K. Kumar v. Additional Chief Secretary to Government, Labour Welfare and Skill Development (A2) Department
2025-01-24
R.N.MANJULA
body2025
DigiLaw.ai
ORDER : R.N.Manjula, J. The Writ Petition in W.P.No.6019 of 2023 has been filed challenging the Government Order issued by the first respondent in G.O.Ms.No.171, Labour Welfare and Skill Development (A2) Department dated 28.12.2022, through which, permission was given by the Government to close down the second respondent's Chennai Plant of Ford India Private Limited with effect from 31.01.2023 and quash the same. 2. The rest of the Writ Petitions have been filed challenging the order passed by the learned Presiding Officer of the Labour Court, Kanchipuram made in I.A.Nos.1 to 1 of 2024 dated 26.06.2024 in the industrial dispute filed by the workmen and quash the same. 3. Heard Mr.S.Kumaraswamy, learned counsel for the petitioners, Mr.P.Kumaresan, learned Additional Advocate General, assisted by Mrs.M.Jayanthi, learned Additional Government Pleader for R1 and Mr.S.Ravi, learned Senior Counsel for R2 in all the Writ Petitions and perused the materials available on record. 4. The case of the petitioners are as follows: The petitioners who were working under the second respondent Company have alleged that they have been illegally retrenched by the second respondent and the Government has issued the impugned Government Order permitting the second respondent to close down the Chennai Plant without following the due procedure and without giving a due opportunity of hearing to the petitioners who are the workers of the second respondent. It is further alleged that the Government Order is unjust and illegal and it is contrary to Section 25(O) (1 & 2) of the Industrial Disputes Act r/w Rule 61(B)(2) of the Industrial Disputes Rules. Since proper notice has not been given in a prescribed manner, there is a violation of principles of natural justice. 4.1. The petitioners were served with the copy of the application seeking permission itself only on 19.12.2022 on which date, they were given with personal hearing. Without hearing the petitioners on the papers submitted by the second respondent to the first respondent, it has been wrongly stated that the petitioners' submissions were heard on 19.12.2022. In fact on 19.12.2022 nothing had taken place because the petitioners were given with the copy of the application seeking permission for closure itself only on the said date. 4.2. The Government Order relied upon the settlement dated 30.09.2022 and its acceptance of 97% of the workers. But, the same was contrary to the law on hands.
In fact on 19.12.2022 nothing had taken place because the petitioners were given with the copy of the application seeking permission for closure itself only on the said date. 4.2. The Government Order relied upon the settlement dated 30.09.2022 and its acceptance of 97% of the workers. But, the same was contrary to the law on hands. Hence, the ratio decidendi laid down in the case of M/s.Oswal Agro Furane Ltd., Vs. Oswal Agro Furane Workers Union and Ors, reported in 2005 (3) SCC 224 should be followed in order to hold that the petitioners were illegally retrenched. The petitioners are entitled to the wages and other benefits as per Section 25(O)(6) of the Act. 5. Mr.S.Kumaraswamy, the learned counsel for the petitioners submitted that the second respondent Management did not give any notice for closure to the employees. On the notice given by the Government, the petitioners went and participated in the proceedings seeking permission for closure. The petitioners had raised a 2A dispute before the Labour Court and the same is pending. The R4 application filed by the second respondent seeking permission for closure of the Chennai Plant did not have the signature of the second respondent and the said fact is revealed through a copy furnished to the petitioners. This is in violation of the Rules. 5.1. The petitioners and 58 others have not given any authorisation to the Union to conclude the settlement. So the settlement dated 30.09.2022 is not in accordance with Rule 25 of the Act. The settlement under Section 18(1) of the Act would only bind the parties to the agreement. The settlement under Section 12(3) of the Act was deliberately avoided as the Government could not endorse the terms of the settlement as fair and just and it is not in compliance with Chapter V(B) of the Act. 5.2. On 05.09.2022, the Management wanted the petitioners and others to give resignation letters by consenting to the severance settlement package. By letter dated 17.10.2022, the petitioners and others requested the Management to provide employment by stating that they did not accept the severance package. On 19.10.2022 the Management informed that they have signed the settlement dated 30.09.2022 and asked the petitioners to collect the dues as per the settlement. On 27.10.2022 the Management wrote a letter to the petitioners stating that the settlement will bind on them.
