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Judgment
V. Ramaswami, J.—The petitioner is the management of Hackbridge Hewittic and Easun Limited, Tiruvothiyur, hereinafter called the
company, and it had two factories, one at Tiruvothiyur which may be called Factory No. 1, where the company is manufacturing power
transformers and it is functioning from 1956, and the other at Eravanur, which may be called Factory No. 2, and this was set up in the year 1966
for the purpose of manufacture of small transformers. It is the case of the company that these two factories are distinct and separate industrial
establishments situate in two different villages and also having separate licences under the Factories Act. Accordingly it was their case that in law as
well as in fact they are two separate industrial undertakings. It appears that at the time when Factory No. 2 was established, some of the
experienced workers from Factory No. 1 were transferred with their consent to Factory No. 2 and later on some new workers also were
employed in the Factory No. 2. The total number of persons thus employed in Factory No. 2 was 83 at the time when the dispute arose. It is also
not in dispute that there are about 493 workers working in Factory No. 1. It was the case of the company that due to severe competition from
small-scale industries all over the country, there was difficulty in continuing production in Factory No. 2. The production was going down and
ultimately the factory was kept closed, since April 1976. During the period of closure, there were some talks and negotiations between the
workers and the management as to how best to revive the working in the factory. Ultimately on 28th September, 1976, the management gave a
notice to the Government u/s 25-FF(A) intimating them that for the reasons explained in the annexure to the letter, they are closing down their
Factory No. 2 at Eravanur. They also stated that the number of workmen who would be affected by the closure and whose services would stand
terminated on account of the closure was 80. In the annexura it was stated that in spite of their best efforts, due to competitive prices they were not
able to make any profit and that there was no hope of reviving the manufacturing operations which were stopped on and from 20th March, 1976.
On 26th October, 1976, the management also issued a notice u/s 25-FFF of the Industrial Disputes Act, hereinafter called the Act, giving one
month''s notice to the workers, intimating them of the closure of the business and the factory with effect from 30th November, 1976, and informing
them that their services will stand terminated with effect from that date, namely, 30th November, 1976. There was also an annexure to this notice
which set out the reasons for the closure. The Hackbridge Hewittic and Easun Limited Employees'' Union, Thiruvothiyur, hereinafter called the
Workers'' Union issued to the Management a strike notice under Rule 59 bf the Tamil Nadu Industrial Disputes rules, 1958. It was pointed out in
the said notice that the workmen were always willing to co-operate with the management, that in spite of their best efforts to revive the working of
the factory, the management illegally and without any warrant are trying to close down the factory. They further stated that the termination of the
employment of the workmen concerned with effect from 30th November, 1976, was illegal and unjusti6ed. They further informed the management
that they will go on strike on any day after 14 days of the receipt of the notice unless the management withdraws the notice of closure of Factory
No. 2 and does not give effect to the proposal to terminate the services of the workmen with effect from 30th November, 1976. In the statement
filed along with the strike notice, as required under the Rule 59 they had stated that the workmen considered that the company''s extreme step of
closure ""is not genuine or bona fide and its intent is to vitiate the negotiations."" They further stated that the consequent non-employment will be
unjustified, as there was no warrant or justification for the proposal of the management. It appears that there was some sort of a conciliation before
the Commissioner of Labour and the conciliation failure report was sent to the Government. Thereafter the Government in G.O. Rt. No. 412,
Labour and Employment Department, dated 23rd February, 1977, referred for adjudication to the Industrial Tribunal, Madras, the following
dispute u/s 10(1)(d) of the Act:
Whether the stoppage of work in Factory II of Hackbridge Hewittic and Easun Limited, Madras-19, with effect from 30th November, 1976, is a
case of closure or lockout and to what relief the workmen would be entitled?.
Before the Industrial Tribunal, the management raised a preliminary objection as to the competency of the Government to refer the dispute in the
terms as set out above and the jurisdiction of the Tribunal to go into that question. It was contended before the Industrial Tribunal that the dispute
that was raised by the workmen was relating to the closure of the Factory No. 2 and it was never contended by the Union or the workers that the
action of the management was one of lock-out. Therefore the Government could not have referred the question as to whether it is a case of lock-
out, to the Industrial Tribunal. The Industrial Tribunal overruled this objection and held that the reference was in order and directed the case to be
posted for disposal on merits. It is against this order of the Industrial Tribunal overruling the preliminary objection that this writ petition has been
filed.
