JUDGMENT
Sujit Barman Roy, C.J.
1. By this application under Article 226 of the Constitution of India the petitioners seek to challenge Annexure-16 to the petition which is order dated 6.1.2003 passed by the Government of Orissa rejecting the prayer of the petitioners for making a reference for adjudication of the dispute by a Tribunal in terms of Section 25-O(5) of the industrial Disputes Act, 1947.
2. Case of the petitioners, in brief, is that petitioner No. 1 -Orient Paper Mills is a unit of Orient Paper and Industries Limited situated at Brajrajnagar of Orissa. Orient Paper and Industries Limited is a company registered under the Companies Act. Petitioner No. 2 is the Vice President of Orient Paper Mills. Petitioner No. 1 – company made an application on 29.12.1998 before the Government of Orissa for closure of its industrial unit under the provisions of Section 25-O of the said Act. In the said application various grounds for such closure were stated. Upon hearing petitioner No. 1 – employer and others, the State Government of Orissa by its order dated 29.12.1998 rejected the closure application. Grievance of the petitioners is that they assigned various grounds for such closure. But, all those grounds have not been dealt with in the order dated 29.12.1998 issued by the Government of Orissa rejecting the petitioners’ prayer for closure of the unit.
3. Again on 24.4.2001 another application for such closure was made before the Government of Orissa stating therein various” grounds in support of the prayer for closure. Written notes of arguments were also filed before the State Government on behalf of the petitioners. However, the State Government again by its order dated 14.6.2001 rejected the aforesaid second application of the petitioners for closure of their industrial unit. Here also grievance of the petitioners is that various grounds were assigned in the application of the petitioners for closure of their industrial unit. Facts and figures in support of the grounds were also placed before the State Government. However, without dealing with all such facts and figures and grounds, the Government by its order dated 14.6.2001 again rejected the prayer of the petitioners for closure of their industrial unit. Soon thereafter on 11.7.2001 an application was filed on behalf of the petitioners in terms of Section 25-O(5) of the said Act for review of the order of the Government dated 14.6.2001 by which prayer of the petitioners for closure of the industrial unit was turned down. The said application dated 11.7.2001 seeking review was also turned down by the Government by a cryptic order dated 6.3.2002 without dealing with various grounds taken by the petitioners in their application seeking review. The order dated 6.3.2002 passed by the Government rejecting the aforesaid prayer for review reads as under:
“I am directed to invite a reference to your application dated 11.7.2001 on the subject noted above and to say that Government after careful consideration, have been pleased to reject your application for review of Government Order No. 3507 dated 14.6.2001 and re-iterate that the grounds of rejection as communicated vide this Department memo No. 8515 (3) dated 14.6.2001 still holds good.”
4. In view of deteriorating situation in the aforesaid industrial unit of the petitioners and huge loss incurred by the company in running the industry and realising that there was absolutely no possibility of revival of the industry, management of the company was forced to move a third such application for closure of its industrial unit on 24.8.2002. In the said application the voluntary retirement scheme was modified after incorporating some additional monetary benefits and after an agreement with the Union, viz. Orient Paper Mills Sramik Congress. In support of such application for closure of the unit, written note of argument was filed before the State Government on behalf of the petitioners. Affidavits were exchanged between the parties. Despite the aforesaid, Government vide its order dated 10.10.2002 rejected the third application of the petitioners for closure of their unit.
