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Judgment
S.S. Sudhalkar, J.—This writ petition is filed by the employer challenging the award of the Industrial Tribunal, Punjab (here in after referred as the "Tribunal") vide which it held that the action of the Petitioner in laying off the workmen with effect from 22.1.1998 is illegal and unjustified from its inception and that it continued to be so till it was lifted with effect from 24.7.1998. It further held that the workmen are entitled to the payment of full wages, allowances and other benefits which would have been payable to them if they had worked during that period of lay-off ice. from 22.1.1998 to 23.7.1998.
The strength of the workmen on the date of lay off declared by the management was 375. 338 workmen were laid off vide its notice dated 21.1.1998. The workers'' union vide its letter dated 22.1.1998 challenged the legality of the lay off by the management and contended that it was in violation of the provisions of Section 25-M of the Industrial Disputes Act (hereinafter referred to as the "Act") and that the workmen are en-titled to full wages for the lay-off period. They also demanded lifting of the lay off.
The Petitioner also intimated the Labour Commissioner vide its letter dated 23.1.1998 of its action in the laying off 338 workmen out of 375 in its establishment stating that it had to be done due to depressed market conditions and financial difficulties faced by it for procurement of the raw material and that the workmen are entitled to compensation u/s 25-C of the Act which would be paid to them. The conciliation proceedings took place but no settlement could be reached and as a result the dispute was referred by the Labour Commissioner to the Industrial Tribunal. During the pendency of the reference, the management lifted lay off with effect from 24.7.1998. The Tribunal vide its award has come to the conclusion that the act of the management in laying off the workmen was illegal and unjustified as stated above.
The case of the Petitioner is;
(i) that the electric power has been cut off because of the order of the Pollution Control Board and, therefore, the mill could not function and the lay off was justified;
(ii) A copy of the demand notice dated 17.2.1998 was not served on the management and hence the reference was void abnitio and the Government could have made the reference without conciliation proceedings pursuant to the demand notice dated 17.2.199.8;
That the factory was closed on 19.2.1998 and, therefore, there could not be any lay off;
That the lay off was because of the depressed market condition and the financial difficulties faced by the management and that the same were emanated from the earlier closure ordered by the Pollution Control Board and continued disconnection of electric and water supply;
That the Tribunal has erred in asking the Petitioner to prove their case, though the onus actually lay on the workers;
That the notice dated 22.1.1998 was made by Surmukh Singh the alleged General Secretary of the union in its personal capacity and that there was no notice of the Union;
That the Petitioner is a sick industry and. therefore, the award could not have been passed against it.
I have heard Learned Counsel for the parties.
Learned Counsel for Respondent No. 2 has raised a preliminary point that the number of workmen was admittedly more than 100 because out of 375 workmen 338 were laid off by the management. He, therefore, relied on Section 25-M of the Act. The said action falls under chapter VB of the Act which applies to the industrial establishment in which the number of workmen is not less than 100. Sub-section (I) of section 25-M reads as under:
25M. Prohibition of lay-off- (1) No workman (other than a badli workman or a casual workman) whose, name is borne on the muster rolls of an industrial establishment to which this chapter applies shall be laid off by his employer except with the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereinafter in this section referred to as the Specified authority), obtained on an application made in this behalf unless such lay-off is due to shortage of power or to natural calamity, and in the case of a mine, such lay off is due also to fire, flood, excess of inflammable gas or explosion.
In the present case admittedly no prior permission of the appropriate Government has been obtained. What the Petitioner has done is to intimate the Labour Commissioner about the lay off vide letter dated 23.1.1998. It has been produced at Ex. W/2. The text of the letter is at under:
Under Rule 75 -A of the Industrial Dispute (Central) Rules, 1957 we hereby inform you that we have laid off 338 workmen out of total 375 employed in our establishment from "A" shift from 6.00 A.M. w.e.f. 22.01.1998 till further order due to depressed market condition and financial difficulties faced by the Management for procurement of the raw material. Such of the workmen as are entitled to compensation u/s 25-C of the Industrial Disputes Act, 1947 will be paid compensation due to them.
