As per case facts, the Petitioner-employer challenged an Industrial Tribunal's award that set aside its factory closure permission and rejected its closure application, directing workmen to be treated as employed ...
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Neeta Sawant WP. NO. 10306 OF 2018
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 10306 OF 2018
WITH
INTERIM APPLICATION 3399 OF 2026
Mahalakshmi Glass Works Pvt. Ltd. …..Petitioner
: Versus :
Sunil V. Magar and others ….Respondents
____________________________________________________________________________________
Mr. Kiran S. Bapat, Senior Advocate with Ms. Sanjana Das & Mr. Janmesh
Vora i/b Mehta & Padamsey, for the Petitioner.
Mr. K.P. Anilkumar with Mr. Amit Saple, Ms. Priyanka Kumar & Ms. Chinmay
Apte, for Respondents.
____________________________________________________________________________________
CORAM : SANDEEP V. MARNE, J.
Reserved On : 20 AUGUST 2026.
Pronounced On : 10 September 2026.
Judgment:
1) The Petitioner-employer has �led the present Petition
challenging the judgment and award dated 31 October 2017 passed by the
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Industrial Tribunal Mumbai answering Reference (IT) No. 64 of 2006 in the
af�rmative and allowing the Review Application �led by the Respondent-
Union under Section 25-O(5) of the Industrial Disputes Act,1947 (ID Act). The
Industrial Tribunal has set aside the order dated 29 July 2006 passed by the
Appropriate Government permitting closure of establishment of the
Petitioner under Section 25-O(2) of the ID Act and Petitioner’s application
dated 3 June 2006 for closure of the undertaking is rejected. On account of
rejection of application under Section 25-O(1) of the ID Act, the Industrial
Tribunal has directed that the affected workmen shall be treated in
employment of the Petitioner and shall be entitled to all consequential
bene�ts.
2) The Petitioner was engaged in the business of manufacturing of
glass containers (SodaLime/Type-III) of various shapes and sizes and had its
factory at Mahalaxmi, Mumbai. It had last employed about 512 employees
comprising of 471 workmen and 41 staff members. Petitioner moved
application before the Labour Commissioner, State of Maharashtra on 8 May
2006 under Section 25-O(1) of the ID Act seeking permission for closure of
the industrial establishment at Mahalaxmi, Mumbai. At that time, Respondent
No.7-Bhartiya Kamgar Sena was the recognized Union under the provisions of
the Maharashtra Recognition of Trade Unions and Prevention of Unfair
Labour Practices Act, 1971(MRTU & PULP Act) and it used to represent
majority of the workmen. Additionally, Respondent No.8 (Akhil Bharitya
Kamgar Sena) was the recognised Union representing some of the workmen of
the establishment.
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3) Respondent Nos.7 and 8 �led their responses to the closure
application opposing the same. The Labour Commissioner acc orded
permission for closure of the establishment vide order dated 29 July 2006. It is
Petitioner's contention that it paid all legal dues to its employees including
retrenchment compensation, gratuity, leave, wages and other dues vide
cheques dated 31 July 2006. Since the closure was envisaged w.e.f 31 August
2006, Petitioner also paid notice pay to the workmen and closed down the
factory w.e.f. 31 July 2006.
4) Respondent No.7-Union �led application dated 1 August 2006
under Section 25-O(5) of the ID Act for review of the order dated 29 July 2006.
Respondent Nos. 1, 3, 4 and 6, along with three other workmen, who were
individual workmen, �led an application dated 28 August 2006 claiming
representation on behalf of 228 workmen demanding that the matter be
referred to the Tribunal for adjudication under Section 25-O(5) of the ID Act.
Petitioner �led its response to both the applications. During the pendency of
the proceedings before the State Government, Respondent No.7-Union
addressed letter dated 1 November 2006 to the Labour Commissioner stating
that the workers were willing to accept the legal dues and expressed its desire
not to pursue the matter further. However, the Labour Commissioner, by order
dated 18 November 2006, referred the application dated 1 November 2006
preferred by Respondent No. 7-Union for adjudication before the Industrial
Tribunal. Petitioner �led Writ Petition No.1228 of 2007 challenging the order
of the Labour Commissioner, which was dismissed by order dated 29 June
2007. Petitioner thereafter �led Statement of Claim on 9 July 2007.
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Respondent Nos.7 and 8-Union did not participate in the proceedings.