On 19.10.2022 the Management informed that they have signed the settlement dated 30.09.2022 and asked the petitioners to collect the dues as per the settlement. On 27.10.2022 the Management wrote a letter to the petitioners stating that the settlement will bind on them. As the Management has not complied Chapter V(B) of the Act, the Government Order permitting closure is not legal. 5.3. Even in the reply given by the Management on 24.11.2022, for the petition filed by the petitioners on 10.11.2022 nothing has been stated about the application submitted for closure. The procedure contemplated under Section 25(O) has not been complied properly. The application submitted by the second respondent did not even contain the date of submission and the settlement dated 30.09.2022 has been made even prior to obtaining permission for closure. The petitioners have returned the settlement towards gratuity through a Demand Draft. When the petitioners were asked to appear for personal hearing on 19.12.2022, they were served with undated R4 application with an annexure running 358 pages. Hence, they could not effectively participate in the hearing. 5.4. On 22.12.2022, the petitioners have written a letter seeking further time. But without providing any opportunity, the Government Order has been passed on 28.12.2022. As the notice was given to the petitioners about R4 application only on 19.12.2022, the date of the application should be considered as 19.12.2022 and so, the application itself has not been filed within the prescribed time as per Section 25(O) of the Act. When the petitioners had challenged the non-employment as early as on 10.11.2022 and the conciliation proceedings were held in this connection, they ought to have served with notice about the closure application. R4 form submitted should be in compliance with Section 61(B) (2). But, the same was not done. 5.5. The petitioners' non-employment is contrary to Section 25(O) and Section 25(N) of the Act. Hence, the petitioners are deemed to be in employment as per Section 25(O)(6) of the Act and they are entitled to the wages and other benefits as though the factory has not been closed. Despite in R4 application in column No.26 it has been stated that the office bearers of the Union should have their exit and the date for the same has been extended to 31.12.2022, the said fact was not stated in the application dated 30.09.2022.
Despite in R4 application in column No.26 it has been stated that the office bearers of the Union should have their exit and the date for the same has been extended to 31.12.2022, the said fact was not stated in the application dated 30.09.2022. Hence, in all fairness, the Government Order in G.O.Ms.No.171 dated 28.12.2022 is liable to be set aside. 5.6. The learned Presiding Officer of the Labour Court, Kanchipuram, ought to have found the termination dated 30.09.2022 is retrenchment and it is contrary to Section 25(N) of the Act. Chapter V(B) of the Act is applicable to the present case and the termination contrary to Section 25(N) is illegal. The settlement has been arrived under Section 18(1) and not under Section 12(3). The issue which has to be given with final determination cannot be taken as preliminary issue. Even in the worst scenario, the petitioners are entitled to claim wages for the period from 30.09.2022 to 30.01.2023. The petitioners were not aware of the application seeking permission for closure. Hence, the impugned order of the Labour Court along with the Government Order should be set aside. 6. Mr.P.Kumaresan, learned Additional Advocate General appearing for the first respondent submitted that the first respondent on careful consideration of the application made by the second respondent for closure of its Chennai Plant, had given reasonable opportunity to the Management and the Trade Union / workmen and after hearing them, had accorded permission to close the second respondent’s Chennai Plant by issuing G.O.Ms.No.171, Labour Welfare and Skill Development (A2) Department dated 28.12.2022. 6.1. The application of the second respondent was scrutinized by the first respondent with relevant Acts and Rules and in fact, a meeting was conducted with the Management, representatives of the Union / workmen on 19.12.2022. After hearing their views, the following facts were elucidated: (I) Out of 2592 workers, 97.5% workers have accepted the severance package through 18(1) settlement under Industrial Disputes Act, 1947 with the only Union functioning at the Company viz., Chennai Ford Employees Union (hereinafter referred to as CFEU) on 30.09.2022. (II) After having entered into a settlement as stated above, 63 workers did not accept the severance package and raised 2A dispute. (III) On the date of signing the settlement, the above 63 workers were the members of the Chennai Ford Employees Union and they have resigned their membership only on 16.11.2022.
(II) After having entered into a settlement as stated above, 63 workers did not accept the severance package and raised 2A dispute. (III) On the date of signing the settlement, the above 63 workers were the members of the Chennai Ford Employees Union and they have resigned their membership only on 16.11.2022. (IV) The Management had assured to give severance package to the 63 workers also when they approached the Management. (V) In the settlement dated 30.09.2022, it has been agreed between the Management and CFEU that in the event of revival of the Company within three years from the date of the settlement, the existing employees will have the option to apply for relevant job and in case they apply, the Company shall explore the feasibility of giving opportunity to such employees on terms and conditions. (VI) Apart from 63 workers, there are three workers who neither opted for severance package nor filed 2A petition under the Industrial Disputes Act, 1947. (VII) The Management stated that 97.5% of workers had already received the severance package and left the Company and there is no production at Chennai Plant and requested to grant permission for closure of the Company. 6.2. After considering the merits of the matter and considering the submissions of the second respondent that they are suffering continuous loss, the Government has accorded permission. In fact, 63 workers who stated that they belonged to Uzhaipor Urimai Iyakkam had only sought time for filing reply. However, the bilateral settlement has already been arrived on 30.09.2022 with the sole Union functioning in the establishment and even the workers who attended the hearing on 19.12.2022 were also the members of the same Union at the time when the settlement was arrived. As the petitioners have sought extension of time only as an after thought and it is devoid of merits and on careful consideration of the application after conducting enquiry by affording a reasonable opportunity to both the Management and the representative of the workmen, the Government has issued the order. 7. Mr.S.Ravi, learned Senior Counsel for the second respondent submitted that the sole Union which was recognised by the second respondent was the CFEU. The petitioners who have filed petitions were also the members of CFEU. Hence, they cannot make any individual claim.