The above letter shows that it was an intimation under Rule 75-A of the Industrial Disputes (Central) Rules. 1957 (hereinafter referred to as the "Rules). The said rules stipulate giving of notice by the employer of the commencing and termination of the lay off in case of workmen employed in an industrial establishment as defined in the explanation below Section 25-A of the Act and not being an industrial establishment referred to in Sub-section (1) of that Section. However, when there is special provision u/s 25-M of the Act relating to the industrial establishment the number of workmen is not less than 100, it will not be proper to give benefit of Section 25-A of the Act or the notice issued under the aforesaid Rules to the Petitioner. Section 25-M is specific in laying down the bar to the lay off in such cases unless certain condition are specified and when there is a specific bar it will not be proper for the court to go round about the tacit provisions of the Act. Therefore, without applying the condition laid down in Section 25-M of the Act, the lay off by the Petitioner can be said to be illegal and the finding on this point by the Tribunal does not deserve any interference.
The next point is regarding the demand notice. A copy of the reference order is at annexure P/7. The date of the demand notice mentioned in the same is 19.2.1998. This date appears in the endorsement of the order to the Presiding Officer, Industrial Tribunal. Learned Counsel for the Petitioner has laid stress on the fact that it is not a demand notice dated 19.2.1998 on which the reference was made and no such demand notice was issued to the Petitioner and, therefore, the reference was not legal. Actual demand notice is dated 22.1.1998 issued by the workers'' union. Learned Counsel for Respondent-workmen argued that this is typographical error in mentioning the date of the demand notice and actually the demand notice was sent along with the reference order to the Industrial Tribunal. The demand notice is dated 22.1.1998. This is found from the record of the Tribunal. Therefore, when there is a typographical mistake in the endorsement, the same cannot be given much importance when the parties knew for which demand the demand notice was. Even otherwise in cases of benevolent legislation, the court cannot be hyper technical to deny the rights of the workmen. The notice is issued to Chief Executive of the Petitioner and the copies of the same are endorsed to (i) Labour Inspector, Dera Bassi, (ii) A.L.C. Patiala and (iii) the Labour Commissioner, Punjab.
The argument of Learned Counsel for the Petitioner that when the factory was closed, there cannot be any lay off, cannot be accepted in view of the fact that the Petitioner has itself given notice regarding lay off. Regarding the depressed market condition and the stopping of the electric connection because of the order of Pollution Control Board, it is argued by Learned Counsel for the Petitioner that the Pollution Control Board ordered cutting of the electric connection of the Petitioner which led to the stoppage of production and the consequent lay off. The responsibility of the industrial establishment to keep effluent under control and within the prescribed norms. Norms of pollution can in no way be compromised. It is a basic requirement. No employer can say that he wants to run the industry and also continue pollution beyond the prescribe norms. Similarly no employer can resort to pollution to invite stoppage of electric supply. If this is done, then it is a self created trouble by the employer for which consequences cannot be shifted to the employees. Moreover when the retrenchment is found against the provision of Section 25-M of the Act, this question has become academic.
Regarding the notice given by Surmukh Singh (General Secretary) of the Union only and there being no resolution of the Union, the argument of Learned Counsel for the Petitioner is that the Respondent-workmen have not proved that the notice was issued after the resolution of the Union and if it is not so proved, the notice, if any, looses its sting because it remains the notice issued by Surmukh Singh in its individual capacity. However, on record of the Tribunal on page 90 annexure - 2 is a resolution of the meeting dated 22.1.1998. According to it there was a discussion also regarding the lay off and pay. The meeting was by Sukhna Paper Mill Workers Union. It was signed by 236 persons in addition to the office bearers. Learned Counsel for the Respondent-workmen has drawn my attention to the pleadings before the Tribunal. He has argued that no such defence has been taken before the Tribunal.
Learned Counsel for the Petitioner has cited various authorities. He has cited the case India Marine Service Private Ltd. Vs. Their Workmen, . It was held by the Supreme Court in that case that where a strike is unjustified and is followed by a lock-out which has because of its long duration, become unjustified, it would not be a proper course for an industrial tribunal to direct the payment of the whole of the wages for the period of the lock-out.
Learned Counsel for the Petitioner has also cited the case of Pottery Mazdoor Panchayat v. The Perfect Pottery Company Ltd and Anr. AIR 1979 SC 1356 in which it has been held that the Tribunal cannot go beyond the terms of reference.