However, Respondent Nos.1 to 5 �led their Written Statement dated 6 August
2007. Another set of workers �led a separate Written Statement on 30 August
2007. The prayer of Respondents for interim relief was rejected by the
Tribunal by Part-I Award dated 7 May 2009. Petitioner led evidence of
witnesses Mr. Narasimha Kashyap Sundareshwaran, General Manager and Mr.
Naresh Chand-Director. Respondent No.1-Sunil Magar and Respondent No.3-
M.B. Bhagyavan examined themselves. Additionally Respond ents also
examined Mr. Nasir Naikwade and Mr. Manohar Bhour from another set of
workers.
5) After examining the pleadings, documentary and oral evidence,
the Industrial Tribunal has passed Award on 31 October 2017 thereby
allowing Reference (IT) No. 64 of 2006. The Industrial Tribunal has set aside
the order dated 29 July 2006 granting closure permission and has rejected
Petitioner's application dated 3 June 2006 for closure. The Industrial Tribunal
has directed that the affected workmen shall be treated as in employment of
the Petitioner with consequential bene�ts. Petitioner has challenged the
Award dated 31 October 2017 in the present petition. By order dated 30
January 2020, this Court admitted the petition granting liberty to the
Petitioner to move a separate application for interim relief. Accordingly,
Petitioner has �led Interim Application No. 3399 of 2020 seeking stay of the
impugned Award. The Interim Application is taken up for hearing alongwith
the main petition.
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6) Mr. Bapat the learned Senior Advocate appearing for the
Petitioner submits that the Industrial Tribunal has committed a manifest
error in misconstruing the scope and mandate of Section 36 of the ID Act by
permitting the workmen to prosecute the Reference in their individual
capacity despite existence of a recognized union (Respondent No.7). That
Respondent No.7 alone was competent to represent the concerned workmen.
That the Industrial Tribunal has erroneously relied on the provisions of
Section 36(1)(c) of the ID Act (as amended in Maharashtra) to justify
individual representation. That the Maharashtra proviso contemplates that
where recognized union exists, the individual workmen are precluded from
independently prosecuting the proceedings concerning collective industrial
disputes. That Proviso to Section 36 does not differentiate between various
proceedings and clearly bars representation otherwise than through the
recognized union when the dispute is of collective nature. That the
interpretation made by the Tribunal defeats the object of the Statute and
undermines the status of a recognized union as sole bargai ning
representative. He relies on judgments this Court in Asian Paints India Ltd.
Versus. Mazdoor Kranti Union & Anr.
1
, Hind Kamgar Sanghatana Versus.
Dai-Ichi Karkaria Ltd. & Anr.
2
and Britania Industries Ltd. Versus.
Maharashtra General Kamgar Union & Anr.
3
in support of his contention
that raising of an industrial dispute and adjudication of the same are two
distinct stages. He also relies on judgment of this Court in M/s. Godrej &
11997 SCC Online Bom 798
2WP-5917-2012 dated 18 April 2019
32009 (3) MH.L.J. 968
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Boyce Manufacturing Company Pvt. Ltd. Versus. Association of Engineering
Workers and another
4
7) Mr. Bapat further submits that the Industrial Tribunal h as
committed a serious error of law in questioning the genuineness of
Petitioner's decision to close the establishment. The mere continuation of the
Factory Manager on the Petitioner's payroll for a limited period after the
cessation of manufacturing activities does not constitute evidence that the
closure was not bona�de. That his continued engagement was exclusively for
carrying out statutory obligations and that continuation of managerial
personnel for limited statutory purposes neither revives nor invalidates an
otherwise lawful closure. That the Tribunal has erroneously held that the
Petitioner could have shifted manufacturing operations to a new unit at
Taloja. That the decision whether to commence business at another location,
expand, relocate or permanently discontinue operations is purely commercial
and managerial prerogative lying within the exclusive domain of the
employer and is not amenable to industrial adjudication. That the law does
not cast any obligation upon an employer to establish an alternative unit
merely because an existing undertaking has been closed. That the Tribunal
has thus traveled beyond the permissible limit of its jurisdiction by
substituting its own commercial wisdom with that of the employer.