7. Mr.S.Ravi, learned Senior Counsel for the second respondent submitted that the sole Union which was recognised by the second respondent was the CFEU. The petitioners who have filed petitions were also the members of CFEU. Hence, they cannot make any individual claim. The second respondent announced that it would cease the vehicle manufacturing activity and there was labour unrest at the Plant. The Deputy Commissioner of Labour / Additional Commissioner of Labour had intervened to bring the normalcy. During the negotiations and the meetings, CFEU negotiated on behalf of the employees including the petitioners and finally the terms of the settlement were agreed, which ensured that the workmen will get a severance package with a minimum of Rs.35,00,000/- to Rs.87,00,000/- which is on an average equivalent to 140 days of average pay for every completed year of continuous service. Additionally, each employee was entitled to a special one-time lumpsum amount of Rs.1,50,000/- and a family medical insurance coverage of Rs,2,50,000/- upto March 2024. The above facts are more than the statutory compensation payable under Section 25(O) of the Act. Apart from that, they were also paid with the applicable leave encashment, gratuity and prorated bonus. 7.1. Even on 10.11.2022, the petitioners who were said to have raised the industrial dispute under Section 2(A) were the members of CFEU. The second respondent filed his application seeking permission under Section 25(O) of the Act on 31.10.2022. In compliance with the Tamil Nadu Industrial Dispute Rules, the copy of the application was served on CFEU and the notice was also displayed conspicuously on the notice board informing the employees about the filing of the application under Section 25(O) of the Act. Hence, the petitioners were also aware of the said fact. After knowing about filing of the application, they have filed an industrial dispute under Section 2(A) which is untenable and not maintainable. So it is false to state that the petitioners came to know about the application seeking permission for closure only on 31.10.2022. No prejudice whatsoever has been caused to the petitioners. For the industrial dispute raised by the petitioners, the second respondent raised the maintainability point and filed an Interlocutary Application. Section 25(N) of the Industrial Disputes Act is not applicable to the facts of the case. 7.2. The Labour Court has rightly relied on the decision rendered in the case of Management of Holwart Engineering Company Vs.
For the industrial dispute raised by the petitioners, the second respondent raised the maintainability point and filed an Interlocutary Application. Section 25(N) of the Industrial Disputes Act is not applicable to the facts of the case. 7.2. The Labour Court has rightly relied on the decision rendered in the case of Management of Holwart Engineering Company Vs. S.Dhanasekar and another, reported in 2012 SCC Online Mad 5425 and concluded that the petition filed by the petitioners is not maintainable. The Labour Court has observed that once permission is granted under Section 25(O), there is no question of any deemed employment. Section 25(N) of the Industrial Disputes Act is not applicable to the case of closure and it is a well settled principle of law. Hence, the petitioners are not entitled to seek any reinstatement or back wages. The Labour Court has taken up a preliminary issue of maintainability of the industrial dispute raised by the petitioners and had rightly held that the industrial dispute itself is not maintainable. 7.3. When no production activities are being carried in the Plant, it is not possible to provide any employment. The application has been filed on 31.10.2022 in due compliance of the requirement of 61(B)(2) of the Rules. The Government has passed the order duly considering the circumstances that the second respondent has been incurring significant losses for the last several years despite making significant investment. There is an unviability in the second respondent's car manufacturing business and there was a low capacity utilisation at the Plant. Measures taken to improve the business did not yield any positive results. 7.4. The interest of the employees had been taken care of by paying the severance package. Unless there is any compelling and overwhelming reasons of the general public interest justifying the refusal, permission to closure would be granted. After the impugned order has been passed, the petitioners received compensation and other payments ranging from Rs.35,00,112/- to Rs.57,79,548/-, which is exclusive of leave encashment and prorated bonus and in accordance with the terms of settlement dated 30.09.2022. The petitioners were also paid with gratuity and medical insurance to the family members to the tune of Rs.2,50,000/- till March 2024. These Petitions have been filed by suppressing the relevant facts. Hence, the Writ Petitions should be dismissed. 8. The petitioners are the individual employees and the erstwhile workmen of the second respondent Company.
The petitioners were also paid with gratuity and medical insurance to the family members to the tune of Rs.2,50,000/- till March 2024. These Petitions have been filed by suppressing the relevant facts. Hence, the Writ Petitions should be dismissed. 8. The petitioners are the individual employees and the erstwhile workmen of the second respondent Company. Though the petitioners have raised an industrial dispute on the allegation that the mandatory procedure has not been followed under Section 25(O) of the Industrial Disputes Act r/w Rule 61(B) of the Tamil Nadu Industrial Dispute Rules, the fact that the factory was closed is not denied. The second respondent who is a Car Manufacturing Plant at Maraimalai Nagar, Chengalpet, is said to have taken a compulsive decision in view of the significant loss in the business during the consecutive financial years and due to poor take of the products in the market. 9. The petitioners did not attack the reasons why the second respondent Management had chosen to close the Unit and all along they have stated that they were not the parties to the severance agreement which was entered into between CFEU and the Management on 30.09.2022. It is further contended that the factory has been closed without following the essential procedure for closure and hence, the deemed fiction of continuation of employment under Section 25(O)(6) has to be presumed and hence, the petitioners should be reinstated into service. While appreciating the merits and other technicalities of the matter, I feel it is essential also to understand Section 25(O)(6) of the Industrial Disputes Act relative to the facts of the case and the events attacked by the petitioners. 10. The term 'closure' as defined under Section 2(cc) of the Industrial Disputes Act would mean permanent closing down of the place of the employment or part thereof. The special provisions relating to lay off, retrenchment and closure in certain industrial establishments falling within the ambit of Industrial Disputes Act have been placed under Chapter V (B) of the Industrial Disputes Act. There is no dispute about the fact that the second respondent Car Manufacturing Plant has employed more than 100 workers and that they fall under the purview of Chapter V of the Act. 11. Section 25(N) states about the conditions attached to retrenchment that the workmen in the industrial establishment should had been in continuous service of not less than one year.
