Sesa Mining Corporation Limited v. Specified Authority And Joint Secretary
2023-06-08
B.P.COLABAWALLA
body2023
DigiLaw.ai
JUDGMENT/ORDER 1. Rule. With the consent of the parties, Rule made returnable forthwith and heard finally. Learned Counsel appearing for the Respondents, waive notice. 2. By the present Writ Petition, exception is taken to the Order dtd. 21/10/2022 ("impugned Order"), passed by the Specified Authority in the exercise of its powers of review. By the impugned order, the Specified Authority withdrew the permission granted to the Petitioner under Sec. 25-N of The Industrial Disputes Act, 1947 (for short the 'ID Act') to retrench 313 workmen engaged by the Petitioner at the Bicholim Iron Ore Mines, Goa. 3. Initially, an application seeking permission for the aforesaid retrenchment was sought predominantly on account of the Petitioner ceasing to hold any Mining Lease in view of the Judgment of the Hon'ble Supreme Court in the case of Goa Foundation vs. Sesa Sterlite Ltd and Ors (2018) 4 SCC 218 )(for short, 'Goa Foundation-II'). When this application was made by the Petitioner [seeking permission to retrench 313 workmen (under Sec. 29-N of the ID Act)], the same was granted by the Specified Authority by its Order dtd. 1/9/2022. After this Order was passed by the Specified Authority, the Respondent No.4 - Union, filed an application under Sec. 25-N(6) of the ID Act for review of the Order dtd. 1/9/2022. In the meantime, and while the said review was pending, the Respondent No.4 - Union also filed Writ Petition No. 2123 of 2022 challenging the Order of the Specified Authority dtd. 1/9/2022 (granting permission to the Petitioner to retrench 313 workmen). This Writ Petition was disposed of by directing the Specified Authority to decide the Review Application filed by the Respondent No.4 - Union in a time-bound manner, and ordered that in the meanwhile, the permission granted to retrench 313 workmen shall not to be given effect to until the Review Application filed by the Respondent No.4 - Union was decided. It is thereafter that the Specified Authority heard the parties again and by its order dtd. 21/10/2022 reviewed its earlier Order [dtd. 1/9/2022] and withdrew the permission given to the Petitioner to retrench 313 workmen. It is this Order dtd. 21/10/2022 [passed in review] that is impugned in the present Writ Petition. 4. The brief facts that need to be noted for deciding the controversy in the present Petition are this.
21/10/2022 reviewed its earlier Order [dtd. 1/9/2022] and withdrew the permission given to the Petitioner to retrench 313 workmen. It is this Order dtd. 21/10/2022 [passed in review] that is impugned in the present Writ Petition. 4. The brief facts that need to be noted for deciding the controversy in the present Petition are this. The Petitioner was granted under the Portuguese Colonies the Mining Leases-Mining Concessions bearing TC Nos. 11/1941, 12/1941, 13/1941, 14/1941 and 15/1941. Subsequently, these Mining Concessions were converted into Mining Leases by virtue of the Goa Daman and Diu Mining Concessions (Abolition and Declaration as Mining Leases) Act, 1987. All the above Leases worked together and were called as the Bicholim Mines. 5. On 10/9/2012, the Government of Goa suspended Mining operations in the State of Goa, and thereafter by an Order dtd. 14/9/2012, the Ministry of Environment and Forest, Government of India, suspended the Environmental Clearance granted to the Mines. Consequently, the Petitioner had to halt all Mining operations from 10/9/2012. The Goa Foundation also filed Writ Petition No. 435 of 2012 in the Hon'ble Supreme Court, when the Apex Court directed that no Mining operations would be carried out in the State of Goa until further orders. Resultantly, Mining operations at Bicholim Mines ceased w.e.f. 10/9/2012. 6. The aforesaid Writ Petition No.435 of 2012 was thereafter allowed by Hon'ble Supreme Court on 21/4/2014, [reported in Goa Foundation vs. Union of India and Ors. (2014) 6 SCC 590 ), (for short, Goa Foundation-I)], inter alia, holding that Mining operations could not have been carried out in the State of Goa on the basis of a deemed extension since a specific Order of second renewal was necessary under Sec. 8(3) of the Mines and Minerals (Development and Regulation) Act 1957, (as it stood then). The Hon'ble Supreme Court also imposed a cap on the amount of excavation of mineral ore which could be carried out in the State of Goa on an annual basis. 7. In light of the decision of the Supreme Court in Goa Foundation-I, the aforesaid Leases in the Bicholim Mines were granted a second renewal by the State Government and pursuant to which Mining Lease Deeds were also executed on 16/3/2015. Pursuant to this, Mining operations could start on 12/6/2015, though, according to the Petitioner, at a substantially reduced capacity.
7. In light of the decision of the Supreme Court in Goa Foundation-I, the aforesaid Leases in the Bicholim Mines were granted a second renewal by the State Government and pursuant to which Mining Lease Deeds were also executed on 16/3/2015. Pursuant to this, Mining operations could start on 12/6/2015, though, according to the Petitioner, at a substantially reduced capacity. As mentioned earlier, the Petitioner could not carry out any Mining operations in the Bicholim Mines from 10/9/2012 till 12/6/2015. 8. After this, the second renewal of the Mining Leases granted to the Petitioner as well as to other Mining Lease holders in the State of Goa, were challenged by the Goa Foundation before the Hon'ble Supreme Court. The Hon'ble Supreme Court, by its Judgment dtd. 7/2/2018 in the case of Goa Foundation-II, set aside and quashed the second renewals granted, inter alia by holding that the same was not in terms of the directions given by the Hon'ble Supreme Court in the case of Goa Foundation-I. The Supreme Court accordingly directed the stoppage of all Mining operations w.e.f 15/3/2018. Accordingly, all Mining operations ceased at Bicholim Mines w.e.f. 15/3/2018. Though multiple Review Petitions were filed against the decision of the Supreme Court in the Goa Foundation-II, the same came to be dismissed on 9/7/2021. Furthermore, a Special Leave Petition asserting an extended tenure, notwithstanding the Judgment in Goa Foundation-II, was also dismissed on 7/9/2021 and a Review Petition preferred against the said dismissal was also rejected on 30/3/2022. 9. According to the Petitioner, in what can be termed as the proverbial last straw that broke the camel's back, on 5/5/2022, the Petitioner received a notice from the Director of Mines and Geology, Government of Goa, directing them to vacate the Leased Mines within one month (i.e. by 6/6/2022). Thereafter, on 27/5/2022, the District Magistrate, exercising powers under the Disaster Management Authority, directed the Petitioner to maintain the Mines by taking care of essential activities like periodic monitoring of water levels, etc. 10. Since all efforts to restart the Mining operations at Bicholim Mines had failed, this finally prompted the Petitioner, who had, in view of the aforesaid litigation, chosen to avoid any retrenchment for the preceding four years, finally filed an Application under Sec. 29-N of the ID Act, before the Specified Authority, seeking permission to retrench 313 workmen.
10. Since all efforts to restart the Mining operations at Bicholim Mines had failed, this finally prompted the Petitioner, who had, in view of the aforesaid litigation, chosen to avoid any retrenchment for the preceding four years, finally filed an Application under Sec. 29-N of the ID Act, before the Specified Authority, seeking permission to retrench 313 workmen. The Specified Authority, after hearing the parties, passed an Order on 1/9/2022, granting permission to the Petitioner to retrench 313 workmen subject to certain conditions. On 30/9/2022, the Respondent No.4 - Union filed an Application under Sec. 25-N(6) of the ID Act, seeking a review of the Order dtd. 1/9/2022. The Specified Authority by its Order dtd. 21/10/2022, reviewed its Order dtd. 1/9/2022 and, consequently, withdrew the permission granted to the Petitioner to retrench 313 workmen. It is to challenge this Order [dtd. 21/10/2022] passed by the Specified Authority reviewing its earlier decision, that the present Writ Petition is filed. 11. In this factual backdrop, Mr. Kantak, the learned Senior Counsel appearing on behalf of the Petitioner, submitted that initially, the Specified Authority had granted permission to the Petitioner to retrench 313 workmen. Mr. Kantak took me through the said Order and submitted that all the material was placed by the Petitioner before the Specified Authority for seeking permission to retrench its 313 workmen. Mr. Kantak submitted that it was brought to the attention of the Specified Authority that the Petitioner had made every effort to avoid retrenchment and since after a lapse of more than four years from the passing of the Judgment of the Supreme Court in Goa Foundation-II, no attempt was made by the State of Goa to grant a fresh Mining Lease, and there remained no ray of hope for starting the Mining operations in the near future, permission to retrench 313 workmen was applied for by the Petitioner. This was because it was not possible for the Petitioner, due to the extreme financial hardship being faced by it, to continue the said workmen on its payroll. 12. Mr. Kantak submitted that during this time, the representatives of the Respondent No.4 - Union were also heard by the Specified Authority.
