{"id":208631,"date":"2008-07-22T00:00:00","date_gmt":"2008-07-21T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-agarwal-traders-vs-ankush-m-bhabal-on-22-july-2008"},"modified":"2018-12-10T02:41:14","modified_gmt":"2018-12-09T21:11:14","slug":"ms-agarwal-traders-vs-ankush-m-bhabal-on-22-july-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-agarwal-traders-vs-ankush-m-bhabal-on-22-july-2008","title":{"rendered":"M\/S. Agarwal Traders vs Ankush M. Bhabal on 22 July, 2008"},"content":{"rendered":"
Bombay High Court<\/div>\n
M\/S. Agarwal Traders vs Ankush M. Bhabal on 22 July, 2008<\/div>\n
Bench: S.A. Bobde<\/div>\n
                         :1:\n\n\n\n         IN THE HIGH COURT OF JUDICATURE AT BOMBAY\n           ORDINARY ORIGINAL CIVIL JURISDICTION\n\n           WRIT PETITION NO. 1977   OF   2006\n\n\n\n\n                                                                  \n    1.   M\/s. Agarwal Traders        ]\n         Proprietor of Navyug        ]\n\n\n\n\n                                         \n         Processes, 12, D.D. Sathe   ]\n         Marg, Girgaon, Mumbai       ]\n    2.   Banwarilal Jalan            ]\n         Partner, residing at        ]\n         12, D.D. Sathe Marg, Girgaon]\n\n\n\n\n                                        \n         Mumbai 400 004              ]..Petitioners\n\n                versus\n\n    1.   Ankush M. Bhabal            ]\n\n\n\n\n                               \n         Shivshankar Nagar, Salt Pan ]\n         Road, Wadala (E), Mumbai 37 ]\n    2.   Smt. Laxmi Maruti Bhabal    ]\n                    \n         widow of late Shri Maruti   ]\n         Vishram Bhabal, Residing at ]\n         Room No. 105, First floor, ]\n         \"A' Wing, Swarganga         ]\n                   \n         Apartments, Sector - 18     ]\n         Kamothe, Khandeshwar,       ]\n         Navi Mumbai 410 209         ]\n    3.   Vijay Dattatraya Yeram      ]\n         A\/90, Shastri Nagar, Sion   ]\n         Koliwada, Mumbai - 22       ]\n      \n\n\n    4.   Sadanlal Mahabir Mali       ]\n         Silver Dukes B No. Room 203 ]\n   \n\n\n\n         Prabhadevi, Hathiskar Marg ]\n         Mumbai - 25                 ]\n    5.   Suryakant Laxman Bhabal     ]\n         Shivshankar Nagar, Salt Pan ]\n         Road, Wadala (E), Mumbai 37 ]\n\n\n\n\n\n    6.   Madhukar Atmaram Lakeshri   ]\n         Baramden Rami Chawl,        ]\n         Jawahar Nagar, Sai Baba Road]\n         Khar (E), Mumbai - 51       ]\n    7.   Naseer Abbas Mullah         ]\n         Municipal Pathra Chawl,     ]\n\n\n\n\n\n         Chawl No. 43, Room No. 4    ]\n         Byculla, Mumbai - 11        ]\n    8.   Manoj Banwarilal Jalan      ]\n         12\/2, D.D. Sathe Marg,      ]\n         Girgaum, Mumbai - 4         ]\n    9.   Smt. Pratikha Prakash       ]\n         Ghavale, widow of late Shri ]\n\n\n\n\n                                          ::: Downloaded on - 09\/06\/2013 13:37:07 :::\n                             :2:\n\n\n\n            Prakash Gunaji Ghavale      ]\n            Lokmanya Co-operative       ]\n            Housing Society, Plot No.526]\n            Room No. 22, Charkop,       ]\n            Kandivali (West),           ]\n\n\n\n\n                                                                            \n            Mumbai 400 067              ]\n    10.     Smt. Shaila Dattatray       ]\n            Kharkar, widow of late Shri ]\n\n\n\n\n                                                    \n            Dattatray Janardan Kharkar ]\n            G-8(96), Hiraji Baug Wadi   ]\n            Chawl No. 8, Jakeria Bunder ]\n            Road, Sewri, Mumbai 400015 ]..Respondents\n\n\n\n\n                                                   \n    Mr. Sudhir Talsania, Senior Counsel with Mr. Kiran\n    Bapat with Mr. J. K. Desai for the Petitioners.\n\n    Mr.   Vinod Shetty      with Ms.        Ketki    Rege       for      the\n\n\n\n\n                                       \n    Respondent No. 1.\n\n    Mr.     Neel Helekar for the Respondent No.             8.\n                         ig      CORAM :     S. A. BOBDE, J.\n<\/pre>\n