Learned Counsel for the Petitioner has also cited the case of The Sindhu Resettlement Corporation Ltd. Vs. The Industrial Tribunal of Gujarat and Others, in which it is held that when an employee was transferred to the subsidiary company by his principal company with his consent and the retrenchment compensation was paid by new company on his termination, he cannot claim reinstatement in principal company and the refusal by principal company to re-employ does not amount to retrenchment.
Learned Counsel for the Petitioner has also cited the case of Shankar Chakravarti Vs. Britannia Biscuit Co. Ltd. and Another, wherein it has been held that in case of application seeking approval of order of dismissal for misconduct and the enquiry found to be conducted in violation of principles of natural justice, and the employer was not asking for opportunity to lead evidence to prove charges, the duty cast on the Tribunal suo moto to call upon employer to adduce evidence.
Learned Counsel for the Petitioner has also cited the case of J.K. Synthetics Vs. Rajasthan Trade Union Kendra and Others, . In that case the Tribunal held that there was closure of textile section of nylon plant and, therefore termination of the workers was justified. The High Court directed reinstatement of the workers and payment of full wages on the ground that there was no closure. It was held by the Supreme Court that the High Court erred in holding that the question of closure was not referred to Tribunal and it was essential for the Tribunal to find whether there was closure or not to determine the justification of the was closure or not to determine the justification of the termination of the services of workers.
Learned Counsel for the Petitioner, has also cited the case of Ashok Kumar Jain and Ors. v. State of Bihar and Others 1995(2) L.L.J. 685 in which it has been held that when the Electricity Board disconnected power supply and the production came to stand still and the lay off resorted to without, prior statory permission u/s 25- M, it was result of " "vis-mejaure""""""
The electric power supply in the present case was cut because of the non-compliance of the required norms regarding pollution by the Petitioner. As mentioned earlier it is the duty of an industrial unit to follow the norms regarding pollution and the breach of the provisions regarding pollution will not, therefore, give a right to the Petitioner to say that now the electricity supply has been cut, hence it is vis-mejaure. The cutting of the electric supply can in no way in the present case, be termed as vis-mejaure for taking the case under the exception of Section 25-M of the Act. In view of the above reasons, the authorities cited by the Petitioner did not come to its rescue because the Petitioner has failed to follow the provisions of Section 25-M of the Act.
As mentioned earlier: it is a typographical error of mentioning the date of demand notice in the endorsement made in the reference order. That does not give a right to the Petitioner to challenge the case of the Respondent.
Learned Counsel for the Petitioner has argued that the Petitioner has been declared as sick industry by BIFR and that provision of Section 22 of the Sick Industrial Companies Special Provision Act, 1985 (hereinafter referred to as the "2nd Act") will prevail over Section 25-M of the Act. He has referred to the order of the BIFR which has been produced at annexure P/1 vide which it has been held that the Petitioner company has become a sick industrial company within the meaning of Clause (O) of Sub-section (1) of Section 3 of the Act and continues to be sick and ordered that the. further proceedings under the Act be taken with respect to the said company, (the copy of the letter of course does not bear any date) Section 22 (1) of the 2nd Act on which the Petitioner relies is regarding jurisdiction of legal proceedings, contract etc. It can be reproduced as under:
Suspension of legal proceedings, contracts, etc. -(1) Where in respect of an industrial company, an inquiry u/s 16 is pending or any scheme referred to u/s 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal u/s 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956) or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said or other law, no proceedings for the winding up of the industrial company or for execution distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof (and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company) shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority.
Counsel for the Respondent has relied on Sub-Section 3 of Section 22 of the 2nd Act which can be reproduced as under:
(3) Where an inquiry u/s 16 is pending or any scheme referred to in Section 17 is under preparation or during the period, of consideration of any scheme u/s 18 of where any such scheme is sanctioned thereunder, for due implementation of the scheme, the Board may by order declare with respect to the sick industrial company concerned that the operation of all or any of the contracts, assurances of property, agreements, settlements, awards, standing orders or other instruments in force, to which such sick industrial company is a party or which may be applicable to such sick industrial company immediately before the date of such order, shall remain suspended or that all or any of the rights, privileges, obligations and liabilities occurring or arising thereunder before the said date, shall remain suspended or shall be enforceable with such adoptions and in such manner as may be specified by the Board.