This was because it was not possible for the Petitioner, due to the extreme financial hardship being faced by it, to continue the said workmen on its payroll. 12. Mr. Kantak submitted that during this time, the representatives of the Respondent No.4 - Union were also heard by the Specified Authority. He pointed out that before the Specified Authority, it was the case of the Respondent No.4 - Union that the entire Mines are located in a residential area and the locals are engaged in Mining operations and these workmen were employed as compensation against their lands. Now the lands are spoilt due to Mining [as it is no longer fertile], and the prospects of farming are very poor. The Respondent No.4 - Union therefore, submitted that they ought not to be retrenched and also questioned the aspect of financial hardship [as claimed by the Petitioner], especially considering its parent company - Vedanta Limited, was paying dividend. Mr. Kantak submitted that the Specified Authority also called for a report of Dy. CLC (C), Mumbai, who informed the Specified Authority that after the Orders of the Supreme Court in Goa Foundation-II, there is no work in the Mines after 16/3/2018 since all Mining activities are banned in the State of Goa. Mr. Kanthak submitted that the report also noted that since the Mining ban, the workers were paid 50 percent of their wages for idle days and full wages for working days. Mr. Kantak submitted that though it was not the case of the Respondent No.4 - Union that retrenching 313 workmen ostensibly amounted to a closure [under Sec. 25-O of the ID Act], this was an issue raised Suo Moto by the Specified Authority, and after hearing the Petitioners, the Specified Authority was satisfied that retrenching the said 313 workmen would not amount to a closure of the industrial establishment as contemplated under Sec. 25-O of the ID Act. Mr. Kantak submitted that after considering all the material placed before it, not only by the Petitioner but also by the Respondent No.4 - Union, the Specified Authority concluded that a case was made out for granting permission to the Petitioner to retrench 313 workmen.
Mr. Kantak submitted that after considering all the material placed before it, not only by the Petitioner but also by the Respondent No.4 - Union, the Specified Authority concluded that a case was made out for granting permission to the Petitioner to retrench 313 workmen. The primary reason why it came to this conclusion, was because it was clear that the Mining operations in Goa has ceased w.e.f. 16/3/2018 in compliance with the Supreme Court's Order in Goa Foundation- II and that the Petitioner had also taken legal recourse to resume its Mining operations, but to no avail. Mr. Kanthak submitted that the Specified Authority noted that for four years, the Petitioner was hopeful of either resuming its Mining operations or being granted a fresh Lease. As this was not possible and there was no hope of restarting the Mining operations, the Specified Authority concluded that a case was made out for retrenching 313 workmen. Mr. Kantak submitted that the Specified Authority, after carefully going through the documents on record and after hearing the parties, came to the conclusion that the Petitioner is not able to carry on their Mining operations and the grounds stated by the Petitioner are reasonable and adequate for the permission sought in the Application. It, therefore, allowed the Application filed by the Petitioner on certain terms and conditions as set out in the said Order. 13. Mr. Kantak submitted that having reached this conclusion after analyzing all the factual material, there was no real reason why the Specified Authority ought to have exercised its powers of review and passed the impugned Order. Mr. Kantak submitted that when considering the permission seeking retrenchment under Sec. 25-N of the ID Act, an objective inquiry into the facts must be done. Once that is done, the permission is either granted or refused. If the Specified Authority wanted to review its Order, it had to follow the same principles, namely, it ought to have done an objective inquiry into the facts for reviewing its own Order. This, according to Mr. Kantak, is conspicuously absent in the impugned order. Mr.
Once that is done, the permission is either granted or refused. If the Specified Authority wanted to review its Order, it had to follow the same principles, namely, it ought to have done an objective inquiry into the facts for reviewing its own Order. This, according to Mr. Kantak, is conspicuously absent in the impugned order. Mr. Kantak submitted that in fact, the Specified Authority, in paragraph 34 of the impugned Order, has come to a categorical finding that no point or issue, which was not considered earlier [while deciding the Application filed under Sec. 25-N of the ID Act], remained to be considered in the Review Application filed by the Respondent No.4 - Union for consideration afresh. Mr. Kantak submitted that, in other words, the Specified Authority came to a categorical finding that no ground for review was made out. However, despite this finding, the Specified Authority concluded that one of the reasons for granting the permission was that there was no certainty as to when the Mining Leases would be auctioned by the Government. However, during the hearing of the Review Application, on 11/10/2022, it came to the notice of the Specified Authority that the Mines in question have been put to auction. Mr. Kantak submitted that in light of these circumstances, the Specified Authority came to an erroneous conclusion that the reason for uncertainty about starting of Mining operations has been removed and is no longer valid. It is solely on this ground that the Order under Review [impugned Order] was passed. Mr. Kantak submitted that this is clear from paragraph 42 of the impugned Order where the Specified Authority records that though the Review Application of the Respondent No.4 - Union had no merit [for interference with the Order dtd. 1/9/2022], the Specified Authority finds merit to review the Order for the sake of justice and, accordingly, withdraws the permission granted to the Petitioner to retrench 313 workmen. Mr. Kantak submitted that the reason given is fallacious and cannot stand the scrutiny of the Court. Mr. Kantak submitted that merely by the Government of Goa auctioning the Mines does not in any way remove the uncertainty which was pleaded by the Petitioner, and which was accepted by the Specified Authority in its Order dtd. 1/9/2022. Mr.
Mr. Kantak submitted that the reason given is fallacious and cannot stand the scrutiny of the Court. Mr. Kantak submitted that merely by the Government of Goa auctioning the Mines does not in any way remove the uncertainty which was pleaded by the Petitioner, and which was accepted by the Specified Authority in its Order dtd. 1/9/2022. Mr. Kantak submitted that this is not a case where now, by virtue of the decision of the State of Goa, the Petitioner was in a position to start its Mining operations. He submitted that the Petitioner would first have to participate in the auction, and if it does, has to be the highest bidder and thereafter be granted a Mining Lease to carry out Mining operations. He submitted that there is no compulsion on the Petitioner to bid at the auction, and even if it did, there was no guarantee that the Petitioner would be successful. He submitted that on these grounds and something that was completely uncertain, the Specified Authority was wholly unjustified in reviewing its earlier Order [dtd. 1/9/2022], and which was based on proper and cogent reasons. Mr. Kantak submitted that merely because there may be a possibility in the future to restart Mining operations, without anything more, would not and cannot be a ground for refusing permission to retrench the 313 workmen. He submitted that this is more so when under the provisions of the ID Act, if the Petitioner was to restart its Mining operations, it would be the obligation of the Petitioner to first employ the retrenched workmen and only thereafter hire additional workforce. Mr. Kantak, therefore, submitted that on this sole ground, the Order passed by the Specified Authority on 1/9/2022 could not have been reviewed. This, according to Mr. Kantak, makes the impugned Order vulnerable to challenge on the ground of perversity and an error apparent on the face of the record requiring interference under Article 227 of the Constitution of India. For all the aforesaid reasons, Mr. Kantak submitted that the impugned Order dtd. 21/10/2022, passed by the Specified Authority [reviewing its Order of 1/9/2022], be quashed and set aside and the Original Order granting permission to the Petitioner to retrench its 313 workmen be restored. 14. On the other hand, Mr.
