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2001 DIGILAW 368 (CAL)

BPMEL Employees Union v. Union of India

2001-06-28

DILIP KUMAR SETH

body2001
JUDGMENT 1. The petitioners have challenged the order dated May 23, 2001 passed under Section 250 of the Industrial Disputes Act, 1947 granting approval for closure of the Company. 2. Mr. Bikash Ranjan Bhattacharyya, learned Counsel for the petitioners, contends that while considering the question, the State Government is supposed to look into the factors contained in subsection (2) of Section 250 of the Act. On the face of the order impugned it appears that none of these factors had ever been considered. 3. He further contends that there is also an order of status quo passed in another proceeding wherein the orders passed by the Board for Industrial & Financial Reconstruction, in short BIFR and the Appellate Authority for Industrial Finance & Reconstruction in short AAIFR have since been challenged. Therefore, no order of closure should be passed in view of the order of status quo and he prays that the said order dated May 23, 2001 should be quashed. 4. Mr. R.K. Chowdhury, the learned Counsel for the Union of India, on the other hand, contends that the proceeding for winding up under the orders of BIFR is altogether a different proceeding which is contemplated under the Companies Act whereas the present one is a proceeding under the Industrial Disputes Act. The status quo relates to the proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985, hereinafter referred to as SICA. Therefore, it cannot travel beyond the scope of the said proceeding and naturally it should confine to the question of winding up and will not travel beyond that. Whereas the present decision has been taken under the Industrial Disputes Act. Therefore, both cannot be confused. Thus, the order of status quo will not affect the company in taking steps for closure of the company. 5. He further contends that the decision under the SICA was taken by a different Authority; whereas the decision of closure is taken by the company itself. He then contends that the petitioners being workmen are not entitled to challenge the same. He also contends that all the factors relevant for the purpose of closure have been considered. Therefore, this petition should be dismissed. 6. Mr. He then contends that the petitioners being workmen are not entitled to challenge the same. He also contends that all the factors relevant for the purpose of closure have been considered. Therefore, this petition should be dismissed. 6. Mr. R.M. Chatterjee appearing for the company, on the other hand, contends pointing out to Annexure 'F' at page 68 of the petition that it appears from Paragraph 6(ii) that the monthwise production for the preceding twelve months were Nil. This report was a report given sometime in April 2001 and in the same column it is further pointed out that the operations of the Company were suspended from June 1, 1998. In Item 10 of the said page, it has been pointed out that there was an order passed on September 12, 1997 recommending winding up by BIFR and the proceedings for winding up had been started on January 12, 1999. It is also pointed out that due to the uncertainty the company did not book any order during: the last three years. He has also pointed out from the order contained in Annexure 'H' at page 82 of the petition that the considerations that had weighed with the Authority are sufficient to take a decision. 7. He further contends relying on sub-section (8) of Section 250 of the Act that the petitioners will not suffer because they are amply protected under the said provision. According to him, the factors which are mentioned in sub• section (2) have since been present in the recommendation of the BIFR. Therefore, this petition should be dismissed. 8. He also contends that the review lies under sub-section (5) of Section 250 of the Act. Therefore, the writ jurisdiction should not be allowed to be invoked. 9. In Reply, Mr. Bhattacharyya points out that the considerations that have been mentioned in the impugned order are only an apology for the factors to be taken into consideration in terms of sub-section (2). 10. I have heard the respective Counsel at length. So far as the question that a review lies is concerned under sub-section (5) of Section 250 of the Act, there is no doubt that there is an alternative namely. Such alternative remedy is at the option of the person coming before the Court. An alternative remedy is not an absolute bar. I have heard the respective Counsel at length. So far as the question that a review lies is concerned under sub-section (5) of Section 250 of the Act, there is no doubt that there is an alternative namely. Such alternative remedy is at the option of the person coming before the Court. An alternative remedy is not an absolute bar. Despite alternative remedy writ petition can be entertained if there are materials to show that there has been glaring violation of the principles of law. 11. Mr. Bhattacharyya, in fact, had pointed out that there is glaring violation of law. 12. Therefore, let us examine as to whether the order of status quo could prevent the Union of India from granting permission to close down the company. As it appears that the order of status quo relates to the proceeding under the SICA challenging the orders passed by the BIFR and AAIFR initially. Therefore, the order of status quo cannot travel beyond the scope of the said proceedings in which such order was granted. It will not mean anything which is not contemplated within the scope and ambit of such proceeding. An order passed in a proceedings is relevant to the context in which it is passed. It is related to the subject-matter involved and the reliefs claimed. It cannot include matters outside the purview of the proceedings in which the order is passed. 13. Admittedly, the proceeding in which the order of status quo was granted was a proceeding under the SICA being altogether a different proceeding which has nothing to do with the Industrial Disputes Act. Whereas the permission of closure is under the provision of Section 250 of the Industrial Disputes Act, which has nothing to do with the SICA. But, then the recommendation for winding up was given by the BIFR whereas the decision to close down is a decision of the Company itself which by reason of Section 250 requires a permission. Therefore, the scope and sphere of the proceedings being altogether different, the order of status quo cannot prevent the company from taking steps for closure. 