11. Section 25(N) states about the conditions attached to retrenchment that the workmen in the industrial establishment should had been in continuous service of not less than one year. So far as Section 25(N) is concerned, it is retrenchment of some other nature not relating to closing down of the business. Even though the petitioners did not dispute about the closure, they pleaded to consider their termination of employment as retrenchment within the meaning of Section 25(N) and claimed that the conditions stated in Section 25(N) has not been followed. 12. As the factory has been closed, the procedure laid down under Section 25(O) and Section 25(N) is not applicable. However it is insisted by the petitioners that any violation of procedure contemplated under Section 25(O) would result in deemed employment and in such case, the petitioners' out of employment should be considered as retrenchment and hence, Section 25(N) is applicable to them. 13. Section 25(O)(6) which states about the illegal closure and deemed continuation of employment reads as under: " 25(O)(6) --- Where no application for permission under sub-section (1) is made within the period specified therein, or where the permission for closure has been refused, the closure of the undertaking shall be deemed to be illegal from the date of closure and the workmen shall be entitled to all the benefits under any law for the time being in force as if the undertaking had not been closed down." 14. The employer is expected to file an application in a prescribed manner for seeking prior permission for closure atleast 90 days before the date on which the intended closure has become effective to the appropriate Government by setting out the reasons for the intended closure of undertaking. The copy of the application should also be served upon the representatives of the workmen in a prescribed manner and thereafter, the appropriate Government shall make an enquiry after giving a reasonable opportunity of hearing to the employees or the representatives of the workmen and such persons interested in the closure with regard to the genuineness and the adequacy of the reasons stated by the employer and the interest of the general public and all other factors. After making the enquiry in the above said manner, the appropriate Government shall refuse permission and the copy of the order shall be communicated to both the employer and the workmen.
After making the enquiry in the above said manner, the appropriate Government shall refuse permission and the copy of the order shall be communicated to both the employer and the workmen. In the event of refusal of closure, the employer shall not close the establishment and if closure is effected without permission that will be deemed as illegal. 15. In the instant case, the application has been filed by the second respondent to the appropriate Government requesting permission for closure. Even before that, the second respondent has taken pro-active steps for negotiation with the Union representatives with the assistance of the Deputy Commissioner of Labour and Additional Commissioner of Labour. The above fact was also not denied by the petitioners. In fact, the petitioners themselves were members of CFEU which was the only recognised Trade Union of the second respondent establishment. 16. The Union is not a party to any of the disputes revolving closure and it has signed Section 18(1) settlement on 30.09.2022. Even though the petitioners were also members of CFEU at the relevant point of time more specifically when the negotiations were made between the Management and the Union for nearly one year, they have shifted to some other Union subsequently. The petitioners submitted that they did not give any authorisation to the Union in any general body meeting of the Union to conclude the settlement. But the petitioners have received severance compensation which has been in the range of Rs.35,00,112/- to Rs.57,79,548/- in addition to special one time lumpsum amount of Rs.1,50,000/- and family insurance coverage of Rs.2,50,000/- till March 2024. Apart from that, they have also given with the leave encashment, prorata bonus along with gratuity. 17. 97.5% of the workers did not object to the terms of the settlement and hence, the settlement is no doubt made in accordance with the principles of collective bargaining. The petitioners have not stated any allegations of malafides, fraud, corruption or other inducements on the part of the Union leaders who had represented and participated in the negotiations which had culminated into settlement under Section 18(1) of the Act on 30.09.2022.
The petitioners have not stated any allegations of malafides, fraud, corruption or other inducements on the part of the Union leaders who had represented and participated in the negotiations which had culminated into settlement under Section 18(1) of the Act on 30.09.2022. While making negotiations of this nature between the Management on one side and the representatives of the Union on the other side, the negotiations would be revolving around the genuineness of the reasons for closure, reasonable protection given to the workmen against the loss of employment and the impact of closure on the public interest. 18. When an application is made to the Government seeking permission for closure, the Government has got an obligation to scrutinise whether the reasons given by the employer for closure are correct, adequate and sufficient. The financial difficulties including the financial losses or accumulation of undisposed stocks are beyond the control of the employer and in such case, the remedy open to the workmen is reasonable compensation and not anything else. 19. The recitals of the settlement dated 30.09.2022 are as follows: (i) The Company has announced its decision to cease the vehicle manufacturing operation in India from 09.09.2021. (ii) Manufacturing itself has been stopped from 20.07.2022. (iii) Production of service parts has also been stopped from 26.08.2022. (iv) The Company received no manufacturing order after 26.08.2022. 20. The negotiations concluded in respect of severance package payable to the employees and they would get a respectable exit. The severance package concluded in respect of the agreement in pursuant to the agreed advice on 20.09.2022. It is just for the terms of settlement. The settlement has been signed by the Union and the employer on 30.09.2022. It has also been agreed between the Management and the Union that there cannot be any employee - employer relationship between the Management and the workmen from 1st October 2022. Hence, the Management will not be responsible for payment of wages or any statutory benefits to any employees post September 30, 2022 and the exit process should be completed on or before 14.10.2022. 21. As it is collective bargaining, the settlement has been arrived under Section 18(1). The petitioners who were all along kept their membership with CFEU, have changed their stand subsequently by stating that they have joined some other Union.