For all the aforesaid reasons, Mr. Kantak submitted that the impugned Order dtd. 21/10/2022, passed by the Specified Authority [reviewing its Order of 1/9/2022], be quashed and set aside and the Original Order granting permission to the Petitioner to retrench its 313 workmen be restored. 14. On the other hand, Mr. Arunkumar Nigalye, the learned Counsel appearing for the Respondent No.4 - Union, submitted that there is nothing wrong with the impugned Order. He submitted that the Specified Authority, after taking into consideration the fact that the State of Goa had now decided to auction the Mines, came to the conclusion that the reason why permission was granted, namely, the uncertainty of starting Mining operations, was no longer existing and therefore, there was no ground/reason for the Petitioner to retrench its workmen. It is in light of this finding that the Specified Authority came to the conclusion that the Order dtd. 1/9/2022 ought to be reviewed. He submitted that the finding reached by the Specified Authority, on the given facts and circumstances of the case, can never be termed as perverse and/or suffering from any error apparent on the face of the record. Consequently, there was no question of interfering with the impugned Order under Article 227 of the Constitution of India, was the submission. 15. Without prejudice to the aforesaid argument, Mr. Nigalye submitted that, in any case, no permission could be granted for retrenchment of the entire workforce of the Petitioner, namely, 313 workmen, because this would effectively lead to a closure of the business of the Petitioner and, therefore, permission ought to have been taken under Sec. 25-O of the ID Act [procedure for closing down an undertaking], and not under Sec. 25-N [for retrenchment]. Mr. Nigalye submitted that because the Petitioner did not want to fulfill certain additional conditions as required under Sec. 25-O of the ID Act [for the closure of industrial establishment], that it resorted to the provisions of Sec. 25-N seeking retrenchment of its 313 workmen. To substantiate this argument, Mr. Nigalye took me through the definition of the word "closure" as defined in Sec. 2(cc), as well as Sec. 25-O of the ID Act. Mr. Nigalye submitted that closure means the permanent closing down of a place of employment or part thereof.
To substantiate this argument, Mr. Nigalye took me through the definition of the word "closure" as defined in Sec. 2(cc), as well as Sec. 25-O of the ID Act. Mr. Nigalye submitted that closure means the permanent closing down of a place of employment or part thereof. He submitted that the procedure for closing down and undertaking is set out in Sec. 25-O which stipulates that an employer who intends to close down an undertaking of an industrial establishment to which Chapter V-B applies, shall, in the prescribed manner, apply to the appropriate Government for prior permission at least ninety days before the date on which the intended closure is to become effective, stating clearly the reasons for the intended closure of the undertaking. A copy of such application would also have to be served simultaneously on the representative of the workmen. Mr. Nigalye submitted that under the very same Sec., where such an application is made, the appropriate Government, after making such inquiry as it thinks fit, and after giving a reasonable opportunity of being heard to the employer as well as the workmen, and having regard to the genuineness and adequacy of the reasons stated by the employer, the interest of the general public, and all other relevant factors, may grant or refuse to grant such permission for closure. Mr. Nigalye submitted that unlike Sec. 25-N of the ID Act, before granting permission for closure, the appropriate Government must be satisfied that the closure is also in the interest of the general public. It is to get out of this obligation that the Petitioner has filed an application for retrenchment under Sec. 25-N of the ID Act rather than for closure under Sec. 25-O of the ID Act, was the submission. Mr. Nigalye submitted that in the facts of the present case, the entire workforce has been retrenched. There can be no other more glaring factor to indicate closure, was the submission of Mr. Nigalye. In support of this proposition, he relied upon the following decisions: (i) Armed Forces Ex Officers Multi Services Cooperative Society Limited vs. Rashtriya Mazdoor Sangh (INTUC) (2022) 9 SCC 586 ), (Paragraph 14); (ii) Shri Hariprasad Shivshanker Shukla and Anr. vs. Shri A. D. Divelkar and Ors. ( 1957 SCR 121 )(Paragraph 20); (iii) Pipraich Sugar Mills Ltd. vs. Pipraich Sugar Mills Mazdoor Union.
vs. Shri A. D. Divelkar and Ors. ( 1957 SCR 121 )(Paragraph 20); (iii) Pipraich Sugar Mills Ltd. vs. Pipraich Sugar Mills Mazdoor Union. ( AIR 1957 SC 95 )(Paragraph 15); (iv) General Labour Union (Red Flag), Bombay vs. B.V. Chavan and Ors. ( AIR 1985 SC 297 )(Paragraph 11); and (v) Workmen of the Indian Leaf Tobacco Development Co. Ltd. Guntur vs. Management of Indian Leaf Tobacco Development Co. Ltd. Guntur. ( AIR 1970 SC 860 )(Paragraph 8). 16. Mr. Nigalye thereafter also faintly sought to suggest that if the Court is not satisfied that this amounts to closure, this would amount to a layoff or a lockout under the provisions of the ID Act. For all the aforesaid reasons, Mr. Nigalye submitted that there was absolutely no case made out for interference with the impugned Order and the Writ Petition be accordingly dismissed. 17. I have heard the learned Counsel for the parties at great length. I have also perused the papers and proceedings in the above Writ Petition including the Order dtd. 1/9/2022 granting permission to the Petitioner to retrench 313 workmen as well as the impugned Order dtd. 21/10/2022 reviewing its Order dtd. 1/9/2022. 18. From the arguments canvassed before me as well as the pleadings, the real controversy in the present Writ Petition is whether any case was made out for the Specified Authority to review its Order dtd. 1/9/2022. To understand this, it would first be important to analyze on what grounds permission was granted to the Petitioner to retrench 313 workmen under Sec. 25-N of the ID Act. The Order granting permission to retrench 313 workmen is dtd. 1/9/2022. In this Order, the Specified Authority first sets out the brief history and background of the Petitioner as well as its financial position. The Specified Authority thereafter briefly examines the reasons for retrenchment which were mainly that by virtue of the decision of the Hon'ble Supreme Court in the case of Goa Foundation-II, the entire Mining operations in Goa were stopped w.e.f. 16/3/2018 and that the Mining Leases granted in favour of the Petitioner were also therefore cancelled and they were asked to surrender the Mines to the State of Goa.
The Specified Authority then noted that even after a lapse of more than four years post the Order passed by the Hon'ble Supreme Court in Goa Foundation-II, no attempt was made by the State of Goa to grant fresh Mining Leases. It also noted the argument of the Petitioner that there remained no hope to start the Mining operations in the near future and therefore to retain the workers associated with the Mining operations would cause extreme financial hardship to the Petitioner. The Specified Authority thereafter set out all the hearings that took place before it as more particularly set out in paragraphs 4.1 to 4.2.8 of the said Order. After this, the Specified Authority framed the points for consideration in paragraph 5 and gave its observations and findings thereon from Paragraph 6 onwards. On whether the reasons for retrenchment of 313 workmen are justified and whether permission ought to be granted, the discussion can be found from Paragraph 6.3 onwards. The Specified Authority noted the case of the Petitioner that by virtue of the Judgment of the Hon'ble Supreme Court in the case of Goa Foundation-II, all Mining operations stopped in Goa and there was no real hope of the Petitioner starting its Mining operations. The Specified Authority also took note of the fact that the Petitioner, during the course of the hearing before the Specified Authority, had tried to adjust the workers in other units of the same Management (to the best extent it was possible), but due to the very technical nature of the jobs that require a specific skill-set, and the fact that the workers were not willing to relocate, they could not succeed. The Specified Authority also noted that presently no such alternate job is available with the Petitioner under the same Management. The Specified Authority thereafter noted the objections of the workmen. It noted the argument of the Respondent No.4 - Union that the entire Mine is located in the residential area, and the workers were engaged by the Petitioners to undertake Mining operations as compensation against their lands. This was because their lands were eroded due to Mining, it being no longer fertile, and the prospect of farming was very poor.
It noted the argument of the Respondent No.4 - Union that the entire Mine is located in the residential area, and the workers were engaged by the Petitioners to undertake Mining operations as compensation against their lands. This was because their lands were eroded due to Mining, it being no longer fertile, and the prospect of farming was very poor. The Specified Authority also noted the argument of the Respondent No.4 - Union who questioned the aspects of losses claimed by the Petitioner, especially considering that the parent company of the Applicant was paying a dividend. After analyzing all the factual aspects placed before it, the Specified Authority came to the conclusion that it was clear that Mining operations were stopped w.e.f. 16/3/2018 [by virtue of the Supreme Court's Order in Goa Foundation-II]. The Specified Authority also correctly took note of the fact that the Petitioner also took legal recourse to resume Mining operations, but to no avail. It noted that for the last four years, the Petitioner had been hopeful of either being allowed to resume Mining operations or being granted a fresh Mining Lease. This had still not happened and, therefore, the grounds on which the Petitioner sought permission for retrenchment were reasonable and adequate, was the conclusion. The Specified Authority, in support of its conclusions, also relied upon certain decisions of this Court. Hence the Specified Authority granted permission to the Petitioner to retrench 313 workmen but at the same time, also imposed certain conditions on the Petitioner, namely, that it would clear all payments of all legitimate dues including unpaid wages, bonus, leave with wages, gratuity as applicable under The Payment of Gratuity Act, 1972, wages from the period of notice (if any) to all workmen, subject to the outcome of the decision of the concerned cases pending adjudication. A further condition was put that the Petitioner will make payment of retrenchment compensation to all workmen which will be equivalent to 15 days average pay for every completed year of continuous service or any part thereof, in excess of six months, in accordance with Sec. 25-N(9) of the ID Act. It is on this basis that the Specified Authority granted permission to the Petitioner to retrench 313 workmen. 19. As mentioned earlier, the Respondent No.4 - Union, vide its letter dtd.
