{"id":227826,"date":"2009-08-17T00:00:00","date_gmt":"2009-08-16T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/khem-chand-vs-the-state-of-haryana-through-the-on-17-august-2009"},"modified":"2017-09-17T13:05:39","modified_gmt":"2017-09-17T07:35:39","slug":"khem-chand-vs-the-state-of-haryana-through-the-on-17-august-2009","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/khem-chand-vs-the-state-of-haryana-through-the-on-17-august-2009","title":{"rendered":"Khem Chand vs The State Of Haryana Through The … on 17 August, 2009"},"content":{"rendered":"
Punjab-Haryana High Court<\/div>\n
Khem Chand vs The State Of Haryana Through The … on 17 August, 2009<\/div>\n
CWP No. 2834 of 2003                                1\n\nIN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH\n\n\n                                          CWP No. 2834 of 2003 (O&M)\n\n                                          Date of decision: 17.08.2009\n\n\n\nKhem Chand s\/o Sh. Kadam Singh and others\n\n\n                                                 .....PETITIONERS\n\n                  VERSUS\n\n\nThe State of Haryana through the Financial Commissioner and Secretary,\nLabour and Employment, New Secretariat Building, Sector-17, Chandigarh\nand another\n\n\n                                                 ..... RESPONDENTS\n\n\n\nCORAM:      HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH\n\n\nPresent:    Ms. Abha Rathore, Advocate,\n            and Mr. Puneet Gupta, Advocate,\n            for the petitioners.\n\n            Mr. D.S.Nalwa, Addl. A.G. Haryana.\n\n            Mr. M.L.Sarin, Sr. Advocate,\n            with Mr. A.S.Chadha, Advocate,\n            and Mr. Vivek Sood, Advocate,\n            for respondent No. 2.\n\n                  ***\n\nAUGUSTINE GEORGE MASIH, J.\n<\/pre>\n
            This writ petition has been preferred by 62 workmen, who are<\/p>\n
aggrieved by the order dated 09.08.2002 (Annexure P-12) passed by the<\/p>\n
State of Haryana granting permission to respondent No. 2-M\/s Whirlpool of<\/p>\n
India Limted, Faridabad, under Section 25-O of the Industrial Disputes Act,<\/p>\n
1947 to close down its ‘Evaporator Section’, and order dated 17.01.2003
\n CWP No. 2834 of 2003                                  2<\/span><\/p>\n
(Annexure P-16), vide which the Review Petition preferred by The<\/p>\n
Whirlpool of India Employees Union (Regd.) against the order dated<\/p>\n
09.08.2002 stands rejected. Apart from praying for quashing of the above<\/p>\n
two orders, the petitioners have also sought quashing of the order in the<\/p>\n
form of notice dated 13.08.2002 (Annexure P-9) informing the workmen of<\/p>\n
the evaporator section about the order dated 09.08.2002 (Annexure P-12)<\/p>\n
leading to the termination of the services of the petitioners-workmen.<\/p>\n
            Respondent No. 2-M\/s Whirlpool of India Limited, Faridabad,<\/p>\n
took over   Kelvinator of India Ltd. in the year 1996 and continued to<\/p>\n
manufacture the same products.        According to the Company, it was<\/p>\n
running into losses and, therefore, had to introduce new technology to<\/p>\n
compete with other companies who were producing these products and to<\/p>\n
bring down the cost of production, had to reduce the manpower by<\/p>\n
introducing the Voluntary Retirement Scheme. Despite cutting down the<\/p>\n
manpower, the Company could not break even its expenses and<\/p>\n
accordingly, the Compressor Division was transferred to M\/s Tecumesh on<\/p>\n
‘as is where is’ basis without affecting the terms and conditions of the<\/p>\n
employment of the employees. The Plastic Division was transferred to M\/s<\/p>\n
Brite Brothers in the year 2001 because of the fact that the technology with<\/p>\n
regard to manufacture of plastic components used in the refrigerators had<\/p>\n
undergone a sea change and the Company was not in a position to meet<\/p>\n
with the requirements of fixing quality components of plastic, which were<\/p>\n
used by the other competitors in the market.\n<\/p>\n
             The Company while manufacturing the refrigerators was using<\/p>\n
clinch tube type evaporators. With the change in technology world-wide in<\/p>\n
respect of the conventional evaporators, roll bond evaporators           were<\/p>\n
introduced, which were much more economical, efficient and consumed
\n CWP No. 2834 of 2003                                 3<\/span><\/p>\n
less energy. The competitors of the Company switched over to the said<\/p>\n
technology and were, therefore, having an edge over the Company-<\/p>\n
respondent No. 2. Apart from this, another compelling circumstance for<\/p>\n
use of roll bond evaporators was that as per The Montreal Convention,<\/p>\n
1987, on Environment, to which India was one of the participants, had<\/p>\n
emphasized that gases which tend to deplete ozone layers in the<\/p>\n
atmosphere should not be used. The Government of India, accordingly,<\/p>\n
framed the Ozone Depleting Substance (Regulation and Control) Rules,<\/p>\n
2000 (hereinafter referred to as ‘Rules, 2000’) under the Environment<\/p>\n
Protection Act, 1986, in which the use of gases, which tend to deplete the<\/p>\n
ozone layers, was prohibited.        The conventional clinch tube type<\/p>\n
evaporators, which were being manufactured by respondent No. 2-<\/p>\n
Company, used gases which tend to deplete ozone layers and were now<\/p>\n
prohibited under the Rules, 2000. As per these Rules, this prohibition was<\/p>\n
to come into effect from the end of 2002 and before that the use of these<\/p>\n
gases was required to be stopped by the manufacturers of refrigerators.<\/p>\n
Taking into consideration all these factors, respondent No. 2-Company<\/p>\n
decided to switch over to the use of roll bond evaporators           in the<\/p>\n
refrigerators. As it did not have the necessary expertise to manufacture the<\/p>\n
roll bond evaporators in its factory, it decided to purchase the same from<\/p>\n
outside sources. Another aspect, which forced the Company to take this<\/p>\n
step, was that the roll bond evaporators had been designed and<\/p>\n
manufactured by M\/s EAR Canal SA Pvt. Ltd., Spain, which had got the<\/p>\n
design patented under the law. All other competitors of respondent No. 2-<\/p>\n
Company in India in the refrigerator industry were purchasing the said<\/p>\n
evaporators from this very Company. The effect of this decision was that<\/p>\n
the entire machinery already lying in the Evaporator Section was rendered
\n CWP No. 2834 of 2003                                  4<\/span><\/p>\n
redundant except that it had to be sold as scrap. Over and above, it<\/p>\n
required an expenditure of Rs. 8 to 9 crores in the infrastructure for fixing<\/p>\n
the roll bond evaporators purchased from outside to be fitted in the<\/p>\n
refrigerators manufactured in the factory of respondent No. 2. Under these<\/p>\n
compelling circumstances, a decision was taken to close down the<\/p>\n
Evaporator Section to keep itself afloat in the cut throat competitive market<\/p>\n
adhering to and complying with the requirement of the statutory provisions.<\/p>\n
Therefore, an application for seeking permission to close down the<\/p>\n
Evaporator Section was moved to the appropriate Government i.e.<\/p>\n
Government of Haryana under Section 25-O of the Industrial Disputes Act,<\/p>\n
1947.\n<\/p>\n
            The application under Section 25-O of the Industrial Disputes<\/p>\n
Act dated 31.05.2002 was received by the Labour Department on<\/p>\n
12.06.2002, copy whereof has been appended as Annexure P-3.<\/p>\n
According to the said application, the date of proposed closure was<\/p>\n
mentioned as 31.07.2002.       The Whirlpool of India Employees Union<\/p>\n
(Regd.) (hereinafter referred to as ‘the Union’) received a copy of the<\/p>\n
application dated 31.05.2002 on 25.06.2002, which was delivered by the<\/p>\n
office of Deputy Labour Commissioner, Faridabad, along with a letter of the<\/p>\n
Labour Department stating that a meeting is fixed for 28.06.2002 at 11.30<\/p>\n
A.M. in the office of the Joint Labour Commissioner, Haryana at<\/p>\n
Chandigarh for hearing the matter regarding application dated 31.05.2002<\/p>\n
for permission for closure of Evaporator Section by the Management of M\/s<\/p>\n
Whirlpool of India Ltd. The Union and the Management appeared before<\/p>\n
the Joint Labour Commissioner, who agreed to grant time to submit reply<\/p>\n
but the Union was not allowed to be represented through their Legal<\/p>\n
Secretary, who was a practicing Advocate. The matter was adjourned to
\n CWP No. 2834 of 2003                                  5<\/span><\/p>\n
08.07.2002. The office bearers of the Union appeared on 08.07.2002 and<\/p>\n
submitted their reply dated 06.07.2002 to the application. Thereafter, the<\/p>\n
matter was adjourned to 13.07.2002 to be heard by the Labour<\/p>\n
Commissioner himself.      On 13.07.2002, respondent No. 2-Company<\/p>\n
submitted rejoinder   dated 11.07.2002 to the reply of the Union.        The<\/p>\n
matter was then adjourned to 23.07.2002 as the Labour Commissioner<\/p>\n
reached late in the office and no time was left to take up the matter. On<\/p>\n
23.07.2002, the Labour Commissioner was not available and the Union<\/p>\n
submitted their written arguments dated 22.07.2002. It would not be out of<\/p>\n
way to mention here that respondent No. 2-Company vide notice dated<\/p>\n
01.8.2002 informed the employees of the Evaporator Department that the<\/p>\n
production activities in the Evaporator Department were being suspended<\/p>\n
temporarily w.e.f. 03.08.2002 to 11.08.2002 and, therefore, the employees<\/p>\n
of this Department need not report for duty. Thereafter, the Union received<\/p>\n
a letter informing that the meeting was fixed on 05.08.2002 at 11.30 A.M.<\/p>\n
in the office of the Financial Commissioner and Principal Secretary        to<\/p>\n
Government of Haryana, Labour and Employment and on that date both<\/p>\n
the parties were heard.      The Financial Commissioner and Principal<\/p>\n
Secretary, Government of Haryana          passed order dated 09.08.2002<\/p>\n
granting permission to the Management to close down the Evaporator<\/p>\n
Section and the letter was sent to respondent No. 2-Management and the<\/p>\n
Union on the same day, but no copy was received by the Union or the<\/p>\n
workmen individually. On receipt of the order dated 09.08.2002 passed by<\/p>\n
respondent No. 1 granting permission to the Management to close down<\/p>\n
the Evaporator Section, notice was displayed that keeping in view the<\/p>\n
permission granted by the Government to close down the Evaporator<\/p>\n
Section, the operation in Evaporator Section is suspended till further orders
\n CWP No. 2834 of 2003                                  6<\/span><\/p>\n
and the workers of the Evaporator Section need not report for duty till then.<\/p>\n
            The workmen were shocked to read the notice as they had no<\/p>\n
knowledge about       the order passed by respondent No. 1 granting<\/p>\n
permission as the same was not conveyed to them and accordingly, the<\/p>\n
Union requested for supply of copy of the order of Government dated<\/p>\n
09.08.2002, which was subsequently received by the Union on 26.08.2002<\/p>\n
sent by the Labour-cum-Conciliation Officer, Faridabad through proper<\/p>\n
channel. However after notice dated 13.08.2002 displayed on the notice<\/p>\n
board of the Company, the Union procured a copy of the order and<\/p>\n
immediately prepared a Review Petition dated 19.08.2002 and submitted<\/p>\n
before respondent No.1 under Section 25-O(5) of the Industrial Disputes<\/p>\n
Act, 1947. A request for stay of the order under Review was sought but<\/p>\n
respondent No. 1 did not fix the date of hearing of the petition and taking<\/p>\n
advantage thereof, respondent No. 2 terminated the services of the 186<\/p>\n
workers of the Evaporator Section. Reply to the Review Petition was filed<\/p>\n
by the Company-respondent No. 2 on 12.10.2002. Since no decision was<\/p>\n
being taken on the Review Petition, the Union approached this High Court<\/p>\n
by way of filing CWP No. 17655 of 2002 titled as Whirlpool of India<\/p>\n
Employees Union (Regd.) vs. State of Haryana and another, which was<\/p>\n
disposed of by this Court vide order dated 31.10.2002 with a direction to<\/p>\n