8) Mr. Bapat further submits that the Industrial Tribunal has erred
in reading the Balance Sheet for the �nancial year ending 31 March 2004
which actually indicates that the Petitioner was suffering loss of Rs.1.77
4 WP No. 96 of 1983 decided on 5 October 1985
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crores which was erroneously considered as Rs.74.64 lakhs by the Tribunal.
That the Tribunal has further erred in holding that losses for the year ending
31 March 2005 were only for Rs.79.54 lakhs whereas the Balance Sheet
indicates that the Petitioner had taken into consideration surplus of the
previous year and that therefore the resultant losses were in the sum of
Rs.2.26 crores. That the Balance Sheets on record clearly discloses losses for 4
years at Rs.2.50 crores. That the Industrial Tribunal has also erred in not
properly appreciating the evidence on record and has recorded perverse
�ndings relating to cost of the furnace oil and light diesel oil. That the
Tribunal has completely misread the letter dated 12 April 2006 addressed by
Mahanagar Gas which did not agree to supply the requisite quantity of gas.
That the Tribunal's opinion, that the Petitioner ought to have started utilizing
available gas is recorded in ignorance of the position that the furnace is
required to be run continuously for 24 hours. That the technology does not
permit switching over from furnace oil to gas.
9) Mr. Bapat further submits that the Industrial Tribunal has rightly
brushed aside the multiple reasons pleaded in the closure application, as well
as evidence led by the Company. That the Tribunal has ignored the fact that
the evidence led by the Petitioner regarding the impossibility of running the
industry due to various constraints has virtually remained unchallenged.
10) Mr. Bapat further submits that Section 25-O(5) of the ID Act
constitutes a special and self-contained statutory scheme and the legislative
mandate is to pass award within 30 days from the date of Reference. He relies
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on judgment of the Apex Court in Orissa Textile & Steel Ltd. Versus. State of
Orissa & Ors.
5
in support of the contention that review must be disposed of
within reasonable time. That the order granting closure permission was
passed by the Appropriate Government on 29 July 2006, the application for
review was �led on 1 August 2006, the order of the Commissioner of Labour
was passed on 18 November 2006. However, the Reference is decided after a
substantial delay on 31 October 2017. That the impugned Award therefore is a
nullity. He relies on judgment of the Apex Court in Vazir Glass Works Ltd.
Versus. Maharashtra General Kamgar Union and another
6
in support of his
contention that Reference in respect of the closure has to be decided within a
period of 1 year. He also relies on judgments of this Court in Ambika Silk
Mills Co. Ltd. Versus. Maharashtra General Kamgar Union and another
7
and
AEW Versus. Indian Hume Pipes
8
in which it is held that time frame
contemplated under Section 25-O is directory and not mandatory. However,
he submits that in United White Metals Ltd. Versus. Bhartiya Kamgar Sena
and others
9
it is held that the view expressed in Ambika Silk Mills Co. Ltd.
(supra) stands impliedly over ruled by the judgment of the Apex Court in
Vazir Glass (supra). He further clari�es that in the judgment in Britania
Industries Ltd. (supra), Single Judge of this Court, prima-facie, did not agree
with the view taken in United White Metals Ltd. (supra). That since the
statutory period is over, the impugned order is without jurisdiction. Lastly,
Mr. Bapat submits that the subsequent events have been placed on record.
That it is now impossible for the Petitioner to commence the manufacturing
5 (2002) 2 SCC 578
6 (1996) 2 SCC 118
7 1998 1 Mh.L.J. 568
8 1986 Mh.L.J. 34
9 2006 (4) Mh.L.J. 566
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process. That as per the documents annexed to the appeal, manufacture of
glass comes under red category and is not permitted to be operated beyond 5
years period, which expired in 2007. That Petitioner's establishment is located
in a busy residential area at Mahalaxmi and it is otherwise not possible to
commence any manufacturing activities therein. He accordingly prays for
setting aside the impugned order.
11) Mr. Anilkumar the learned counsel appearing for Respond ent
Nos.1 to 6 opposes the petition. He submits that the Industrial Tribunal has
rightly appreciated the entire material on record for rejecting the application
for closure submitted by the Petitioner. That the order making Reference has
been repealed by this Court vide order dated 29 June 2007. Therefore,
Petitioner is now estopped from questioning maintainability of the Reference
at the behest of individual workmen. He submits that Petitioner’s witness, Mr.