14. The question of closure is one of the privileges of the Employer circumscribed by the procedures laid down in Section 250 of the Industrial Disputes Act. The Employer cannot be compelled to continue even if it continues to sustain loss. 15. However, Mr. 14. The question of closure is one of the privileges of the Employer circumscribed by the procedures laid down in Section 250 of the Industrial Disputes Act. The Employer cannot be compelled to continue even if it continues to sustain loss. 15. However, Mr. Bhattacharyya had pointed out that there is sufficient quantum of land of the company which can be sold for the purpose of making the company viable. Whether a particular property would be sold or not is the right of the Employer. The employees cannot compel the Company to part with some of its properties. More so, the contention is wholly without substance inasmuch as the Company having been declared sick under the SICA and there being a scheme and a recommendation for winding up, none of the properties could be transferred by the company so long as the said proceeding is not over or without the permission of the Board or according to the scheme in view of Section 22 of SICA. Then again, such sale would violate the order of status quo as granted in the proceeding for winding up that is pending. Therefore, this contention cannot hold good. 16. From Annexure 'F' at page 68 of the petition as pointed out by Mr. R.M. Chatterjee, it appears that the company has not been undertaking any operation since June 1, 1998 and that it had not booked any order for the last three years. In such circumstances, the Employer cannot be compelled to keep the company without being closed. In case, it is decided by the company to close down. it may take such a decision. There is nothing in the law to prevent the Employer to do so. 17. The only question that can be gone into is, whether while granting such permission the Union of India had acted properly and had taken into consideration all the factors that are to be taken as contemplated under sub-section (2) of Section 250 of the Act. Section 250(2) provides that such a permission can be granted after giving an opportunity to the workmen and the Employer and the persons interested in such close of being heard. Admittedly, the workmen were given such opportunity and they had submitted their objection though, however, they did not attend the hearing. Therefore, the question of giving an opportunity of hearing was complied with. Admittedly, the workmen were given such opportunity and they had submitted their objection though, however, they did not attend the hearing. Therefore, the question of giving an opportunity of hearing was complied with. Sub-section (2) further requires consideration of certain factors, viz., the genuineness and adequacy of the reasons stated by the Employer and the interest of the general public and other relevant factors. It appears that BIFR has already recommended winding up and that for the purpose of closure certain particulars were furnished as is apparent from Annexure 'F'. Apart from the said factors, an Expert Group had been appointed and it had reported impossibility or revival and there being an order of winding up already recommended, the same are definitely the other relevant factors which arc to be weighed. 18. Having regard to the report contained in Annexure 'F' which is also not disputed, it appears that the company has not been running any business since June 1, 1998 It does not seem that simply because the said factors had not been recorded in the order would serve good if the matter is remitted back again. It would be only a formality leading to an infructuous exercise. The materials that have been produced show that there are sufficient grounds and adequate reasons for granting permission for closure. Even if it has not been so recorded in the order impugned, still then if the Court finds from the materials-on-record or the pleadings that there are sufficient materials even' if the same are not mentioned, the Court cannot undertake an infructuous exercise by remanding back the matter once again. But, then the other relevant factors if outweigh the other factors which have not been considered, then also it cannot be said that the order suffers from any perversity, resulting in an illegality. It might be an irregularity. It will not affect the merit of the order when on record sufficient reasons are in existence and that the other relevant factors themselves are sufficient to grant the permission. 19. In the circumstances, I do not find any reason to interfere with the impugned order having regard to the facts and circumstances as discussed above. 20. The learned Counsel for the Union of India has relied on a decision in the case of (1) The Andhra Prabha Ltd. & Anr. 19. In the circumstances, I do not find any reason to interfere with the impugned order having regard to the facts and circumstances as discussed above. 20. The learned Counsel for the Union of India has relied on a decision in the case of (1) The Andhra Prabha Ltd. & Anr. v. The Secretary, Madras Union of Journalists and Others reported in AIR 1967 SC 1869 , wherein it has been held that on account of continuous strike the business of the company was closed from 1959 and the Court cannot compel the Management to carryon the operation of the company when it is running at a loss. The Court cannot compel a person to incur unnecessary loss in respect of his own business if the law permits him to close it down. The decision to close down cannot be interfered with by the Court except the permission that has been granted. The permission can be interfered with as observed earlier and not otherwise. 21. Having regard to the present facts and circumstances of the case, I do not think it to be a fit case for interference. 22. This writ petition, therefore, fails and, accordingly, it is dismissed. All parties concerned are to act on a xeroxed signed copy of this Dictated Order on the usual undertaking.