It is on this basis that the Specified Authority granted permission to the Petitioner to retrench 313 workmen. 19. As mentioned earlier, the Respondent No.4 - Union, vide its letter dtd. 30/9/2022, filed a Review Application under Sec. 25-N(6) of the ID Act and requested the Specified Authority to review the Order dtd. 1/9/2022. This Review Application was heard by the Specified Authority and the impugned Order came to be passed. In the Order under review, the Specified Authority noted that during the hearing, all the issues raised in the Review Application were heard pointwise, wherein the Respondent No.4-Union were asked to substantiate their grounds. The Specified Authority also noted that the Respondent No.4 - Union was in agreement that they were given an adequate opportunity of being heard and also to submit their written submissions which were conveyed through a notice of hearing and during the hearing as well. Thereafter, the Specified Authority (in the order under review) dealt with the issues raised by the Respondent No.4 - Union as well as the response of the Petitioner thereto. What is important to note is that it also took into consideration the argument canvassed by the Respondent No.4 - Union (and which was canvassed for the first time in review), that terminating the services of 313 workmen by resorting to the provisions of retrenchment [under Sec. 25-N of the ID Act], was ostensibly a closure of the industrial establishment as contemplated under Sec. 25-O of the ID Act. On the issue of closure, the Specified Authority in fact noted that initially the Respondent No.4 - Union did not raise this issue. This point was raised Suo Moto by the Specified Authority during the course of hearing of the Application [the first time around] to satisfy itself. Only upon being satisfied by the reasons espoused by the Petitioner, it granted the Petitioner permission to retrench the workmen as contemplated under Sec. 25-N of the ID Act. The Specified Authority noted that in this light it was not relevant/necessary to discuss the issue again [in review] when it had been well discussed during the earlier hearing and settled. Despite this, the Specified Authority provided an opportunity to the Respondent No.4 - Union to substantiate their contentions but they failed to set forth any substantial clarifications and reasons to bring home their argument regarding closure.
Despite this, the Specified Authority provided an opportunity to the Respondent No.4 - Union to substantiate their contentions but they failed to set forth any substantial clarifications and reasons to bring home their argument regarding closure. The Specified Authority even considered the argument espoused by the Respondent No.4 - Union regarding lockout and layoff and held that it could not substantiate their contention regarding illegal lockout and layoff under the ID Act. 20. As far as the contention of the Respondent No.4 - Union regarding re-employment of the workmen in the sister concern of the Petitioner - Company is concerned, the Specified Authority noted that the Petitioner is a separate legal entity from its parent company - Vedanta Ltd, and without the consent of both, the Specified Authority had no jurisdiction to impress upon the Petitioner to provide reemployment in their sister concern. The Specified Authority also noted the argument of the Petitioner that its parent company - Vedanta Ltd. are in possession of an adequate workforce, and for this reason also the Specified Authority was of the opinion that this relief could not be granted to the workmen. 21. After discussing everything, in paragraph 34 of the order under review (the impugned order), the Specified Authority categorically came to a finding that no point or issue which was not considered before it while deciding the Application filed by the Petitioner under Sec. 25-N of the ID Act [in the earlier round], required consideration afresh. In other words, the Specified Authority rejected all the grounds on which review was sought by the Respondent No.4 - Union. However, and this is what is strange, despite the aforesaid finding, the Specified Authority reviewed its Order dtd. 1/9/2022 and withdrew the permission granted to the Petitioner to retrench 313 workmen on the ground that during the course of the hearing of the Review Application, it came to the notice of the Specified Authority that the Mines in question have been put up for auction. Since the Mines in question were put up for auction, the uncertainty to start Mining operations [by the Petitioner] had now disappeared. It is on this sole ground that the Specified Authority reviewed its Order dtd. 1/9/2022. 22. I find considerable force in the argument canvassed by Mr. Kantak that this is a completely specious ground on which the Order dtd. 1/9/2022 has been reviewed.
It is on this sole ground that the Specified Authority reviewed its Order dtd. 1/9/2022. 22. I find considerable force in the argument canvassed by Mr. Kantak that this is a completely specious ground on which the Order dtd. 1/9/2022 has been reviewed. Merely because the Government of Goa put up the Bicholim Mines for auction, did not in any way remove the uncertainty of re-starting the Mining operations by the Petitioner. As correctly submitted by Mr. Kantak, firstly, the Petitioner would be under no compulsion to participate in the auction process. Secondly, even if it did participate in the auction process (and which it did not), the Petitioner would then have to be the highest/successful bidder and only thereafter the Petitioner would enter into a Mining Lease with the Government of Goa and then start its Mining operations. All this was completely in the realm of conjecture and the Specified Authority could not have reviewed its earlier Order only on this basis. This is more so when its earlier Order was based on proper and cogent reasons. This clearly, to my mind, is an error apparent on the face of the record as there is a complete nonapplication of mind by the Specified Authority when it reviewed its own Order dtd. 1/9/2022. I say this because in its earlier Order (dtd. 1/9/2022), the Specified Authority examined all the facts and circumstances of the case and thereafter came to the conclusion that the Petitioner had made out a case for retrenching 313 workmen. The Specified Authority came to this finding because it was of the opinion that there was no hope for the Petitioner to start its Mining operations. Merely because the Government of Goa has decided to conduct fresh auctions of the Mines in Goa (including that of the Bicholim Mines), did not in any way change this situation. As mentioned earlier, once the Mines were put up for auction, the Petitioner would have to take a decision whether it would want to participate in the auction process, and if it did, it would then have to be the successful bidder for it to start its Mining operations. Merely because the Government of Goa decided to auction the Mines in the State of Goa, did not remove the uncertainty about the Petitioner restarting its Mining operations.
Merely because the Government of Goa decided to auction the Mines in the State of Goa, did not remove the uncertainty about the Petitioner restarting its Mining operations. In these circumstances, I am clearly of the opinion that the reason given by the Specified Authority for reviewing its earlier order dtd. 1/9/2022 is wholly unstainable. 23. According to me, there is yet another reason why the impugned Order is unsustainable. As mentioned earlier, the permission to retrench 313 workmen was granted by the Specified Authority vide its Order dtd. 1/9/2022. Even assuming for the sake of argument, that the Petitioner would start its Mining operations in the future, then the law provides that the retrenched workmen have to be employed first before the Petitioner can employ any other workforce. This being the case, I find that even for this reason, the impugned Order (withdrawing the permission of retrenchment) is wholly unsustainable. In fact, to be fair, Mr. Nigalye, he did not seriously make any argument to sustain the impugned Order on this ground. 24. However, Mr. Nigalye contended that the impugned Order can be sustained on the ground that retrenching 313 workmen (which is the entire workforce of the Petitioner), effectively amounted to a closure of the industrial undertaking, and therefore, the Petitioner ought to have applied for closure under Sec. 25-O of the ID Act instead of Sec. 25-N, which deals with retrenchment of workmen. To put it differently, Mr. Nigalye submitted that the Petitioner intentionally asked for permission for retrenchment [under Sec. 25-N] because they were aware that before getting permission for closure [under Sec. 25-O], the appropriate Government would have to be satisfied that the closure is not against the interest of the general public. It is to avoid this that the Petitioner chose to seek permission for retrenchment under Sec. 25-N rather than apply for closure under Sec. 25-O of the ID Act, was the submission. If this be the case, then, the impugned Order can be sustained on this ground and ought not be interfered with under Article 227 of the Constitution of India, was the submission. 25. As far as this aspect is concerned, I seriously doubt whether such a contention can be taken up now by the Respondent No.4 - Union, especially when the Petitioner challenges the Order passed in the Review Application.