respondent No. 1 to decide the Review Petition preferred by the Union<\/p>\n
within two months from the date of certified copy of the order of the Court is<\/p>\n
brought to the notice of the competent authority. In compliance with the<\/p>\n
order passed by the High Court, the Review Petition preferred by the Union<\/p>\n
was decided vide order dated 17.01.2003. The stand of the Union was<\/p>\n
rejected by respondent No. 1 leading to the filing of the present petition<\/p>\n
challenging the order dated 09.08.2002 (Annexure P-12), vide which
\n CWP No. 2834 of 2003                                  7<\/span><\/p>\n
permission has been granted to the Company under Section 25-O of the<\/p>\n
Industrial Disputes Act, 1947 to close down the Evaporator Section as also<\/p>\n
the order dated 17.01.2003 (Annexure P-16) passed by respondent No. 1<\/p>\n
rejecting the Review Petition preferred by the Union and the notice dated<\/p>\n
13.08.2002 (Annexure P-9), vide which the operation in the Evaporator<\/p>\n
Section was suspended till further orders and the workers in the Evaporator<\/p>\n
Section were directed not to report for duty.\n<\/p>\n
             The present petition was initially preferred by the Whirlpool of<\/p>\n
India Employees Union (Regd.), Haryana (affected persons of the Union<\/p>\n
only) through Sri Parkash s\/o Sh. Harpal Singh resident of MCF No. 388,<\/p>\n
60 feet Road, Parwatia Colony, Faridabad, Haryana. The Company raised<\/p>\n
a number of preliminary objections, out of which one was that Mr. Sri<\/p>\n
Parkash and Mr. Dhan Singh have no locus standi to initiate any legal<\/p>\n
action on behalf of the petitioner-Union as they are not the office bearers of<\/p>\n
the Union.      On this objection having been taken, two separate<\/p>\n
Miscellaneous Applications i.e. Civil Misc. No. 21925 of 2004 and Civil<\/p>\n
Misc. No. 22045 of 2004 were filed.       In C.M. No. 21925 of 2004, the<\/p>\n
applicants claimed that they were working in the Evaporator Section of the<\/p>\n
Company and since they were affected by the impugned orders, which<\/p>\n
have been challenged in the writ petition, they have authorized Mr. Sri<\/p>\n
Parkash to represent the applicants in all legal proceedings. They have,<\/p>\n
therefore, prayed that the applicants be added as writ petitioners and the<\/p>\n
name of Whirlpool of India Employees Union (Regd.) Haryana (Affected<\/p>\n
members of Union only) may be deleted from the array of parties. The<\/p>\n
application was filed by 62 affected members. In C.M. No. 22045 of 2004,<\/p>\n
the petitioners had prayed for the amendment of the writ petition in view of<\/p>\n
the objections raised by the Company. The amendment sought was
\n CWP No. 2834 of 2003                                8<\/span><\/p>\n
mentioned in paragraphs 8 and 9 of the application. The applicants had<\/p>\n
detailed the amendment sought. Reply to the said applications were filed<\/p>\n
by the Company. On consideration of the applications and the reply filed<\/p>\n
by the Company and after hearing the counsel for the parties, a Division<\/p>\n
Bench of this Court vide its order dated 11.04.2005 allowed both the<\/p>\n
applications as per their prayers. However, all objections legal as well as<\/p>\n
factual were left open to the Company including the objections with regard<\/p>\n
to delay and latches.\n<\/p>\n
            Counsel for the petitioners contends that the order dated<\/p>\n
09.08.2002 passed by the Government granting permission to the<\/p>\n
Company cannot be sustained as the same is in violation of the provisions<\/p>\n
of Section 25-O of the Industrial Disputes Act. There is a patent legal<\/p>\n
error, which has crept in and the same has not been taken into<\/p>\n
consideration by the Government while passing the order dated 09.08.2002<\/p>\n
(Annexure p-12) and thereafter, order dated 17.01.2003 (Annexure P-16)<\/p>\n
while deciding the Review Application preferred by the Union. She submits<\/p>\n
that Section 25-O provides for the procedure for closing down an<\/p>\n
undertaking. As per sub-section (1), an employer who intends to close<\/p>\n
down an undertaking of an industrial establishment to which this chapter<\/p>\n
applies, shall apply in the prescribed manner for the prior permission at<\/p>\n
least 90 days before the date on which the intended closure is to become<\/p>\n
effective, to the appropriate Government. She submits that the application<\/p>\n
for permission to seek closure of the Evaporator Unit is dated 31.05.2002<\/p>\n
(Annexure P-11).    The said application gives the date, on which the<\/p>\n
intended closure is to become effective, as 31.07.2002. This only comes to<\/p>\n
60 days, which is against the mandate of Section 25-O. The application, in<\/p>\n
any case, was received by the appropriate Government on 12.06.2002
\n CWP No. 2834 of 2003                                  9<\/span><\/p>\n
and, therefore, the actual period, for which the notice was given by the<\/p>\n
Company, comes to 48 days. She further submits that Section 25-O (1),<\/p>\n
apart from mandating 90 days notice, also provides that a copy of the said<\/p>\n
application of intended closing down of an industrial establishment shall<\/p>\n
also be served simultaneously on the representatives of the workmen in<\/p>\n
the prescribed manner. As has come on record, the said application dated<\/p>\n
31.05.2002 was not served upon the Union simultaneously. The same<\/p>\n
was received by the Union on 25.06.2002 and that too, not from the<\/p>\n
Company but from the Labour Commissioner, Haryana, vide letter dated<\/p>\n
21.06.2002, which was received by the Union on 25.06.2002 (Annexure P-<\/p>\n
2). Accordingly, she submits that even if the provisions of Section 25-O are<\/p>\n
stretched to the extent that all requirements under the provisions were<\/p>\n
fulfilled that would come to 25.06.2002, when the application was received<\/p>\n
by the Union and when the period is calculated from this date, it comes to<\/p>\n
only 35 days. She, on this basis, submits that the application itself being in<\/p>\n
violation of Section 25-O of the Industrial Disputes Act, the same could not<\/p>\n
have been considered and decided by the Government as it was an<\/p>\n
incurable defect. She further submits that apart from this patent error,<\/p>\n
which has been overlooked by the Government to the prejudice of the<\/p>\n
petitioners, the Government as per Section 25-O (2) of the Industrial<\/p>\n
Disputes Act was required to make an enquiry into the reasons mentioned<\/p>\n
in the application for seeking permission to close down an undertaking and<\/p>\n
such enquiry without taking into confidence the employees, who are<\/p>\n
directly affected by such a decision of the Government, would be in<\/p>\n
violation of the basic principles of natural justice. The Union was not given<\/p>\n
effective hearing by the Government and its officials.       They were not<\/p>\n
allowed to be represented by the Legal Secretary as the workmen were not
\n CWP No. 2834 of 2003                                 10<\/span><\/p>\n
well conversant    with the language, which was being used during the<\/p>\n
submissions being made and further the application and the contents<\/p>\n
thereof were technical in nature, which a layman could not understand and<\/p>\n
respond to. On the other hand, the Management was represented by high<\/p>\n
officials, who were well educated and were aware of the details and the<\/p>\n
implication of the technical and legal aspects pitted against workmen who<\/p>\n
neither understood the intricacies of law and the technical details. The<\/p>\n
enquiry thus was without virtually associating the Union and, therefore,<\/p>\n
cannot be said to be in accordance with the provisions of law. She submits<\/p>\n
that the intention of the Legislature was to give effective opportunities of<\/p>\n
being heard to the employer and the workmen, who may be interested in<\/p>\n
such closure. All factors relevant have not been taken into consideration<\/p>\n
by the Government while coming to its decision granting permission to the<\/p>\n
Company for closure. It is her further submission that the requirement of<\/p>\n
section 25-O (2) is that on the decision having been taken by the<\/p>\n
Government, the order so passed, a copy of such order shall be<\/p>\n
communicated to the employer and the workmen simultaneously. In the<\/p>\n
present case, the employer has been communicated the order dated<\/p>\n
09.08.2002 and copy thereof supplied but the same has not been done as<\/p>\n
far as the workmen are concerned. The workmen only came to know of<\/p>\n
the said order when notice dated 13.08.2002 was displayed on the notice<\/p>\n
board by the Company and the order dated 09.08.2002 was officially<\/p>\n
communicated      to the Union only on 26.08.2002 when the same was<\/p>\n
received from the Labour-cum-Conciliation Officer, Faridabad (Annexure P-<\/p>\n
10). She submits that the whole proceedings are biased in favour of the<\/p>\n
Company to the prejudice of the workmen.        The permission has been<\/p>\n
granted under Section 25-O of the Industrial Disputes Act by the
\n CWP No. 2834 of 2003                                   11<\/span><\/p>\n
Government overlooking the provisions of the Act with an intention to<\/p>\n
please the Multinational Company. An effort was made by the Government<\/p>\n
by not communicating the order dated 09.08.2002 to the Union to scuttle<\/p>\n
the right of the workmen to prefer an application under Section 25-O (5) for<\/p>\n
review of the order granting permission under sub-section (2).<\/p>\n
            Another point, which has been pressed into service by the<\/p>\n
counsel for the petitioners, is that the Evaporator Section is not an<\/p>\n
undertaking of an industrial establishment. She submits that it is only an<\/p>\n
up-gradation of the technology or at the most, change of technology, which<\/p>\n
would only amount to closing down a Department. It is not an independent<\/p>\n
portion of the business of the Company, which is being sought to be closed<\/p>\n
down nor an independent venture, which would fall within the definition of<\/p>\n
an undertaking, as provided under Section 2 (ka) of the Industrial Disputes<\/p>\n
Act. She relies upon the judgments of the Hon’ble Supreme Court in the<\/p>\n
case of Avon Services (Production Agencies) Pvt. Limited vs.<\/p>\n
Industrial Tribunal, Haryana, Faridabad and others<\/a>, 1979 LLJ (1) 1,<\/p>\n
Management of Hindustan Steel Ltd. vs. The Workmen and others<\/a>,<\/p>\n
1973 LAB I.C. 461, District Red Cross Society vs. Babita Arora and<\/p>\n
others<\/a>, (2007) 7 Supreme Court Cases 366 and a judgment of the Delhi<\/p>\n
High Court in the case of Raj Hans Press vs. K.S.Sidhu and others, 1977<\/p>\n
LAB I.C. 1633. She has, on the basis of the above judgments, contended<\/p>\n
that if a unit or a part of undertaking, which has no functional integrity with<\/p>\n
the other unit, then and only then can it be termed as a separate<\/p>\n
undertaking or unit, which could be granted permission to close down. She<\/p>\n
further submits that the staff of the industry was inter-transferable and,<\/p>\n
therefore, the principle of ‘last come first go’ should have been given effect<\/p>\n
assuming the closure is said to be in accordance with law. Even if, for
\n CWP No. 2834 of 2003                                   12<\/span><\/p>\n
arguments sake, it is accepted that the closure was in accordance with law,<\/p>\n
the principle of ‘last come first go’ should have been followed. She relies<\/p>\n
upon the judgment of the Ho’ble Supreme Court in the case of<\/p>\n
J.K.Synthetic vs. Rajasthan Trade Union Kendra<\/a> (2001) 2 SCC 87 in<\/p>\n
support of this contention. She contends that since this Evaporator Section<\/p>\n
is not an independent unit and the closure of which would, therefore, not<\/p>\n
fall within the ambit of Section 25 FFF of the Industrial Disputes Act with<\/p>\n
regard to the grant of compensation to the workmen rather it would fall<\/p>\n
under Section 25-N of the Industrial Disputes Act. Since the provisions of<\/p>\n
Section 25-N of the Industrial Disputes Act having not been complied with,<\/p>\n
the termination of the services of the workmen cannot be said to be in<\/p>\n
accordance with law and is in violation of the provisions of the Industrial<\/p>\n
