ORDER : (PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA) 1. The present Letters Patent Appeal filed under Clause 15 of the Letters Patent, 1865, is directed against the judgment and order dated 13.09.2022 passed by the learned Single Judge in the captioned writ petition, wherein and whereby the respondent-Port has assailed the award dated 02.03.2019 passed by the Labour Court, Ahmedabad in Reference (T) No.383 of 2015. By the said award, the Labour Court has directed the respondent to reinstate the appellant-workman in service with 25% back-wages. 2. The learned Single Judge has altered the reinstatement with 25% back-wages to that of awarding an amount of Rs.7,00,000/- as compensation. 3. Learned advocate Mr.Jigar D. Dave, appearing for the appellant – workman has submitted that the appellant-workman may be ordered to be reinstated in service, instead of payment of compensation. He has alternatively submitted that an amount of Rs.7,00,000/- is too meagre and the same may be enhanced. 4. Learned advocate Mr.Jigar Dave, has further submitted that in fact, before the Labour Court, the respondent – Port was ready and willing to appoint the workman as an Operator on contractual basis at Chhatisgarh Port however, the Labour Court has finally thereafter directed reinstatement in service with 25% back-wages. Thus, it is submitted that the impugned judgment and order passed by the learned Single Judge may be set aside. 5. Learned advocate Mr.Dipak Dave, appearing for the respondents, while opposing the aforesaid submissions, has submitted that the judgment and order passed by the learned Single Judge may not be set aside, as the same is appropriately passed since the termination of the workman was due to the closer of unit at Belekeri Port in Karnataka and hence, the termination of the appellant would be in violation of Section 25FFF of the Industrial Disputes Act, 1947 (in short, the I.D. Act). It is submitted by the learned advocate Mr.Dave, that in fact, the appellant had worked for a period 7 years and hence, the amount awarded by the learned Single Judge on consensus shown by the respondent – Port of paying an amount of Rs.7,00,000/- is appropriate and the same may not be interfered with. 6. It is not in dispute that the appellant, who was working at Belekeri in Karnataka was terminated from service due to closer of their operation at that port. 6. It is not in dispute that the appellant, who was working at Belekeri in Karnataka was terminated from service due to closer of their operation at that port. Thus, the termination is in violation of Section 25FFF of the I.D. Act. The learned Single Judge, after placing reliance on the judgment of the Supreme Court on the issue has finally, looking to the service of 7 years rendered by the appellant-workman, has awarded the compensation of Rs.7,00,000/-. 7. The learned Single Judge in the impugned judgment and order has held thus : - “7.1 Section 25FFF of the Act particularly sub section (1) provides that where an undertaking is closed down for any reason, every workman who has been in continuous service for not less than one year in that undertaking is entitled to notice and compensation in accordance with the provisions of Section 25F of the Act as if the workman had been retrenched. There is between the text of Section 25F and Section 25FFF of the Act a significant difference in phraseology. Section 25FFF(1) of the Act merely imposes liability to give notice and to pay compensation on closure of the undertaking which results in termination of employment of the workman. Evidently, therefore, payment of compensation is the only relief that can be granted. 7.2 In the case of Hathising Manufacturing Company Ltd. (supra), the Apex Court appreciating the provisions of Section 25FFF has held as under: “20. Does the impugned provision impose an unreasonable restriction because it imposes liability to pay compensation which is not related to the capacity of the employer ? Before the impugned section was enacted, the industrial tribunals undoubtedly decided the individual claims for compensation for termination of employment submitted to them on their merits and sometimes refused compensation if it was found that the closure was bona fide and was in part due to irresponsible conduct of the workmen concerned. The decisions of the industrial tribunals before the impugned section was enacted again show that even where compensation was allowed, there was no fixed standard or principle on which the compensation was awarded. The decisions of the industrial tribunals before the impugned section was enacted again show that even where compensation was allowed, there was no fixed standard or principle on which the compensation was awarded. Where the business is continuing its capacity to meet the obligation to pay dearness allowance, gratuity and provident fund, etc., may have to be taken into account ; the reason being that if the capacity