                              DATE      :    22ND JULY, 2008.\n\n\n    ORAL JUDGMENT :\n      \n\n\n    .     This   petition   by    the       employer      is      directed\n   \n\n\n\n    against    the   Order of the Industrial Court,                Mumbai,\n\n    dated    6.6.2006   holding    the petitioners            guilty        of\n\n\n\n\n\n    Unfair    Labour Practices under Item 6 of Schedule                     II\n\n    and   Item   9 of Schedule IV of the MRTU &               PULP       Act,\n\n<\/pre>\n
    1971.     The Industrial Court has further directed the<\/p>\n
    petitioners to pay the wages of the complainants till<\/p>\n
    subsistence of contract of employment after deducting<\/p>\n
    the payment already made \/ deposited.\n<\/p>\n
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\n                                    :3:<\/span><\/p>\n
    2.     The      Petitioner      No.1      is   a   partnership             firm<\/p>\n
    engaged      in    the business of job work of                calendaring<\/p>\n
    and packaging of cloth.              In 1986, the land upon which<\/p>\n
    the    factory      of    the      petitioners     was      situate         was<\/p>\n
    acquired        by the BEST Undertaking for construction of<\/p>\n
    Depot.       This acquisition was challenged by the Union<\/p>\n
    Sarva      Shramik      Sangh by Writ Petition No.                  1106      of<\/p>\n
    1993.      This petition was dismissed on 15.6.1993.\n<\/p>\n
    3.     On    12.7.1993 a Notice of intended lock-out with<\/p>\n
    effect from 26.7.1993 was put up on the notice board.\n<\/p>\n
    Before      the\n                             \n                       lock-out took effect, on              13.7.1993          the\n\n    BEST    Authorities demolished the factory premises                           of\n                            \n    the petitioners.\n\n\n\n    4.     According        to    the petitioners they offered                  the\n      \n\n\n    dues       to     the    workmen      on    account        of       closure.\n   \n\n\n\n    Apparently        some    accepted the dues while others                    did\n\n    not.\n\n\n\n\n\n    5.     On 30.8.2000 the Respondent Nos.                  1 to 7 filed a\n\n    Complaint        on their own behalf and on behalf of other\n\n\n\n\n\n<\/pre>\n
    workmen totalling 76, after a period of about 7 years<\/p>\n
    claiming that the closure effected by the petitioners<\/p>\n
    is    in    the    guise      of    the    lock-out      and      being       in<\/p>\n
    contravention        of      Section      25(O) of     the      Industrial<\/p>\n
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\n                                 :4:<\/span><\/p>\n
    Disputes      Act,   is    illegal    since     the       contract          of<\/p>\n
    employment      continues,     the petitioners are bound                    to<\/p>\n
    pay the wages to the respondents employees.\n<\/p>\n
    6.     The Industrial Court condoned the delay of about<\/p>\n
    7    years and thereupon adjudicated the complaint.                         It<\/p>\n
    came    to the conclusion that the lock- out                    announced<\/p>\n
    vide     a    Notice   dated       12.7.1993     intended            to     be<\/p>\n
    effective      from 26.7.1993 was illegal and unjustified<\/p>\n
    and    further that the petitioners have not taken                        any<\/p>\n
    steps    to    terminate the contract of             employment           and<\/p>\n
    therefore<\/p>\n
                   they are liable to pay wages.                The learned<\/p>\n
