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1986 DIGILAW 386 (ALL)

Saroop Vegetable Product Industries Ltd. v. State of U. P

1986-05-20

R.M.SAHAI

body1986
ORDER R.M. Sahai, J. - In this petition directed against award of Labour Court the short question that arises for consideration is if the petitioner was bound to re-employ, on restart of the unit, its workmen even though they had resigned when plant had closed. 2. Admittedly petitioners, engaged in production of vegetable Ghee etc. gave notice on 24th Nov., 1976 informing its workmen that it has decided to close the factory with effect from 25th Dec., 1976. In pursuance of this notice the workmen tendered their resignation, consequently, their services came to an end. The unit ceased functioning from 25th Dec., 1976. It, however, restarted from 1st August, 1978. The workmen, therefore, made representations for being taken back. But since management did not respond they raised industrial dispute which was referred by the State Government on 17th July, 1979 for adjudication under S. 4-K of U.P. Industrial Disputes Act, 1947. The Labour Court found that perusal of resignation letters indicated-that the resignations were given by the employees on the line dictated by the employer. It was further held that closure of the unit in pursuance of the notice dated 24th Nov., 1976 could not be termed as closure within the meaning of S. 25-FFF of the Industrial Disputes Act. Therefore, the termination of services of workmen amounted to retrenchment and they were entitled for re-employment on re-start of the factory on priority basis in accordance with provisions of S. 6-Q of the Act. It was also held that management was not justified in refusing to re-employ members of the opposite parties-Union as there was no moral justification in refusing them employment on the ground that workmen concerned had tendered their resignations. 3. Retrenchment as defined by S. 2 of the Industrial Disputes Act, has been construed in Hari Prosad Shiv Shankar Shukla v. A. D. Divelkar, AIR 1957 SC 121 , to consist of following four essential requirements, (a) termination of service of workmen, (b) by the employer; (c) for any reason whatsoever, and (d) otherwise than as a punishment inflicted by way of disciplinary action. That resignation results into termination hardly admits of any dispute. It is voluntary ceaser from service but in law its effect is the same namely termination. That resignation results into termination hardly admits of any dispute. It is voluntary ceaser from service but in law its effect is the same namely termination. As it was brought in effect due to closure of unit it could not be termed in any manner other than that it was at the instance of the employer. Termination by employer to become retrenchment has to be construed liberally keeping in view objective of the Act and the malady it tried to cure. The expression `for any reason whatsoever' is significant. It has been purposely used to allay any doubt that termination by employer has not to be understood in restricted sense. The intention is further clear by excluding from its purview termination in consequence of disciplinary proceedings only. On fact found, rather undisputed it is, apparent that all essential requirements were fulfilled, therefore, it was a case of retrenchment. 4. Learned counsel urged that cessation of employment by closure did not amount to retrenchment, as discharge of surplus labour or staff by the employer could be in a running concern provisions of Industrial Disputes Act apply to an existing industry and not a dead industry. Reliance was placed on Hari Prasad decision (supra) and Banaras Ice Factory Ltd. v. Its Workmen, AIR 1957 SC 168 . It was also urged that if closure was bona fide then the termination of services of employees could not be considered to be retrenchment and they were not entitled to benefit of re-instatement. According to learned counsel since this aspect was not considered by the Tribunal the order was liable to be set aside as held in Kalinga Tubes Ltd. v. Their Workmen, AIR 1969 SC 90 : (1969 Lab IC 90). Learned counsel urged that motive for closure was irrelevant. What was to be decided by Tribunal for applicability of S. 25 was whether closure was bona fide or not. Neither of the submissions appear to have any merit. Hari Prasad's decision and Banaras Ice Factory decision were in different set of facts, as their factories or units had closed and they never re-started whereas the petitioner-factory closed but re-started in 1978. It was not a case, therefore, of dead factory or a unit but a factory which had temporarily closed. Effect of re-opening was that link between closure and re-reopening was established. The factories which revived cannot be considered to be dead. It was not a case, therefore, of dead factory or a unit but a factory which had temporarily closed. Effect of re-opening was that link between closure and re-reopening was established. The factories which revived cannot be considered to be dead. It was dormant for a short spell. Therefore, the argument based on the two decisions of 1957 does not help the petitioner. Since running of industry was suspended for a short time, therefore, it cannot be said that only that termination could be considered to be retrenchment which was made as a result of surplusage. The argument that cesser due to bona fide closure does not amount to retrenchment cannot be accepted. If it is retrenchment in law then it does not become otherwise due to bona fide or mala fide of employer. Those are aspects which are material for enhancing liability in payment of compensation or allowance. The decision in T.D.L. Association v. Ex-employees, AIR 1960 SC 815 is of no help as a mala fide closure may not result in continuing the undertaking in the eye of law, but where the company re-starts the principles of the decisions cannot be applied. In Workmen v. Straw Board Manufacturing Factory, AIR 1974 SC 1132 : (1974 Lab IC 730) the transfer of one unit to other unit by purchase was held to be closure under S. 25-FFF. This decision again does not help as it is not a case of transfer from one to other unit but a revival of the same unit. Tribunal, therefore, did not commit any error in holding that the petitioners were entitled to re-employment. 5. Even the other finding that morally the petitioners were duty bound to re-employ opposite parties appears to be well founded. Admittedly there were no complaints against opposite parties. They had to resign and their services came to an end not because of any fault on their part but because of the difficulties in running of the unit. Once unit was revived it was incumbent on petitioners to offer re-employment to these persons. Social justice in country like ours demands that persons should not be put to grave injury and loss in respect of service for no fault of theirs. Entire objective of S. 25-F double F and triple F has been to plug loopholes of termination or dispensing with services of workmen by the unit. Social justice in country like ours demands that persons should not be put to grave injury and loss in respect of service for no fault of theirs. Entire objective of S. 25-F double F and triple F has been to plug loopholes of termination or dispensing with services of workmen by the unit. In keeping with the spirit of present day time and on fairness the Tribunal rightly allowed re-employment of the opposite parties. In any case the order does not call for any interference in writ jurisdiction. 6. In the result both the writ petitions fail and are dismissed. Parties shall, however, bear their own costs.