Disputes Act entitling them to reinstatement in service with all<\/p>\n
consequential benefits. It is her contention that the closure could not have<\/p>\n
come into force and if the closure had to be effected, the Company could<\/p>\n
not have violated the settlement, which it had reached with its workmen by<\/p>\n
way of the agreement dated 29.01.2002 entered under Section 12 (3) of<\/p>\n
the Industrial Disputes Act, 1947.     She submits that as per the said<\/p>\n
agreement, the decision regarding installation of machines, increase in<\/p>\n
capacity, change in production facilities, new\/improved production system<\/p>\n
implementation of new technology, raw engineering of shop floor\/relaying<\/p>\n
of machines was solely to be the prerogative of the Management and union<\/p>\n
and the workmen would neither interfere nor obstruct the implementation<\/p>\n
of these management decisions rather Union and the workmen were to<\/p>\n
provide their full cooperation in implementing these decisions but all this<\/p>\n
was   dependent    upon   and    subject   to   the   further   clause, which<\/p>\n
states that it will not have adverse effect on the employment of the
\n CWP No. 2834 of 2003                                   13<\/span><\/p>\n
workmen. It is an admitted position by the Company that the conciliation<\/p>\n
settlement\/agreement dated 29.01.2002, which has been referred to in<\/p>\n
para-3 of the writ petition, was in force, when the application for closure of<\/p>\n
the Evaporator Unit was made and thereafter, the closure was effected<\/p>\n
from 13.08.2002.       She submits that the said decision under the said<\/p>\n
agreement under the Industrial Disputes Act was binding between the<\/p>\n
parties under Section 18 of the Industrial Disputes Act and, therefore, the<\/p>\n
decision of closure is not sustainable in view of the settlement entered into<\/p>\n
between the parties.\n<\/p>\n
            In view of the above submissions, she submits that the present<\/p>\n
writ petition deserves to be allowed and the impugned orders cannot be<\/p>\n
sustained entitling the petitioners to reinstatement in service with all<\/p>\n
consequential benefits.\n<\/p>\n
            On the other hand, learned senior counsel for respondent No.<\/p>\n
2-Company has pressed into service certain preliminary objections with<\/p>\n
regard to the maintainability of the present writ petition. He submits that<\/p>\n
the principle of collective bargaining is applicable to the Industrial Disputes<\/p>\n
Act and the orders under challenge cannot be questioned by an individual<\/p>\n
workman. He submits that when the initial application for permission of<\/p>\n
closure under Section 25-O of the Industrial Disputes Act was preferred by<\/p>\n
the Company, the objections were raised by the M\/s Whirlpool of India<\/p>\n
Employees Union (Regd.). After considering the contentions of the Union<\/p>\n
and the Company and after due enquiry, as per the provisions of the<\/p>\n
Industrial Disputes Act, the order dated 09.08.2002 (Annexure P-12) was<\/p>\n
passed by the appropriate Government granting permission to the<\/p>\n
Company for closure of the unit. He further submits that thereafter, an<\/p>\n
application for Review under Section 25-O (5) was preferred by the Union.
\n CWP No. 2834 of 2003                                  14<\/span><\/p>\n
None of the petitioners, although provided for under Section 25-O (5) of the<\/p>\n
Industrial Disputes Act that a workman can also file a Review, preferred a<\/p>\n
Review of the order granting permission under Sub-Section (2) of Section<\/p>\n
25-O of the Industrial Disputes Act. The Review Application preferred by<\/p>\n
the Union was duly considered by the Appropriate Government and on<\/p>\n
consideration of the objections, dismissed the same vide order dated<\/p>\n
17.01.2003 (Annexure P-16). The Union has chosen not to challenge the<\/p>\n
orders of permission granted for closure dated 09.08.2002 (Annexure P-12)<\/p>\n
and the order dismissing the Review Petition dated 17.01.2003 (Annexure<\/p>\n
P-16), meaning thereby that the Union has accepted the decision of the<\/p>\n
Appropriate Government granting permission for closure of the unit. In<\/p>\n
support of this, he submits that out of 186 employees of the Evaporator<\/p>\n
Section, 124 employees have accepted the decision of the Government<\/p>\n
and have taken the benefits, as provided by the Company, which were far<\/p>\n
in excess of the statutory benefits, to which the workmen would have been<\/p>\n
entitled to. Only 62 employees have preferred to challenge the above<\/p>\n
mentioned orders, which they cannot, in view of the basic principles of the<\/p>\n
Industrial Disputes Act containing the concept of collective bargaining. The<\/p>\n
petitioners having not challenged the order dated 09.08.2002 by way of<\/p>\n
Review Petition, have no right to challenge the same through the present<\/p>\n
writ petition. He further submits that the writ petition is marred by delay<\/p>\n
and latches as the original order of closure is dated 09.08.2002 and the<\/p>\n
present writ petition was initially filed on 10.02.2003 purported to be by M\/s<\/p>\n
Whirlpool of India Employees Union (Regd.). When an objection was taken<\/p>\n
by the Company that no Office Bearers of the Union had filed the writ<\/p>\n
petition nor any authority or resolution was placed on record for challenging<\/p>\n
the said orders on behalf of the Union, the petitioners filed an amended writ
\n CWP No. 2834 of 2003                                   15<\/span><\/p>\n
petition only on 13.12.2004. The said amendment was allowed by this<\/p>\n
Court vide order dated 11.04.2005 and notice of motion was issued for<\/p>\n
11.08.2005. He thus, on this basis, submits that the writ petition deserves<\/p>\n
to be dismissed on this score alone. Apart from these objections, it has<\/p>\n
been submitted that the petitioners, having failed to avail the remedy of<\/p>\n
review under Section 25-O (5) of the Industrial Disputes Act i.e. by way of<\/p>\n
preferring a Review Petition in their individual capacity, have an alternative<\/p>\n
remedy of challenging their termination by taking recourse to Section 10 of<\/p>\n
the Industrial Disputes Act by preferring a demand notice, which could<\/p>\n
result into reference by the appropriate Government under the Industrial<\/p>\n
Disputes Act. As a matter of fact he contends, that the challenge by the<\/p>\n
petitioners is to the order dated 13.08.2002 (Annexure P-9), vide which the<\/p>\n
notice has been displayed on the notice board by the Company that the<\/p>\n
permission of closure has been granted by the appropriate Government,<\/p>\n
which has been projected as an order of termination. Pressing all these<\/p>\n
submissions into service, he prays for dismissal of the present writ petition.<\/p>\n
            On merits, it has been submitted that provisions of Section 25-<\/p>\n
O (1) of the Industrial Disputes Act are intended primarily to give notice to<\/p>\n
the appropriate Government as also to the workmen about the intention of<\/p>\n
the Management to close down an undertaking of an industrial<\/p>\n
establishment. The requirement of 90 days notice for prior permission has<\/p>\n
been prescribed only for this purpose. On going through the complete<\/p>\n
Section 25-O of the Industrial Disputes Act, it is apparent that the intention<\/p>\n
of Legislature is that the workmen, apart from the employer, are given full<\/p>\n
opportunity to put forth their submissions before the appropriate<\/p>\n
Government and further to give the appropriate Government reasonable<\/p>\n
time for making such enquiry so as to come to a conclusion about the
\n CWP No. 2834 of 2003                                  16<\/span><\/p>\n
genuineness or adequacy of reasons stated by the Management for<\/p>\n
closure of the undertaking.     The period of 90 days prescribed is not<\/p>\n
sanguine as is apparent from Sub-Section (3) of Section 25-O of the<\/p>\n
Industrial Disputes Act as it provides that the refusal or grant of permission<\/p>\n
to the employer has to be communicated by the appropriate Government<\/p>\n
within a period of 60 days from the date an application for permission for<\/p>\n
closing down an undertaking has been moved under Section 25-O (1) of<\/p>\n
the Industrial Disputes Act. He submits that , in any case, the intent and<\/p>\n
purpose of the provisions of Section 25-O (1) has been fully complied with,<\/p>\n
as according to the Government, the application under Section 25-O (1) of<\/p>\n
the Industrial Disputes Act was received by the appropriate Government on<\/p>\n
12.06.2002, the permission for closure by the appropriate Government was<\/p>\n
accorded on 09.08.2002 and the actual effective date of closure of the<\/p>\n
undertaking was 12.09.2002. He, on this basis, submits that when the<\/p>\n
spirit, with which the Legislature has brought about this Section, having<\/p>\n
been complied with mere wrong mentioning of the date for intended closure<\/p>\n
of the undertaking i.e. 31.07.2002 in the application would not in itself<\/p>\n
amount to such a defect, which cannot be cured.         He submits that no<\/p>\n
prejudice whatsoever has been caused to the petitioners as the Union has<\/p>\n
been, at every stage, associated with the process of enquiry and the Union<\/p>\n
has been given an opportunity of being heard personally as well as through<\/p>\n
making representation.     He submits that various meetings were held,<\/p>\n
wherein the Union had participated before different authorities. Objections<\/p>\n
have been raised by the Union to the application submitted by the<\/p>\n
Company under Section 25-O (1). All those objections have been duly<\/p>\n
considered and decided by the competent authority in accordance with law.<\/p>\n
The technical objection with regard to the application under Section 25-O<\/p>\n
(1), wherein the date of intended closure was given as 31.07.2002, which
\n CWP No. 2834 of 2003                                  17<\/span><\/p>\n
would come to 60 days from the date which was mentioned in the<\/p>\n
application, was accepted as a mistake by the Management and<\/p>\n
accordingly, had undertaken and stated in the rejoinder to the reply filed by<\/p>\n
the Union during the proceedings under Sub-Section (2) that the intended<\/p>\n
date of closure be read as 12.09.2002 as the date of the submission of the<\/p>\n
application under Section 25-O (1) was 12.06.2002 to the appropriate<\/p>\n
Government.     The appropriate Government has taken all this into<\/p>\n
consideration while granting permission to the Company for closing down<\/p>\n
the Evaporator Section. As a matter of fact, he submits that the closure<\/p>\n
indeed came into effect from 12.09.2002 and the salary of all the<\/p>\n
employees of the Evaporator Section and all benefits under the Industrial<\/p>\n
Disputes Act have been calculated, compiled and paid as well to 124<\/p>\n
workers treating their service up to 12.09.2002. He submits that even the<\/p>\n
petitioners were given the wages up to 12.09.2002 and their benefits,<\/p>\n
under the Industrial Disputes Act, also calculated up to 12.09.2002, which<\/p>\n
was offered to them but the petitioners have chosen not to accept the<\/p>\n
same.   He    submits that the petitioners would be entitled to the same<\/p>\n
benefits as other workmen of the Evaporator Section have been granted,<\/p>\n
which is much more beneficial than their entitlement under the Industrial<\/p>\n
Disputes Act.    He further submits that Rule 76-C(1) of the Industrial<\/p>\n
Disputes (Central) Rules, 1957, which has been said to be applicable to the<\/p>\n
Company is misplaced, as the Industrial Disputes (Punjab) Rules, 1958<\/p>\n
has been notified by the Punjab Government, which is applicable to the<\/p>\n
State of Haryana and, therefore, Rule 75 (C) of the said Rules would be the<\/p>\n
Rule, which would be applicable to the present case. He relies on Rule 75-<\/p>\n
C (1) to submit that the same does not mandate the copy of an application<\/p>\n
for closing down an undertaking to be served simultaneously on the<\/p>\n
representatives of the workmen.\n<\/p>\n
 CWP No. 2834 of 2003                                18<\/span><\/p>\n
            Counsel for respondent No. 2-Company has supported the<\/p>\n