    Industrial      Court therefore directed the                petitioners<\/p>\n
    to    pay    wages   and    legal dues     to    the        respondents<\/p>\n
    workmen       till   the    subsistence        of        contract           of<\/p>\n
    employment.\n<\/p>\n
    7.     Mr.      Talsania,      learned      counsel             for       the<\/p>\n
    petitioners       submitted       that   the     Order            of      the<\/p>\n
    Industrial      Court is unsustainable in law,                  primarily<\/p>\n
    since    the Industrial Court has ignored the existence<\/p>\n
    of    the    closure of the petitioners establishment                       on<\/p>\n
    13.7.1993.       According to the learned counsel it                      was<\/p>\n
    necessary      to give legal effect to the closure                     which<\/p>\n
    necessarily terminated the contract of employment and<\/p>\n
    therefore      even though the petitioners might be                      held<\/p>\n
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\n                                  :5:<\/span><\/p>\n
    liable to payment of closure compensation they should<\/p>\n
    not    be    held liable for payment of wages as                 if     the<\/p>\n
    contract of employment continued.\n<\/p>\n
    8.     Mr.        Shetty   the     learned      counsel       for       the<\/p>\n
    respondents        submitted that the Industrial Court                  has<\/p>\n
    come    to the conclusion that the lock-out is                   illegal<\/p>\n
    and since the petitioners had really effected closure<\/p>\n
    in    the    guise of lock-out, there was a clear                  unfair<\/p>\n
    labour      practices committed by them and therefore the<\/p>\n
    contract      of    employment      must   be     held      to     be     in<\/p>\n
    existence.\n<\/p>\n
                      Accordingly, the petitioners must be held<\/p>\n
    liable      for    payment    of wages.      The procedure           of     a<\/p>\n
    valid    closure      is provided by Section 25 FFA of                  the<\/p>\n
    Industrial Disputes Act, which reads as follows:-\n<\/p>\n
           “25FFA.   Sixty days’ notice to be given of
\n           intention to close down any undertaking.- (1) An<\/p>\n
           employer   who   intends to    close   down   an
\n           undertaking shall serve, at least sixty days
\n           before the date on which the intended closure is
\n           to become effective, a notice in the prescribed
\n           manner, on the appropriate Government stating<\/p>\n
           clearly the reasons for the intended closure of
\n           the undertaking:<\/p><\/blockquote>\n
\n\n           Provided     that     nothing   in this       section         shall\n           apply to     -\n\n\n\n\n\n            (a)   an undertaking in which-\n\n                 (i)    less than fifty workmen are employed,\n                        or\n\n<\/pre>\n
                 (ii)   less than fifty workmen were employed
\n                        on an average per working day in<\/p>\n
                                                      ::: Downloaded on – 09\/06\/2013 13:37:07 :::<\/span>
\n                                   :6:<\/span><\/p>\n
                         the preceding twelve months,<\/p>\n<\/blockquote>\n
            (b) an undertaking set up for the construction
\n            of buildings, bridges, roads, , roads, canals,
\n            dams or for other construction work or project.\n<\/p><\/blockquote>\n
            (2)   Notwithstanding anything    contained   in
\n            sub-section (1), the appropriate Government,<\/p>\n
            may, if it is satisfied that owing to such
\n            exceptional circumstances as accident in the
\n            undertaking or death of the employer or the like