21. As it is collective bargaining, the settlement has been arrived under Section 18(1). The petitioners who were all along kept their membership with CFEU, have changed their stand subsequently by stating that they have joined some other Union. Once the Union enters into the settlement by making several round talks with the Management and the terms of settlement is agreed by the majority of the members of the Union and it is reduced into writing and signed by both Union representatives and the employer, such settlement will not only for the benefit of the members of the Union who stood in majority, but that will also bind the other minority members who opposed it. Hence, there is no question of holding any individual settlement with the individual workman and it is impractical to hold the closure settlement with a individual workman without such collective interest is addressed by the Trade Union which has been very much recognised by the Management. 22. During the course of negotiations, the Additional Commissioner of Labour has also issued an agreed advice on 20.09.2022, wherein, it has been specifically stated that the sales of the Company has come down globally. Hence, the Management has decided to close the factory. In fact, the manufacturing itself has been stopped. Such an act on the part of the Management would only show that there are some compelling circumstances which had forced the second respondent to take an ultimate decision of closing down the factory. 23. The employer cannot be expected to continue an unviable business and sustain loss. Public interest involves not only the interest of the workmen but also the interest of the Company. Because a sick industry which has sustained loss in the business cannot help to the growth of the Nation's economy. If the employer gives bonafide reasons, permission to closure has to be granted. In fact, in the case of Associated Cement Companies Limited and Another Vs. Union of India and Others, reported in 1988 (2) LLN 1089 , the High Court of Gujarat has dealt four necessary situations that have to be considered as essential in the matter of granting permission for closure and they are as follows: (i)Which reasons can be regarded as genuine or adequate? (ii)What is meant by the interests of the general public? (iii)Which other relevant factors are to be considered?
(ii)What is meant by the interests of the general public? (iii)Which other relevant factors are to be considered? and (iv)What weight is required to be given to the interests of the general public and other relevant factors? 24. By making reference to various decisions of the Hon'ble Supreme Court and other Courts, the following answers have been given for the questions formulated by the Court. In the context of genuine and adequate reasons, the Hon'ble Supreme Court has held in the case of Excel Wear Vs. Union of India, reported in (1978) 4 SCC 224 , that the financial difficulties including the financial losses can be considered as unavoidable circumstances beyond the control of the employer. 25. In Associated Cement Companies Limited and Another Vs. Union of India and Others, it is held that the appropriate Government cannot refuse permission on the ground that the employer should have managed his affairs in a better manner so as to avoid the compelling situation of closure. Unless there are compelling and overwhelming reasons of general public interest justifying refusal in serious issues like financial or commercial compulsions, which are serious Management issues, the authorities concerned will have to grant permission for closure. So the above situation can be considered as genuine and for adequate reasons. 26. While adverting to find out the meaning of general interest, the interest of the labour alone cannot be the sole criteria. The interest of the labour and other members of the public have to be considered to a reasonable extent. In other words, only if the interest of the labour is substantially ignored that can be reasons for considering the interest of labour as part of public interest. In any context, it is unreasonable and impractical to expect the company which is incurring loss and facing unreserved suppressing issues bothering the growth of business, to continue its business. 27. If prevention of unemployment is regarded as the sole basis or paramount consideration, no closure permission can be granted and that would render the restriction as unreasonable and ultravires to Article 19(1)(g) of the Constitution of India. In the case in hand, the loss incurred by the second respondent was huge and without demand for the goods manufactured by the second respondent, the company cannot be compelled to dwell in perennial loss by continuing the business.
In the case in hand, the loss incurred by the second respondent was huge and without demand for the goods manufactured by the second respondent, the company cannot be compelled to dwell in perennial loss by continuing the business. The reasons stated by the second respondent to close the business are not trivial or minor issues that are manageable with some meticulous plans by effecting certain changes. The public interest would also include the interest of the Company and hence, the appropriate authority has to take that also into consideration while granting permission. 28. The next aspect which is relevant for consideration is the opportunity of hearing to be given to the workmen. The appropriate Government has to make sure whether the reasons stated by the Management for closure is genuine and adequate and at the same time, the workmen were also informed about the situation and understand the consequences. 29. If an employer wants to close his business bonafidely for genuine and adequate reasons, permission shall not be refused. Unless for some special reasons or extraordinary circumstances where the refusal is regarded as reasonable on the ground of interest of the general public or other weighty reasons. 30. As stated already, in the instant case, the interest of the workmen has been represented by the Trade Union recognised by the second respondent Company even before the application for closure has been made and after several rounds of talks, the Management and the Trade Union had arrived at an amicable terms and signed 18(1) settlement. The efforts taken in the above manner before the closure would show that the Company had best interest of the workmen also in mind and worked out the feasibility of better settlement in the form of compensation to the workers, as they would become unemployed at the closure of the Company. 31. The comprehensive reading of the petitioners' demand and the concerns would only show that they tried to stand on certain technicalities and not on the substantive matrix of the facts which led to the closure. In other words, the petitioners did not have any serious objection as to the genuineness and adequate reasons for closure. The quantum of compensation and all other terms have been worked out in favour of the workmen.