decision of the Management to close down the Evaporator Section<\/p>\n
primarily on the ground that the Statute puts such a condition on the<\/p>\n
Company according to the Montreal Protocol of 1987, wherein India was<\/p>\n
one of the participating countries, which led to the promulgation of the<\/p>\n
Ozone Depleting Substance (Regulation and Control) Rules, 2000<\/p>\n
(hereinafter referred to as ‘Rules of 2000’)     under the Environment<\/p>\n
Protection Act, 1986.   These Rules of 2000 prohibit the use of gases,<\/p>\n
which lead to depletion of the ozone layers.     Apart from the statutory<\/p>\n
bindings, he has justified the decision on the basis of the technical<\/p>\n
advancement in the field of refrigeration, wherein new roll bond<\/p>\n
evaporators are being used because of energy efficiency and change of<\/p>\n
use of gas. The competitors of the Company having adopted this new<\/p>\n
technology were having an edge over them and to keep itself afloat in the<\/p>\n
cut throat competitive market the Company had no option. Apart from the<\/p>\n
statutory provisions, the technical and economical reasons also forced the<\/p>\n
Management to take such a decision to survive in the market. The losses,<\/p>\n
which were accumulated by the Company, did not permit the Company to<\/p>\n
continue with its obsolete technology, which would have led to the total<\/p>\n
closure of the Company itself. He has submitted that as the design and<\/p>\n
manufacture of roll bond evaporators was patented under the law by M\/s<\/p>\n
EAR Canal SA Pvt. Ltd., Spain, the Company was forced to outsource this<\/p>\n
vital manufacturing process. He has referred to in detail the reasons, the<\/p>\n
technology and the mandate of law to justify the decision of the<\/p>\n
Management of the Company as well as the decision of the Government<\/p>\n
granting permission for closure.      He has taken me through the<\/p>\n
compensation package, which the Company has formulated in the light of
\n CWP No. 2834 of 2003                                   19<\/span><\/p>\n
the closure of the Evaporator Section for the workmen in the said unit,<\/p>\n
which according to the counsel is much more beneficial than those to which<\/p>\n
the workmen are entitled to under the statutory provisions of the Industrial<\/p>\n
Disputes Act.\n<\/p>\n
            Counsel for respondent No. 2 has referred to Section 25L,<\/p>\n
which deals with the definitions for the purposes of Chapter VB of the<\/p>\n
Industrial Disputes Act, which is applicable in the present case. According<\/p>\n
to Sub-Section (a) ‘Industrial Establishment has been defined.              An<\/p>\n
Industrial Establishment means a factory as defined in clause (m) of<\/p>\n
Section 2 of the Factories Act, 1948, He has, on this basis, referred to the<\/p>\n
Factories Act clause 2 (m) (i) and then has referred to Section 2 (cc) , 2<\/p>\n
(ka) and 2 (ka)(a) to contend that the Evaporator Section would fall within<\/p>\n
the definition of an Industrial Establishment. He submits that Evaporator<\/p>\n
Section is an independent unit in itself as the said unit is severable from the<\/p>\n
other units of the establishment.      He relies upon the judgment of the<\/p>\n
Hon’ble Supreme Court in the case of Isha Steel Treatment, Bombay vs.<\/p>\n
Association of Engineering Workers, Bombay and<\/a> another, AIR 1987<\/p>\n
Supreme Court 1478 as also on S.G.Chemical and Dyes Trading<\/p>\n
Employees Union vs. S.G. Chemicals and Dyes Trading Ltd. and<\/a><\/p>\n
another, 1986 LAB. I.C. 863, to contend that it is a separate unit in itself<\/p>\n
and, therefore, closure of the said unit will fall within the ambit of Section<\/p>\n
25-O of the Industrial Disputes Act.\n<\/p>\n
            It is further the contention of the counsel for respondent No. 2<\/p>\n
that it is for the Management to decide as to how to run the Company in a<\/p>\n
most effective and economical manner and specially when the statutory<\/p>\n
rules require a particular manufacturing process to be in accordance with<\/p>\n
those specifications, the Management is bound by it. Under those
\n CWP No. 2834 of 2003                                  20<\/span><\/p>\n
circumstances, the employers should not be forced to retain the work force<\/p>\n
at the expense of losing the economical viability of the unit. Reliance has<\/p>\n
been placed on a Division Bench judgment of this Court in the case of Lal<\/p>\n
Jhanda Rockman Cycle Industries Workers’ Union vs. State of Punjab<\/p>\n
and others<\/a>, 2007 (1) PLR 359.\n<\/p>\n
            He submits that the contention of the petitioners that the<\/p>\n
Company has violated the settlement, which has been entered into<\/p>\n
between the Management and the Union, is not based on correct reading<\/p>\n
of the settlement.    He submits that the Union had agreed that the<\/p>\n
Management had the sole prerogative to instal new machines, increase its<\/p>\n
capacity, change the production facilities, implement new technology etc.<\/p>\n
and the Union had stated that they would provide full cooperation in<\/p>\n
implementing these decisions. The said decision has not been violated by<\/p>\n
the Management as it had no option, in the given facts and circumstances<\/p>\n
of the case, but to close down the Evaporator Section so that the statutory<\/p>\n
requirements are complied with, failing which, it would have resulted in the<\/p>\n
closure of the total manufacturing process of refrigeration.      He further<\/p>\n
submits that instead of total closure of the manufacturing process of the<\/p>\n
refrigeration products, the Company, due to technical changes and the<\/p>\n
statutory compulsions, the requirement of which if not complied with would<\/p>\n
have resulted into penal consequence and even stopping of production<\/p>\n
altogether, the Company had no option but to close down the Evaporator<\/p>\n
Section to save the other Sections of the manufacturing processes and the<\/p>\n
production of refrigerators. The patent of the technology, which was being<\/p>\n
sought to be introduced also was the impediment in itself, which led to the<\/p>\n
outsourcing of the production of the Evaporator Section. He, on this basis,<\/p>\n
submits that in the larger interest of the employees, this decision was taken
\n CWP No. 2834 of 2003                                    21<\/span><\/p>\n
and the same cannot be said to be in violation of the settlement\/agreement<\/p>\n
dated 29.01.2002.     He, on this basis, submits that the permission of<\/p>\n
closure granted by the Government and thereafter, the dismissal of the<\/p>\n
review application is in accordance with law and does not call for any<\/p>\n
interference by this Court and, therefore, the writ petition deserves to be<\/p>\n
dismissed on merits also.\n<\/p>\n
             Counsel for the State has supported and reiterated the<\/p>\n
submissions, as have been put forth by the counsel for respondent No. 2-<\/p>\n
Company. He has, defending the decision of the Government granting<\/p>\n
permission to close down the unit, submitted that no prejudice has been<\/p>\n
caused to the petitioners as at each stage ample opportunities have been<\/p>\n
given to the workmen through their Union to represent their case and their<\/p>\n
objections. Various meetings were held and personal hearing was also<\/p>\n
given by the authorities before a well considered and detailed order was<\/p>\n
passed granting the permission for closure of the unit vide order dated<\/p>\n
09.08.2002 (Annexure P-12). He submits that a thorough enquiry was held<\/p>\n
by the competent authority at its own level to satisfy itself with regard to the<\/p>\n
reasons and the grounds given by the Management in its application for<\/p>\n
closure of the unit. He submits that an enquiry was got conducted through<\/p>\n
Labour Commissioner and the report substantiated the reasons submitted<\/p>\n
by the Management, which were quite genuine and adequate in support of<\/p>\n
the decision for closure of the unit. He further submits that although initially<\/p>\n
the intended date of closure was given by the Management as 31.07.2002<\/p>\n
but when the application was received on 12.06.2002 and the Union of the<\/p>\n
workmen in their reply to the application, pointed out the requirement of 90<\/p>\n
days notice for intended closure, the Company had, in its rejoinder dated<\/p>\n
11.07.2002, stated that the closure would be given effect to from the date
\n CWP No. 2834 of 2003                                     22<\/span><\/p>\n
of completion of 90 days from the date of submission of the application to<\/p>\n
the appropriate Government and as a matter of fact also the closure came<\/p>\n
into force w.e.f. 12.09.2002. He submits that the provisions of Section 25-<\/p>\n
O (I) are only procedural and not mandatory and if any defect is found in<\/p>\n
the application that would ipso facto not be the basis for holding the closure<\/p>\n
to be bad specially when provisions of Sub-Section (2) of Section 25-O<\/p>\n
have been complied with. He has referred to Sub-Section (7) of Section<\/p>\n
25-O of the Industrial Disputes Act to contend that the period provided<\/p>\n
under Sub-Section (1) can be diluted and is not a rigid requirement of law.<\/p>\n
He submits that Sub-Section (1) of Section 25-O and Sub-Section (2) are<\/p>\n
two independent provisions. Sub-Section (1) is procedural, which provides<\/p>\n
for the requirement of the application, whereas Sub-Section (2) is the<\/p>\n
decision to be taken by the appropriate Government. He submits that they<\/p>\n
operate in separate fields and once the provisions, as contained under<\/p>\n
Sub-Section (2), have been complied with, Sub-Section (1) would stand<\/p>\n
diluted specially when the employer undertakes to comply with the<\/p>\n
provisions of Sub-Section (1) before a decision as per Sub-Section (2) is<\/p>\n
taken by the appropriate Government. On this basis, he submits that the<\/p>\n
decision of the Government firstly granting permission for closure and<\/p>\n
thereafter dismissal of the Review Application of the Union is in accordance<\/p>\n
with law.\n<\/p>\n
             I have heard the counsel for the parties and with their able<\/p>\n
assistance have gone through the records of the case.\n<\/p>\n
             It would be appropriate to first consider the preliminary<\/p>\n
objections as have been raised by respondent No. 2-Company with regard<\/p>\n
to the maintainability of the present writ petition. As regards the principle of<\/p>\n
collective bargaining is concerned, suffice it to say that inspite of the
\n CWP No. 2834 of 2003                                   23<\/span><\/p>\n
principle of collective bargaining, law does recognize an individual’s right to<\/p>\n
challenge an order, which affects him personally.           Section 25-O (5)<\/p>\n
recognizes that right wherein an individual workman has been given the<\/p>\n
discretion to move an application for review, where the permission for<\/p>\n
closing down an undertaking has been granted              or refused by the<\/p>\n
appropriate Government under Sub-Section (2). Merely because he has<\/p>\n
not preferred a review petition and the Union has chosen to take up his<\/p>\n
cause against the grant of permission would not debar the workman to<\/p>\n
approach this Court by way of writ petition on the ground that he had<\/p>\n
personally not preferred an application for review. It is not a case of an<\/p>\n
individual workman but they are 62 workmen, who had preferred the<\/p>\n
present writ petition challenging the order of permission granting closure as<\/p>\n
also the dismissal of the review application preferred by the Union on their<\/p>\n
behalf. This contention, therefore, of the counsel for respondent No. 2-<\/p>\n
Company cannot be sustained.\n<\/p>\n
             Now coming to the question of delay and latches, this again<\/p>\n
cannot come in the way, as initially the present writ petition was filed on<\/p>\n
10.02.2003 and even if the application for amendment of the writ petition<\/p>\n
along with the amended writ petition is taken into consideration that also<\/p>\n
came to be filed on 13.12.2004, whereas the order on the review<\/p>\n
application impugned is dated 17.01.2003.        The amendment was also<\/p>\n
