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of <h1>Supreme Court rules company liable for closure, not lock-out, under Industrial Disputes Act.</h1> The Supreme Court allowed the appeal, setting aside the Tribunal's award. It held that the appellant company's action constituted a closure of its ... - Issues Involved:1. Whether the appellant company's action constituted a closure or a lock-out.2. Legality of the lock-out declaration.3. Determination of compensation under Section 25FFF of the Industrial Disputes Act, 1947.Issue-wise Detailed Analysis:1. Whether the appellant company's action constituted a closure or a lock-out:The principal question was whether the appellant company's action on October 3, 1967, constituted a closure of its undertaking or a lock-out. The Tribunal found that:- Since October 3, 1967, there had been no production by the factory, and operatives had not been employed.- There was no prior intention to close down the undertaking as evidenced by the absence of any Board of Directors or shareholders' meeting between the Annual General Meeting on September 30, 1967, and the notice issued on October 3, 1967.- The company's trade results for 1966-67 did not suggest any financial necessity for closure.- The closure was a direct consequence of the alleged illegal activities of the workmen and the refusal by officers and supervisory staff to carry on their normal work due to safety concerns.The Tribunal concluded that the action taken by the management amounted to a lock-out rather than a closure, influenced by the absence of evidence indicating the winding up of the business or the dissolution of the company. The Tribunal noted that the management's actions, such as issuing notices to vacate quarters and informing authorities about the closure, were consistent with a lock-out disguised as a closure.2. Legality of the lock-out declaration:The Tribunal found that the declaration of a lock-out was illegal as it contravened Section 23 of the Industrial Disputes Act, 1947, which prohibits lock-outs during the pendency of certain proceedings. The Tribunal noted that the assertion by the Union that workmen went to work on October 3, 1967, was not challenged by the management. The Tribunal held that the lock-out was declared due to the assembly of workmen at the administrative building demanding higher bonus rates and that the management should have taken disciplinary action against the workmen instead of declaring a lock-out.3. Determination of compensation under Section 25FFF of the Industrial Disputes Act, 1947:The Supreme Court examined whether the closure was genuine and bona fide. The Court held that the closure must be genuine and not a mere pretence, and the motive behind the closure is immaterial. The Court found that the management's decision to close the undertaking was influenced by the gherao and the apprehension of danger to the staff's safety. The Court noted that the management's actions, such as issuing notices of termination and discharging employees, indicated a genuine closure of the undertaking. The Court emphasized that the closure of the business itself, not just the place of business, is required for a genuine closure.The Court further examined whether the closure was due to 'unavoidable circumstances beyond the control of the employer' under the proviso to Section 25FFF(1). The Court found that the circumstances, such as the gherao and the apprehension of danger, were not sufficient to constitute unavoidable circumstances beyond the employer's control. The Court held that the burden was on the company to prove that the circumstances were unavoidable and beyond its control, which the company failed to do. Consequently, the Court ruled that compensation should be paid as if the undertaking was closed down 'for any reason whatsoever' under Section 25FFF(1).Conclusion:The Supreme Court allowed the appeal, setting aside the Tribunal's award, and held that the appellant company closed down its principal undertaking on October 3, 1967. The Court determined that the closure was not due to unavoidable circumstances beyond the employer's control, and thus, the appellant was liable to pay compensation under the principal part of Section 25FFF(1) of the Industrial Disputes Act, 1947. The parties were left to bear their own costs.
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