Provided that such declaration shall not be made for a period exceeding two years which may be extended by one year at a time so, however, that the total period shall not exceed seven years in the aggregate.
Counsel for the Petitioner has referred to the affidavit of Deepak Khetarpal who was the Manager (Finance and Accounts) of the Petitioner-company before the Tribunal. A copy of it is produced at Annexure P-11. In that affidavit it is stated that the factory was declared sick by B1FR in case No. 419/87 as per Ex. M-2. Annexure P/1 is the copy of Ex. M2. It is further stated in the affidavit that though financial institution released the sanctioned reliefs, the bank and State Government did not meet their commitments and as a result the rehabilitation scheme of the company could not be implemented in full and the revival operation of the company was severely effected day by day and that the company further suffered a setback in their rehabilitation programs because of the hammer of the Pollution Control Board. Though this document does not bear the date of the order, it can be seen that it is case of 1987.
Mr. Arora Learned Counsel for the workmen has relied on the case of Baburao P. Tawade v. Hes Limited3 1995 Lab. I.C. 2200. It is judgment of Bombay High Court in which it has been held that even if the application has to be made by the workmen u/s 33C(2) of the Act, for recovery of the monies due to them, after the reference under SICA made to the BIFR, such application could not have attracted the bar u/s 22(1) of SICA much less the writ petition under Articles 226 and 227 of the Constitution of India. The learned Single Judge of the Bombay High Court has relied on the various judgments including the judgment of the Supreme Court in me case of M/s. Rohtas Industries Ltd v. M/s Rohtas Industries Ltd. 1987(2) Lab. L.J,. 1. In that case the Supreme Court has observed that the wages and emoluments of the workmen after the period of closure would have priority against the claims of the financial institution. It has also been observed in that case that though this judgment is not directly on the point, it surely is a straw in the wind on judicial thinking on the subject.
Learned Counsel for the Respondent has relied on the case of Deputy Commercial Tax Officer and Others Vs. Corromandal Pharmaceuticals and Others, . It has been held therein that the suspension of legal proceedings in respect of dues against sick company applies only to such of those dues reckoned or included in sanctioned scheme for rehabilitation and for the recovery of sales tax dues, proceedings are not barred. It has been observed in para 10 of that judgment as under:
.....it will be reasonable to hold that the bar or embargo envisaged in Section 22 (1) of the Act can apply only to such of those dues reckoned or included in the sanctioned scheme. Such amounts like sales tax, etc, which the sick industrial company is enabled to collect after the date of the sanctioned scheme legitimately belonging to the Revenue, cannot be and could not have been intended to be covered within Section 22 of the Act. any other construction will be unreasonable and unfair and will lead to a state of affairs enabling the sick industrial unit to collect amounts due to the Revenue and withhold it indefinitely and unreasonably. Such a construction which is unfair, unreasonable and against spirit of the statute in a business sense, should be avoided.
As per Sub-Section 3 of Section 22 of the 2nd Act, a declaration has to be made for the period not exceeding two years and cannot exceed 7 years in the aggregate. When that is the position the period of seven years from 1987 the year in which the case was registered before the BIFR, has already elapsed and, therefore, the Petitioner cannot get the advantage of the same. In view of the above, the writ petition deserves to be dismissed.
CM 11701 of 2001 is given by the workmen for making payment of wages to the workers as the workers have not been paid any wages for the last more than three years. The Tribunal had allowed the reference and held that the workmen were entitled to full wages, allowances and other benefits which would have been payable to them as if they had worked during that period of lay off with effect from 22.1.1998 to 20.7.1998. This order was stayed in this writ petition. In view of this position, when the writ petition is being dismissed, it will be equable to order the Petitioner to pay the amount for the period of lay-off as prayed for.
As a result, the writ petition is dismissed. CM 11701 of 2001 is allowed and the Petitioner is directed to pay the amount to the Respondent-workmen, to which they are held entitled by the Tribunal, within a period of one month from today.