allowed by this Court vide order dated 11.04.2005. As is apparent from the<\/p>\n
record that initially the writ petition was filed on 10.02.2003 although under<\/p>\n
the wrong bona fide belief to which objections were raised by the<\/p>\n
Company-respondent No. 2 and further on realization of the mistake, the<\/p>\n
application for amendment was filed which amendment was objected to by<\/p>\n
the Company but on consideration of the reasons and the grounds stated
\n CWP No. 2834 of 2003                                   24<\/span><\/p>\n
therein, the Division Bench of this Court vide order dated 11.04.2005<\/p>\n
allowed the application for amendment, however leaving it open to<\/p>\n
respondent No. 2-Company to take all objections legal as well as factual at<\/p>\n
an appropriate stage. This cannot be said to be an inordinate delay in<\/p>\n
approaching this Court, which would in itself be a good ground for<\/p>\n
dismissal of the writ petition.    Therefore, this contention cannot be<\/p>\n
accepted. Other objections already taken by the respondent No.2-<\/p>\n
Company and rejected by this Court cannot now be allowed to be raised.<\/p>\n
             As regards the availability of the alternative     remedy of<\/p>\n
reference of the dispute under Section 10 of the Industrial Disputes Act by<\/p>\n
preferring a demand notice is concerned that could be an objection<\/p>\n
available to the petitioners but that would not preclude or debar the<\/p>\n
exercise of powers by this Court under Article 226 of the Constitution of<\/p>\n
India especially when there is no serious dispute on facts.            The<\/p>\n
submissions of the parties are based on documentary proofs and,<\/p>\n
therefore, the present petition cannot be said to be not maintainable. In<\/p>\n
any case, the Hon’ble Supreme Court in the case of Orissa Textile and<\/p>\n
Steel Ltd. vs. State of Orissa and others<\/a>, 2002 (1) LLJ 853 has in para<\/p>\n
16 at page 870 held as follows:-\n<\/p>\n
            “xxx          xxx        xxx         xxx<\/p>\n
            This review and\/or reference under amended Section 25-O<\/p>\n
            would be in addition to a judicial review under Article 226 or<\/p>\n
            Article 32.\n<\/p>\n
            xxx           xxx        xxx         xxx”\n<\/p>\n
            In view of the above observations of the Hon’ble Supreme<\/p>\n
Court, this contention of respondent No. 2-Company also cannot be
\n CWP No. 2834 of 2003                                   25<\/span><\/p>\n
accepted.\n<\/p>\n
             Now moving on to the merits of the case, Section 25-O of the<\/p>\n
Industrial Disputes Act requires to be referred to here as the case revolves<\/p>\n
around it.\n<\/p>\n
             “25-O. Procedure for closing down an undertaking.-(1) An<\/p>\n
             employer who intends to close down an undertaking of an<\/p>\n
             industrial establishment to which this Chapter applies shall, in<\/p>\n
             the prescribed manner, apply, for prior permission at least<\/p>\n
             ninety days before the date on which the intended closure is to<\/p>\n
             become effective, to the appropriate Government, stating<\/p>\n
             clearly the reasons for the intended closure of the undertaking<\/p>\n
             and a copy of such application shall also be served<\/p>\n
             simultaneously on the representatives of the workmen in the<\/p>\n
             prescribed manner:\n<\/p><\/blockquote>\n
                   Provided that nothing in this sub-section shall apply to<\/p>\n
             an undertaking set up for the construction of buildings, bridges,<\/p>\n
             roads, canals, dams or for other construction work.<\/p>\n
             (2)   Where an application for permission has been made<\/p>\n
             under sub-section (1), the appropriate Government, after<\/p>\n
             making such enquiry as it thinks fit and after giving a<\/p>\n
             reasonable opportunity of being heard to the employer, the<\/p>\n
             workmen and the persons interested in such closure may,<\/p>\n
             having regard to the genuineness and adequacy of the<\/p>\n
             reasons stated by the employer, the interests of the general<\/p>\n
             public and all other relevant factors, by order and for reasons<\/p>\n
             to be recorded in writing, grant or refuse to grant such<\/p>\n
             permission and a copy of such order shall be communicated to<\/p>\n
             the employer and the workmen.\n<\/p><\/blockquote>\n
 CWP No. 2834 of 2003                                26<\/span><\/p>\n
\n
          (3)   Where an application has been made under sub-section<\/p>\n
          (1) and the appropriate Government does not communicate the<\/p>\n
          order granting or refusing to grant permission to the employer<\/p>\n
          within a period of sixty days from the date on which such<\/p>\n
          application is made, the permission applied for shall be<\/p>\n
          deemed to have been granted on the expiration of the said<\/p>\n
          period of sixty days.\n<\/p><\/blockquote>\n
          (4)   An order of the appropriate Government granting or<\/p>\n
          refusing to grant permission shall, subject to the provisions of<\/p>\n
          sub-section (5), be final and binding on all the parties and shall<\/p>\n
          remain in force for one year from the date of such order.<\/p>\n
         (5)    The appropriate Government may, either on its own<\/p>\n
         motion or on the application made by the employer or any<\/p>\n
         workman, review its order granting or refusing to grant<\/p>\n
         permission under sub-section (2) or refer the matter to a<\/p>\n
         Tribunal for adjudication:\n<\/p><\/blockquote>\n
                Provided that where a reference has been made to a<\/p>\n
          Tribunal under this sub-section, it shall pass an award within a<\/p>\n
          period of thirty days from the date of such reference.<\/p>\n
          (6)   Where no application for permission under sub-section<\/p>\n
          (1) is made within the period specified therein, or where the<\/p>\n
          permission for closure has been refused, the closure of the<\/p>\n
          undertaking shall be deemed to be illegal from the date of<\/p>\n
          closure and the workmen shall be entitled to all the benefits<\/p>\n
          under any law for the time being in force as if the undertaking<\/p>\n
          had not been closed down.\n<\/p><\/blockquote>\n
          (7)   Notwithstanding anything contained in the foregoing<\/p>\n
          provisions of this section, the appropriate Government may, if
\n CWP No. 2834 of 2003                                   27<\/span><\/p>\n
            it is satisfied that owing to such exceptional circumstances as<\/p>\n
            accident in the undertaking or death of the employer or the<\/p>\n
            like, it is necessary so to do, by order, direct that the provisions<\/p>\n
            of sub-section (1) shall not apply in relation to such<\/p>\n
            undertaking for such period as may be specified in the order.<\/p>\n
            (8)   Where an undertaking is permitted to be closed down<\/p>\n
            under sub-section (2) or where permission for closure is<\/p>\n
            deemed to be granted under sub-section (3), every workman<\/p>\n
            who is employed in that undertaking immediately before the<\/p>\n
            date of application for permission under this section, shall be<\/p>\n
            entitled to receive compensation which shall be equivalent to<\/p>\n
            fifteen days’ average pay for every completed year of<\/p>\n
            continuous service or any part thereof in excess of six<\/p>\n
            months.”<\/p><\/blockquote>\n
            A perusal of the above Section would show that it provides for<\/p>\n
the procedure, which is required to be followed for closing down an<\/p>\n
undertaking. An employer, who intends to close down an undertaking of an<\/p>\n
industrial establishment, is required to apply in a prescribed manner for<\/p>\n
prior permission at least 90 days before the date on which the intended<\/p>\n
closure is to become effective to the appropriate Government. Not only<\/p>\n
this, the further requirement is that the applicant should clearly give the<\/p>\n
reasons for the intended closure. Apart from this, the said application is<\/p>\n
required to be served simultaneously on the representatives of the<\/p>\n
workmen in the manner prescribed. Sub-Section (1), therefore, gives the<\/p>\n
requirement of the employer to make an application thereunder, wherein<\/p>\n
the minimum time for intended closure has been prescribed apart from the<\/p>\n
requirement of the contents of the application as mandated as well as the
\n CWP No. 2834 of 2003                                  28<\/span><\/p>\n
requirement of service of the said application on the representatives of the<\/p>\n
workmen. Sub-Section (2) comes into operation when an application under<\/p>\n
Sub-Section (1) is submitted by the employer. It mandates an enquiry by<\/p>\n
the appropriate Government at its own or through its agencies in the<\/p>\n
manner it thinks fit. This sub-section further requires that a reasonable<\/p>\n
opportunity of being heard is to be given to the employer, workmen and<\/p>\n
persons interested in such closure. This reasonable opportunity of being<\/p>\n
heard is to be with regard to the genuineness and the adequacy of the<\/p>\n
reasons given by the employer. The Government is required to not only<\/p>\n
take into consideration the submissions of the applicant, the workmen and<\/p>\n
the persons interested in such closure but also to keep the interest of the<\/p>\n
general public and other relevant factors into mind while coming to a<\/p>\n
decision on the application of the employer. This sub-section further<\/p>\n
requires the order to be recorded in writing which should contain reasons<\/p>\n
either granting or refusing to grant such permission. A copy of such order<\/p>\n
has then to be communicated to the employer and the workmen. This<\/p>\n
exercise, as provided under sub-section (2) has to be complied by the<\/p>\n
appropriate Government within a period of 60 days, failing which sub-<\/p>\n
section (3) comes into operation, which says that if the appropriate<\/p>\n
Government does not communicate the order granting or refusing the grant<\/p>\n
of permission to the employer within 60 days from the date on which the<\/p>\n
application is made, the permission would be deemed to have been<\/p>\n
granted.   Sub-Section (4) provides that the order of the appropriate<\/p>\n
Government on the application of the employer shall be final and binding<\/p>\n
on all parties and will remain in force for one year from the date of order.<\/p>\n
Sub-Section (5) provides for and gives a right of review. This right of<\/p>\n
review is not restricted to the employer or any workman but it is open to the
\n CWP No. 2834 of 2003                                  29<\/span><\/p>\n
appropriate Government itself to review the order on its own motion or the<\/p>\n
appropriate Government may refer the matter to the Tribunal for<\/p>\n
adjudication. If such a reference is made, the award is required to be<\/p>\n
passed within 30 days from the date of reference. Sub-Section (6) deals<\/p>\n
with a situation where no application for permission under sub-section (1) is<\/p>\n
made within the period specified therein or where the permission for<\/p>\n
closure has been refused, such closure shall be deemed to be illegal from<\/p>\n
the date of closure and the workmen shall be entitled to all benefits under<\/p>\n
the law as if there was no closure.        Sub-section (7) deals with the<\/p>\n
exigencies, which may arise where the appropriate Government may, if it is<\/p>\n
satisfied owing to such exceptional circumstances, direct the waiver or non-<\/p>\n
application of sub-section (1) to such undertaking for such period as may<\/p>\n
be specified in the order. Sub-Section (8) deals with the situation where<\/p>\n
permission has been granted to the employer under sub-section (2) for<\/p>\n
closure or deemed closure under sub-section (3). Every workman in that<\/p>\n
undertaking, who was in employment before the date of application for<\/p>\n
