TaxTMI 
TaxTMI 
2007 (6) TMI 566
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....iya Mill Mazdoor Sangh (RMMS for short) was joined as party respondent. By the impugned order, the award of the Industrial Tribunal dated 21st February, 2004 granting and/or confirming the grant of permission to close down two undertakings of the appellant-Mill came to be set aside with direction to grant compensation, in lieu of reinstatement, to the workmen, who did not opt for voluntary retirement until 1st March, 2004 with other reliefs referred to in the operative part of the judgment and order together with gratuity in accordance with the provisions of the Payment of Gratuity Act. Factual Matrix: 2. The factual matrix, not in dispute, taken from the impugned judgment are as under: 3. The appellant-Mill is a business house of some antiquity belonging to the Thackersey family. The business activities were initially commenced in 1805 as a trader and were then expanded to cover the manufacture of cotton fabrics. The Mill was incorporated in 1882 or thereabouts as a Limited Company. The Crown Spinning and Manufacturing Company Ltd., which had also been incorporated in 1880, was amalgamated with the appellant-Mill with effect from 1st April 1975 by an order passed by this ....
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....The Company agreed to issue post-dated cheques but Clause 3(g) laid down that in the event that the Company was unable to raise funds as visualized therein, due to unavoidable circumstances, after relieving the employees, the Company in consultation with RMMS would inform both RMMS and the employees individually, not to deposit the cheques in their Bank Accounts. In such cases, the employees would be paid interest at a rate 1% higher than what is payable by nationalized Banks for fixed deposits, on the delayed part of payment. The employees, it was provided, will not take recourse to any legal proceedings. Clause 4(k) of VRS Agreement is material for the present purposes, for it provided that employees who will not opt for voluntary retirement, would be redeployed by the Company, if necessary, by re-organizing and restructuring manufacturing activities in any of the Industrial Units of the Company. Clause 4(k), inter alia, provided as follows: The remaining employees who will not opt for voluntary retirement under the Scheme will be redeployed and assigned work in any section, department or units of the Company without adversely affecting their service conditions. The empl....
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....me submitted to IDBI, the operating agency recently. The Chairman stated that in the event that all the workmen at the Crown Mills Unit and the Process House Division did not opt for VRS, it would not be possible to properly reorganize or restructure the working of any unit in Mumbai with the small group of workers who may not opt for VRS and it would be impossible to run such operations except at heavy cash losses. Therefore, opined the Chairman, the Company would have no alternative but to exercise an option of closure of all units in Mumbai i.e. A/B Units at Mahalaxmi, C Unit at Dadar and Process House at Prabhadevi. The Board thereupon passed a resolution authorising the making of an application for closure of the Mumbai Units under the Industrial Disputes Act, 1947. 6. On 10th April 2003, the Company moved applications under Section 25O of the Industrial Disputes Act, 1947 each in respect of the Crown Mills and the Process House Units before the Commissioner of Labour, Mumbai, which were treated as one application dated 2nd May, 2003 by consent of parties. The annexure annexed thereto gave full particulars and details of the first appellant and the process house and Crown D....
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....osses of Rs. 9.40 crore in 1997-98 which increased to Rs. 46.60 crore in 2000- 01 and as of 30th September 2002, the cumulative losses were stated to be Rs. 185 crore. The Company, it was stated, had to make a reference to the BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985 since as of 31st March 2001 its net worth stood eroded. The BIFR had declared the Company as a Sick Industrial Undertaking on 4th December 2002. In support of its proposal to close down the undertakings, the Company claimed that many composite mills at Mumbai including the appellant-Mill had become sick and had closed down or were proposing closure due to the following reasons: (a) Government policies: The Company claimed that the decentralized sector has been a recipient of several concessions and exemptions in fiscal, trade and labour policies. The excise duty structure and quota policy were alleged to be biased towards the small scale and decentralized sectors; (b) Attempts to rectify anomalies in Government policies were alleged not to have borne fruit. As a result, the share of fabric production of the composite mill sector was reduced to less than 4% in....