\n            it is necessary so to do, by order, direct that
\n            provisions of sub-section (1) shall not apply in<\/p>\n
            relation to such undertaking for such period as
\n            may be specified in the order].\n<\/p><\/blockquote>\n
    It may be noted that the respondents have been unable<\/p>\n
    to    establish      the existence of more than 76             workmen<\/p>\n
    and<\/p>\n
           therefore it is clear that the provisions                   under<\/p>\n
    Chapter    VB which include Section 25-O of the I.                      D.\n<\/p>\n
    Act are not applicable.\n<\/p>\n
    9.     There    is no doubt that the closure took                place.\n<\/p>\n
    There    was    in   fact     a physical     demolition        of     the<\/p>\n
    petitioners      factory      by    the BEST   on    13.7.1993          in<\/p>\n
    pursuance      of    notice    of     land   acquisition.            That<\/p>\n
    thereafter      the lock-out notice given on the               earlier<\/p>\n
    day    12.7.1993 was not given effect to.             It is        clear<\/p>\n
    from    the complaint that the respondents are aware of<\/p>\n
    this    demolition.       Earlier the respondents had                also<\/p>\n
    challenged the acquisition by way of a writ petition.\n<\/p>\n
    The    question      is, in such circumstances what is                the<\/p>\n
    responsibility       and liability of an employer such                  as<\/p>\n
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\n                                  :7:<\/span><\/p>\n
    the    petitioners.         It    is clear that      Section         25FFA<\/p>\n
    would    not    apply to the closure in question                 because<\/p>\n
    the    closure      did not take place in pursuance                of     an<\/p>\n
    intention      of employer to close down the undertaking.\n<\/p>\n
    The    closure took place as a result of acquisition of<\/p>\n
    the    premises and the demolition of the factory.                        In<\/p>\n
    the    circumstances,        the petitioners’ liability                will<\/p>\n
    have    to    be    worked out in accordance           with      Section<\/p>\n
    25FFF.       That liability must therefore be a liability<\/p>\n
    to    issue    notice and pay compensation in               accordance<\/p>\n
    with    the provisions of Section 25F as if the workmen<\/p>\n
    had been retrenched.\n<\/p>\n
    10.    Mr.     Talsania      the    learned    counsel          for     the<\/p>\n
    petitioners        stated    that    the petitioners          does      not<\/p>\n
    claim    any    protection of liability under Proviso                     to<\/p>\n
    Section      25FFF.     However, the Industrial             Court       has<\/p>\n
    ignored      the settled position in law that the closure<\/p>\n
    brings      an end to the contract of employment and                    has<\/p>\n
    held that the contract of employment which existed on<\/p>\n
    12.7.1993 i.e.        on the date of the notice of lock-out<\/p>\n
    continued      thereafter because the petitioners did not<\/p>\n
    take    any    steps    for      terminating   the      contract          of<\/p>\n
    employment.        This is a clear error of law on the face<\/p>\n
    of    the    record.    The Industrial Court ought to                  have<\/p>\n
    noticed      the    closure      and given effect to          the      said<\/p>\n
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\n                                    :8:<\/span><\/p>\n
    closure      by    imposing liability of           compensation           for<\/p>\n
    closure      rather      than for payment of wages as if                  the<\/p>\n
    contract      of    employment subsist.           There is        in     fact<\/p>\n