25. As far as this aspect is concerned, I seriously doubt whether such a contention can be taken up now by the Respondent No.4 - Union, especially when the Petitioner challenges the Order passed in the Review Application. However, considering that this is an argument made by the workmen, I have proceeded on the assumption that such an argument can be considered. I have heard Mr. Nigalye on this aspect at some length. The only argument canvassed by Mr. Nigalye to contend that the action of the Petitioner to retrench 313 workmen would amount to a closure, is the fact that the entire workforce of the Petitioner is sought to be retrenched, and therefore, the same would amount to closure. I am unable to accept this argument for multiple reasons. Firstly, at least as I understand it, merely by the fact that the entire workforce has been retrenched, without anything more, would not necessarily amount to a closure. It is one thing to say that the Petitioner is stopping its Mining operations and wholly another to say that it is closing down its business. In fact, closure has been defined in Sec. 2(cc) of the ID Act to mean the permanent closing down of a place of employment or part thereof. This definition of closure came up for consideration before the Division Bench of this Court in the case of Biddle Sawyer Ltd. Mumbai vs. Chemical Employees Union and Ors. ( 2007 (5) Mh.L.J. 618 ). This Court, after reviewing the law on the subject, came to the conclusion that closure would really mean permanent closure of the "place of employment" or part thereof. The Division Bench held that place of employment means a place which generates employment or where business is carried on and the same should not be construed in a superficial manner to indicate only a building or factory. The relevant portion of this decision reads thus: "38. Having considered extensively all the judgments placed before us by the learned Senior Counsel, the law relating to "closure" seems to be a well settled one. Closure is the closing down permanently of the source of employment of the workmen, i.e. the place where the employment is actively generated.
The relevant portion of this decision reads thus: "38. Having considered extensively all the judgments placed before us by the learned Senior Counsel, the law relating to "closure" seems to be a well settled one. Closure is the closing down permanently of the source of employment of the workmen, i.e. the place where the employment is actively generated. It thus follows that closing down of a "place" of business would not amount to closure as that would be over simplification which would lead to various negative ramifications as they have been extensively dealt with in the earlier part of the judgment in various quotations from various judgments. It must be recalled that the object of labour legislation is social welfare legislation. It is an umbrella of protection provided to workmen to shield them from the employer exploiting their vulnerable position. But it cannot be said that merely because a place of manufacture has been closed down and restarted at another place or transferred to another employer that the undertaking has been closed down. The business itself is still alive, the source of employment is still present and there is no valid closure in law. 39. A conspectus of all the above judgments makes it clear that "closure" would really mean permanent closure of the "place of employment" or a part thereof and the same could never mean only "place" of employment. One has to read the above definition of Sec. 2(cc) of Industrial Disputes Act in a comprehensive manner and not in a disjointed manner. A "place of employment" means a place, which generates employment or where business is carried on, and the same should not be construed in a superficial manner to indicate only a building or factory. The above interpretation has been consistently adopted by the Hon'ble Supreme Court and our High Court, as can be seen from the following: (a). The Hon ble Supreme Court in the case of Tatanagar Foundry Co. Ltd. Vs. Their Workmen, in paragraph No.3 has observed as under: "...... It was pointed out in that case that in the case of a closure, the employer does not merely close down the place of business but he closes the business itself finally and irrevocably. A lockout on the other hand indicates the closure of the place of business and not closure of the business itself.
It was pointed out in that case that in the case of a closure, the employer does not merely close down the place of business but he closes the business itself finally and irrevocably. A lockout on the other hand indicates the closure of the place of business and not closure of the business itself. In the present case the totality of facts and circumstances would lead to the conclusion that the undertaking at Jamshedpur was closed down completely and was a final and irrevocable termination of the business itself." (b). Our High Court in the case of Innovations Garment Limited v. S.K. Singe and Anr. (2002) 2 CLR 902 has observed in paragraph No.8 as follows: "The petitioners were directed to discontinue or stop the manufacturing activities under the law by the competent authority. It is, therefore, not possible for me to accept the contention of Ms. Gopal that the decision of the petitioners to stop or to discontinue the manufacturing activities suffer from lack of bonafides or an act of victimisation or it was a malafide decision to resort to closure in the guise of shifting. The bonafides of the petitioner can further be tested in the light of their restarting the factory at Mumbai after making alternative arrangement from 1/9/1998. The petitioners had sufficient land and infrastructure at Massourie and their decision to shift their activities to Massourie cannot be questioned as unjustified or malafide. I do not find any fault with the decision of the petitioners to shift to Massourie their manufacturing unit from Mumbai. It is, therefore, not possible for me to accept the findings of the industrial Court that stopping of manufacturing activity at Mumbai and shifting to Massourie amounted to closure as defined under the provisions of the Industrial Disputes Act. Since there was no closure of the manufacturing activities at Mumbai and it was decided to relocate or shift the factory at Massourie, it cannot be said that it was a closure of the factory or company at Mumbai. In my opinion, therefore, Sec. 25(O) of the Industrial Act is not attracted.... 40. We are in full agreement with the observations of Madras High Court in the case of Workman of Indian Forge and Drop Stampings Limited v. Management of India Forge and Drop Stampings Limited and Ors. 1996 (III) LLJ 501 wherein paragraphs 15 and 16 read as under: 15.
40. We are in full agreement with the observations of Madras High Court in the case of Workman of Indian Forge and Drop Stampings Limited v. Management of India Forge and Drop Stampings Limited and Ors. 1996 (III) LLJ 501 wherein paragraphs 15 and 16 read as under: 15. "......It is by now well settled by more than one decision of the Supreme Court as also of this Court that the concept of closure in law is not merely closing down the place of business, but, on the other hand, the business itself must be relinquished clearly and unmistakably and the legal personality of the same must come to an end. When an employer is really continuing the business as distinguished from the mere outward form of it, and that in the case of legal closure, an employer does not merely close down the place of business, but he closes down the business itself and consequently, the closure indicates a final and irrevocable termination of the business itself, in contrast to lock-out which indicates closure of the place of business and not closure of the business itself. It is also well-settled that where the closure is mere pretense or unreal in the sense that having purported to close the agencies, the same have been allowed to function all the time under a different garb, it would not constitute closure in law. Equally, it is well settled that it would not be necessary to wind up the company or the concern itself to substantiate the claim of closure in law.... 16. ......In our view, a factual closure of a unit does not ipso facto constitute closure of the business also and the Tribunal has not only understood the correct position of law but appeared to have taken pains to maintain the dichotomy between the factual closure or the pretended closure on the one hand and the closure of the business once and for all on the other which alone would constitute closure in the eye of law. ......" 41. It must be realised that a place can never be permanently closed if it has no relationship with the business or industry. Therefore, if the business is not closed, then one cannot permanently close a "place" of business.
......" 41. It must be realised that a place can never be permanently closed if it has no relationship with the business or industry. Therefore, if the business is not closed, then one cannot permanently close a "place" of business. Similarly closure of a place of employment i.e. any one of the establishment will have no meaning unless the industry or establishment is closed and the employment comes to an end. This is because without closing the business closure of a "place" in which business is carried on cannot be permanently closed, as some other business will start in that place. Therefore closure of a "place of employment" would mean closure of the undertaking or the establishment wherein employees are provided employment in the sense business is closed and not merely the place where business is carried on. 42. In the light of the above, we are clearly of the view that the interpretation of the learned Single Judge in the case of Industrial Perfume Workers Union (supra) with regard to "closure" is the correct interpretation, and accordingly we answer the above issue." (emphasis supplied) 26. In the facts of the present case, the Petitioner has not closed down its business finally and irrevocably. It is for this reason that the Petitioner filed an Application for retrenching its workmen rather than apply for closure as contemplated under Sec. 25-O of the ID Act. There is one more reason why I am unable to accept the submission canvassed by Mr. Nigalye. Originally, when the Petitioner filed their Application before the Specified Authority [under Sec. 25-N of the ID Act] seeking permission to retrench 313 workmen, the same was opposed by the Respondent No.4 - Union by filing a reply dtd. 27/7/2022. In the said reply, it was inter alia contended by the Respondent No.4 - Union that even considering the closure of Mining operations in the State of Goa, the Petitioner is still in the business for the reasons stated by them in Annexure VIII, which shows that the Petitioner had made a sale in 2021 of Rs.139.33 Crores and in 2022, Rs.94.15 Crores. This shows that the Petitioner is still in financial existence and reasons of financial difficulties cannot be considered, was the argument.