permission was submitted, has been held to be compensated as per this<\/p>\n
sub-section.\n<\/p>\n
               The Section, therefore, deals with the procedure and process<\/p>\n
for closing down an undertaking. It further gives the requirements, the<\/p>\n
rights, responsibilities and the duties at each step to be complied with for<\/p>\n
coming to a conclusion of whether to grant permission or not for closure of<\/p>\n
an undertaking. It also gives the consequences for non-compliance of the<\/p>\n
requirements under this Section. The period, therefore, provided under<\/p>\n
sub-section (1) i.e. 90 days, is the period which is minimum provided for a<\/p>\n
valid closure of an undertaking by an employer from the date of submission<\/p>\n
of the application. Any closure coming into effect of an undertaking earlier
\n CWP No. 2834 of 2003                                  30<\/span><\/p>\n
to the expiry of 90 days from the date of application would ipso facto be<\/p>\n
invalid. The only exception to that is provided under sub-section (7) where<\/p>\n
in exceptional circumstances, the appropriate Government has been given<\/p>\n
the power to waive the application of sub-section (1) for such period, as<\/p>\n
specified in the order. Meaning thereby that the intent and purpose of sub-<\/p>\n
section (1) is to give an advance notice to the appropriate Government and<\/p>\n
the workmen of the intended closure so that the Government is made<\/p>\n
aware of the decision of the employer with regard to the intended closure of<\/p>\n
an undertaking.    The simultaneous serving of the application on the<\/p>\n
representatives of the workmen in the prescribed manner again is with an<\/p>\n
intention that the directly affected party i.e. the workmen because of the<\/p>\n
closing down of the undertaking are put to notice and they are also made<\/p>\n
aware of the reasons for the intended closure of the undertaking. What,<\/p>\n
therefore, is essential is the 90 days period from the date of submission of<\/p>\n
the application to the actual date of closing down of the undertaking. An<\/p>\n
employer may give notice of the intended closure beyond the period of 90<\/p>\n
days but even if permission under sub-section (2) is provided to him within<\/p>\n
the period of 60 days but still the employer cannot close down the<\/p>\n
undertaking before the expiry of the period of 90 days from the date of<\/p>\n
submission of the application to the appropriate Government. Similarly if<\/p>\n
an application is submitted by an employer wherein he gives a date of<\/p>\n
intended closure, which is earlier to the expiry of 90 days from the date of<\/p>\n
submission of the application and permission is granted under sub-section<\/p>\n
(2) by the appropriate Government but still for valid closing down of an<\/p>\n
undertaking, he will have to wait till the expiry of 90 days from the date of<\/p>\n
submission of the application except where powers under sub-section (7) is<\/p>\n
exercised by the appropriate Government. So what is essential and
\n CWP No. 2834 of 2003                                     31<\/span><\/p>\n
mandated under Section 25-O (1) of the Industrial Disputes Act, is 90 days<\/p>\n
of clear period from the date of submission of the application for closing<\/p>\n
down an undertaking to the actual closure of the undertaking,         non-<\/p>\n
compliance of which would render the closure of the undertaking as invalid<\/p>\n
as is apparent from sub-section (6) as well. The simultaneous serving of<\/p>\n
application on the representatives of the workmen as per sub-section (1) is<\/p>\n
with the purpose that the workmen are informed of the intention of the<\/p>\n
employer so that they can prepare themselves either to oppose the said<\/p>\n
proposal before the appropriate Government where the matter is to be<\/p>\n
considered and\/or to prepare themselves to take up alternative<\/p>\n
employment or make alternative arrangements for their livelihood. The<\/p>\n
intention of the legislature is not to render the application of employer<\/p>\n
invalid due to non serving of the application simultaneously on the<\/p>\n
representatives but to give them an opportunity to prepare their response<\/p>\n
to the reasons as put forth by the employer for the intended closure of the<\/p>\n
undertaking. Thus, merely because a copy of the application has not been<\/p>\n
served simultaneously on the representatives of the workmen would not by<\/p>\n
itself render the application of the employer invalid.<\/p>\n
             In the present case, application was submitted by respondent<\/p>\n
No. 2-Company on 12.06.2002 under sub-section (1) to the appropriate<\/p>\n
Government wherein the date of intended closure given as 31.07.2002,<\/p>\n
which was less than 90 days, as prescribed under Section 25-O (1). The<\/p>\n
copy of the application was received by the Union on 25.06.2002. On the<\/p>\n
consideration of the application under sub-section (2) when the Union was<\/p>\n
called upon to submit its response, an objection with regard to the non-<\/p>\n
completion of the period of 90 days from the date of submission was put<\/p>\n
forth and on a rejoinder submitted by the Company on 11.07.2002, it had
\n CWP No. 2834 of 2003                                    32<\/span><\/p>\n
stated that the closure would be given effect to from the date of completion<\/p>\n
of 90 days from the date of submission of the application to the appropriate<\/p>\n
Government i.e. 12.09.2002. As a matter of fact, the said closure of the<\/p>\n
Evaporator Section came into effect from 12.09.2002, which was beyond<\/p>\n
the period of 90 days from the date of submission of the application by the<\/p>\n
employer to the appropriate Government. Since the Union had submitted<\/p>\n
its response to the application of the Company before the appropriate<\/p>\n
Government, no prejudice was caused to the workmen by non<\/p>\n
simultaneous supply of the copy of the application to the Union by the<\/p>\n
Company. In this view of the matter, the submission of the application<\/p>\n
under Section 25-O (1) of the Industrial Disputes Act could at most be said<\/p>\n
to be a defective application, which was cured on the basis of the<\/p>\n
acceptance of the mandate of 90 days from the date of submission of the<\/p>\n
application to the appropriate Government till the date of closure of the<\/p>\n
undertaking.    The defect having been cured, the consideration of the<\/p>\n
application of the Company by the appropriate Government cannot be said<\/p>\n
to be not in accordance with law or that because of wrong mentioning of<\/p>\n
the period for the intended closure or non-simultaneous supply of the copy<\/p>\n
of the application to the representatives of the workmen, had rendered the<\/p>\n
application void, ab-initio. The contention, therefore, raised by the counsel<\/p>\n
for the petitioners with regard to non-compliance of Section 25-O (1) of the<\/p>\n
Industrial Disputes Act cannot be accepted.\n<\/p>\n
             The contention of the counsel for the petitioners, that Rule 76-<\/p>\n
C(1) of the Industrial Disputes (Central) Rules, 1957 has not been<\/p>\n
complied by the Company which mandates supply of the copy of the<\/p>\n
application under Section 25-O (1) to the Union simultaneously, has no<\/p>\n
force in view of the fact that the said rules are not applicable in the present
\n CWP No. 2834 of 2003                                   33<\/span><\/p>\n
case as the rules applicable in the State of Haryana are the Industrial<\/p>\n
Disputes (Punjab) Rules, 1958, which do not mandate the supply of copy of<\/p>\n
the   application   for   closing   down   an   undertaking   to   be   served<\/p>\n
simultaneously on the representatives of the workmen.          However, this<\/p>\n
would have no bearing on the present case as it has already been held that<\/p>\n
the purpose and intent of Section 25-O (1) of the Industrial Disputes Act<\/p>\n
providing for simultaneous supply of the application is only with a purpose<\/p>\n
to apprise the workmen of their right to contest the said application moved<\/p>\n
by the Management under Section 25-O of the Industrial Disputes Act.<\/p>\n
             Sub-Section 25-O (2) provides for the consideration of the<\/p>\n
application by the appropriate Government for permission submitted by the<\/p>\n
employer under sub-section (1). The first mandate is to make an enquiry,<\/p>\n
as the appropriate Government thinks fit. Apart from the said enquiry, the<\/p>\n
Statute mandates giving a reasonable opportunity of being heard both to<\/p>\n
the employer and the workmen apart from any other person, who is<\/p>\n
interested in such closure meaning thereby it recognizes the principle of<\/p>\n
natural justice where the parties are given an opportunity to put forth their<\/p>\n
objections and suggestions. Their submissions are to be considered in the<\/p>\n
light of and with regard to the genuineness and adequacy of reasons given<\/p>\n
by the employer in the application for the intended closure. This apart, the<\/p>\n
appropriate Government may also take into consideration the interest of<\/p>\n
the general public and all other relevant factors which it may consider<\/p>\n
appropriate in coming to a decision whether to grant permission for closure<\/p>\n
or refuse such permission. The further requirement is that the order has to<\/p>\n
be a reasoned one and that too recorded in writing. This order is required<\/p>\n
to be conveyed to the employer and the workmen.\n<\/p>\n
             It is the case of the petitioners that they have been deprived of
\n CWP No. 2834 of 2003                                 34<\/span><\/p>\n
the full opportunity to represent themselves and make their submissions<\/p>\n
before the authorities and the appropriate Government while the process of<\/p>\n
decision making as per sub-section (2) was in progress.        The primary<\/p>\n
submission is that they were not allowed to be represented by their Law<\/p>\n
Secretary, who is an Advocate and, therefore, the basic principle of audi<\/p>\n
alteram partem has been violated and, therefore, the order of granting<\/p>\n
permission for closing down the Evaporator Section is bad in law. The<\/p>\n
principle, as is apparent, is that the employer and the employees should be<\/p>\n
given a reasonable opportunity of being heard. A detailed reply, to the<\/p>\n
application submitted by the Company for permission for closure, was<\/p>\n
given by the Union. They were represented by their Office Bearers before<\/p>\n
the appropriate authorities when the proceedings under sub-section (2)<\/p>\n
were in progress.     They were given personal hearing and all their<\/p>\n
submissions, written and oral, have been duly considered by the<\/p>\n
appropriate Government while passing a detailed reasoned order granting<\/p>\n
permission to the Company to close down the undertaking. The case of<\/p>\n
the petitioners is not that the Company was represented by an Advocate<\/p>\n
and thus no prejudice has been caused to the petitioners by non-<\/p>\n
representation of the Union by an Advocate on their behalf.<\/p>\n
            A perusal of the order dated 09.08.2002 would show that an<\/p>\n
enquiry was got conducted through the Labour Commissioner.              On<\/p>\n
completion of the said enquiry, a report was submitted, which accepted the<\/p>\n
reasons as given by the Company as genuine and reasonable. It further<\/p>\n
substantiated the grounds, as submitted by the Management, which were<\/p>\n
found to be genuine and adequate in support of the decision for closure of<\/p>\n
the unit. The contention, therefore, of the counsel for the petitioners that<\/p>\n
no enquiry has been held by the appropriate Government is without any
\n CWP No. 2834 of 2003                                  35<\/span><\/p>\n
basis. The contention that the petitioners were required to be associated<\/p>\n
with the enquiry, which was undertaken by the appropriate Government,<\/p>\n
again is not acceptable for the reason that this discretion has been granted<\/p>\n
by the Statute to the appropriate Government as sub-section (2) provides<\/p>\n
for the making of such enquiry as the appropriate Government thinks fit.<\/p>\n
The requirement of associating the representatives of the workmen or the<\/p>\n
