L. M. GLASFIBER INDIA PRIVATE LIMITED, HOSAKOTE v. STATE OF KARNATAKA
2010-03-09
H.N.NAGAMOHAN DAS
body2010
DigiLaw.ai
ORDER In this writ petition the petitioner has prayed for a writ in the nature of certiorari to quash the order of reference dated 16-11-2009 Annexure-C passed by the first respondent. 2. Petitioner is a private limited company registered under the provisions of the Companies Act, 1956 and is engaged in the manufacture of blades for wind turbines. It is the case of the petitioner-company that it has incurred huge losses in the years 2008 and 2009. On account of low order position, petitioner's factory could not operate to its full capacity. The petitioner-company had employed more than 100 workmen. The second respondent is the registered trade union representing the workmen of the petitioner-company. Having regard to the condition of petitioner-company, it had filed an application on 1-6-2009 under Section 25-O of the Industrial Disputes Act, 1947 (for short 'the Act') to close down the undertaking with effect from 1-9-2009 and also to terminate the services of the workmen. This application of the petitioner-company came to be rejected by the first respondent vide order dated 25-7-2009. Against this order of the first respondent the petitioner-company filed W.P. No. 28332 of 2009 on the file of this Court and the same is pending adjudication. 3. When the matter stood at that stage the petitioner-company filed an application on 7-8-2009 for layoff of the 98 employees under Section 25-M of the I.D. Act. The first respondent after hearing both the parties passed an order on 7-10-2009 as per Annexure-B permitting the petitioner-company to layoff 98 workmen for a period of six months. Thereafter the second respondent-Union filed an application under subsection (7) of Section 25-M of the I.D. Act on 9-10-2009 as per Annexure-R1 to refer the application seeking layoff of the petitioner-company to the Industrial Tribunal for adjudication. The first respondent under the impugned order dated 16-11-2009 as per Annexure-C referred the following points of dispute to the Tribunal for adjudication. They are: i. Whether the management of M/s. L.M. Glasfiber India Private Limited, is justified in seeking permission under Section 25-M of the I.D. Act, 1947 vide their application dated 7-8-2009 to layoff 98 workmen as shown in the appended annexure with effect from 10-10-2009 for a period of 12 months? ii. If so what relief the workmen are entitled to? 4. The petitioner-company being aggrieved by the impugned order of reference at Annexure-C are before this Court. 5.
ii. If so what relief the workmen are entitled to? 4. The petitioner-company being aggrieved by the impugned order of reference at Annexure-C are before this Court. 5. Sri Vijayashankar, learned Senior Counsel for the petitioner-company contends that the impugned order of reference is passed without providing an opportunity to the petitioner-company and as such the same is opposed to principles of natural justice. First respondent passed the impugned order without holding an enquiry, without assigning any reasons, without application of mind and as such the same is not a speaking order. Reliance is placed on the following decisions.- 1. Workmen of Kempt (India) Limited (represented by Kempt Employees Union, through its General Secretary), Coimbatore v Government of Tamil Nadu (represented by Secretary, Labour and Employment Department), Madras and Others1; 2. Orissa Textile and Steel Limited v State of Orissa and Others2. 6. Per contra, Sri Anantharam, learned Counsel for the second respondent contends, that sub-section (7) of Section 25-M of the I.D. Act provides to review the order passed under Section 25-M(4) of the Act and also to refer the dispute for adjudication. The prayer of second respondent-Union was only to refer the dispute and not for reviewing the order of layoff. Therefore while referring the dispute for adjudication it is not necessary to provide an opportunity to the petitioner-company and to assign any reason. The petitioner-company will have an opportunity to contest the matter on merits before the Tribunal and as such no prejudice is caused to then under the impugned order. He justifies the impugned order and reliance is placed on the following decision.- a. Paint Employees Union v Kansai Nerolac Paints Limited1; b. Britannia Industries Limited v Maharashtra General Kamagar Union and Anotlzer2; c. Cable Corporation of India Limited v Additional Commissioner of Labour and Other3; d. Cable Corporation of India v Additional Commissioner of Labour and Others4; e. Vazir Glass Works Limited v Maharashtra General Kamgar Union and Another5; f. Staff Superintendent of State Bank of Patiala v The Presiding Officer, Central Government Industrial Tribunal-cum-Labour Court and Others6. 7. Heard arguments on both the side and perused the entire writ papers. 8. Section 25-M of the Act deals with layoff, Section 25-N deals with retrenchment of workmen and Section 25-O deals with closing down of an industrial undertaking.
7. Heard arguments on both the side and perused the entire writ papers. 8. Section 25-M of the Act deals with layoff, Section 25-N deals with retrenchment of workmen and Section 25-O deals with closing down of an industrial undertaking. For the purpose of this case sub-section (7) of Section 25-M of the Act is relevant and the same reads as under: "The appropriate Government or the specified authority, may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (4) or refer the matter or, as the case may be, cause it to be referred, to a Tribunal for adjudication: Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference". 9. Sub-section (7) of Section 25-M of the Act, sub-section (6) of Section 25-N of the Act and sub-section (7) of Section 25-O of the Act are identical. The Supreme Court in the case of Cable Corporation of India, while interpreting sub-section (6) of Section 25-N of the Act held: "A plain reading of the provision makes the position clear that two courses are open. Power is conferred on the appropriate Government to either on its own motion or on an application made, review its order or refer the matter to the Tribunal. Whether one or the other course could be adopted depends on facts of each case, surrounding circumstances and several other relevant factors. When once the review application is disposed off, no scope for making reference". 10. A Division Bench of Bombay High Court in Paint Employees Union, held as under: "19. In view of the above clear enunciation of law there need not be any debate over the interpretation of Section 25-O(5) of the said Act. The specified authority can on its own motion or on an application made to it, review its order or refer the matter to the Industrial Tribunal. Once review application is disposed of there is no scope for further making a reference". 11. As already stated sub-section (7) of Section 25-M of the Act, subsection (6) of Section 25-N and sub-section (5) of Section 25-O of the Act are identical.