This shows that the Petitioner is still in financial existence and reasons of financial difficulties cannot be considered, was the argument. In fact, from reading this reply, it is clear that it was the case of the Respondent No.4 - Union that the workers ought not to be retrenched because the business of the Petitioner was continuing. The relevant portion of this reply reads thus: "2. The Sesa Mining Employees Union on behalf of all its members states that the Management otherwise whose intention was to terminate the services to their workers are now taking the shelter of the Retrenchment option in order to decrease their financial liability towards the paying of the salary to the present workers, whose salary are at the higher level considering the seniority of theirs in the organization and therefore when the mining business will commence they can employ the new employee with the less salary as compared to the present employees. ... 7. It is stated that on the one hand the Govt. of Goa promising the workmen and the Mining Company that mining will start within 3-5 months (As recently Hon'ble CM of Goa has also announced the same on the floor of the house in Goa Assembly) therefore the reason which has been cited for retrenchment of workmen cannot be sustained. 8. It is also stated that the reason mentioned by the Company for permission for retrenchment are all false and bogus which can be proved by going through the Balance sheet and the profit and loss of the Company, wherein all the provisions which have been maintained by the company for last few years itself create doubt that it was the planning of the Company from past to retrench the workers. ... 11. It is stated that even the Petitions which were filed by the Company with respect to Lease renewal are also sub-judice before the Hon'ble High Court therefore the company cannot assume that the Lease deed cannot be renewed or the mining will not start in Goa. 12. It is stated that even considering the closure of the Mining, the Company is still in the business as per the reason stated by them in Annexure -VIII which shows that the Company had made a sale in 2021 Rs.139.33 Cr and 2022 Rs.94.15 Cr. Company has even processed royalty paid ore during the closure period.
12. It is stated that even considering the closure of the Mining, the Company is still in the business as per the reason stated by them in Annexure -VIII which shows that the Company had made a sale in 2021 Rs.139.33 Cr and 2022 Rs.94.15 Cr. Company has even processed royalty paid ore during the closure period. This shows that the Company is still in financial existence and reasons of financial difficulties cannot be considered. ... 15. It is stated that even if the mining operation is not operating in the State of Goa the Company is having its operation outside the State of Goa and therefore the Company can adjust or Send the present workmen on deputation basis to other location in order to secure the employment. ... 28. It is stated that before granting of the permission the Authority needs to keep in mind, that the Company is not closing perhaps not applied for the closure however the Company had only asked for permission to retrench the workmen. Further Company is all set to participate in the auction process of granting lease if auctioned and therefore no where company has stated that they won't participate in auction process which is likely to happen in Goa in next 5-6 months. 29. It is stated that one can understand that if the employer is closing an establishment then there is no alternate way to secure the employment of the workmen. However, in the present case the establishment is not closing instead the business of the establishment will resume within few months." (Emphasis supplied) 27. It is thus clear that it was the case of the Respondent No.4 - Union itself that the workers should not be retrenched because it is not as if the Petitioner is closing down. Once this was the specific stand taken by the Respondent No.4 - Union to oppose the Application for retrenchment, I fail to understand how they can be allowed to argue today that by retrenching the entire workforce of the Petitioner, the same would amount to closure. This argument in fact has been considered by the Specified Authority not only Suo Moto in its first Order dtd. 1/9/2022, but also in the impugned Order dtd.
This argument in fact has been considered by the Specified Authority not only Suo Moto in its first Order dtd. 1/9/2022, but also in the impugned Order dtd. 21/10/2022, wherein it stated that no legal and factual basis has been set out by the Respondent No.4 - Union to contend that by retrenching 313 workmen, the Petitioner was closing down its entire business and which would then amount to a closure. I, therefore, find no merit in the aforesaid contention canvassed by Mr. Arunkumar Nigalye. Even, as far as the argument of layoff and lockout are concerned, I find that the same reasoning would apply. The argument of layoff as well as lockout have been considered by the Specified Authority in the Order dtd. 21/10/2022 and the same have been negated. There is absolutely nothing shown to me, and neither is there any factual basis, to contend that there is a layoff, or a lockout, as sought to be contended by Mr. Nigalye. 28. Before concluding, it would only be fair to deal with the judgments relied upon by Mr. Nigalye. The first judgment relied upon by Mr. Nigalye was of the Hon'ble Supreme Court in the case of Armed Forces Ex-officers Multi Services Co-op Society Ltd (supra). The facts of this case reveal that the Appellant was a c0- operative Society run by ex-officers of the three defence forces, engaged in the business of providing support services such as transportation, housekeeping and security services to companies and government establishments. The Respondent was a labour union affiliated with the Indian National Trade Union Congress representing the Drivers formerly employed by the Appellant. Fifty-five Drivers who were members of the Respondent Union were employed by the Appellant from 1998 through a settlement for pay and allowances. As the settlement expired on 30/6/2004, fresh negotiations were initiated. However, they did not result in any settlement, and therefore, conciliation proceedings were invoked. While the conciliation proceedings were in progress, the employees resorted to a strike on 23/1/2007. On the same day, the Appellant also filed a complaint before the Industrial Court asserting that the strike was illegal, and the employees should be made liable for unfair labour practices. Initially, the Industrial Tribunal passed an interim order and later directed the Appellant to allow the employees to join duties and which they in fact did on 16/3/2007.
On the same day, the Appellant also filed a complaint before the Industrial Court asserting that the strike was illegal, and the employees should be made liable for unfair labour practices. Initially, the Industrial Tribunal passed an interim order and later directed the Appellant to allow the employees to join duties and which they in fact did on 16/3/2007. It was two years later i.e. on 27/11/2009, the Industrial Tribunal by its final order declared the strike carried out by the Respondent for the period between 23/1/2007 and 15/3/2007, as illegal. Be that as it may, during the pendency of the above-referred proceedings i.e. immediately after 16/3/2007, [when the employees rejoined services], the Appellant, through individual letters dtd. 22/3/2007, "retrenched" the services of all the fifty five employees on the ground that the Appellant had closed its business. By the said letter, the employees were offered retrenchment compensation as per Sec. 25-F of the ID Act. In fact, one of the termination letters was reproduced in the said judgment wherein it is specifically stated that as the business is closed it is not possible to give work to the employee, and hence, there was no option but to remove him from services. It is in this factual background that the Supreme Court, whilst analyzing the case before it, and whilst dealing with the argument of the learned Senior counsel appearing for the Appellant that this is a simple case of retrenchment and not closure, opined that the method and the manner in which the workmen were retrenched clearly demonstrates that it is virtually a closure. The Supreme Court opined that it has no hesitation in confirming these findings of fact given by the Labour Court. What the Supreme Court held was that the act of terminating the services of all the Drivers at the same time, coupled with the statement of the Appellant that the entire business is closed down, was sufficient to convey to the workers and the Union that the transport business has come to a standstill and that there was no scope of continuing the business any further. I do not see how this decision is of any assistance to the Respondent No.4 - Union. In the facts before the Supreme Court, it was the case of the Appellant themselves that the entire business was closed down.
I do not see how this decision is of any assistance to the Respondent No.4 - Union. In the facts before the Supreme Court, it was the case of the Appellant themselves that the entire business was closed down. Taking this factor into consideration along with the fact that all the fifty-five employees were terminated, the Supreme Court confirmed the findings given by the Court below that this virtually amounted to a closure. The factual situation before me is completely different. Firstly, it is not the case of the Petitioner that their business had closed down. In fact, it is their specific case that the business is continuing. Secondly, it was even the case of the Respondent No.4 - Union (in the earlier round of litigation) that the business of the Petitioner was continued and the same was not closed down. Thirdly, in the facts of the present case, the Specified Authority has examined this aspect (regarding closure) not only in its order dtd. 1/9/2022, but also in the impugned order dtd. 21/10/2022, and come to a conclusion that by seeking retrenchment of 313 workmen of the Petitioner, would not amount to a closure, as contemplated under Sec. 25-O of the ID Act. In the aforesaid decision, the Supreme Court has not held that merely by the fact that the entire workforce is retrenched, without anything more, would ipso facto amount to closure of the business. In these circumstances, I find that the reliance placed by Mr. Nigalye on the decision of the Supreme Court in the case of Armed Forces Ex-officers Multi Services Coop Society Ltd (supra), is wholly misplaced. 29. The next judgment relied upon by Mr. Nigalye is a decision of the Supreme Court in the case of Shri Hariprasad S. Shukla (supra). In this judgment, the principal question before the Supreme Court was the validity or otherwise of the claim made by the workmen for retrenchment compensation under Clause (b) of Sec. 25-F of the ID Act. The facts of this case would show that under an Agreement dtd. 1/8/1895, between the Secretary of the State for India in Council, and the Railway Company, the latter constructed, maintained and worked a light railway between Barsi Town and Barsi Road Station on the railway system, known then as the Great Indian Peninsular Railway.