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..... By its Award dated 21st February 2004, the Industrial Tribunal came to the conclusion that the Company had established a case for closure under Section 25-O. The Industrial Tribunal, directed that the closure compensation shall be paid within a period of 30 days and that workmen would be granted the closure compensation or payment due under the VRS agreement dated 29th December 2002, whichever was more beneficial. The Industrial Tribunal also directed that VRS payments due to employees, who were still to be paid, should similarly be discharged and paid within a period of 30 days. 15. Not satisfied with the aforesaid award of the Industrial Tribunal, both appellant-Mill as well as Union filed writ petitions in this Court referred to in the opening part of the judgment. The learned single Judge, vide his judgment and order dated 21st February, 2005, was pleased to set aside the award of the Industrial Tribunal and the petitions came to be disposed of in terms of para- 43 of the said judgment. 16. Being aggrieved by the aforesaid judgment and order of the learned single Judge, the appellant-Mill filed two appeals being Appeal Nos.364/2005 and 458/2005 setting up various legal ....
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....r statutory authorities. He further submits that the sanctioned scheme is, in fact, in the process of being implemented; three SPVs have been incorporated; and the lands of the two units in Mumbai have, in fact, been transferred to the SPV. He further submitted that in this context, the learned single Judge has noted that it is impossible to visualize a situation where the manufacturing operations in the Mumbai Mill can commence since the plant and machinery have all been sold. 20. Mr.Dada also tried to encash the finding recorded by the learned single Judge in the impugned judgment; wherein he has recorded that AAIFR has proceeded on the basis that the unavailability of the two Mumbai units was established and that a sanctioned scheme for rehabilitation exits, which is based on the closure of the two Mumbai units. It is, in this context, that the learned single Judge has noted that restarting operations of the Mumbai units have been rendered impossible s a result of the sale of the plant and machinery. Having regard to the above findings, Mr.Dada submitted that on learned Judge's own findings, the test of impossibility stands satisfied. 21. Mr.Dada further urged that the....
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....the Order book, item-wise and value- wise; (v) Financial position of the Appellant; (vi) The losses incurred by the Crown and Process House Units for the last three years; (vii) Percentage of wages of workmen to the total cost of production; (viii) Administrative, general and selling costs; (ix) Inventory position, item-wise and value- wise; (x) Annual Sales figures for the last 3 years; (xi) Reasons for proposed closure; and (xii) Attempts made by the Appellant to avoid closure. 25. Mr.Dada further submits that in support of each of the fact the appellant-Mill led oral evidence of Mr.Ghaisas, Vice-President of the Mill. Mr.Dada took us through the evidence of Mr.Ghaisas in support of his submissions. 26. Mr.Dada while proceeding with his submission also urged that the learned single Judge had no jurisdiction or power to award any VRS compensation to the workmen who had not opted for VRS. In his submission, the quantum awarded is abnormally high. 27. Mr.Dada also relied upon the subsequent decision of the Division Bench of this Court in Writ Petition No. 462/2005 filed by the respondent- Union challeng....
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....ulars and proof of statements made therein. According to him, even before the Tribunal no evidence was produced by the Company in support of the statements made in the applications. According to him the Industrial Tribunal misunderstood Section 25-O(2) & (5) of the I.D.Act. That the Mill-management could not prove any of the allegations made in the applications including the comparative cost of production of the appellant- Mill vis-a-vis other mills in organized and unorganized sectors in Mumbai and elsewhere. That the appellant-Mill could not establish the unavailability of the units proposed to be closed. 31. In the submission of Mr.Ganguli, the documents submitted cannot be accepted as evidence by mere production thereof. They were required to be proved, subject to cross-examination. In his submission, Mr.Ghaisas, who was examined, was not the author of the documents which were referred to by him in his evidence. According to Mr.Ganguli, Mr.Tidke's evidence by no means support the case of the management for closure. 32. Mr.Ganguli submits that the appellant-Mill did not produce BTRA report before any of the Court or Tribunal. According to him, the closure of Mumbai uni....