Once review application is disposed of there is no scope for further making a reference". 11. As already stated sub-section (7) of Section 25-M of the Act, subsection (6) of Section 25-N and sub-section (5) of Section 25-O of the Act are identical. In view of the law laid down by the Apex Court in Cable Corporation of India's case, the specified authority under sub-section (7) of Section 25-M of the Act can on its own motion or on an application made, review its order or refer the matter to the industrial Tribunal. In the instant case the respondent-Union filed an application on 9-10-2009 as per Annexure-R1 with a request to refer the matter for adjudication under sub-section (7) of Section 25-M of the Act. A reading of Annexure-R1 makes it clear that the respondent-Union is not seeking review of the order passed by the specified authority on 7-10-2009 granting permission to the petitioner to layoff 98 workmen for a period of six months. It is open for the respondent-Union to elect either to seek review of the order or seek reference to the Tribunal. Therefore, the application filed by the respondent-Union seeking reference to the Tribunal sub-section (7) of Section 25-M of the Act is in accordance with Law. 12. As already pointed out sub-section (7) of Section 25-M of the Act specifies two things: firstly to review the order and secondly to refer the matter to the Tribunal. If the specified authority reviews the order then he has to make an expiry into all relevant facts, assign reasons and to decide the matter. Once the specified authority reviews the order then the same becomes final and binds the parties. When the specified authority passes an order of review it will affect the rights of parties concerned. Therefore it is necessary for the specified authority to provide an opportunity of being heard to the concerned parties before passing an order of review. The Supreme Court in the case of Orissa Textile and Steel Limited, while interpreting sub-section (5) of Section 25-0 of the Act held as under: "16. In our view, the learned Attorney General is right. A proper reading of sub-section (5) of amended Section 25-O shows that, in the context in which it is used, the word "may" necessarily means "shall".
In our view, the learned Attorney General is right. A proper reading of sub-section (5) of amended Section 25-O shows that, in the context in which it is used, the word "may" necessarily means "shall". Thus the appropriate Government "shall" reviews the order if an application in that behalf is made by the employer or the workmen. Similarly, if so required by the employer or the workman, it shall refer the matter to a Tribunal for adjudication. As submitted by the learned Attorney General, in a review the appropriate Government would have to make an enquiry into all necessary facts particularly into the genuineness and adequacy of the reasons stated by the employer. An opportunity of being heard would have to be given to the employer, workmen and all interested persons. The order on review would have to be in writing giving reasons. Thus, in exercising powers of review, the appropriate Government would be performing quasi-judicial functions. Sub-section (5) of amended Section 25-O provides that the award should be passed within a period of 30 days from the date of reference. Even though it does not provide any time frame within which the review is to be disposed off, it is settled law that the same would have to be disposed of within a reasonable period of time, in our view, a period of 30 days would be a reasonable period for disposing of a review also. This review and/or reference under amended Section 25-O would be in addition to a judicial review under Article 226 or Article 32. In Workmen of Meenakshi Mills Limited v Meenakshi Mills Limited and Another, AIR 1994 SC 2696 : (1992)3 SCC 336 , it has been held that the exercise of power being quasi-judicial the remedy of judicial review under Article 226 or Article 32 was an adequate protection against the arbitrary action in the matter of exercising of power by the appropriate Government. We are in full agreement with those observations". 13. In view of the law laid down by the Supreme Court in the decision referred to supra it is necessary to provide an opportunity to the concerned parties while passing an order of review under sub-section (7) of Section 25-M of the Act. But, in the instant case, the impugned order is not an order of review.
13. In view of the law laid down by the Supreme Court in the decision referred to supra it is necessary to provide an opportunity to the concerned parties while passing an order of review under sub-section (7) of Section 25-M of the Act. But, in the instant case, the impugned order is not an order of review. On the other hand the impugned order is passed by the specified authority referring the dispute between the parties for adjudication to the Tribunal. Learned Counsel for the petitioner relying on a judgment of Division Bench of Madras High Court in Workmen of Kempt Limited's case, contends that the Government cannot straightaway refer the matter to the Industrial Tribunal for adjudication without notice to the petitioner. On the other hand learned Counsel for the respondent relying on a Full Bench judgment of Delhi High Court in the case of Staff Superintendent of State Bank of Patiala, contend that no adjudication was made, no rights were affected, no benefits given to the workmen nor any liability imposed or financial restriction put on the management by an order of reference. The whole case ought to be decided by the Tribunal where full fledged opportunity will be given to the parties. Therefore there is no violation of principles of natural justice. In the instant case the Government by exercising its power under sub-section (7) of Section 25-M of the Act on prima facie view of the matter referred the dispute for adjudication to the Tribunal. Before the Tribunal both the petitioner and respondent will have an opportunity to lead evidence and to substantiate their respective stands. Therefore there is no violation of principles of natural justice. I am not persuaded by the judgment of Madras High Court in Workmen of Kempt Limited's case. I am in agreement with the view taken by the Delhi High Court in Staff Supelintendent of State Bank of Patiala's case. 14. For the reasons stated above, the writ petition is hereby dismissed.