IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF JULY, 2019 BEFORE THE HON’BLE MR.JUSTICE R. DEVDAS WRIT PETITION NO.5864 OF 2018(L-RES) BETWEEN M/S. VINAYAKA C. N. C. CENTRE PVT. LTD. HAVING ITS REGISTERED ADDRESS AT: UNIT-1, A-347, 9TH MAIN, 2ND STAGE, PEENYA INDUSTRIAL ESTATE, BENGALURU-560 058.
REPRESENTED BY ITS DIRECTOR: MR. C. S. SUKUMARAN.
(BY SRI KRISHNA KUMAR S R, ADVOCATE) AND 1. THE PRESIDING OFFICER-5 LABOUR DEPARTMENT, VIKASA SOUDHA, BENGALURU-560076.
2. THE ASSISTANT LABOUR COMMISSIONER BENGALURU SUB-DIVISION-1, KARMIKA BHAVAN, 1ST FLOOR, ITI COMPOUND, BANNERGHATTA ROAD, BENGALURU-560076.
3. TUMKUR JILLA COFFEE MATHU ETHARE KARMIKARA SANGHA ... PETITIONER (CITU), 3RD CROSS, UNION OFFICE, NAZARABADM TUMKUR-1 REPRESENTED BY ITS GENERAL SECRETARY.
... RESPONDENTS (BY SMT. M. S. PRATHIMA, AGA FOR R1 & R2 SRI. A. J. SRINIVASAN, ADVOCATE FOR R3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE ORDER DATED NOVEMBER 03,2016 PASSED BY THE RESPONDENT NO.1 (ANNEXURE-A) AND ETC.
THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED ON 15.04.2019 AND COMING ON FOR PRONOUNCEMENT OF ORDERS, THIS DAY, THIS COURT MADE THE FOLLOWING:
ORDER This writ petition is filed by the petitioner-company seeking a writ of certiorari to quash the Reference made under Section 10 (1) of the Industrial Disputes Act, 1947, vide Government Order dated 03.11.2016, mainly on the ground that the same is bad in law inasmuch as the closure of an industrial establishment cannot and will not give raise to an industrial dispute.
2. The petitioner industrial establishment at Tumakuru was closed down permanently, according to the petitioner, w.e.f. 06.06.2016. It is submitted that the factory license was also surrendered and all machineries were subsequently sold and even the power connection has been surrendered.
3. Learned counsel for the petitioner submitted that the petitioner-company had two functional units, one at Bengaluru and another at Tumakuru. The relationship between the management and the workmen at Tumakuru unit became strained since the year 2012, when the workmen, without prior notice to the petitioner conducted a tool-down strike for almost 76 days. The strained relationship also caused law and order situation. The petitioner contends that at the intervention of the Deputy Commissioner, Tumakuru, a semblance of reproachment was brought about and an MOU was signed between the management and workmen on 05.10.2012. It is contended by the petitioner that the workmen did not keep up the promise made in the MOU and therefore, show-cause notice was issued to the workmen calling upon them to improve productivity and refrain from hampering customer schedules.
On account of non-cooperation of the workmen, the petitioner company incurred losses at the Tumakuru unit. It is in this background that the management decided to close down the Tumakuru unit and accordingly, a communication dated 09.01.2016 was made to the Secretary, Department of Labour, Government of Karnataka. In the said notice, the petitioner informed the appropriate Government that the Tumakuru unit will be permanently closed down by 01.04.2016.
4. Learned counsel for the petitioner submitted that even after issuance of notice, the management tried to bring about a resolution and improve the relationship with the workmen. In the process, the management missed the proposed date of closure, but eventually when the management found it unviable and in fact, unsafe to continue the unit, the management issued closure order dated 06.06.2016. The workmen were informed in the closure notice that the closure compensation and other legal dues payable to the workmen will be credited to their respective bank accounts. The formalities of closure was completed by informing the Governmental authorities, in accordance with law. It is specifically submitted that the closure compensation were duly credited to the bank accounts of the workmen.
5. On 08.06.2016, the workmen, through the 3rd respondent-Union made a petition before the 2nd respondent- Assistant Labour Commissioner, seeking appropriate action on the ground that the factory unit was closed down in violation of Sections 25-O, 25-F and 25-G of the Industrial Disputes Act, 1947 (hereinafter referred to as ‘I.D.Act’). The petitioner filed its statement of objections before the 2nd respondent. The 2nd respondent explored the possibilities of an amicable settlement. Since, conciliation failed, the 2nd respondent submitted failure report dated 25.07.2016, to the State Government. The State Government made a Reference to the Industrial Tribunal, Bengaluru by G.O. dated 03.11.2016.
