undertaking resulting in bad relationship with the labour or incurring recurring losses the undertaking may be taken over by the State. That will be affecting the property right with which we are not concerned in this case. It will also be consistent with the object of making India a Socialist State. In a given case for his mismanagement of the undertaking resulting in bad relationship with the labour or incurring recurring losses the undertaking may be taken over by the State. That will be affecting the property right with which we are not concerned in this case. It will also be consistent with the object of making India a Socialist State. But not to permit the employer to close down is essentially an interference with his fundamental right to carry on the business." S. 25-0 discussed in the afore-said decision required ninety days' notice to be given by the Management of its intention to close down its undertaking and sub-section (2) thereof enables the appropriate Government, if it is satisfied that the reasons for the intended closure of the undertaking are not adequate and sufficient or the closure is prejudicial to the public interest, by order, to direct the employer not to close down such undertaking. The Supreme Court struck down the aforesaid provision for the reason that the same is violative of the management's fundamental right to carry on business enshrined in Art.19 (1) (g) of the Constitution. To the same effect are the decisions of the Supreme Court in Workmen of the Indian Leaf Tobacco Development Co. Ltd. Guntur v. The Management of Indian Leaf Tobacco Development Co. Ltd., Guntur (1970 Lab. I. C. 755); and M/s. Parry & Co. Ltd. v. Judge, 2nd Indnsutrial Tribunal (1970 Lab. I, C. 1071). In the Workmen of the Indian Leaf Tobacco Development Co. Ltd., Guntur v. The Management of Indian Leaf Tobacco Development Co. Ltd., Guntur (1970 Lab. I.C. 755), the Supreme Court pointed out that the closure which may be treated as a part of the activity or business of the Company, "is an act of management which is entirely in the discretion of the Company carrying on the business". It was further laid down therein that the Industrial Tribunal cannot, in a reference under S 10 (1) (d) of the Industrial Disputes Act, interfere with discretion exercised in such a matter and the Tribunal would have no power to direct a Company to continue a part of the business which the Company has decided to shut down. In M/s Parry and Co., Ltd v. Judge, 2nd I. T. (1970 Lab. In M/s Parry and Co., Ltd v. Judge, 2nd I. T. (1970 Lab. I. C. 1071) also that court said that: "It is well established that it is within the managerial discretion of an employer to organise and arrange his business in the manner he considers best. So long as that is done bona fide it is not competent of a tribunal to question its propriety. If a scheme for such reorganisation results in surplusage of employees no employer is expected to carry the burden of such economic dead-weight and retrenchment has to be accepted as inevitable, however unfortunate it is. The legislature realised this position and therefore provided, by S.25-F compensation to soften the blow of hardship resulting from an employee being thrown out of employment through no fault of his. It is not the function of the Tribunal, therefore, to go into the question whether such a scheme is profitable or not and whether it should have been adopted by the employer." The said decision also lays down that it is a matter of discretion for the management to decide whether a particular policy in running the business will be "profitable, economic or convenient" and said that there is no provision in the industrial law which confers any power on the tribunal "to inquire into such a decision so long as it is not actuated by any consideration for victimisation or any such unfair labour practice." 7. It is also necessary to refer to the decision in Pottery Mazdoor Panchayat v. Perfect Pottery Co. Ltd. (1979 Lab. 1C. 827). That decision is to the effect that the Tribunal cannot go behind the reference. The Supreme Court said therein as follows: "The very terms of the references show that the point of dispute between the parties was not the fact of closure of its business by the respondent but the propriety and justification of the respondent's decision to close down the business. That is why the references were expressed to say whether the proposed closure of the business was proper and justified. In other words, by the references, the Tribunals were not called upon by the Government to adjudicate upon the question as to whether there was in fact a closure of business or whether under the pretence of closing the business the workers were locked out by the management. In other words, by the references, the Tribunals were not called upon by the Government to adjudicate upon the question as to whether there was in fact a closure of business or whether under the pretence of closing the business the workers were locked out by the management. The references being limited to the narrow question as to whether the closure was proper and justified, the Tribunals by the very terms of the references, had no jurisdiction to go behind the fact of closure and inquire into the question whether the business was in fact closed down by the management." The submission based on this decision is that the reference was made on the premise that there had been closure and the Tribunal, as a matter of fact, found that there had been intermittent closures every year. On that basis it is contended on behalf of the petitioner - management that in so far as the reference is on the premise that there had been closure and that fact has been found "by the Tribunal, it was not necessary to embark upon the question as to whether the undertaking was of a seasonal character or not. Explaining further the learned counsel for the petitioner I submitted that irrespective of the decision on the question whether the undertaking is seasonal in character or not, it was perfectly within the right of the management to close down the depot intermittently. In that connection the learned counsel for the petitioner pointed out that there is no case that the closure was only a pretended closure or a ruse is order to victimise the workers of the establishment. It appears to me that it is not necessary for me to go into that question with reference to the impugned portion of the award, though issue No.1 appears to be on the premise of intermittent closures of the depot every year and the Tribunal has, as a matter of fact, found that there had been intermittent closures. 8. In view of what is stated above, it is necessary to set aside the award on Issue No.1 referred to the Tribunal. I do so. 8. In view of what is stated above, it is necessary to set aside the award on Issue No.1 referred to the Tribunal. I do so. I direct the Tribunal to go into that question afresh in the light of what is stated herein and with reference to the principles of law as laid down by this Court and by the Supreme Court to which I have adverted to. This writ petition is allowed to the above extent. In the circumstances of the case there will be no order regarding costs.