The facts of this case would show that under an Agreement dtd. 1/8/1895, between the Secretary of the State for India in Council, and the Railway Company, the latter constructed, maintained and worked a light railway between Barsi Town and Barsi Road Station on the railway system, known then as the Great Indian Peninsular Railway. One of the Clauses in the Indenture of Agreement was that the Secretary of State could purchase and take over the undertaking after giving the Railway company not less than twelve calendar months' notice in writing of the intention to do so. Such a notice was given to the Railway Company for and on behalf of the President of India, by the Director of the Railway Board to the effect that the undertaking of the Railway Company would be purchased and taken over from 1/1/1954. Accordingly, the Railway Company served a notice on its workmen intimating them that as a result of the Government of India's decision to terminate the contract of the Railway Company and take over the Railway from January 1, 1954, the services of all the workmen of the Railway Company would be terminated with effect from the afternoon of December 31, 1953. The notice further stated that the Government of India intended to employ such of the staff of the company as would be willing to serve on the Railway on the terms and conditions which were to be notified later. These were notified on 15/12/1953. Pursuant to this notice, majority of the workmen of the Railway Company were re-employed by the Government. Only about 24 of the former employees of the Railway Company declined service under the Government. Soon thereafter, Respondent No.1 Union filed some sixty-one applications on behalf of the erstwhile workmen of the Railway Company under Sec. 15 of the Payment of Wages Act, 1936 for payment of retrenchment compensation under clause (b) of Sec. 25-F of the ID Act. The applications were made to Respondent No.3. It is in this factual background that principal question to be decided by the Supreme Court and which is reflected in paragraph 9 of the decision, was the validity or otherwise of the claim for retrenchment compensation under clause (b) of Sec. 25-F of the ID Act.
The applications were made to Respondent No.3. It is in this factual background that principal question to be decided by the Supreme Court and which is reflected in paragraph 9 of the decision, was the validity or otherwise of the claim for retrenchment compensation under clause (b) of Sec. 25-F of the ID Act. The Supreme Court, from paragraphs 10 to 19 onwards examined the definition of word "retrenchment" as defined in Sec. 2 (oo) of the ID Act as well as several judgments cited before it and thereafter came to the conclusion that retrenchment as defined in Sec. 2 (oo) and as used in Sec. 25-F has no wider meaning than the ordinary, accepted connotation of the word. It means the discharge of surplus labour or staff by the employer for any reason whatsoever otherwise than as a punishment inflicted by way of disciplinary action. The Supreme Court clearly opined that the same would have no application where services of all workmen have been terminated by the employer on real and bona fide closure of business or where the services of all workmen have been terminated by the employer on the business or undertaking being taken over by another employer. The Supreme Court opined that though there is in fact a distinction between transfer of business and closure of business, but so far as the definition clause is concerned, both stand on the same footing if they involve termination of service of the workmen by the employer for any reason whatsoever, otherwise than as a punishment by way of disciplinary action. The Supreme Court inter alia held that in no case is there any retrenchment, unless there is discharge of surplus labour or staff in a continuing or running industry. Accordingly, the Supreme Court held that the Appellants before the Supreme Court were not liable to pay any compensation under Sec. 25-F of the ID Act to the erstwhile workmen which were not retrenched within the meaning of that expression in Sec. 2 (oo) of the ID Act. I do not think there can be any dispute with the proposition laid down by the Hon'ble Supreme Court in the aforesaid decision. I, however, fail to understand how this judgment can be of any assistance to the Respondent No.4 - Union to contend that because 313 workmen have been retrenched, the same would amount to closure.
I do not think there can be any dispute with the proposition laid down by the Hon'ble Supreme Court in the aforesaid decision. I, however, fail to understand how this judgment can be of any assistance to the Respondent No.4 - Union to contend that because 313 workmen have been retrenched, the same would amount to closure. In fact, from the facts narrated in the aforesaid Supreme Court decision, it was clear that the workmen were in fact claiming retrenchment compensation because their employer had closed down the business. Despite this, the Supreme Court taking into consideration the law as it then stood, was of the opinion that the workmen are not entitled to retrenchment compensation. In the facts of our case, the only argument canvassed in support of the argument of closure is that because 313 workmen have been retrenched, the same amounts to closure. I am afraid the aforesaid judgment relied upon by Mr. Nigalye does not lay down any such absolute proposition. This is apart from the fact that it is the case of the Petitioner that there are certain employees still retained by the Petitioner and the business of the Petitioner has not been closed down. This being the case, I find that the reliance placed on this decision also is wholly misplaced and is of no assistance to the Respondent No.4 - Union. 30. The next decision relied upon by Mr. Nigalye was the decision of the Supreme Court in the case of General Labour Union (Red Flag) Bombay (supra) and more particularly paragraph 11 thereof. The Supreme Court in paragraph 11 of this decision has opined that while examining whether the employer has imposed a lockout or has closed the industrial establishment, it is not necessary to approach the matter from the angle that the closure must be irrevocable, final and permanent and that a lockout is necessarily temporary or for a period. The employer may close down industrial activity bona fide on such eventualities as suffering continuous loss, no possibility of revival of business, or inability for various other reasons to continue the industrial activity. There may be a closure for any of these reasons though these reasons are not exhaustive but are merely illustrative. The Supreme Court opined that to say that closure must always be permanent and irrevocable is to ignore the causes which may have necessitated closure.
There may be a closure for any of these reasons though these reasons are not exhaustive but are merely illustrative. The Supreme Court opined that to say that closure must always be permanent and irrevocable is to ignore the causes which may have necessitated closure. The Supreme Court finally held that, therefore, the true test is that when it is claimed that the employer has resorted to closure of industrial activity, the Industrial Court in order to determine whether the employer is guilty of unfair labour practice must ascertain on evidence produced before it whether the closure was a device or pretence to terminate services of workmen or whether it is bonafide and for reasons beyond the control of the employer. Once again, I fail to understand how this decision can in any way support the proposition canvassed by Mr. Nigalye. In fact, in the facts of the present case, the Specified Authority has already examined the issue of closure on the material placed before it and thereafter concluded that by allowing the Petitioner to retrench 313 workmen would not amount to a closure as contemplated under Sec. 25-O of the I. D. Act. In fact, even before me, no material is produced to show or indicate that the action of the Petitioner to retrench 313 workmen amounted to the closure of the business carried on by the Petitioner. Further, as mentioned earlier, this is in fact contrary to the stand taken by the Respondent No.4 - Union before the Specified Authority (in the earlier round of litigation) that the business of the Petitioner is continuing and is not closed down. In these circumstances, even this decision is of no assistance to the Respondent No.4 - Union. 31. The next judgment relied upon by Mr. Nigalye was in the case of Pipraich Sugar Mills Ltd (supra). In this decision, it was contended [on the strength of the decisions in Employees v/s India Reconstruction Corporation Ltd (1953) LAC 563 and Benett Coleman and Co Ltd v/s Employees (1954) LAC 24] that even prior to the enactment of the Act of 43 of 1953, the Tribunal had acted on the view that retrenchment included discharge on closure of business, and had awarded compensation on that footing and that the award of the Tribunal in the present case could be supported and that view should not be disturbed.