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....ount, after providing for Income Tax and debt obligations, the worker might get amount equivalent to 50% of the wages by way of return on the investments. That the worker should get the wages up to the date of the order. In his submission, the liability on this account is capable of being met by the Mill with soaring prices of the real estate. 38. Mr.Ganguli submits that there will be no question of any discrimination between the workers affected by closure and the workers who had opted for VRS under the agreement dated 29th December, 2002, since they have opted for VRS with their eyes open knowing fully well the consequences of the agreement and receipt paltry sums thereunder. He submits that the said workers have not only received the VRS amount but also interest thereon on account of delayed payment and Rs. 25,000/- additional by way of ex-gratia payment (Bakshis). He, thus, submits that the appeals filed by the Mill deserve to be dismissed, whereas appeal filed by the Union deserves to be allowed with costs. Contours of Writ Jurisdiction: 39. Before proceeding to consider the aforesaid issues in light of the rival contentions, it would be profitable and relevant to consid....
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....ourt's ruling so that if a decision is quashed for a procedural error, the correct procedure as indicated by the Court must be followed where the matter is to be considered afresh. 44. The aforesaid principles are well-settled and well recognised in catena of cases viz; Parry & Co. v. Commercial Employees Association (1952)ILLJ769SC , Veerappa Pillai v. Raman and Raman Ltd. [1952]1SCR583 , Ebrahim Aboobakar v. Custodian General of Evacuee Property [1952]1SCR696 , Hari Vishnu Kamath v. Ahmed Ishaque: [1955]1SCR1104 ,: [1958]1SCR1240 and Custodian, E.P. v. Abdul Shukoor [1961]3SCR855 consistently followed in all subsequent judgments of the Supreme Court till date. 45. In short, Judicial review is directed not against the decision, but is confined to the examination of the decision making process. When the issue raised in judicial review is whether a decision is vitiated by taking into account irrelevant, or neglecting to take into account of relevant factors or is so manifestly unreasonable that no reasonable authority entrusted with the power in question could reasonably have made such decision. The judicial services of the decision making process includes examination, as ....
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....ourt. 50. Before, however, we proceed to examine above aspect of the case, we may first consider the scope of the Tribunal's jurisdiction in case of closure arising under Section 25-O(2) & (5) of the I.D.Act. The requirement of Section 25-O(2) is in the nature of a restriction imposed upon the right of the employer to close down the business. The present Section 25-O of the I.D.Act is denuded of the infirmities found in its predecessor. The provisions of Section 25-O of the I.D.Act, as it now stand require the Government to give reasons for its order; the factors to be considered by the appropriate government are stated in Section 25-O(2); an objective approach in arriving at the decision by the Government, is now imperative; the factors stated in Section 25-O(2) which are to be considered are to be understood in the light of the decision in Excelwear (supra); the appropriate Government has to strive to strike a balance between the various interest involved, in the background of a particular situation; any unreasonable order can be corrected by judicial review; the Government itself may review its order or refer the matter for decision by a Tribunal for adjudication; the app....
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....liminary objection to the tenability of the reference (which appellant did not press at this stage), the appellant-Mill has stated that the Company had filed two separate applications under Form XXIV-C under Section 25(0-1) of the Industrial Disputes Act, both dated 10-4-2003; subsequently treated as having been made on 2nd May, 2003; seeking permission to close two subject undertakings of the Company, namely; (1) Crown Mill at Gokhale Road (South) Prabhadevi, Mumbai and (2) Process House at Yadav Patil Lane, Veer Savarkar Marg, Prabhadevi, Mumbai. The Commissioner of Labour by common order dated 30th June, 2003 was pleased to grant permission for closure of the said two units for the reasons recorded therein. 54. The appellant-Mill while placing reliance on the contents of the aforesaid two applications produced some additional documents and pleaded that when the applications for permission in the prescribed form were made the financial position was showing loss of Rs. 185 crore which was further deteriorated resulting in further carry forward losses in the sum Rs. 237 crore for the quarter ending 30th June, 2003. 55. It was also pleaded that none of the two units could work....
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....international markets was admitted by the Union but the appellant-Mill was sought to be held responsible for the same. 58. It is further alleged by the respondent- union in defence that on many occasions the aforesaid lapses on the part of the Mill- management were brought to their notice but in reality management never took any steps to ensure proper supply of spare parts and proper mixing of cotton and polyester since promoters were adverse to accept any suggestions of the respondent-union. 59. The similar allegations are to be found in the written statement with respect of Crown Mill; that the quality of the finished cloth was not maintained by the Mill. The orders placed with the Mill were abruptly cancelled by the parties for want of quality product. In export trade, the goods supplied by the Company were rejected by the foreign buyers as they were not satisfied with the quality of the product. The appellant, ultimately, lost heavily in the export market during the period 1st April, 1999 to December, 1999. The earning in foreign exchange on account of export of goods for the period April to December, 1999 started showing reverse trend. This fall in export earning was fal....