workmen in the enquiry to be conducted by appropriate Government is not<\/p>\n
mandated. Nevertheless, the Union having submitted their objections to<\/p>\n
the application by the Company in writing thereafter, the Office Bearers of<\/p>\n
the Union were heard in person, even written arguments were submitted<\/p>\n
and considered by the appropriate Government before taking a decision,<\/p>\n
the principle of giving them reasonable opportunity of hearing having been<\/p>\n
complied with, no illegality has been committed by the Government in not<\/p>\n
associating the workmen in its enquiry.\n<\/p>\n
            The reasons submitted by the employer for seeking permission<\/p>\n
to close down the Evaporator Section are primarily based on the statutory<\/p>\n
mandate, which required the discontinuance of the gases in the<\/p>\n
refrigeration industry, which tend to deplete the ozone layers. It is not in<\/p>\n
dispute that the gas used in the conventional clinch tube type evaporators,<\/p>\n
which were being produced in the Evaporator Section, were the ones,<\/p>\n
which tend to deplete the ozone layers. India being a participant in the<\/p>\n
Montreal Convention,1987, which initiated on 16.9.1987, accepted the<\/p>\n
same which mandated the prohibition of the use of ozone depleting gases.<\/p>\n
In accordance with and as per the Montreal Convention, Government of<\/p>\n
India framed the Ozone Depleting Substance (Regulation and Control)<\/p>\n
Rules, 2000 under the Environment Protection Act, 1986. According to<\/p>\n
Rule 10 (3), no person shall either himself or by any other person or
\n CWP No. 2834 of 2003                                  36<\/span><\/p>\n
enterprise on his behalf sell, stock or exhibit for sale or distribute any<\/p>\n
product resulting out of activities, or provide services, specified in column<\/p>\n
(2) of Schedule IV using ozone depleting substances specified in column<\/p>\n
(3) after the date specified in column (4) of that Schedule. Serial No. 6 of<\/p>\n
Schedule IV provides for manufacture of other Refrigeration and other Air-<\/p>\n
conditioning products and the Group of Ozone Depleting Substance as<\/p>\n
Group I and the phase out date is mentioned as 01.01.2003. This shows<\/p>\n
the statutory requirement of replacing the conventional clinch tube type<\/p>\n
evaporators, as the gases used in these evaporators were the ones, which<\/p>\n
were required to be phased out. The Company, therefore, had no option<\/p>\n
but to stop the production of the conventional tube type evaporators. Apart<\/p>\n
from this, with the change in technology world wide, the clinch tube type<\/p>\n
evaporators were being replaced by roll bond evaporators, which were<\/p>\n
much more energy efficient and of an advance technology which fulfilled<\/p>\n
the mandate of the Statute as the gases used in roll bond evaporators were<\/p>\n
not prohibited under any law.         This apart, the Company had no<\/p>\n
technological expertise or infrastructures to manufacture the roll bond<\/p>\n
evaporators. These evaporators had been designed and manufactured by<\/p>\n
M\/s EAR Canal SA Pvt. Ltd. Spain, which had got the design patented<\/p>\n
under the law.    All other competitors of the Company in India in the<\/p>\n
refrigerator industry were purchasing the roll bond evaporators from the<\/p>\n
said Company, therefore, the economics, the technological, the energy<\/p>\n
efficiency and compliance of the statutory provisions left no option to the<\/p>\n
Company but to purchase the roll bond evaporators from the said<\/p>\n
Company. The result thereof was the decision by the Company to close<\/p>\n
down the Evaporator Section.      If this step had not been taken by the<\/p>\n
Company, it would have no option but to close down the manufacture of
\n CWP No. 2834 of 2003                                 37<\/span><\/p>\n
the refrigerators altogether, which would have resulted in much more<\/p>\n
losses to the Government in terms of loss of revenue and taxes, to the<\/p>\n
Company as the other machinery would have been rendered surplus and<\/p>\n
would have to be sold as junk and further all the employees of the<\/p>\n
Refrigerator Section would have been rendered unemployed apart from<\/p>\n
those, who were dealing with the sales and maintenance etc. The decision<\/p>\n
taken by the appropriate Government granting the permission for closing<\/p>\n
down the Evaporator Section on consideration of the reasons as stated by<\/p>\n
the employer Company, the interest of the general public and other<\/p>\n
relevant factors after giving reasonable opportunity of being heard apart<\/p>\n
from making an enquiry is fully justified. A well reasoned and detailed<\/p>\n
order in writing has been passed by the appropriate Government which<\/p>\n
does not call for any interference by this Court. Similarly the order passed<\/p>\n
on the application for review of the order granting permission for closing<\/p>\n
down the Evaporator Section is in accordance with law as all contentions<\/p>\n
raised by the workers Union have been considered in detail and a<\/p>\n
reasoned order has been passed rejecting the review application.<\/p>\n
            The contention of the petitioners that they have not been<\/p>\n
communicated the order granting the permission for closing down the<\/p>\n
Evaporator Section and, therefore, the said order is not sustainable, again<\/p>\n
cannot be accepted. The intent and purpose of the communication of the<\/p>\n
order is to inform the parties showing the consideration of their<\/p>\n
submissions by the appropriate Government, the other purpose, which this<\/p>\n
communication of the order would serve, is for giving an opportunity to the<\/p>\n
concerned party to prefer a review application under sub-section (5). In the<\/p>\n
present case, the contention, which has been raised by the petitioners,<\/p>\n
therefore, is that the order having not been communicated to them
\n CWP No. 2834 of 2003                                  38<\/span><\/p>\n
simultaneously ipso facto    would render the order passed under sub-<\/p>\n
section (2) invalid. The permission granted to the Company was vide order<\/p>\n
dated 09.08.2002, the said order was displayed on the notice board by the<\/p>\n
Company on 13.08.2002, the order as per the workers Union was officially<\/p>\n
communicated to them only on 26.08.2002 and, therefore, they were<\/p>\n
prejudiced by such act of non-communication of the order by the<\/p>\n
appropriate Government. This, according to the petitioners, shows the bias<\/p>\n
of the appropriate Government towards the workers as they had<\/p>\n
communicated the order to the Company but not to the workmen. The<\/p>\n
stands of the Company and the Government is that a copy was indeed<\/p>\n
sent to the workers Union but it may be a different position whether they<\/p>\n
have received or not. However, it is an admitted position that the Union<\/p>\n
had procured that order and has preferred a review application on<\/p>\n
18.08.2002 to the appropriate Government which review application has<\/p>\n
been duly considered and orders passed thereon. No prejudice has thus<\/p>\n
been caused to the workmen by non-receipt or non-communication of the<\/p>\n
order dated 09.08.2002. In any case, it is an admitted position that the<\/p>\n
order dated 09.08.2002 was received by the Union on 26.08.2002. That<\/p>\n
being the position, this contention also cannot be sustained.<\/p>\n
            Coming to the contention of the counsel for the petitioners that<\/p>\n
the Evaporator Section is not an undertaking or an industrial establishment,<\/p>\n
as has been referred to in Section 25-O (1) of the Industrial Disputes Act<\/p>\n
and, therefore, the permission granted for closure cannot be sustained.<\/p>\n
Reference to the relevant provisions of the Industrial Disputes Act, at this<\/p>\n
stage, would be helpful to understand the requirement of law to settle this<\/p>\n
question. Section 25-L (a) (i) of the Industrial Disputes Act deals with the<\/p>\n
definitions, which would be applicable to Chapter VB of the Industrial<\/p>\n
Disputes Act wherein Section 25-O finds mentioned.\n<\/p>\n
 CWP No. 2834 of 2003                                    39<\/span><\/p>\n
            Section 25-L (a) (i) of the Industrial Disputes Act reads as<\/p>\n
follows:-\n<\/p>\n
            “25L. Definitions.-For the purposes of this Chapter,-<\/p>\n<\/blockquote>\n
            (a)    \"industrial establishment\" means-\n\n            (i)    a factory as defined in clause (m) of Section 2 of the\n\n            Factories Act, 1948 (63 of 1948);\n\n                   xxx          xxx          xxx             xxx\"\n\n\n\n<\/pre>\n
            Section 2 (m) (i) of the Factories Act, 1948, which is relevant<\/p>\n
for the present case, reads as follows:-\n<\/p>\n
            “(m) “factory'” means any premises including the precincts<\/p>\n
            thereof-\n<\/p><\/blockquote>\n
            (i)    Whereon ten or more workers are working, or were<\/p>\n
            working on any day of the preceding twelve months, and in<\/p>\n
            any part of which a manufacturing process is being carried on<\/p>\n
            with the aid of power, or is ordinarily so carried on, or<\/p>\n
             xxx         xxx           xxx          xxx”<\/p><\/blockquote>\n
            Section 2 (ka) (a) & (b), which again defines Industrial<\/p>\n
establishment or undertaking under the Industrial Disputes Act, reads as<\/p>\n
follows:-\n<\/p>\n
            “2 (ka)”Industrial establishment or undertaking” means an<\/p>\n
            establishment or undertaking in which any industry is carried<\/p>\n
            on:\n<\/p><\/blockquote>\n
                   Provided that where several activities are carried on in<\/p>\n
            an establishment or undertaking and only one or some of such<\/p>\n
            activities is or are an industry or industries, then,-<\/p>\n<\/blockquote>\n
            (a)    if any unit of such establishment or undertaking carrying<\/p>\n
            on any activity, being an industry, is severable from the other
\n CWP No. 2834 of 2003                                    40<\/span><\/p>\n
             unit or units of such establishment or undertaking, such unit<\/p>\n
             shall be deemed to be a separate industrial establishment or<\/p>\n
             undertaking;\n<\/p><\/blockquote>\n
             (b)    if the predominant activity or each of the predominant<\/p>\n
             activities carried on in such establishment or undertaking or<\/p>\n
             any unit thereof is an industry and the other activity or each of<\/p>\n
             the other activities carried on in such establishment or<\/p>\n
             undertaking or unit thereof is not severable from and is, for the<\/p>\n
             purpose of carrying on, or aiding the carrying on of, such<\/p>\n
             predominant activity or activities, the entire establishment or<\/p>\n
             undertaking or, as the case may be, unit thereof shall be<\/p>\n
             deemed to be an industrial establishment or undertaking;”<\/p><\/blockquote>\n
             Section 2 (cc) of the Industrial Disputes Act, which defines<\/p>\n
closure, reads as follows:-\n<\/p>\n
             “2 (cc)        “closure” means the permanent closing down of a<\/p>\n
             place of employment or part thereof;”<\/p><\/blockquote>\n
             The test, therefore, on perusal of the above provisions<\/p>\n
applicable to the present case, would be whether the Evaporator Section of<\/p>\n
the respondent-Company fulfills the test of the industrial establishment or<\/p>\n
undertaking as defined under Section 2 (ka) of the Industrial Disputes Act<\/p>\n
as also the ‘factory’ as defined under Section 2(m) (i) of the Factories Act,<\/p>\n
1948. Section 25 L (1) of the Industrial Disputes Act by introducing the<\/p>\n
definition of ‘factory’ as an industrial establishment as applicable to<\/p>\n
Chapter VB has restricted the definition of the industrial establishment or<\/p>\n
undertaking as defined under Section 2 (ka) of the Industrial Disputes Act.<\/p>\n
The definition, therefore, of the ‘factory’ comes into limelight to determine<\/p>\n
whether the Evaporator Section fulfills the definition of the ‘factory’ and if<\/p>\n
so; does that fulfil the requirement of the industrial establishment or