5. Id the aforesaid compelling circumstances and in view of the principles laid down by the Supreme Court in a recent decision in Orissa Textile & Steel Ltd. v. State of Orissa and Ors., (2002) 2 Supreme Court Cases 578, the petitioners made an application before the Government in terms of Section 25-O(5) for making a reference before the Industrial Tribunal constituted under Section 7-A of the said Act. The said application is at Annexure – 13 to the petition. Instead of referring the dispute to the Tribunal for adjudication in terms of Section 25-O(5) of the Act, the State Government converted the said application for reference into a review application and issued notice on 4.12.2002. Soon after that, management of the petitioners by its letter dated 19.12.2002 reminded that State Government that the application on behalf of the petitioners was filed for a making a reference to the Industrial Tribunal in view of the judgment of the Supreme Court in the case of Orissa Textile & Steel Ltd. (supra). Despite the aforesaid, the-Government by its order dated 6.1.2003 after hearing the parties refused to review its earlier order by which the Government rejected the third prayer of the petitioners for closure of the unit. The said order dated 6.1.2003 passed by the Government is at Annexure – 16 to the petition. The said order reads as under:
“Government of Orissa
Labour and Employment Department
ORDER
Bhubaneswar the dated 6.1.2003.
No. II/21-81/2002-251/LE. Whereas an application dated 1.11.2002 filed under Section 25-O(5) of the Industrial Disputes Act, 1947 by the Vice President of M/s Orient Paper Mills, Brajrajnagar praying for reference of the issue of closure of the aforesaid industrial undertaking-to the Tribunal for adjudication.
and
Whereas the said application was heard on 20.12.2002 in the presence of all concerned.
Now therefore in pursuance of the said Sub-section (5) of Section 25-O of the I.D. Act, 1947 the State Government do hereby reject the said review application for the following reasons.
1. The management in their application under Section 25-O of I.D. Act, 1947, dated 24.8.2002, submitted that in the event of permission for closure being granted every workman in the undertaking Would be paid compensation as specified in the Sub-section (5) but subject to availability of funds. It was further submitted in the said application that if the closure was allowed the management would make endeavour for payment of the statutory dues, if any and other admitted liabilities including compensation and other dues of the employees within a period of 10 to 12 months. The aforesaid submission of the employer that the payment of compensation would be subject to availability of funds is neither acceptable nor sustainable under the law and against public interest. An application for intended closure cannot be subject to any kind of condition by the employer.
2. The sickness of an industry has to be corroborated , by referring the issue to the BIFR under the Sick Industrial Companies (Special Provision) Act, 1985. It has been consistently stressed by the employer that the company as a whole is not sick, but the O.P. Mill unit at Brajrajnagar was sick. Sincere attempt should have been made by the employer to revive the identity from the sickness by arranging funds from the company which is not sick as admitted by the employer or from financing institutions. The employers having not referred the matter to the BIFR under the SICA, 1985 and without sincerely attempting for its revival cannot possibly claim that all attempts of revival have been made and there is no iota of hope of revival.
3. It is further evident that the very same employer has also established a paper mill unit at Amlai in Madhya Pradesh. Further, other paper mills in Orissa like J.K. Paper Mill and Sewa Paper Mill are carrying out their respective business successfully. In face of the aforesaid position of paper industries running successfully in the State, the claim of non-viability of the paper mill unit at Brajrajnagar despite having all infrastructure is not convincing.
4. That the management has claimed outright reference of the issue of closure to the Tribunal oh the basis of the orders of the Hon’ble Supreme Court of India in HINDALCO industries Ltd. v. Union of India and Ors. in Civil Appeal No. 14136 of 1996. In the above case, it was held that the appropriate Government shall review the order, if an application in that behalf is made by the employer or by the workmen. Similarly, if so required by the employer or the workmen, it shall refer the matter to a Tribunal for adjudication. In a review, the appropriate Government would have to make an inquiry into all necessary facts particularly into the genuineness and adequacy of the reasons stated by the employer. Thus in exercising powers of review, the appropriate Government would be performing quasi judicial functions. It has been held by the Hon’ble Apex Court that Government have to make an inquiry into all necessary facts particularly into the genuineness and adequacy of the reasons stated by the employer. In keeping with the aforesaid observation, Government after necessary inquiry and hearing have found that the application dated 24.8.2002 for intended closure filed by the employer under Section 25-O was not adequate and genuine and accordingly rejected the same view vide order dated 10.10.2002. Against the said order, the employer has now filed the present application seeking reference of the issue to the Tribunal. In this context, Government are inclined to believe that while reviewing the earlier order, sufficient grounds must exist so as to make out
a case for reference to the Tribunal. But in the instant case the employer has failed to make out a convincing case for reference with reasonable and sufficient grounds. Government while disposing the application is also required to keep the public interest in mind.