to pay is not taken into account, the business itself may come to an end and the very purpose of industrial adjudication in the matter of fixation of wages, payment of dearness allowance and the schemes of gratuity and provident fund which are intended for the amelioration of the conditions of labour may be frustrated. But where a business is closed, the capacity to pay is not a relevant consideration. Normally, if the business is capable of meeting the obligation to pay the wages of the workmen and to meet the other expenses necessary for its continuance, it would not be closed down. Capacity to pay has therefore to be taken into account in the case of a running business in assessing liability to fix wages or gratuity or dearness allowance. Once the undertaking is closed and liability to pay compensation under the impugned section is not made a condition precedent, the amount which the workmen may be able to recover must depend upon the assets of the employer which may be available to meet the obligation. The workmen would be entitled to recover compensation only if the employer is able to meet the obligation; otherwise they would have to rank pro-rata with the other ordinary creditors of the employer. 21. The legislature has imposed restricted liability in cases where closure is due to circumstances beyond the control of the employer. By the proviso to sub-s. 1 of s. 25FFF, where the undertaking is closed down on account of circumstances beyond the control of the employer, the compensation to be paid to the workmen is not to exceed his average pay for three months. If the principal provision is not unconstitutional as imposing an unreasonable restriction, it is not suggested that the proviso is on any independent ground unconstitutional. 22. However, the explanation to s. 25FFF proviso is, it is submitted, unreasonable. If the principal provision is not unconstitutional as imposing an unreasonable restriction, it is not suggested that the proviso is on any independent ground unconstitutional. 22. However, the explanation to s. 25FFF proviso is, it is submitted, unreasonable. The explanation provides : "An undertaking which,, is closed down by reason merely of financial difficulties (including financial losses) or accumulation of undisposed of stocks shall not be deemed to have been closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to this subsection." 23. The effect of the impugned section along with the proviso is to classify the undertakings into two classes, viz., (1) those which are closed down on account of unavoidable circumstances beyond the control of the employer and (2) the remaining. When the closure of an undertaking is due to circumstances beyond the control of the employer, the maximum limit of compensation is average pay for three months, irrespective of the length of service of the workmen; in the residuary class, the liability is unrestricted. The explanation is in substance a definition clause which sets out what shall not be deemed to be closures on account of circumstances beyond the control of the employer. By this explanation, employers who had to close down their industrial undertakings merely because of financial difficulties including financial losses or accumulation of undisposed of stocks are excluded from the benefit of the proviso to s. 25FFF(1). The proviso restricts the liability of employers who are compelled to close down their undertakings on account of unavoidable circumstances beyond their control, but in the view of the Parliament, in that category are not to be included employers compelled to close down their undertakings merely because of financial difficulties or accumulation of undisposed of stocks. Closure of an undertaking attributable merely to financial difficulties or accumulation of undisposed of stocks, is by the explanation, excluded from the benefit of restricted liability; but coupled with other circumstances, financial difficulties or accumulation of undisposed of stocks may justify the view that the closure is due to unavoidable circumstances beyond the control of the employer, and attract the application of the proviso notwithstanding the explanation. 24. 24. Where an undertaking is closed down on account of persistent losses due to no fault of the employer or due to accumulation of/stocks having regard to persistent unfavourable market conditions, the closure may normally be regarded as due to unavoidable circumstances beyond the control of the employer. By the explanation, the jurisdiction of the Tribunal which may be called upon to ascertain whether in a given case, the closure was on account of circumstances beyond the control of the employer and whether OD that account the employer was entitled to the benefit of the proviso may be restricted. But it is not provided that in no case of financial difficulty or accumulation of stocks coupled with other circumstances, the closure is to be regarded as due to unavoidable circumstances beyond the control of the employer. It is only where the closure is "merely" on account of financial difficulties or accumulation of undisposed of stocks that the closure is not to be deemed due to circumstances beyond the control of the employer. 