    very little discussion by the Industrial Court on the<\/p>\n
    existence      of      closure.       On    the    other      hand,       the<\/p>\n
    Industrial        Court has come to the conclusion that the<\/p>\n
    lock-out       proposed        by    the    petitioners         was       not<\/p>\n
    justified.         In doing so the learned Industrial Court<\/p>\n
    overlooked        the    fact that the lock-out never                became<\/p>\n
    effective      since it was intended to take effect                      from<\/p>\n
    26.7.1993,         Whereas      the     petitioners       factory         and<\/p>\n
    establishment<\/p>\n
                           suffered a forcible closure because of<\/p>\n
    the    land acquisition on 13.7.1993.               The order of the<\/p>\n
    Industrial        Court      is therefore not sustainable.                  It<\/p>\n
    therefore         appears       clear      that    the      petitioners<\/p>\n
    establishment          was closed with effect from              13.7.1993<\/p>\n
    and    indeed there is no evidence on record to come to<\/p>\n
    a   contrary       conclusion.\n<\/p>\n
    11.    It    must      be    made clear     that    the     Petitioners<\/p>\n
    cannot      be held liable for any non-compliance because<\/p>\n
    they    did    not issue notices and           offer      compensation<\/p>\n
    before the closure.\n<\/p>\n
    12.    It    is    a    settled      law, vide     Judgment        of     the<\/p>\n
    Supreme      Court      in    M\/s.      Avon   Services       Production<\/p>\n
                                                        ::: Downloaded on – 09\/06\/2013 13:37:07 :::<\/span>
\n                                 :9:<\/span><\/p>\n
    Agencies       (P) Ltd., vs.      Industrial Tribunal, Haryana<\/p>\n
    and    others    [AIR 1970 Supreme Court 170] and                Maruti<\/p>\n
    Udyog    Ltd.      vs.    Ram Lal & Ors.<\/a>      [(2005)2         Supreme<\/p>\n
    Court    Cases     638]
\n                       638     that   issuance of      a    notice        and<\/p>\n
    payment     of compensation is not a condition precedent<\/p>\n
    for    giving    effect     to a closure as in the            case      of<\/p>\n
    Section 25FFF of the Industrial Disputes Act.\n<\/p>\n
    13.    In   M\/s.   Avon Services case the Supreme                Court,<\/p>\n
    vide a paragraph 16 observed as follows:\n<\/p>\n
                “…..\n<\/p><\/blockquote>\n
                          By S. 25F a prohibition against
\n                retrenchment until the conditions prescribed
\n                by that section are fulfilled, is imposed;
\n                by S. 25FFF(1) termination of employment on<\/p>\n
                closure of the undertaking without payment
\n                of compensation and without either serving
\n                notice or paying wages in lieu of notice is
\n                not prohibited. Payment of compensation and
\n                payment of wages for the period of notice
\n                are not, therefore, conditions precedent to<\/p>\n
                closure.”\n<\/p><\/blockquote>\n
    In    Maruti    Udyog     case, the Supreme      Court,        vide       a<\/p>\n
    paragraph 21 observed as follows:-\n<\/p>\n
          “21.\n<\/p><\/blockquote>\n
           21.   How far and to what extent the provisions<\/p>\n
          of Section 25-F of the 1947 Act would apply in
\n          case of transfer of undertaking or closure
\n          thereof is the question involved in this appeal.
\n          A plain reading of the provisions contained in
\n          Section 25-FF and Section 25-FFF of the 1947 Act
\n          leaves no manner of doubt that Section 25-F<\/p>\n
          thereof is to apply only for the purpose of
\n          computation of compensation and for no other.