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.... the huge loan liability incurred by the appellant-Mill resulting in heavy interest burden was admitted blaming the appellant-Mill for indulging in such reckless borrowings. 62. It was further alleged in the written statement that in the month of March, 2002 with the active support and co-operation of the recognised union, namely; R.M.M.S., the company managed to obtain resignations of 1,528 employees working in Unit-B. The operation in Unit-B was carried on up to October, 2002 with the help of the workers who had already resigned but agreed to work on payment of 70% of the normal wages paid on cash basis. It was thus, admitted that VRS was floated and majority of the workers opted for the same. The stoppage of production of Unit-B was also admitted by the Union in its written statement. 63. It was further alleged that various Departments and/or Sections were closed in the Crown Mill and Process House from June, 2001 and payment of monthly wages to staff and workers were deliberately delayed by the Mill. In the written statement reference to B.I.F.R. was admitted but it was sought to be contended that the applications for closure was based on vague and general allegations wit....
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....e to its due weight though like all other admissions, it is neither conclusive nor irrefutable. (see Shankar v. Vithalrao: AIR1989SC879 ). In the case on hand, admissions are given in the written statement filed in the very case. 68. Now, let us examine the concept of burden of proof. Under Section 101 of the evidence Act, whoever desires any Court to give judgment as to any legal right or liability dependent on existence of facts, which he asserts, must prove that those facts exist. When person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person. In other words, the burden of proof lies on the party who substantially asserts the affirmative of the issue and not upon the party who denies it. The party on whom onus of proof lies must, in order to succeed, establish a prima facie case. He cannot, on failure to do so, take advantage of the weakness of his adversary's case. 69. With the above settled legal position of law, now let us examine whether any attempt was made by the respondent-Union to prove their stand or defence taken by them in the written statement. The burden of proof was on the respondent-Union since their case....
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....ion to dispute the figures of the Balance-sheet produced by the appellant-Mill to which he replied, I cannot say about the figures, profit from the Balance-sheet of 1996-97, so also Balance-sheet of 1997-98, I cannot read the balance-sheet and the figures mentioned in it i.e. The Balance-sheets of the years 1989-90 and 1998-99. He further deposed as under: I do not possess any documentary evidence to show that second hand machinery installed in Karad plant. I do not possess any documentary evidence about the unrealistic planning referred in my W.S. I cannot specify from which unit which machinery has been repurchased. He do not possess any evidence regarding the exorbitant price, referred in the written statement. I do not possess any evidence of major financial misappropriation made by the company. No evidence offered by me in respects of contents of para 12 of written statement. (Note para 12 or allegations are made in respect of reduction of cloth and certain method of profit) He further deposed in paras-32 and 33 of his evidence reading as under: I say that if permission for closure of mill is granted then full life of 398 workers of Crown Mill ....
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....ven to Management to give wages from 1st of July, 2003 order also be passed to continue the service of workers till they attend the age of 63 years. I say that under the scheme of voluntary retirement the non resigned workers and employees are expecting justice from Tribunal and it is requested to give natural justice and release from danger from forthcoming unemployment to the workers. Such type of request is being done by Workers and Union. Mr. Shinde in his cross-examination stated as under: I cannot understand from the balance sheet regarding the content of para-10 of my affidavit. However I say so as per the advise given to me. ... Personally I do not know about the valuation of the assets of the company. We have not filed any evidence before this Tribunal regarding the financial soundness of the process house. I have not personally checked the application moved by the company for permission of closure. ... I have not checked all the contents of the application of closure, and about its correctness. ... I cannot say anything about the balance sheet figures.... I do not possess any evidence to show th....