25. A state of financial difficulties or accumulation of undisposed of stocks may be temporary, it may be brought about by past mismanagement directly attributable to the employer or may even be deliberately brought about. The closure on account of financial difficulties or accumulation of undisposed of stocks is accordingly not necessarily the result of unavoidable circumstances beyond the control of the employer. That, in certain events, a statute may impose restrictions which will be irksome and may be so regarded by certain citizens as unreasonable, is not decisive of the question whether it imposes a reasonable restriction. As observed in Mohd. Hanif Quareshi and Others v. The State of Bihar (1) by Das, C. J. : "In determining that question (the reasonableness of the restriction) the court we conceive, cannot proceed on a general notion of what is reasonable in the abstract or even on a consideration of what is reasonable from the point of view of the person or persons on whom the restrictions are imposed. The right conferred by sub-el. (g) is expressed in general language and if there had been no qualifying provision like el. (6), the right so conferred would have been an absolute one. To the person who has this right, any restriction will be irksome and may well be regarded by him as unreasonable. The right conferred by sub-el. (g) is expressed in general language and if there had been no qualifying provision like el. (6), the right so conferred would have been an absolute one. To the person who has this right, any restriction will be irksome and may well be regarded by him as unreasonable. But the question cannot be decided on that basis. What the court has to do is to consider whether the restrictions imposed are reasonable in the interest of the general public." Again, as observed in Bijay Cotton Mills Ltd. v. The State of Ajmer (2): " Individual employers might find it difficult to carry on the business on the basis of the minimum wages fixed under the Act but this must be due entirely to the economic conditions of these particular employers. That cannot be a reason for the striking down the law itself as unreasonable ". By the explanation, certain persons because of persistent losses or accumulation of stocks, find them selves unable to carry on the business, and may still not be entitled to the benefit of the proviso, but that will not be a ground for holding that the explanation is unreasonable. The tribunal called upon to decide whether the case of an employer is covered by the proviso will certainly be entitled to look into the causes which led to the financial losses or the accumulation of stocks and ascertain whether the closure was merely on account of financial losses or accumulation of stocks or was on account of circumstances beyond the control of the employer, and in assessing whether the circumstances were beyond the control of the employer, the fact that the employer has suffered financial losses or there is accumulation of stocks is not required by the legislature to be excluded from consideration. 26. The procedure for enforcement of liability to pay compensation, prescribed by s. 33(c)of the Act which makes the amount recoverable as arrears of land revenue cannot, ex facie, be regarded as unreasonable. 26. The procedure for enforcement of liability to pay compensation, prescribed by s. 33(c)of the Act which makes the amount recoverable as arrears of land revenue cannot, ex facie, be regarded as unreasonable. Undoubtedly, under certain State laws, (e.g., the Bombay Land Revenue Code (Act V of 1879) for failure to pay land revenue, the defaulter may be imprisoned; but because of the special mode of recovery prescribed, the law imposing a civil liability to pay compensation for termination of employment does not become unreasonable.” 7.3 Even in the case of District Red Cross Society (supra), the Apex court in paras 8-10 has held as under: “8. The question which arises for consideration is whether the respondent is entitled to protection of Section 25F and 25G of the Act if the establishment in which she was working itself has been closed down though certain other wings or units of the appellant District Red Cross Society, Karnal, have not been closed down and are still functioning. Section 25F of the Industrial Disputes Act lays down the conditions precedent to retrenchment of workmen and it reads as under: 25F. Conditions precedent to retrenchment of workmen.