6. In the claim statement made by the 3rd respondent- Union, the Union has sought for setting aside the closure notice dated 06.06.2016 and a direction to the management to provide work to the 73 workmen. In the meanwhile, the 3rd respondent-Union seems to have parallely made a representation dated 25.07.2016 to the Additional Chief Secretary, Department of Labour, Government of Karnataka. The Additional Chief Secretary having concluded that Section 25-O of the Act was not attracted, however directed the 2nd respondent Assistant Labour Commissioner to look into the alleged violation of Section 25-FFA of the Act. The Assistant Labour Commissioner, was of the opinion that the petitioner establishment had violated Section 25-FFA. Thereafter, the Additional Chief Secretary directed the 2nd respondent herein to take appropriate action. Notice was issued to the petitioner and the petitioner gave a detailed response to the notice issued for alleged violation of Section 25-FFA.
7. The petitioner establishment has also filed a civil suit in O.S.No.102/2017 before the I Addl. Civil Judge of Tumakuru, seeking relief of Permanent Injunction against the respondent workmen from causing obstruction and interference in the peaceful possession and enjoyment of the factory in Tumakuru. Since the Interlocutory application seeking Temporary Injunction against the workmen was refused by the trial Court, the petitioner approached the appellate Court in M.A.No.31/2017 and the appellate Court granted an order of Temporary Injunction on 26.02.2018.
8. Subsequent to filing of this writ petition, the proceedings before the Industrial Tribunal has been stayed.
9. Learned counsel for the petitioner, while placing reliance on the following judgments, would contend that while applying the principles enunciated by the Hon’ble Supreme Court, the Industrial Tribunal is precluded from embarking upon an enquiry to find out whether the Tumakuru unit of the petitioner has been closed down or not.
(1) The Delhi Cloth and General Mills Co. Ltd., Vs. The Workmen and others, AIR 1967 SC 469;
(2) Pottery Mazdoor Panchayat Vs. Perfect Pottery Co. Ltd., and Another (1979) 3 SCC 762; and (3) Oshiar Prasad and Others Vs. Employers In Relation To Management of Sudamdih Coal Washery Of M/s. Bharat Coking Coal Limited, Dhanbad, Jharkhan (2015) 4 SCC 71.
10. The learned counsel, while pointing out to the representation dated 08.06.2016, made by the respondent Union to the Assistant Labour Commissioner, would submit that the averments made in the representation clearly evidences the fact that the respondent Union admits in no uncertain terms that the management has closed down the Tumakuru unit permanently. It is therefore the contention of the petitioner that the respondents having admitted that the Tumakuru unit is permanently closed down, there remains no ‘industrial dispute’ to be considered under the Act. In this regard the learned counsel places reliance on the decision of the Apex Court in the case of Indian Hume Pipe Co. Ltd., Vs. Workmen, reported in AIR 1968 SC 1002 and M/s. P.V.Desai Vs. State of Karnataka, reported in ILR 1991 KAR 665.
11. The learned counsel also places reliance on ANZ Grindlays Bank Ltd. Vs. Union of India and Others, reported in (2005) 12 SCC 738, to buttress his contention that it is permissible for this Court to entertain a writ petition against an order of the appropriate Government making a reference under Section 10 of the Act, disregarding the fact that the parties would nevertheless get an opportunity to lead evidence before the Labour Court or Industrial Tribunal and to show that the claim made is either unfounded or there was no occasion for making a reference.
12. Per contra, the learned counsel for the 3rd respondent Union submitted that the Reference made by the appropriate Government is based on the material contentions that the industrial units, both at Bengaluru and Tumakuru constitutes one establishment of the petitioner company. The contention of the respondent Union is that there were more than 100 workmen working on the date of alleged closure and the alleged closure is in contravention to Sections 25-O, 25-G and/or 25-FFA of the Act. The contention of the Union is that the alleged closure is illegal, unjustified, malafide and not real closure. It is the contention of the Union that the petitioner company continues to run the industrial unit in one form or the other. The learned counsel has placed reliance on the following judgments:
1. Annapurna Mistanna Bhandar Vs. Industrial Tribunal (VIII), reported in LAWS (CAL) 1988 8 8;
2. Secretary, K.J.H.S.W. Union Vs. Industrial Tribunal, reported in 1998 I-LLJ-574;
3. The State of Madras Vs. C.P.Sarathy and another, reported in AIR 1953 SC 53;
4. The Associated Cement Companies Ltd., Chiabasa Cement Works, Jhinkpani Vs. Their Workmen, reported in AIR 1960 SC 56;
5. Kalinga Tubes Limited Vs. Their Workmen, reported in F.J.R. 1968 Vol. 34 393; and 6. Tatanagar Foundry Company Limited Vs. Their Workmen, reported in AIR 1970 SC 1960.