Government after careful consideration of the matter in its entirety are inclined to believe that the application seeking reference of the issue of closure to the Industrial Tribunal does not deserve to be considered for the reasonings as described above and as such the same is rejected.
By Order of the Governor,
K.C. Mishra,
Deputy Secretary to Government.”
In the said order no reason was assigned by the Government as to why no reference was made to the Industrial Tribunal as prayed for by the petitioners. Even the Government did not make any reference to the case of the Supreme Court in the case of Orissa Textile & Steel Ltd. v. State of Orissa, (2002) 2 Supreme Court Cases 578, though the said decision was specifically referred to by and on behalf of the petitioners in their application seeking such reference.
6. It is this order dated 6.1.2003 which is under challenge.
7. According to the learned counsel for petitioners, the Government was bound to follow the decision of the Supreme Court in this regard in the case of Orissa Textile & Steel Ltd. referred to above and accordingly, it was obligatory on the part of the Government to refer the dispute between the parties to the Industrial Tribunal as prayed for by the petitioners in terms of Section 25-O(5) of the Act.
8. On the other hand, learned counsel for opposite party Nos. 1 and 2 while referring to Section 25-O(5) contended that it was not at all obligatory on the part of the Government to make such reference as prayed for by the petitioners. Sub-section (5) of Section 25-O provides that 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. Proviso thereto further provides 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.
9. The only question is : Whether in view of the language of Sub-section (5) of Section 25-O it is obligatory on the part of the Government to make a reference to the Tribunal in case such a prayer is made by the management of a company seeking closure
of its industrial unit ? In this regard question further arises : Whether the word “may” occurring in Sub-section (5) of Section 25-O should mean “shall” ? In the aforesaid case of Orissa Textile & Steei Ltd., the Supreme Court held in paragraph 16 of the judgment as follows :
“In our view, the learned Attorney-General is right. A proper reading of Sub-section (5) of the amended Section 25-O shows that, in the context in which it is used, the word “may” necessarily means “shall”. Thus the appropriate Government “shall” review the order if an application in that behalf is made by the employer or the workmen. Similarly, if so required by the employer or the workman, it shall refer the matter to a tribunal for adjudication…..”
Therefore, it is apparent from the aforesaid decision that once the management prays for making a reference of the dispute to the Industrial Tribunal in terms of Sub-section (5) of Section 25-O of the Act, the Government is left with no option but to make a reference to the Tribunal. In the instant case, Government converted the application of the petitioners seeking a reference of the dispute to the Tribunal into an application for review. Therefore, Government’s decision to convert the application seeking reference into one for review is clearly beyond its power in view of the interpretation attributed by the Supreme Court to Section 25-O(5) in the aforesaid case of Orissa Textile & Steel Ltd.. In these circumstances, we need not enter into the other questions as to the inherent merit of the order of review. Once the petitioners drew the attention of the Government to the aforesaid decision of the Supreme Court in the case of Orissa Textile & Steel Ltd., the Government ought not to have acted contrary to the law as laid down by the Supreme Court in that case. The law laid down by the Apex Court is binding on the Government. It has no option in the matter to adopt a different course altogether. In these circumstances, we are left with no option but to strike down the order at Annexure-16 dated 6.1.2003 passed by the Government, and direct the State Government to immediately refer the dispute to the Industrial Tribunal in terms of Section 25-O(5) of the Industrial Disputes Act.
10. The writ petition is accordingly allowed.
No order as to costs.
L. MOHAPATRA, J.
11. I agree.