In other words, the petitioners did not have any serious objection as to the genuineness and adequate reasons for closure. The quantum of compensation and all other terms have been worked out in favour of the workmen. Even while stating about the denial of adequate opportunity for representation, the petitioners could not say whether such negotiations would have guaranteed the sustenance of the Company or whether any prejudice has been caused to the petitioners in view of the terms agreed by the Trade Union on behalf of the workers. 32. The primary contention of the petitioners is that they came to know about the submission of the application for closure by the second respondent after they have raised objection and more particularly on 19.12.2022, when they appeared for hearing in pursuant to the notice given by the first respondent. The petitioners tried to make out a case that prior to 19.12.2022, the closure proposal was not within their knowledge and they were kept at dark about the closure arrangements. In fact, the petitioners themselves have availed the substantial portion of the settlement package which is the outcome of 18(1) settlement dated 30.09.2022. In fact, it is not even the case of the petitioners that there is no fairness in the compensation given by the second respondent. The terms of the settlement would only show that the second respondent has tried his level best to give a better compensation to the workers by incorporating better terms under Section 18(1) settlement dated 30.09.2022. 33. When an application for closure is submitted by the second respondent to the first respondent, a reasonable notice is expected to be given to the workers. But such reasonable notice cannot be construed as an individual notice to each of the employees and serve it at their doorstep. Even though the petitioners were pressing for re-employment by raising an industrial dispute consequent to the Government Order, they also received the settlement amount which was a hefty package of several benefits. 34. The second respondent has filed the application on 31.10.2022, after serving the copy of the application to the recognised Trade Union and notice about it has been displayed consequently on the notice board. Hence, in all probabilities the petitioners could have had the knowledge about filing of the application by the second respondent.
34. The second respondent has filed the application on 31.10.2022, after serving the copy of the application to the recognised Trade Union and notice about it has been displayed consequently on the notice board. Hence, in all probabilities the petitioners could have had the knowledge about filing of the application by the second respondent. Even though the petitioners had pointed out that the application submitted by the second respondent is without signature, such complaint has not been made by the first respondent who has the duty to scrutinise the correctness of the application. Just because the copy does not have the signature of the applicant, it cannot be presumed that the originals also did not have the signature of the applicant. The first respondent could not have considered the application without the signature of the applicant affixed on it and in fact, the learned Additional Advocate General had submitted that the application seeking permission for closure submitted to the government had got the signature of the applicant affixed on it. 35. So far as the reasonable opportunity is concerned, it is for the first respondent to decide what is reasonable in the existing state of affairs. The first respondent has stated that the workmen who raised objection had resigned their membership from CFEU only on 16.11.2022 which is subsequent to the date of the submission of the application and the bipartite settlement with regard to severance package dated 30.09.2022. So, in the appreciation of the first respondent, the objection of the petitioners is considered as an afterthought and just to delay the proceedings. When there is no malafide intention is seen to be present either on the part of the Trade Union which made negotiations with the Management or on the appropriate Government, no prejudice can be presumed to have caused to the petitioners. 36. As the petitioners have participated in the enquiry called upon by the first respondent and made their written submissions and the first respondent has considered and arrived at a conclusion by appraising the matter in a holistic manner, there is no strength in the argument that the petitioners were not given with any reasonable opportunity. There cannot be any quarrel with regard to the principles laid down by the Hon'ble Supreme Court in the case of Workmen of Meenakshi Mills Limited Vs. Meenakshi Mills Ltd and Another.
There cannot be any quarrel with regard to the principles laid down by the Hon'ble Supreme Court in the case of Workmen of Meenakshi Mills Limited Vs. Meenakshi Mills Ltd and Another. However, there is no retrenchment by way of victimization and the appropriate Government also did not form such an opinion after appreciating all the relevant factors for granting permission for closure. 37. So far as the other judgment submitted by the petitioners reported in AIR 2002 SC 708 (Orissa Textile and Steel Ltd Vs. State of Orissa and Ors) about adequacy and sufficiency of reasons in the matter of closure is based upon the observations made by the Supreme Court in the case of Meenakshi Mills Limited. So it is not the case where the Government did not conduct any enquiry or the workmen were not given with any reasonable compensation. The Government at its discretion had conducted the enquiry in the nature which it deemed fit and appreciated the materials also before according permission. 38. A party complaining the denial of opportunity and failure to adhere to the principles of natural justice has an obligation to prove that prejudice has been caused to him due to the breech of natural justice. As regards the principles of natural justice, it has been held time and again by the Hon'ble Supreme Court that the natural justice is an acceptable tool in the hands of the Judge in order to give a suitable remedy. The words of the Hon'ble Supreme Court held in the case of State of the Uttar Pradesh Vs. Sudhir Kumar Singh, reported in (2021) 19 SCC 706 , as under: "42. An analysis of the aforesaid judgments thus reveals: 42.1. Natural justice is a flexible tool in the hands of the judiciary to reach out in fit cases to remedy injustice. The breach of the audi alteram partem rule cannot by itself, without more, lead to the conclusion that prejudice is thereby caused. 42.2.Where procedural and/or substantive provisions of law embody the principles of natural justice, their infraction per se does not lead to invalidity of the orders passed. Here again, prejudice must be caused to the litigant, except in the case of a mandatory provision of law which is conceived not only in individual interest, but also in public interest. 42.3.