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....ion (M.P.B.) and deposed that on account of deteriorating financial position and considering the various factors it was considered impossible to continue working of the two units economically as such the Board of Directors has to take a decision to close down these two units since there was no alternative. 80. He further deposed that when the applications for permission were made the financial position as given in the application was showing loss of Rs. 185 crore which was further deteriorated resulting in further carry forward losses of Rs. 237 crores for the period ending 30.6.2003. He further stated that in the application; various reasons given were the causes for the losses incurred by the Company, which had adversely affected the working of the two units resulting in heavy losses. He further deposed that the reasons given in the applications were true and correct. That the attempts were made to overcome the financial crisis but the Mill-Management found it difficult to overcome the adverse situation. All attempts made proved futile. He deposed that the detailed facts given in the applications were true and correct. That the B.I.F.R. has declared the company as sick company....
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.... authority of the House of Lords that this much a counsel is bound to do while cross-examining that he must put to each of his opponent's witnesses in turn, so much of his own case as concerns that particular witness or in which that witness has any share. If he asks no question with regard to this, then he must be taken to have accepted the opponents case in its entirety. (see A.E.G. Carapiet v. A.Y.Derderian AIR 1961 Cal 539; Sarwansing v. State of Punjab 1995CriLJ3630 ). 85. It was also expected rather necessary on the part of the respondent-Union to extensively cross-examine Mr.Tidke and to challenge each and every statement made by him on oath to demonstrate its falsify and to confront him with their defence. But the respondent-Union miserably failed to challenge Mr.Tidke's evidence. It could not succeed in demolishing the case of the appellant- Mill. It could not establish its defence. Even no suggestions of their defence were given to Mr.Tidke. With the result, the evidence of Mr. Tidke practically went unchallenged. As a matter of fact, in the cross-examination, adverse material is brought on record by the Union which advanced the case of the appellant-Mill rathe....
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.... in this behalf is well settled. In the case of Ram Janki Devi v. Juggilal Kalamapat [1971]3SCR573 , the contention that in absence of scribe, the account books were not proved -was held unacceptable. One of the reasons was that the account books were shown to the witness in the cross-examination and questions were asked on the same. The Supreme Court treated those account books as proved. Similar is the situation in case at hand vis-a-vis balance sheets, profit and loss accounts, and other financial statements are concerned. Each of them were shown and used in the cross-examination by the Union. It is, thus, not open to the respondent-Union to complain lack of proof of those documents. All those documents were rightly read by the Industrial Tribunal in evidence. 89. The case sought to be made out in the written statement which throws entire blame on the Mill-Management for creating adverse situation was never put to these witnesses, when they were under cross-examination as already stated hereinabove. 90. The legal position is well settled. A person who says house is benami must satisfy the Court of this fact. Where a person claims right of way, he must prove that he acquire....
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....s are bogus. (iv) Respondent-Union could not suggest a concrete plan to profitably run the subject Units. (v) The appellant had borrowed money from financial institutions and all these financial institutions wanted to recover money. The public money of the financial institutions was required to be saved; (vi) It was the duty of the Tribunal to consider the plus and minus factors while granting or refusing the permission. The reasons given, in totality favoured grant of permission. (vii) The figures of profit and losses given in the chart and the Balance Sheets and the Annual Statements of the appellant were required to be appreciated, it being the figures of the account maintained in the due course of business and there being nothing on record to disbelieve the same, as such the same could not be ignored; (viii) Having given an opportunity of hearing to the appellant, the workmen and the persons interested, the genuineness and adequacy of the reasons of the closure could not be doubted; (ix) Respondent-Union could not offer any evidence pertaining to the profits gained by both the units; ....
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.... failed to make out a case that the closure was a camouflage and not bona fide; (xxv) The Appellant had proved that continuing the manufacturing activities was not possible in the present situation; (xxvi) Figures of profit and losses and the balance-sheet given by the Appellant could not be disbelieved and/or ignored. 94. Having examined the rival pleadings, rival evidence and findings recorded, it can not be said that the findings of the Tribunal in the award were based on no evidence as held by the learned Single Judge in the impugned order. IMPACT OF B.I.F.R. PROCEEDINGS: 95. The Supreme Court in the case of Navnit R. Kamant v. R.R.Kamani (1989)ILLJ47SC ) explicitly explained the object of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA)legislation in the following words: The legislation had been enacted with the end in view to: 1. Afford Maximum protection of employment; 2. Optimize the use of the funds etc; 3. Salvaging the production assets; 4. Realising the amounts due to the banks, etc., and 5. To replace the existing time- consuming and inad....