\n CWP No. 2834 of 2003                                   41<\/span><\/p>\n
undertaking, as provided under Section 2 (ka) of the Industrial Disputes<\/p>\n
Act.\n<\/p>\n
            The pleadings, as has been referred to above, clearly indicate<\/p>\n
that the Evaporator Section, closure of which was being sought by the<\/p>\n
respondent-Company, was a distinct unit, which is severable from other<\/p>\n
units of the establishment.       What was being manufactured in the<\/p>\n
Evaporator Section was the evaporators, which were conventional, namely,<\/p>\n
clinch tube type evaporators. It is itself an independent component which<\/p>\n
was being manufactured by the Company, which manufacturing process<\/p>\n
and technology had been rendered obsolete and was not found<\/p>\n
economically feasible in view of the advance technology being used by<\/p>\n
other competitors.      That apart, the conventional clinch tube type<\/p>\n
evaporators could not fulfil the statutory requirement of non use of ozone<\/p>\n
depleting gases. The Company did not have the necessary expertise to<\/p>\n
manufacture the advanced roll bond evaporators in its factory and that<\/p>\n
apart, due to the design of the said roll bond evaporators being patented<\/p>\n
under the law, it could not go for the manufacture of the said evaporators<\/p>\n
forcing them to close down the Evaporator Section and purchase the roll<\/p>\n
bond evaporators from the manufacturers, namely, M\/s EAR Canal SA Pvt.<\/p>\n
Ltd. Spain from outside source.        What the Evaporator Section was<\/p>\n
manufacturing could not be continued with due to the                 statutory<\/p>\n
compulsion, which was in the form of non use of ozone depleting gases<\/p>\n
and the non-availability of the technology for manufacturing advanced roll<\/p>\n
bond evaporators [These aspects have been discussed in detail in the<\/p>\n
earlier part of the judgment therefore, need not be repeated again and are<\/p>\n
only referred to here]. The unit in itself was carrying on an activity which<\/p>\n
would fulfil the requirement of it being a factory as defined under the
\n CWP No. 2834 of 2003                                   42<\/span><\/p>\n
Factories Act, 1948 and also the requirement of industrial establishment or<\/p>\n
undertaking as defined under Section 2 (ka) of the Industrial Disputes Act<\/p>\n
as the Evaporator Section was a unit carrying on an activity being industrial<\/p>\n
and severable from other units of the Company. It cannot be said that this<\/p>\n
unit had functional integrity with other units and was not severable from the<\/p>\n
other units although the product, which was being manufactured in the<\/p>\n
Evaporator Section formed an integral part of the end project but the<\/p>\n
activity, which was being performed in the Evaporator Section, was distinct<\/p>\n
and separate from the other units. That being so, the Evaporator Section<\/p>\n
fulfills the requirement of law, for which the Company could move an<\/p>\n
application for permission to close down that unit.\n<\/p>\n
             The principles laid down in the judgments which have been<\/p>\n
relied upon by the counsel for the petitioners cannot be disputed with and<\/p>\n
the present case, as has been stated above, fulfils those principles and<\/p>\n
tests laid down therein and the statute as existing now. However, it needs<\/p>\n
to be pointed out here that these judgments primarily were dealing with the<\/p>\n
statutory provisions which were prevalent prior to the amendment or<\/p>\n
introduction of the present provisions applicable for closure of the<\/p>\n
undertaking\/industrial establishment.      Section 25-O of the Industrial<\/p>\n
Disputes Act was substituted w.e.f. 28.08.1984. Section 2 (cc), (ka) were<\/p>\n
inserted w.e.f. 21.08.1984. The judgments in the case of Avon Services<\/p>\n
(Production Agencies) Pvt. Limited (supra), Management of Hindustan<\/p>\n
Steel Ltd. (supra), Raj Hans Press (Supra) are cases which were not<\/p>\n
dealing with the present provisions. The judgment of the Hon’ble Supreme<\/p>\n
Court in District Red Cross Society (Supra) primarily was dealing with the<\/p>\n
question with regard to the provisions dealing with the compensation.<\/p>\n
However, it has clearly been held in the said judgment that it is not
\n CWP No. 2834 of 2003                                   43<\/span><\/p>\n
necessary that the entire establishment of an employer should be closed.<\/p>\n
If a unit or part of an undertaking, which has no functional integrity with<\/p>\n
other units, is closed, it will amount to closure. As regards the judgment of<\/p>\n
the Hon’ble Supreme Court in the case of J.K.Synthetic (supra) is<\/p>\n
concerned that was dealing with a situation where the work force was<\/p>\n
totally separate and the workmen were not transferable nor were<\/p>\n
transferred from one unit to the other. In the present case, it has been<\/p>\n
submitted that some workmen were transferred from other units to the<\/p>\n
Evaporator Section. There are only two instances which have been<\/p>\n
referred to by the petitioners which cannot establish, as a matter of fact,<\/p>\n
that the transfers were being done in a routine manner and that would not<\/p>\n
prove and show the functional integrity of the Evaporator Section with that<\/p>\n
of other units. A distinct process of manufacturing was being carried out in<\/p>\n
the Evaporator Section, which cannot be said to be functionally integratable<\/p>\n
with other units merely because two instances of transfer of some workmen<\/p>\n
from other units have been done by the Company.\n<\/p>\n
            A perusal of all the provisions i.e. Section 25-O (1), 25-L (a) (i),<\/p>\n
2 (ka) (a) & (b) and 2 (cc) of the Industrial Disputes Act, 1947 and Section<\/p>\n
2 (m) (i) of the Factories Act, 1948 would show that it is not necessary that<\/p>\n
in order to effect closure of an undertaking or unit, the Management should<\/p>\n
close down all the undertakings\/units of its industrial establishment. The<\/p>\n
word undertaking has been used in a manner that it is not intended to<\/p>\n
cover the entire industry or business of the employer. Even the closure of<\/p>\n
a part of the activity or unit by the employer would be covered by the<\/p>\n
provisions of the Industrial Disputes Act provided the said unit or activity is<\/p>\n
severable from other units or activities of the industrial establishment or<\/p>\n
undertaking. Each case has its own peculiar facts and circumstances and,
\n CWP No. 2834 of 2003                                    44<\/span><\/p>\n
therefore, no hard and fast rules can be laid down, which would be<\/p>\n
applicable to each case but the test as laid down under Section 2 (ka) of<\/p>\n
the Industrial Disputes Act can be stated to mean that the functions of the<\/p>\n
unit should be so integrated that there cannot be separated and the said<\/p>\n
unit cannot be said to be an independent unit in itself.<\/p>\n
            In the present case, as has been held above, the Evaporator<\/p>\n
Section is an independent unit and, therefore, the Company has rightly<\/p>\n
moved an application under Section 25-O of the Industrial Disputes Act for<\/p>\n
closing down the same.\n<\/p>\n
            Now coming to the contention of the petitioners that there has<\/p>\n
been violation of the conditions of the settlement entered into between the<\/p>\n
Company      and     the   Union,    reference    may      be   made    to   the<\/p>\n
Settlement\/Agreement dated 29.01.2002.           The relevant portion thereof<\/p>\n
reads as follows:-\n<\/p>\n
             ”       Union and workmen agree, that decisions regarding<\/p>\n
             installation of machines, increase in capacity, change in<\/p>\n
             production    facilities,   new\/improved      production   system<\/p>\n
             implementation of new technology, raw engineering of shop<\/p>\n
             floor\/relaying of machines will solely be the prerogative of the<\/p>\n
             Management, Union & workman will neither interfere, nor<\/p>\n
             obstruct the implementation of these management decisions<\/p>\n
             rather union and the workmen will provide their full cooperation<\/p>\n
             in implementing these decisions but this will not have adverse<\/p>\n
             effect on the employment of workmen.”\n<\/p>\n
            A perusal of the above would show that the Management, as<\/p>\n
per the Agreement, was given the sole prerogative to bring about change in<\/p>\n
production facilities, introduce new and improved production system,
\n CWP No. 2834 of 2003                                45<\/span><\/p>\n
implementation of new technology etc. the only rider, which was put, was<\/p>\n
that implementation of these will not have adverse effect on the<\/p>\n
employment of workmen.      As has been held above, the economic, the<\/p>\n
technological and the statutory requirements left no option with the<\/p>\n
Company but to outsource the production of the Evaporator Section<\/p>\n
leading to the decision of closing down of the Evaporator Section. This<\/p>\n
was being done to save the manufacture and production of refrigerators. If<\/p>\n
the Company had not taken this decision, it would have been left with only<\/p>\n
one option i.e. to close down the production of refrigerators altogether,<\/p>\n
which would have led to rendering a large number of employees without<\/p>\n
any work which would have adversely effected the employment of much<\/p>\n
more workmen than those who have now been affected by the closure of<\/p>\n
the Evaporator Section alone. The Company, therefore, cannot be said to<\/p>\n
have violated the Settlement dated 29.01.2002, as it has been forced to<\/p>\n
take such a decision due to the reasons discussed in detail above.<\/p>\n
             In view of the above, the order dated 09.08.2002 (Annexure P-<\/p>\n
12) passed by the Government of Haryana granting permission to<\/p>\n
respondent No. 2-M\/s Whirlpool of India Limited, Faridabad under Section<\/p>\n
25-O of the Industrial Disputes Act, 1947 and the order dated 17.01.2003<\/p>\n
(Annexure P-16) rejecting the review petition of the Whirlpool of India<\/p>\n
Employees Union (Regd.) are in accordance with law.\n<\/p>\n
             Finding no merit in the present petition, the same stands<\/p>\n
dismissed.\n<\/p>\n
             It would not be out of way to mention here that it has been<\/p>\n
submitted by the counsel for respondent No. 2-Company during the course<\/p>\n
of hearing that all the petitioners would be entitled to and paid the same<\/p>\n
amount of compensation as paid to the other workmen of the closed
\n CWP No. 2834 of 2003                                  46<\/span><\/p>\n
Evaporator Section who had accepted the same, which is on the higher<\/p>\n
side than what was statutorily payable and, therefore, if a request is<\/p>\n
submitted by the petitioners for release of the said compensation to the<\/p>\n
respondent No. 2-Company, it shall be released to such petitioners within a<\/p>\n
period of one month from the date of submission of such request.<\/p>\n
                                          ( AUGUSTINE GEORGE MASIH )
\n                                                    JUDGE
\nAugust 17, 2009
\npj<\/p>\n
Refer to Reporters …………….Yes.\n<\/p>\n
 CWP No. 2834 of 2003   47<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Punjab-Haryana High Court Khem Chand vs The State Of Haryana Through The … on 17 August, 2009 CWP No. 2834 of 2003 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No. 2834 of 2003 (O&M) Date of decision: 17.08.2009 Khem Chand s\/o Sh. Kadam Singh and others …..PETITIONERS VERSUS The State […]<\/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":[8,28],"tags":[],"class_list":["post-227826","post","type-post","status-publish","format-standard","hentry","category-high-court","category-punjab-haryana-high-court"],"yoast_head":"\nKhem Chand vs The State Of Haryana Through The ... on 17 August, 2009 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/khem-chand-vs-the-state-of-haryana-through-the-on-17-august-2009\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Khem Chand vs The State Of Haryana Through The ... on 17 August, 2009 - 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