The learned Counsel for the petitioner contended that the question for closure could not form an industrial dispute within the meaning of Section
2(k) of the Act and that the petitioner has a fundamental right to close down the business and the reference on the question of closure is
incompetent. He also contended that the workmen never raised a dispute that the action of the management amounted to a lock-out and that
therefore even the case, whether it is a lock-out or not could not have been referred to the Industrial Tribunal.
In one of the earliest cases considered by this Court in the Indian Metal and Metallurgical Corporation Vs. Industrial Tribunal, Madras and
Another, , this Court held that as a citizen has got a right to carry on business, he is equally given liberty not to carry it on, if he so chooses. The
Industrial Tribunal could adjudicate only on the question whether a particular lock-out was justified or not, but it cannot decide the question
whether the employer can close down his business temporarily or for an indefinite period or permanently. The decision also pointed out some of
the main differences between closing down a business and lock-out and held that closing down is distinct from lock-out. The proposition was
further elaborated by the Supreme Court in Kalinga Tubes Ltd. Vs. Their Workmen, . It was held that on no principle of industrial law, the
Tribunal could go into the question as to whether the closure of an undertaking was for financial, economic or other considerations. In other words,
the closure could be on any ground other than financial, economic or other considerations of a like nature and the bona fides or otherwise of the
closure was irrelevant. There is also another earlier decision of the Supreme Court in Indian Hume Pipe Co. Ltd. Vs. Their Workmen, . in which it
was held that in., a series of decisions it has been laid down that it is not for Industrial Tribunals to enquire into the motive for closure to find out
whether the closure is justified or not; and once the Tribunal finds that an employer has closed his factory as a matter of fact, it is not concerned
with the question as to the motive which guided him and to come to a conclusion that because of the previous history of the dispute between the
employer and the employees the closure was not justified, and such a closure cannot give rise to an industrial dispute. But in all these decisions and
some of the decisions cited by the learned Counsel for the petitioner, it was held that the question whether there was as a matter of fact a closure
could be gone into and could be put as an issue between the parties. Thus, though the bona fides or otherwise of the closure or the necessity for
the closure and whether the closure was necessitated by financial, economic or other, considerations could not be gone into and could not be put
as an issue or as an industrial dispute, the question whether there was in fact a closure or it amounted to a lock-out could be put as an issue or as
an industrial dispute. The learned Counsel for the respondent-workmen pointed out that if the Tribunal were to give a finding that there was no
factual closure, it would amount to a lock-out and therefore the dispute as referred by the Government for adjudication was the real and proper
dispute which the Government could have and ought to have referred and in view of the same the preliminary objection has no force. There is great
force in this argument of the learned Counsel for the workmen. Lock-out is defined as meaning, ""the closing of a place of employment, or the
suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him"". Closure has been held to mean
a closure of the business and not the closing of the place of employment. If the Tribunal were to hold that there was no factual closure, it would
only mean that either there was closure of the place of employment or suspension of work. It may also amount to refusal by an employer to
continue to employ any number of persons employed by him. The factual question of closure will thus necessarily involve the question of lock-out.
It is in those circumstances that the Government referred the dispute as to whether it is a case of closure or lock-out. The use of the word ""case"" in
this reference is very important, because the case of closure will take in a dispute to the genuineness of the closure itself. As already pointed out in
the narration of facts, the workmen in their own way were contenting all along that there was no genuine closure. In the conciliation proceedings
before the Commissioner also they were maintaining that the ""closure is not genuine or bona fide"" and action of the management ""would not amount
to a real or genuine closure in the eye of law"". Therefore it could not be stated that before the reference, there was no dispute as to the factual
closure of Factory No. 2 at Eravanur. If there was no factual closure in. the sense in which the workmen were contending, namely, that there was
no genuine closure, it would only mean that they have closed the place of employment for ulterior purposes or with a motive. That would lead to a
question. of raising a dispute that it is a lock-out and not a closure.
Accordingly I am of the view that the reference by the Government was in order and the overruling of the preliminary objection by the Industrial
Tribunal is not liable to be interfered with in this writ petition. The writ petition accordingly fails and it is dismissed. The second respondent will be
entitled to the costs. Counsel''s fee Rs. 250 (Rupees Two hundred and fifty only).