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....nder Section 14, the Board or the Appellate Authority shall be deemed to be a civil court for the purpose of Section 195 of Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974) and every proceeding before the Board or the Appellate Authority shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 and for the purposes of Section 196 of the Indian Penal Code (45 of 1860). 98. As a matter of fact, the High Court of Orissa in case of Noorjahan Begum v. O.S.L. Corpn. Ltd.: (1999)IILLJ527Ori had an occasion to examine provisions of Industrial Disputes Act, vis-a-vis SICA Legislation and record as under: Thus, the field of operation of Section 25-O of the Industrial Disputes Act cannot be said to be the same as that of Section 15 of the Act of 1985. As the two provisions of these two Acts do not operate in the same field, there is no question of any conflict or Section 15 of the Act of 1985 having overriding effect on Section 25-O of the Industrial Disputes Act. There is no doubt that in case of any conflict in the field of operation of the Act of 1985,provisions of the Act of 1985 have the overriding effect. 99. Fro....
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.... VRS, to the extent of Rs. 5 crore and (iii) Charges of Municipal Corporation and other statutory charges, legal and professional charges etc. up to Rs. 14 crore. 104. Three certificates were issued by M/s.Pandhi and Shah, Chartered Accountants, inter alia, certifying the authorized capital, paid-up capital, accumulated losses and value of the equity shares of the three Companies viz. M/s.Capricorn Realty Limited, M/s.Bhishma Realty Limited and M/s.Chaitra Realty Limited. Three separate Declaration-cum-Affidavits executed by the Appellant. In turn these three Companies have also confirmed the transfer and vesting of the assets and liabilities mentioned therein giving an undertaking to discharge all the obligations mentioned in the order of BIFR dated 1st April 2004 and the Scheme framed thereunder. These declaration-cum-affidavits were filed before the BIFR. That is how the B.I.F.R. Scheme was given effect to. 105. At the meeting of the Monitoring Committee the Respondent-Union specifically informed the Monitoring Committee that these workers have no objection for going on with the process of satisfying the dues of the workers who have taken VRS, from the sale ....
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....fully protected in the sanctioned scheme; (v) That the necessity for closing the units at Dadar and Prabhadevi had been examined and justified on grounds of public interest by the Labour Commissioner and upheld by the Industrial Tribunal, and the question of redeploying the 597 workmen in the two closed units at Dadar and Prabhadevi (Mumbai) did not arise; (vi) The prayer of the respondent Nos. 1 and 2 to remand the matter to the BIFR for modifying the sanctioned Scheme to protect the interests of Respondent- Union would serve no useful purpose and would only result in delay in implementation of the scheme besides leading to cost escalation. (vii) The sanctioned Scheme fully protected the interests of all the stake holders including the workers who had accepted VRS and who had not accepted VRS. (viii) The sanctioned Scheme would help the revival of the viable unit at Karad through the process of rationalization of work force and financial reconstruction and refurbishment of the tools and machinery; (ix) The sanctioned Scheme had the full support of the operating Agency all the secured creditors as well as Respondent No. 3. SUBSEQUENT ....
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....nancial benefits under the scheme. Hence, no case is made out for interference and consequently, petition stands dismissed. 113. The above judgment of the learned Division Bench is accepted by the respondent-Union since no further challenge to the said Judgment and order was set up by them. This judgment is binding on the respondent-Union. The orders of B.I.F.R. and A.A.I.F.R have become final and conclusive and binding on the Union on the touch-stone of doctrine of res-judicata. 114. The orders of the authorities constituted under the S.I.C.A. having become final, it is not possible for any Court much less this Court to put the clock back and direct resumption of manufacturing activities. As a matter of fact, the learned Single Judge also found it difficult to issue any such direction contrary to the order of the B.I.F.R. and A.A.I.F.R. which is clear from the following observations made in the judgment and order: 39. The subsequent events have, in a sense, over take the course of events. It is common ground that some part of the machinery has been redeployed from the Crown Mills to the Karad Unit (reference may be made in this connection to the 122nd Annual R....