- No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until— (a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice: (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay [for every completed year of continuous service] or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the appropriate Government [or such authority as may be specified by the appropriate Government by notification in the Official Gazette]. Section 25FFF deals with compensation to workmen in case of closing down of undertakings. The relevant part of Subsection (1) of Section 25FFF (omitting the proviso) reads as under : 25FFF. Section 25FFF deals with compensation to workmen in case of closing down of undertakings. The relevant part of Subsection (1) of Section 25FFF (omitting the proviso) reads as under : 25FFF. Compensation to workmen in case of closing down of undertakings.- (1) Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub-section (2), be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched: Provided ............................ Therefore, the legislature has treated closing down of undertakings which automatically result in termination of services of all workmen working therein differently from a retrenchment simplicitor as defined in Section 25F of the Act. In Workmen of the Indian Leaf Tobacco Development Co. Ltd., Guntur v. The Management of Indian Leaf Tobacco Development Co. Ltd., Guntur AIR 1970 SC 860 , it was held as under : "No Industrial Tribunal, even in a reference under Section 10(1)(d) can interfere with discretion exercised by a company in the matter of closing down some of its branches or depots. Even if such closure may not amount to closure of business of the Company, the Tribunal has no power to issue orders directing a Company to reopen a closed depot or branch, if the Company, in fact, closes it down and that closure is genuine and real. The closure may be treated as stoppage of part of the activity or business of the Company. Such stoppage of part of a business is an act of management which is entirely in the discretion of the Company carrying on the business. ...................." In Management of Hindustan Steel Ltd. v. The Workmen & Ors. 1973 Labour & Industrial Cases 461, it was held by this Court as under in para 10 of the reports : "10. The word undertaking as used in S.25FFF seems to us to have been used in its ordinary sense connoting thereby any work, enterprise, project or business undertaking. It is not intended to cover the entire industry or business of the employer as was suggested on behalf of the respondents. Even closure or stoppage of a part of the business or activities of the employer would seem in law to be covered by this sub-section. It is not intended to cover the entire industry or business of the employer as was suggested on behalf of the respondents. Even closure or stoppage of a part of the business or activities of the employer would seem in law to be covered by this sub-section. The question has indeed to be decided on the facts of each case. ........................." In workmen of the Straw Board Manufacturing Company Limited v. M/s Straw Board Manufacturing Company Limited (1974) 1 LLJ 499 , this Court laid down the test of closure of a unit by observing that the most important aspect in a case relating to closure is whether one unit has such componental relation that the closing of one must lead to the closing of the other or the one cannot reasonably exist without the other. Functional integrity will assume an added significance in the case of closure. 9. It appears that after the aforesaid decisions of the Supreme Court, the legislature by an amendment made in the year 1982 to the Industrial Disputes Act defined the word "closure" by adding Section 2(cc). Section 2(cc) of the Act reads as under : 2(cc). "closure" means the permanent closing down of a place of employment or part thereof. It is, therefore, clear that in order to attract Section 25FFF it is not necessary that the entire establishment of an employer should be closed. If a unit or part of an undertaking which has no functional integrity with other units is closed, it will amount to closure within the meaning of Section 25FFF of the Act. In J.K. Synthetics v. Rajasthan Trade Union Kendra & Ors. (2001) 2 SCC 87 , it has been observed that the closure need not be of the entire plant. A closure can also be of a part of the plant. In Maruti Udyog Ltd. v. Ram Lal & Ors. (2005) 2 SCC 638 , it was held as under in para 21 of the report : "21. How far and to what extent the provisions of Section 25F of the 1947 Act would apply in case of transfer of undertaking or closure thereof is the question involved in this appeal. In Maruti Udyog Ltd. v. Ram Lal & Ors. (2005) 2 SCC 638 , it was held as under in para 21 of the report : "21. How far and to what extent the provisions of Section 25F of the 1947 Act would apply in case of transfer of undertaking or closure thereof is the question involved in this appeal. A plain reading of the provisions contained in Section 25FF and Section 25FFF of the 1947 Act leaves no manner of doubt that Section 25F thereof is to apply only for the purpose of