N. Narasimhalu and Others vs Commissioner of Industries, Andhra Pradesh and Another

This writ petition is directed against notices issued by the respondents, that is, the Commissioner of Industries, A.P. Hyderabad and the General Manager, District Industries Centre, Srikakulam in closing down the Bristle and Mattress Fibre Industry, Baruva with effect from 29th February, 1984. The petitioners want a declaration that the closure is illegal and also ask for a direction to the respondents to reopen the industry forthwith. The respondents have issued a notice, dated 25th February, 1984 to all the petitioners in the said Unit saying that in as much as the said industry at Baruva has been running at loss since its inception, the Commissioner of Industries has ordered it to be closed with effect from 29th February, 1984 and that they proposed to do so and hence, their services are not needed w.e.f. 29th February, 1984 evening onwards. Again on 29th February, 1984, a notice was issued with reference to the earlier notice stating that the industry is closed down w.e.f. 29th February, 1984 evening onwards. The notice further stated that for the amounts due to them, action will be taken in consultation with the Labour Assistant Commissioner.

The contention of the petitioners that in as much as the respondents have not complied with the requirements of Section 25-FFF of the Industrial Disputes Act No. 14 of 1947, the closure is illegal and hence, the relief sought for by them, has to be acceded to. It is urged by Sri N. Rammohan Rao, learned Counsel for the petitioners, that the consequences that flow from non-compliance with Section 25-F, must also follow from the non-compliance of Section 25-FFF. In other words, the contention is that in as much as, the Court would direct reinstatement of workmen with all the ancillary benefits in case of violation of Section 25-F, a direction declaring closure as illegal should also follow from the non-compliance with the requirements of Section 25-FFF of the Act. I do not find it possible to agree. Sub-section (1) of Section 25-FFF in so far as it is relevant for the purpose, reads as under :

"Section 25-FFF Compensation to workmen in case of closing down of undertaking :- Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall subject to the provisions of sub-section (2) be entitled to notice and compensation in accordance with the provisions of S. 25-F as if the workman has been retrenched ....."

To notice the contrast in the language employed in this sub-section with the language of Section 25-F, it would be appropriate to set out S. 25-F as well. It reads thus :

"25-F. Conditions precedent to retrenchment of workmen :- No workman employed in an industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until (a) the workman has been given one month''s notice in writing indicating the reasons for retrenchment and the period of notice has expired or the workman has been paid in lieu of such notice, wages for the period of the notice :

Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of service;

(b) the workman has been paid at the time of retrenchment compensation which shall be equivalent to fifteen days'' average pay for every completed year of continuous service or any part thereof in excess of six months; and

(c) notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the official Gazette".

A perusal of sub-section (1) of Section 25-FFF shows that where an industry is closed down, for whatever reason it may be, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure, is entitled to notice and compensation in accordance with the provisions of Section 25-F, as if the workman had been retrenched. In the context and of the language of this sub-section, it is not possible to hold that where the said requirement is not followed, the closure itself becomes illegal.

It is true that u/s 25-F of the Act, it has been held that in case of non-compliance with the requirements of the section thereof, retrenchment is illegal and the workman is entitled to reinstatement with all the ancillary benefits, that is because of the nature of that Section and also because the industry in that case will be a continuing industry. Section 25-F says, ".... no workman employed in an industry, who has been in continuous service for not less than one year, under an employer, shall be retrenched by that employer until the prescribed conditions are complied with". While the language of Section 25-FFF is different, I do not think it possible or practicable to hold that even in case of non-compliance with Section 25-FFF, the closure should be declared illegal. By declaring the closure illegal, several other problems would arise which will be difficult of solution. According to the plain language of sub-section (1) of Section 25-FFF, the only right given to the workers is to get the notice and compensation prescribed u/s 25-F. In the circumstances, the writ petition is allowed in part. No costs. The petitioners shall be entitled to the payment of compensation as contemplated by Section 25-F. The respondents shall work out the compensation payable to them and shall pay the same, within two months from the date of receipt of this order. Indeed, as stated above, the notice dated 29th February, 1984 itself says that action is separately being taken for paying the amounts due to the petitioners. This order shall apply to all the petitioners in the said Unit and action shall be taken, accordingly.

Sri N. Ramamohan Rao, the learned Counsel for the petitioners, makes a request that, the petitioners engaged in the Unit, at the time of its closure, are prepared to run the Unit by forming a co-operative society and that they should be allowed to so. This is a matter which the respondents should consider, having regard to all the relevant facts and circumstances of the case. It is directed, that if any such request is made, the 2nd respondent shall examine the same and submit his report/recommendation, as the case may be, to the 1st respondent, within one month from the date of receipt of such an application. The 1st respondent shall thereupon pass appropriate orders on the report/recommendation within one month from the date of receipt of such report and communicate the same to the workers.