\n          The expression “as if” used in Section 25-FF and
\n          Section 25-FFF of the 1947 Act is of great
\n          significance.   The said term merely envisages
\n          computation of compensation in terms of Section
\n          25-F of the 1947 Act       and not the     other<\/p>\n
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\n                                    :10:<\/span><\/p>\n
           consequences flowing therefrom. Both Section
\n           25-FF and Section 25-FFF provide for payment of
\n           compensation only, in case      of transfer or
\n           closure of the undertaking.       Once a valid
\n           transfer or a valid closure comes into effect,<\/p>\n
           the relationship of employer and employee does
\n           not survive and ceases to exist.    Compensation
\n           is required to be paid to the workman as a<\/p>\n
           consequence thereof and for no other purpose.”\n<\/p><\/blockquote>\n
    14.    Thus,     the       closure        of     the       petitioners<\/p>\n
    establishment        cannot      be held to be vitiated on               the<\/p>\n
    ground that it was not preceded by notice and payment<\/p>\n
    of    compensation.        The closure was validly             effected.<\/p>\n
\n\n\n\n\n                                            \n    This    however      does      not relieve the      petitioners            of\n\n\n\n    petitioners      have\n                           \n<\/pre>\n
    their liability to pay compensation.\n<\/p>\n
                               not     paid    closure\n                                                        Admittedly, the\n\n                                                            compensation.\n                          \n    According      to    them      they   were     ready    to,      but     the\n\n    respondents      did not approach them.            It is clear that\n\n    the    law    casts    a duty on the employer            to      pay     the\n      \n\n\n    compensation        and    the    employer is not        entitled          to\n   \n\n\n\n    contend      that    he wanted to but the workmen                did     not\n\n    claim    it.     It    appears that        the    petitioners           have\n\n<\/pre>\n
    deposited compensation before the Industrial Court as<\/p>\n
    per    the order of this court and the amount has                       been<\/p>\n
    withdrawn by the respondents.\n<\/p>\n
    15.    The     learned         counsel     for    the      respondents<\/p>\n
    submitted      that    the       petitioners      had    deliberately<\/p>\n
    avoided      payment      of    compensation from the            date      of<\/p>\n
                                                       ::: Downloaded on – 09\/06\/2013 13:37:07 :::<\/span>
\n                                 :11:<\/span><\/p>\n
    closure     i.e.       13.7.1993 and must be held liable                 to<\/p>\n
    pay interest on the said sum.            There is merit in this<\/p>\n
    contention        on    behalf   of     the     respondents            and<\/p>\n
    accordingly       I consider it appropriate to direct                  the<\/p>\n
    petitioners       to    pay interest at the rate of 12%                per<\/p>\n
    annum    from     13.7.1993 till the date the            amount        was<\/p>\n
    deposited       by them before the Industrial Court.                   The<\/p>\n
    petitioners       are accordingly directed to deposit                  the<\/p>\n
    amount     of    interest,    as stated       above,     before        the<\/p>\n
    industrial       Court    within a period of 12          weeks        from<\/p>\n
    today.\n<\/p>\n
    16.        The respondents shall be at liberty to claim<\/p>\n
    interest     of unpaid gratuity in accordance with law,<\/p>\n
    as may be advised.         The petitioners shall be at full<\/p>\n
    liberty to defend such an application, if made.\n<\/p>\n
    17.   At    this    juncture,      it may be     noted       that      the<\/p>\n
    learned     counsel      for the petitioners submitted                that<\/p>\n
    the   learned      Industrial      Court   committed         error       in<\/p>\n
    entertaining       the    Dispute     after a period         of     seven<\/p>\n
    years.     It is true that there is AN inordinate delay.\n<\/p>\n
    However,     having      regard to the circumstances of                the<\/p>\n
    case,    viz.     the fact that the respondents mainly are<\/p>\n
    illiterate and appear to have been laid down by their<\/p>\n
    Union,     the learned Industrial Court has condoned the<\/p>\n
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\n                             :12:<\/span><\/p>\n
    delay in the interest of justice.     I see no reason to<\/p>\n
    interfere with the order condoning the delay.\n<\/p>\n
    18.   In   the result, the impugned order is hereby set<\/p>\n
    aside.     The   Petitioners shall be liable, as         above.\n<\/p>\n
    19.   Rule made absolute as indicated above.\n<\/p>\n
                                       (S. A. BOBDE, J.)<\/p>\n
                                            ::: Downloaded on – 09\/06\/2013 13:37:07 :::<\/span>\n <\/p>\n","protected":false},"excerpt":{"rendered":"
Bombay High Court M\/S. Agarwal Traders vs Ankush M. Bhabal on 22 July, 2008 Bench: S.A. Bobde :1: IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 1977 OF 2006 1. M\/s. Agarwal Traders ] Proprietor of Navyug ] Processes, 12, D.D. Sathe ] Marg, Girgaon, Mumbai ] 2. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11,8],"tags":[],"class_list":["post-208631","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"\nM\/S. Agarwal Traders vs Ankush M. 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