computation of compensation and for no other. The expression "as if" used in Section 25FF and Section 25FFF of the 1947 Act is of great significance. The said term merely envisages computation of compensation in terms of Section 25F of the 1947 Act and not the other consequences flowing therefrom. Both Section 25FF and Section 25FFF provide for payment of compensation only, in case of transfer or closure of the undertaking. Once a valid transfer or a valid closure comes into effect, the relationship of employer and employee does not survive and ceases to exist. Compensation is required to be paid to the workman as a consequence thereof and for no other purpose." The position in law is, therefore, well settled that if the entire establishment of the employer is not closed down but only a unit or undertaking is closed down which has no functional integrity with other units or undertaking, the provisions of Section 25FFF of the Act will get attracted and the workmen are only entitled to compensation as provided in Section 25FFF of the Act which has to be calculated in accordance with Section 25F of the Act. The Tribunal and also the High Court clearly erred in holding that as other units of the appellant Red Cross Society like Drug De-Addiction-cum-Rehabilitation Centre, Family Planning Centre and Viklang Kendra were functioning, the termination of services of the respondent would amount to retrenchment. The Maternity Hospital was functioning as a distinct entity. It was not receiving any grant from the Government and was being run entirely on charitable basis from donations received from public. Due to financial stringency, the Maternity Hospital had to be closed down. The Maternity Hospital was functioning as a distinct entity. It was not receiving any grant from the Government and was being run entirely on charitable basis from donations received from public. Due to financial stringency, the Maternity Hospital had to be closed down. The other three units, viz., Drug De- Addiction- cum-Rehabilitation Centre, Family Planning Centre and Viklang Kendra are receiving grants from government and are functioning as separate entities and the mere fact that they have not been closed down, cannot lead to the inference that the termination of services of the respondent was by way of retrenchment which was illegal on account of non compliance of the provisions of Section 25F of the Act. 10. In view of the findings recorded above, the respondent would be entitled to compensation only in accordance with Section 25FFF of the Act and the award for reinstatement in service with back wages passed by the Tribunal which was affirmed by the High Court cannot be sustained and must be set aside.” 7.4 Accordingly, what is the relief that a Labour Court can grant on holding violation of such provisions is compensation. 8. There is another reason why this court would want to substitute the award of reinstatement with 25% backwages with compensation. At Ex. 16, the employer had filed a purshis before the Labour Court (page 91 of the petition) that the petitioner is willing to reinstate the respondent employee at Adani Enterprise Limited, Parsa East Kanta Basan Open Cast Mine at Chhatisgarh. The respondent refused that offer during the pendency of the proceedings before the Labour Court. To a statement made by learned counsel for the petitioner that even at present the respondent was gainfully employed as a Fork Lift Operator with another company at Mundra, there was no denial. Therefore on two grounds that is on the question of position of law as enunciated by the judgements of the Apex Court and on the conduct of respondent, this court is of the opinion that the award of the Labour Court needs to be modified so as to award compensation. 9. As has been reflected in the earlier part of this order, learned counsel for the petitioner on instructions, had submitted that the petitioner is willing to fully and finally settle the issue by awarding Rs. 9. As has been reflected in the earlier part of this order, learned counsel for the petitioner on instructions, had submitted that the petitioner is willing to fully and finally settle the issue by awarding Rs. 7 lakhs as compensation, the award of the Labour Court dated 02.03.2019 in Reference (T) No. 383 of 2015 is modified. The award of reinstatement with 25% backwages is modified to the effect that the petitioner shall pay compensation of Rs.7 lakhs to the respondent employee within a period of four weeks from the date of receipt of the copy of this order.” 8. We are in complete agreement with the observations made by the learned Single Judge. The compensation of Rs.7,00,000/- (Rupees Seven Lacs Only) appears to be appropriate, looking to the service of 7 years of the appellant – workman. Hence, neither we are inclined to allow the present appeal nor to enhance the amount of compensation. The present, thus, appeal fails. The same is hereby rejected accordingly.