42.2.Where procedural and/or substantive provisions of law embody the principles of natural justice, their infraction per se does not lead to invalidity of the orders passed. Here again, prejudice must be caused to the litigant, except in the case of a mandatory provision of law which is conceived not only in individual interest, but also in public interest. 42.3. No prejudice is caused to the person complaining of the breach of natural justice where such person does not dispute the case against him or it. This can happen by reason of estoppel, acquiescence, waiver and by way of non-challenge or non-denial or admission of facts, in cases in which the Court finds on facts that no real prejudice can therefore be said to have been caused to the person complaining of the breach of natural justice. 42.4. In cases where facts can be stated to be admitted or indisputable, and only one conclusion is possible, the Court does not pass futile orders of setting aside or remand when there is, in fact, no prejudice caused. This conclusion must be drawn by the Court on an appraisal of the facts of a case, and not by the authority who denies natural justice to a person. 42.5. The “prejudice” exception must be more than a mere apprehension or even a reasonable suspicion of a litigant. It should exist as a matter of fact, or be based upon a definite inference of likelihood of prejudice flowing from the non-observance of natural justice. 43. Judged by the touchstone of these tests, it is clear that Respondent No.1 has been completely in the dark so far as the cancellation of the award of tender in his favour is concerned, the audi alteram partem rule having been breached in its entirety." 39. It is reiterated that the petitioners have not taken out a plea of malafide, fraud or corruption on the part of any players involved in the closure. The situation under Section 25(O)(6) would arise only if the closure is illegal. Hence, there need not be any deemed fiction of continuance of employment by the workmen with the second respondent Company. 40. In M/s.Oswal Agro Furane Ltd., Vs. Oswal Agro Furane Workers Union and Ors, reported in 2005 (3) SCC 224 , the Hon’ble Supreme Court has settled the legal position with regard to the concept of deemed employment on certain proved circumstances.
40. In M/s.Oswal Agro Furane Ltd., Vs. Oswal Agro Furane Workers Union and Ors, reported in 2005 (3) SCC 224 , the Hon’ble Supreme Court has settled the legal position with regard to the concept of deemed employment on certain proved circumstances. But in the instant case no illegality as prescribed under Section 25(O)(6) is proved in order to presume the deemed fiction of employment. Hence, no question of retrenchment or illegal retrenchment, as pleaded by the petitioners would arise. When the majority workers have shown their interest in accepting the settlement and the viability of the Company was also questionable and it was not able to carry out its business activities any further, the genuineness and the adequateness of the reasons for closure and the due acceptance of the same by the Government need not be suspected. 41. In this regard, it is worthwhile to cite the decision of the Hon'ble Supreme Court in the case of Dayakar Reddy Vs. MD, Allwyn Auto Ltd and Others, reported in (2000) 9 SCC 247 , wherein, it is held when the Government is satisfied that proper procedure has been followed and it had considered the compliance of all the essential aspects connected to the closure of the Company, the State is justified in granting permission to closure. The relevant part of the above judgment is extracted hereunder: "4. It was contended by Mr. P.S. Mishra, learned senior counsel for the-petitioner that in this case the State had suggested that the company should be closed down and it was the same State which then decided under Section 25(O) to grant permission for closure. In a case where the company is a State Government Undertaking, such a situation may arise. It has to take an administrative decision first and then a quasi judicial decision under Section 25(O). What we find is that while exercising its power under Section 25(O) it did follow the proper procedure and consider all the relevant aspects. It is not possible to find any fault with the decision of the State Government. The facts of this case are very eloquent. However, by the time the Government took the decision, out of 1800 workers. 1200 workers had shown their willingness to accept the Voluntary Retirement Scheme.
It is not possible to find any fault with the decision of the State Government. The facts of this case are very eloquent. However, by the time the Government took the decision, out of 1800 workers. 1200 workers had shown their willingness to accept the Voluntary Retirement Scheme. The G.O. dated 16.6.97 clearly discloses the reasons why the company had become unviable and why it was not able to carry on its activity any further. The reasons appear to be genuine and adequate and therefore the Government was justified in granting permission for closure of the company. This special leave petition is therefore dismissed." 42. In the judgment of the Hon'ble Supreme Court in the case of Navneet Kaur Harbhajansing Vs. State of Maharashtra and Others, reported in 2024 SCC Online SC 494, it is held that in the absence of any allegation of malafide and perversity, the Writ jurisdiction of the High Court shall not be invoked for mere asking. In the case of Herbertsons Limited Vs. Workmen of Herbertsons Limited and Others, reported in (1976) 4 SCC 736 , the Hon'ble Supreme Court has held when a recognised Union negotiates with an employer, the workers as individuals can raise objection only in exceptional circumstances like malafides or fraud. The relevant part of the above judgment is extracted as under: "18. When a recognised union negotiates with an employer the workers as individuals do not come into the picture. It is not necessary that each individual worker should know the implications of the settlement since a recognised union, which is expected to protect the legitimate interests of labour, enters into a settlement in the best interests of labour. This would be the normal rule. We cannot altogether rule out exceptional cases where there may be allegations of malafides, fraud or even corruption or other inducements. Nothing of that kind has been suggested against the President of the 3rd respondent in this case. That being the position, prima facie, this is a settlement in the course of collective bargaining and, therefore, is entitled to due weight and consideration." 43 . The Hon'ble Supreme Court has held in various decisions including the case involving Excel Wear (cited supra) that the order issued by the Government under Section 25(O)(2) does not require reasons to be stated.
