The High Court held that the Specified Authority could not refer the matter to the Tribunal after rejecting a review application under Section 25-O(5). The petition was allowed, and the impugned Tribunal award was quashed.
Writ of Certiorari to quash and set aside the impugned Award dated 5th May 2007 passed by the Industrial Tribunal.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 1332 OF 2007
Kansai Nerolac Paints Limited ]
formerly known as Goodlas ]
Nerolac Paints Limited ]
a company duly constituted ]
under the provisions of the ]
Companies Act, 1956 having ]
its Registered Office at ]
Nerolac House, P. O. Box 1632 ]
Ganpatrao Kadam Marg ]
Mumbai 400 013 ] ..Petitioner
versus
Paints Employees Union ]
a Trade Union, Registered ]
under the Trade Unions Act, ]
1926, C/o. Shri T. K. Walawalkar]
B-29, Jivan Nagar, Mithagar Road]
Mulund (East), Mumbai 400 081 ] ..Respondent
Mr. J. P. Cama, Senior Counsel with Mr. R. N.
Shah, Mr. Sanjay Udeshi and Mr. Mahesh Londhe i/b.
M/s. Sanjay Udeshi & Co. for the Petitioner.
Ms. Meena Doshi for the Respondent No. 1.
CORAM : S. A. BOBDE, J.
DATE : 28TH JULY, 2008.
ORAL JUDGMENT :
. This writ petition is filed by the employer
challenging the order dated 5.5.2007 passed by the
Industrial Tribunal, Maharashtra, holding that the
petitioners are not entitled to effect closure of
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its Lower Parel Establishment and directing them to
pay full wages to all the concerned workmen with
effect from 2.2.2003. The petitioner had applied
under Section 25-O of the Industrial Dispute Act
(for short "I.D. Act") for permission to close its
Lower Parel Unit. That application was allowed on
27.3.2003 by the Commissioner of Labour. On
15.4.2003 the respondent union applied for review or
reference of the permission of closure under section
25-O(5) of the I. D. Act. On 24.4.2003, the
Commissioner Labour who is the Specified Authority
under Section 25-O declined to review permission for
closure and instead referred the matter to the
Industrial Tribunal for adjudication. The question
is whether by declining to review, the Specified
Authority has rejected the application for review.
Therefore, whether the Specified Authority could
have thereafter referred the matter to the
Industrial Tribunal for adjudication under Section
25-O(5) of the I.D. Act.
2. Mr. Cama, the learned counsel for the
petitioners submitted that the order of the
Industrial Tribunal rejecting the petitioners
application for closure is passed without authority
of law since the order making the reference dated
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24.4.2003 was itself without authority of law and
incompetent. The learned counsel relies on section
25-O(5) of the Act and the decision of the Supreme
Court in Cable Corporation of India Ltd. vs.
Additional Commissioner of Labour & Ors. [ 2008 II
CLR 545 ] interpreting an identical scheme section
25(N) of the I.D. Act. Section 25-0(5) reads as
follows:
"25-O. Procedure for closing down an
undertaking.- (1) An employer who intends to
close down an undertaking of an industrial
establishment to which this Chapter applies
shall, in the prescribed manner, apply, for
prior permission at least ninety days before
the date on which the intended closure is to
become effective, to the appropriate
Government, stating clearly the reasons for
the intended closure of the undertaking and
a copy of such application shall also be
served simultaneously on the representatives
of the workmen in the prescribed manner :
Provided that nothing in this sub-section
shall apply to an undertaking set up for the
construction of buildings, bridges, roads,
canals, dams or for other construction work.
(2) ...
(3) ...
(4) ...
(5) The appropriate Government may, either
on its own motion or on the application made
by the employer or any workman, review its
order granting or refusing to grant
permission under sub-section (2) or refer
the matter to a tribunal for adjudication.
Provided that where a reference has been
made to a Tribunal under this sub-section,
it shall pass an award within a period of
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thirty days from the date of such
reference."
In short the submission on behalf of the petitioner
is that Specified Authority could have on the
respondents application either reviewed the order of
the company granting or refusing to grant permission
for closure or refer the matter to a Tribunal for
adjudication. It had no authority to reject the
application for review and refer the matter to the
Tribunal for adjudication.
3. This contention is clearly supported by the
judgment of the Supreme court in the case of Cable
Corporation of India, interpreting Section 25-N(6),
which reads as follows:-
"25-N: Conditions precedent to retrenchment
of workmen.- (1) No workman employed in any
industrial establishment to which this
Chapter applies, who has been in continuous
service for not less than one year under an
employer shall be retrenched by that
employer until,-
(a) .....
(b .....
(2) .....
(3) .....
(4) .....
(5) .....
(6) The appropriate Government or the
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specified authority may, either on its
motion or on the application made by the
employer or any workman, review its order
granting or refusing to grant permission
under sub-section (3) or refer the matter
or, as the case may be, cause it to be
referred, to a Tribunal for adjudication.
Provided that where a reference has been
made to a Tribunal under this sub-section,
it shall pass an award within a period of
thirty days from the date of such
reference."
4. In the case before the Supreme Court both
the application for review and the application for
reference has been rejected. However, the High
Court had directed that a Reference be made. The
Supreme Court reversed the order of the High Court
holding that the appropriate Government could either
review the matter or refer the matter to the
Tribunal. It could not do both. The Supreme Court
in paragraph 15 observed as follows:-
"15. A plain reading of the provision makes
the position clear that two courses are
open. Power is conferred on the appropriate
Government to either on its own motion or on
an application made, review its order or
refer the matter to the Tribunal. Whether
one or the other of the courses could be
adopted depends on the fact of each case,
the surrounding circumstances and several
other relevant factors."
