K. Mohan and Co. International, Nashik vs Nashik Workers Union, Nashik and another

Mrs. Nishita Mhatre, J.—The petition challenges the order of the Industrial Court in Complain (ULP) No. 319 of 1997. The Industrial Court has by its order dated 31.3.1997 held that the Company has indulged in an unfair labour practice under Items 9 and 10 of Schedule IV of the M.R.T.U. & P.U.L.P. Act by declaring a closure w.e.f. 31.7.1997.

The brief facts in the present petition are as follows:--

The petitioner is a partnership firm in which the workmen represented by respondent No. 1 Union are employed. The petitioner had declared a lock-out from November, 1994 which was lifted after about six months, in March, 1995. The petitioner contends that it was facing considerable financial constraints and therefore, it had to lay off the workmen on several occasions in accordance with the Industrial Disputes Act (in short I.D. Act). Ultimately, The petitioner issued a notice informing the workmen that their factory would be closed w.e.f. 31.7.1997. Aggrieved by this decision, the Union preferred Complaint (ULP) No. 319 0f 1997 before the Industrial Court under Items 9 and 10 of Schedule IV of the MRTU & PULP Act. The Industrial Court stayed the notice and, therefore, the closure could not be effected. This order was challenged by the Company in Writ Petition No. 2700 of 1997. The stay granted by the Industrial Court was vacated on 7.7.1997. Thereafter, the Company effected the closure from 31.7.1997.

The Industrial Court while considering whether the closure was legal and whether there was an unfair labour practice under Items 9 and 10 of the M.R.T.U. & P.U.L.P. Act, has held that the closure had not been effected in accordance with the provisions of law and that section 25-O of the Industrial Disputes Act had been breached. The Industrial Court also came to the conclusion that there could not be a closure of only a part of the establishment and, therefore, held that the closure was illegal.

Mr. Rele criticised the judgment of the Industrial Court and, in my view, rightly. The Industrial Court has declared that the closure is illegal since there is a breach of the provisions of section 25-O of the Industrial Disputes Act. This finding is contrary to law as the facts indicate that there were less f than 100 workmen-employed with The petitioner-Company at the relevant time. Chapter V-B, which contains section 25-O of the I.D. Act is applicable only to an industrial establishment where 100 or more workmen have been employed on an average in the preceding twelve months. The findings of the Industrial Court indicate that there were only 66 workmen when the notice of the closure was issued. The Industrial Court has observed that a Voluntarily Retirement Scheme (in short V.R.S.) was introduced between 11th and 14th February, 1997 and 17 workmen had availed the V.R.S. Thus, at best, there were 83 workmen at the relevant time. Therefore, obviously, the provisions of section 25-O would not be applicable. These findings of the Industrial Court cannot be sustained and must be set aside.

Apart from this, it is now well settled that a closure can be effected of even of a part of an undertaking, the entire undertaking need not be closed.

In these circumstances, the order impugned is set aside.

Rule made absolute. Writ petition allowed. No order as to costs