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.... hand in hand. Implementation of one order negates another. In view of this conflicting situation the order of B.I.F.R. will have the overriding effect. On this count also appellant is entitled to succeed, though the appellant has independently established their case for closure as found by us. By no means, it can be said that in the case in hand the appellant has not made out a case for closure of subject Units under Section 25-O of the I.D. Act. In view of this positive findings, it is not necessary to consider other submissions made by Mr.Dada leading to the interpretation of Section 25-O(7) of the I.D. Act. 116. In Dayakar Reddy v. M.D.Allwyn Auto Ltd. (2000)ILLJ1439SC , case (supra), the Apex Court observed that in a case where the Company is a State Government Undertaking, the State has to take an administrative decision first and then a quasi- judicial decision under Section 25-O. In paragraphs 2, 3 and 4 of the said report, the Apex Court observed thus: 2. Allwyn Auto Ltd. was not a sick company taken to BIFR. The Company which had become sick was Hyderabad Allwyn Ltd. Under the Scheme framed by BIFR, the Auto Division of Allwyn was to be transferred to Al....
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....ement Scheme. GO dated 16-6-1997 clearly discloses the reasons why the Company had become unviable and why it was not able to carry on its activities any further. The reasons appear to be genuine and adequate and, therefore, the Government was justified in granting permission for closure of the Company. This special leave petition is, therefore, dismissed. 117. In the present case also, the facts are eloquent. They are: (i) old and outdated building and machinery and very low productivity, (ii) continuous heavy losses, (iii) the subject units of the Mill are unviable, (iv) The accumulated losses of the appellant-Mill which were Rs. 108 crore as on 31st March, 2001 increased to Rs. 185 crore as on 30th September, 2002 and stood at Rs. 237 crore as on 30th June, 2003; (v) The debt burden towards banks and financial institutions alone stood at about Rs. 202 crore as on 30th September, 2002; which was beyond sustainable capacity of manufacturing operations. (vi) The workers' dues with statutory dues as on 30th September, 2002 were to the tune of Rs. 111.82 crore and Rs. 4.97 crore respectively; ....
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....O of the I.D.Act seeking closure of the subject units is in violation of Article 14 and 19(1)(g) of the Constitution of India cannot be accepted. There is also no merit in the submission of Mr.Ganguli that the mismanagement of the appellant-Mill by its Management is a cause for bringing bad days to the subject units. Not a single piece of evidence is available on record warranting this conclusion or that the appellant- Mill could have made better use of their resources when it wanted to. As held by the Supreme Court in the case of Andra Prabha v. Madras Union of Journalist (1968)ILLJ15SC , we have got to judge things by what was done and not what could have been done. The Division Bench of the Gujarat High Court in the case of Associated Cement Company v. Union of India (1989)ILLJ599Guj has observed as under: Merely because the employer has not managed his undertaking properly, it cannot be made out a ground for refusing permission to close down his undertaking. Unless it is found as a matter of fact that the situation requiring closure has been brought about deliberately and malafide, poor management or mismanagement of the undertaking can hardly be regarded as a good gro....
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....esitation by way of good gesture and to buy peace agreed to offer better deal without prejudice to their legal rights and filed two affidavits dated 9th April, 2007 and 11th April, 2007 setting out their offer and agreed to pay: (i) 36 days salary for each year of service based on last drawn salary as on 31st March, 2004, subtracting amount already paid by way of closure compensation; (ii) Gratuity, leave allowances and 83 other allowances; (iii) Ex-gratia payment of Rs. 30,000/- per worker; (iv) Salary from 1st July, 2003 to 31st March, 2004 with interest on item Nos. (i) and (ii) (supra) at the reasonable rate from 1st July, 2003 till payment in full and final; 124. However, this offer is made subject to the conditions that the members of the respondent- Union, who would be agreeable to accept compensation in terms of the above must communicate their unconditional acceptance by registered A.D. letter within a period of 30 days from the date of pronouncement of this judgment and after receipt of such unconditional acceptance, the appellant-Mill shall make payment within 30 days thereafter. Failure on the part of the workers to exerci....