There is no reason why Section 25-O(5) should not be
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construed similarly. In the present case, it is
clear that the respondents union applied for a
review of the order granting permission for closure
and in the alternative prayed for a Reference of the
dispute to the Specified Authority. The Specified
Authority considered the application and declined a
Review in the following words:
".... I am also of the opinion that the
Applicant Union has not made out a case for
review of the order dated 27.3.2003."
Instead it referred the matter under Section 25-O(5)
of the Act, in the following words:
"..... hereby referred under Section
25-O(5) of the said Act to the Industrial
Tribunal, Mumbai consisting of Smt. S. V.
Ayarekar."
5. Ms. Doshi, learned counsel for the
respondent submitted that the Order of the Specified
Authority cannot be construed as an order rejecting
the respondents application for review but is liable
to be construed only as an order giving reasons why
the Authority decided to refer the matter under
Section 25-O(5) of I.D. Act. It is not possible to
construe the order in the manner suggested by the
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learned counsel for the respondents. The order
clearly says no to the application for review and
yes to the Reference under Section 25-O(5) of the
I.D. Act.
6. At this juncture, it may be noted that the
respondents had not disputed before the Tribunal
that Commissioner of Labour decided the Review
application on merits and declined to call back his
order of granting permission to close down the Lower
Parel Unit.
7. It was next contended on behalf of the
respondent that if the order is to be construed as
an order rejecting the review, the respondents would
be entitled in law to challenge that order and might
still challenge that order. The respondents are
certainly free to take such steps as may be advised
in regard to the order but as a fact today there is
no challenge to the order and therefore this
submission does not merit any consideration.
8. The learned counsel for the respondent next
contended that the order dated 24.4.2003 allegedly
declining Review cannot be said to be in accordance
with the law. The learned counsel relied on the
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judgment of the Supreme Court in Orissa Textile &
Steel Ltd. vs. State of Orissa & Ors. [ 2002 I
CLR 831 ] In paragraph 16, the Supreme Court
observed as follows:
"..... As submitted by the learned Attorney
General, in a review the appropriate
government would have to make an enquiry
into all necessary facts, particularly into
the genuineness and adequacy of the reasons
stated by the employer. An opportunity of
being heard would have to be given to the
employer, workmen and all interested
persons. The order on review would have to
be in writing giving reasons."
In any case its validity has not been questioned by
the respondent and it is not necessary to deal with
this question. It must be noted that the learned
counsel for the respondent urged this court to
decide the entire controversy in the matter and not
merely the competence of the Tribunal to go into the
Reference. It is obviously not necessary to do so,
if the reference is found to be incompetent. It was
pointed out on behalf of the respondent that the
petitioners have further purported to effect the
closure to their undertaking Lower Parel Unit after
the closure in dispute under Section 25FFA of the
I.D. Act and therefore the validity of the entire
order of the Tribunal should be decided in this
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matter. The subsequent closure is not in issue in
these proceedings.
9. Mr. Cama, the learned counsel for the
petitioners submitted that the subsequent closure
has been effected without prejudice to the rights
under the earlier permission. However, it appears
that there is no reason why the entire controversy
should be decided if it is seen that the Reference
was not competent.
10. In this view of the matter, I am of opinion
that the Specified Authority could not have referred
the matter to the Tribunal in exercise of its power
under Section 25-O(5) of the I.D. Act, having
rejected the application for Review. The power of
the Specified Authority to deal with and decide an
application made to it under Section 25-(O) stood
exhausted on the rejection of the Review application
and a Reference to the Tribunal thereafter was not
competent.
11. In this view of the matter, the petition
succeeds. Rule is made absolute in terms of prayer
clause (a), which reads as follows:-
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"(a) That this Honourable Court be pleased
to issue a Writ of Certiorari or a Writ in
the nature of Certiorari of any other Writ,
Order or Direction under Article 226 of the
Constitution of India, calling for the
records and proceedings of Reference (IT)
No. 37 of 2003 from the office of the Trial
Court and after examining the legality,
validity and/or propriety of the impugned
Award dated 5th May 2007 and after hearing
all the parties to the Petition, quash and
set aside the impugned Award dated 5th May
2007, which is annexed at Exhibit ’R’
hereto;"
12. At the request of the learned counsel for
the respondents, the petitioners shall not withdraw
the Bank Guarantee furnished by them for a period of
six weeks from today.
(S. A. BOBDE, J.)
2 issues framed by the court
Whether the Specified Authority could refer the matter to the Industrial Tribunal after declining the application for review under Section 25-O(5) of the Industrial Dispute Act.
Whether the order of the Specified Authority declining review and referring the matter was competent and without authority of law.
Colour shows how this judgement treated each authority
Cable Corporation of India Ltd. vs. Additional Commissioner of Labour & Ors.Followed¶17
Cable Corporation of India Ltd. vs. Additional Commissioner of Labour & Ors. [ 2008 II CLR 545 ]
Orissa Textile & Steel Ltd. vs. State of Orissa & Ors.Referred¶49
Orissa Textile & Steel Ltd. vs. State of Orissa & Ors. [ 2002 I CLR 831 ]
3 provisions across 2 enactments
Kansai Nerolac Paints Limited
Paints Employees Union
S. A. BOBDE
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court