13. Heard the learned counsels for the petitioner and the respondents and perused the writ papers.
14. The thrust of the arguments for the learned Counsel for the petitioner-Management is that the respondents have unequivocally admitted in writing that the Tumakuru unit has been closed down consequent to issuance of a closure notice dated 06.06.2016 and it is also admitted that the employees have received closure compensation. When that being the case, there was substantial material before the Government that the industrial unit having been closed down, the relationship of Management and employees having been terminated legally, no industrial dispute remained to be decided or referred by the Government. On the question of maintainability, this Court agrees with the learned Counsel for the petitioner that High Court, under Article 226 of the Constitution can entertain a petition questioning the order of the appropriate Government making a reference under Section 10 of the I.D. Act.
15. However, what is important is that the employees, represented by the Union have specifically raised a contention that the closure is illegal, unjustified, malafide and not real closure. It is their contention that the Management continues to run the industrial unit in one form or the other. In this regard, reliance placed by the learned Counsel for the respondents on the decisions of the Apex Court in the case of The Associated Cement Companies Ltd., Chiabasa Cement Works, Jhinkpani Vs. Their Workmen, reported in AIR 1960 SC 56, Kalinga Tubes Limited Vs. Their Workmen, reported in F.J.R. 1968 Vol. 34 393; and Tatanagar Foundry Company Limited Vs. Their Workmen, reported in AIR 1970 SC 1960, to throw some light on the question raised for consideration. In The Associated Cement case (supra), the Hon’ble Supreme Court has held that the question of unity or oneness presents difficulties when the industrial establishment consists of parts, units, departments, branches, etc. If it is strictly unitary in the sense of having one location and one unit only, there is little difficulty in saying that it is one establishment. Where, however, the industrial undertaking has parts, branches, departments, units, etc. with different locations near or distant, the question arises as to what tests should be applied for determining what constitutes ‘one establishment’. It has also been held that how the relationship between the units will be judged must depend on the facts proved, having regard to the scheme and object of the statute which gives the right of unemployment compensation and also prescribes a disqualification therefor. Admittedly, in the present case there were two units, one at Bengaluru and the other at Tumakuru. Whether there was unity or oneness or they were two independent establishments, are questions to be answered only on verifying cogent material and on proof of facts. Therefore, the same requires adjudication before the competent Court or Tribunal.
16. In Kalinga Tubes (supra), the Hon’ble Supreme Court has observed that in case of a closure, the employer does not merely close down the place of business but he closes the business itself finally. Similarly, in State of Madras Vs. C.P.Sarathy (supra), it is held that if the dispute was an industrial dispute as defined in the Act, its factual existence and the expediency of making a reference in the circumstances of a particular case are matters entirely for the Government to decide upon, and it will not be competent for the Court to hold the reference bad and quash the proceedings for want of jurisdiction merely because there was, in its opinion, no material before the Government on which it could have come to an affirmative conclusion on those matters. Therefore, if the Government, on the basis of the material is of the prima facie opinion that an industrial dispute exists, no fault could be found in the reference.
17. In the light of the above, this Court is of the opinion that the contention of the petitioner-Management that since the employees/Union have admitted in writing that the Tumakuru unit was closed on 06.06.2016 and therefore when the unit itself is admittedly closed down, there remains no relationship of employer and Management and no industrial dispute exists for consideration, cannot be countenanced.
18. For the reasons stated above, the writ petition deserves to be dismissed and is accordingly dismissed.
19. At the instance of the petitioner, the proceedings before the Tribunal has been stayed. Therefore, this Court is of the considered opinion that costs are required to be imposed on the petitioner. Accordingly, costs of Rs.1,00,000/- (Rupees One Lakh) is imposed on the petitioner/Management, which shall be paid to the respondent-Union before the Tribunal.
SD/- JUDGE DL/JT