The Hon'ble Supreme Court has held in various decisions including the case involving Excel Wear (cited supra) that the order issued by the Government under Section 25(O)(2) does not require reasons to be stated. It only means that if the appropriate Government gets satisfied by making its own enquiry about the appropriateness and the necessity to accord permission, that itself is sufficient. 44. When a settlement has been arrived during the course of the collective bargaining with the help of the Deputy Commissioner / Additional Commissioner and the settlement has been arrived at with the recognised majority Union members, its obligation would be extended to all the workmen of the establishment including those belonging to the minority Union which had objected the same. 45. While disclosing the above principle, the Hon'ble Supreme Court in the case of Barauni Refinery Pragatisheel Shramik Parishad Vs. Indian Oil Corporation Limited, reported in (1991) 1 SCC 4 , it is observed that such settlement to the extent of making it applicable to the minority Union members also departs from the ordinary law of contract. It is on the belief that any settlement so made with the help of Conciliation Officer must be fair and reasonable and hence, it would bind not only the workmen belonging to the said Union but also others who do not belong to that Union. 46. In the instant case, the petitioners were very much the members of the Union which had negotiated the settlement and they continued to be so till 30.09.2022, on which date the Union had signed the settlement. After the Government Order was passed, the petitioners had chosen to receive severance package also. 47. As the petitioners had filed and brought an industrial dispute which is not maintainable, the learned Trial Judge cannot be expected to take it a full trial without deciding its maintainability. Hence, it is appropriate on the part of the Presiding Officer of the Labour Court, Kanchipuram, in the special circumstances as explained above, to take up the maintainability question as a preliminary issue and render a finding that the industrial dispute is not maintainable. The Labour Court has rightly understood the principles governing non-employment arising out of closure and other retrenchment coming under Section 25(N) and the difference between two and had rightly given a finding that the petitioners' case will not fall under Section 25(N) of the Act. 48.
The Labour Court has rightly understood the principles governing non-employment arising out of closure and other retrenchment coming under Section 25(N) and the difference between two and had rightly given a finding that the petitioners' case will not fall under Section 25(N) of the Act. 48. The judgment relied on by the learned Presiding Officer of the Labour Court, Kanchipuram held by this Court in the case of Management of Holwart Engineering Company Vs. Dhanasekar and Another, reported in 2012 SCC Online Mad 5425 is also appropriate to the issue at hand. In the above case, this Court has held that there cannot be any individual employment issue in the event of closure in order to raise an industrial dispute under Section 2(A) of the Industrial Disputes Act and that too, when the workmen have been paid with full and final settlement. The relevant part of the above judgment holding the above view has been brought out hereunder: "In the light of the above legal precedents, the dispute raised by the workmen are not maintainable for more than one reason. The first reason being there cannot individual non-employment issue in case of closure covered by Section 2-A of the I.D.Act, especially when the workmen have demanded their legal dues to be paid and have accepted and passed on a full and final settlement receipt not to claim any reinstatement or re-employment. The Labour Court did not find any answer either to the letter written by the workers or the subsequent payment of compensation. Even otherwise when a closure covered by Section 2(cc) of the I.D.Act is under challenge, it has to be done only in terms of a collective dispute under Section 2(k) of the I.D.Act as held by the Supreme Court referred to above. The only exception is the industrial establishment covered by Chapter V-B of the I.D.Act." 49. In fine, the discussions only gives an inference that the first respondent appropriate Government has scrupulously followed the mandates of Section 25(O) before according permission for closure under Section 25(O)(2) and hence, there is no illegality as alleged by the petitioners. Hence the Government Order passed in G.O.Ms.No.171, Labour Welfare and Skill Development (A2) Department dated 28.12.2022 issued in this regard by the first respondent does not warrant any interference.
Hence the Government Order passed in G.O.Ms.No.171, Labour Welfare and Skill Development (A2) Department dated 28.12.2022 issued in this regard by the first respondent does not warrant any interference. I also hold that the order of the Labour Court made in I.A.Nos.1 to 1 of 2024, dated 26.06.2024 in the industrial dispute raised by the workmen also does not suffer from factual or legal infirmity calling for any inference. 50. In the result, these batch of Writ Petitions filed challenging the Government Order issued in G.O.Ms.No.171 dated 28.12.2022 and the order passed by the learned Presiding Officer of the Labour Court, Kanchipuram made in I.A.Nos.1 to 1 of 2024 dated 26.06.2024 are dismissed. No costs. Consequently, connected miscellaneous petitions are closed.