Thereafter, the Supreme Court went on to examine the decision in Employees v/s India Reconstruction Corporation Ltd. After setting out the relevant portion, the Supreme Court opined that they were unable to agree with the observations made by the Tribunal. The Supreme Court opined that though there is discharge of workmen, both, when there is retrenchment and closure of business, the compensation is to be awarded under the law, not for discharge as such but for discharge on retrenchment, and if, as is conceded, retrenchment means in ordinary parlance, discharge of the surplus, and therefore, cannot include discharge on closure of business. The Supreme Court opined that there was no question of closing of business in Employees v/s India Reconstruction Corporation Ltd, as what happened there was that one of the units of the company, that at Calcutta, was closed and that would be a case of retrenchment, and the observations quoted above were purely obiter. I do not think there can be any dispute about the proposition laid down by the Supreme Court on the aforesaid decision. I, however, once again fail to understand how the aforesaid proposition can assist Mr. Nigalye. In the facts of the present case, the Specified Authority had in fact examined the issue of closure on the material placed before it and rejected the contentions of the Respondent No.4 - Union that by allowing the Petitioner to retrench 313 workmen, the same would amount to a closure as contemplated under Sec. 25-O of the ID Act. As laid down by the Supreme Court in several of its decisions, whether an industrial undertaking is closed down under Sec. 25-O of the ID Act (or otherwise) is a question of fact and evidence. No evidence was brought on record before the Specified Authority to substantiate the claim that the industrial undertaking of the Petitioner was closed down. In fact, as mentioned earlier, it was the case of the Respondent No.4 - Union itself (in the first round of litigation) that the business of the Petitioner is continuing, and they have not closed down their business. Taking everything into account, the Specified Authority did not find favour with the arguments canvassed by the 4th Respondent - Union.
In fact, as mentioned earlier, it was the case of the Respondent No.4 - Union itself (in the first round of litigation) that the business of the Petitioner is continuing, and they have not closed down their business. Taking everything into account, the Specified Authority did not find favour with the arguments canvassed by the 4th Respondent - Union. Even before me, no material is produced to show or indicate that the action of the Petitioner to retrench 313 workmen amounted to the closure of the business carried on by the Petitioners. This being the factual position, I find that the reliance placed on the aforesaid decision of the Supreme court in the case of Pipraich Sugar Mills Ltd (supra) is also wholly misplaced. 32. The last decision relied upon by Mr. Nigalye was of the Supreme Court in the case of Workmen of the Indian Leaf Tobacco DevelopmentCo Ltd (supra). The facts of this case would reveal that a company gave a notice to the union of the Appellant Workmen that 8 out of 21 depots mentioned therein would be closed down w. e. f. 30/9/1963. Thereafter, an industrial dispute was raised by the workmen which related to the closure of these 8 depots as well as to a number of other demands, including revision of basic wages and dearness allowance, additional discomfort allowance etc. The State Government, by its order dtd. 14/11/1963, referred the dispute for adjudication under Sec. 10 (1) (d) of the Industrial Disputes Act, 1947 to the Industrial Tribunal for adjudication on two issues. The first issue was that no depot which worked during the 1962 season should be closed and (ii) that no workman who worked in the 1962 season should be retrenched. There were several other issues which really did not arise for consideration of the Hon'ble Supreme Court. After these issues were framed, the company took a preliminary objection that the closure of the depots was a managerial function and there could not be an industrial dispute for such closure. The Industrial Tribunal proceeded to hear the reference on this question as well as all other issues referred to it and ultimately gave its Award on 11/12/1964. In that Award, both parts of issue No.1 were decided against the workmen. That is how the workmen approached the Supreme Court by filing an SLP.
The Industrial Tribunal proceeded to hear the reference on this question as well as all other issues referred to it and ultimately gave its Award on 11/12/1964. In that Award, both parts of issue No.1 were decided against the workmen. That is how the workmen approached the Supreme Court by filing an SLP. The Supreme Court in the aforesaid decision inter alia held that the closure of the 8 depots by the company, even if it is held not to amount the closure of the business of the company, cannot be interfered with by the Industrial Tribunal, if in fact, the closure was genuine and real. The Supreme Court opined that so far as the second part of that issue was concerned, it was competent for the Tribunal to go into it and decide whether the claim of the workmen that they should not be retrenched, was justified. Paragraph 8 of this decision, and on which Mr. Nigalye placed reliance, reads thus:- 8. So far as the second part of that issue is concerned, as we have said above, it was competent for the Tribunal to go into it and decide whether the claim of the workmen that they should not be retrenched was justified. On an examination of the interim award and the final award, we, however, find that the Tribunal in fact did do so. The case reported in Pipraich Sugar Mills Ltd. was also concerned only with the question as to the relief that can be granted to workmen when there is closure of a business. No question arose either before the Court, or in the cases considered by the Court, of an Industrial Tribunal making a direction to the employers to continue to run or to reopen a closed branch of the business. The Labour Appellate Tribunal in the case of Employees of India Reconstruction Corporation Ltd, Calcutta was dealing with the question of retrenchment compensation as a result of the closure of one of the units of the company concerned, and it held that the workmen were entitled to retrenchment compensation in accordance with law. This Court, in the case of Pipraich Sugar Mills Ltd., only explained why the Labour Appellate Tribunal was justified in granting retrenchment compensation in that case.
This Court, in the case of Pipraich Sugar Mills Ltd., only explained why the Labour Appellate Tribunal was justified in granting retrenchment compensation in that case. The opinion expressed by the Court was that, though there is discharge of workmen both when there is retrenchment and closure of business, the compensation is to be awarded under the law not for discharge as such but for discharge on retrenchment and if, as is conceded, retrenchment means in ordinary parlance discharge of the surplus, it cannot include discharge on closure of business. It was in this context that the Court went on to add that in the case of Employees of India Reconstruction Corporation Ltd., Calcutta what had happened was that one of the units of the Company had been closed which would be a case of retrenchment and not a case of closure of business. It may be noted that, at the time when this decision was given, Sec. 25-FF and Sec. 25-FFF had not been introduced in the Industrial Disputes Act, and the only right to retrenchment compensation granted to the workmen was conferred by Sec. 25-F. It was in the light of the law when prevailing that the Court felt that the decision of the Labour Corporation Ltd. granting retrenchment compensation could be justified on the ground that the services of the workmen had not been dispensed with as a result of closure of business, but as a result of retrenchment. That question does not arise in the case before us. Since then, as we have indicated above, Sec. 25-FF and Sec. 25-FFF have been added in the Industrial Disputes Act, and the latter Sec. specifically lays down what rights a workman has when an undertaking is closed down. In a case where a dispute may arise as to whether workmen discharged are entitled to compensation under Sec. 25-F or Sec. 25-FFF it may become necessary to decide whether the closure, as a result of which the services have been dispensed with, amounts to a closure in law or not.
In a case where a dispute may arise as to whether workmen discharged are entitled to compensation under Sec. 25-F or Sec. 25-FFF it may become necessary to decide whether the closure, as a result of which the services have been dispensed with, amounts to a closure in law or not. In the case before us, it was admitted by learned counsel for both parties that the workmen, who have been discharged as a result of the closure of the 8 depots of the Company, have all been paid retrenchment compensation at the higher rate laid down in Sec. 25-F, so that, in this case, it is not necessary to decide the point raised on behalf of the workmen." 33. I fail to see how anything stated in paragraph 8 supports the case of Mr. Nigalye. In fact in paragraph 9, the Supreme Court held as under:- 9. In connection with the second part of Issue 1, it was also urged by learned counsel for the appellants that the business, which was being carried on at the 8 depots, had not in fact been closed down and had merely been transferred to buying points situated in and around the closed depots, including two new buying points established by the Company after the closure of these 8 depots. The argument was that the workmen were old employees who had served the Company for a long time and were entitled to certain benefits as a result of that long service. The Company closed these 8 depots mala fide with the object of depriving the workmen of those benefits and merely altered the nature of the business by closing the depots and carrying on the same business at the buying points. This point urged by learned counsel cannot, however, be accepted in view of the findings of fact recorded by the Tribunal. 34. I, therefore, find that even this decision is of no assistance to Mr. Nigalye. 35. In view of the foregoing discussion, the impugned Order dtd. 21/10/2022 is hereby quashed and set aside and the Order passed by the Specified Authority dtd. 1/9/2022 is hereby reinstated and revived. It is made clear that if the Petitioner restarts its Mining operations, it shall first employ the 313 workmen that are retrenched, before employing any other workforce as per the relevant provisions of the ID Act. 36.
21/10/2022 is hereby quashed and set aside and the Order passed by the Specified Authority dtd. 1/9/2022 is hereby reinstated and revived. It is made clear that if the Petitioner restarts its Mining operations, it shall first employ the 313 workmen that are retrenched, before employing any other workforce as per the relevant provisions of the ID Act. 36. Rule is made absolute in the aforesaid terms and the Writ Petition is also disposed of in terms thereof. However, there shall be no order as to costs. 37. This Order will be digitally signed by the Private Secretary/Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.