Narasimha Kashyap Sundareshwaran gave several important admissions in
his evidence such as absence of short supply of material including furnace oil,
failure to mention reasons for closure in the notice given to the employees,
non-surrendering of license under the Bombay Shop and Establishments Act,
1948 directors of the Company looking after the estate of the Company and
its net pro�t being Rs.1 crore, Company's attempt to relocate the Plant at
Taloja when the Company has not been declared as a sick unit, continuation
of license of the factory and employment of 24 employees etc. That even the
second witness, Mr. Naresh Chand admitted that he was running the business
and received Rs.1,70,000/- as a salary from the Company. He also admitted
that the Company never attempted to modernize the Plant and that there
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were several clients with the Company at the time of closure. That the
Tribunal has correctly appreciated the evidence appearing on record for
rejecting the application for closure.
12) Mr. Anilkumar submits that Petitioner's objection about
maintainability of the Reference at the behest of individual workmen has
been properly dealt with by the Industrial Court and rejected. That the
Tribunal has rightly arrived at the conclusion that Petitioner was unable to
prove existence of circumstances pleaded in the application for closure. That
the decision of the Industrial Court is supported by several judgments.
13) In support of his contention of maintainability of the Reference
at the behest of individual workmen, he relies on judgment of this Court in
Krantikari Kamgar Union Versus. Collector/Labour Commissioner & Ors.
10
.
That the Industrial Tribunal is entitled to go into the correctness of the
reasons for closure. Mr. Anilkumar further relies on judgment of this Court in
Maharashtra General Kamgar Union & Anr. Versus. Vazir Glass Works
Ltd.
11
in support of his contention that the Tribunal can go into the reasons
for closure including the ground of public interest. Relying on judgment in
Orissa Textile & Steel Ltd. Versus. State of Orissa & Ors.
12
he submits that
restrictions are imposed on closure on the basis of reasonableness and
general public interest. In support of his contention that the Industrial
Tribunal is entitled to go into the correctness of the reasons for closure and
that closure application requires employer to indicate speci�c measures to
10 2023 SCC Online Bom 2245
11 1996 (3) LLN 747
12 (2002) 2 SCC 578
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avoid proposed closure he relies on judgment in Voltas Employees Union,
Mumbai Versus. Voltas Limited & Anr.
13
In support of his contention that
the workmen alone are required to be heard while deciding application for
closure he relies on judgment of this Court in Krantikari Kamgar Union.
14) Lastly, Mr. Anilkumar submits that the real reason for closure is
the intention on the part of the Directors of the Petitioner to commercially
develop the land which is situated at a prominent location in Mumbai. That
several other employees are continued and are being paid salaries. He accuses
Petitioner of entering into a secret deal with an unknown developer for
development of the land. On above broad submissions, Mr. Anilkumar would
pray for dismissal of the petition.
15) Rival contentions of the parties now fall for my consideration.
16) The Petitioner-employer has challenged the correctness of the
Award dated 31 October 2017 passed by the Industrial Tribunal by which the
Tribunal has adjudicated the Reference made to it by the Appropriate
Government under Section 25-O. To appreciate the controversy at hand, it
would be necessary to make reference to the statutory scheme relating to
closure of an undertaking. Chapter V-B has been added to the ID Act by Act 32
of 1976. Provisions of Chapter V-B apply to industrial establishments where
not less than 100 workmen are employed on an average per working day in
the preceding 12 months. Section 25-O which is a part of Chapter V-B and
deals with the procedure for closing down an undertaking. Under Section 25-
O, an employer intending to close down an undertaking of an industrial
13 2003 (5) Mh.L.J. 43
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establishment can apply for prior permission at least 90 days before the date
on which intended closure is to become effective to the appropriate
Government stating reasons for intended closure. Copy of such application is
required to be served on the representatives of the workmen. After receipt of
such application seeking permission for closure, the appropriate Government
needs to make an inquiry and after granting reasonable opportunity of being
heard to the employer, the workmen and the persons interested in such
closure, the Government can either grant or refuse to grant such permission
after having regard to the genuineness and adequacy of the reasons stated by
the employer, the interest of general public and all other relevant factors.
The order passed by the appropriate Government granting or refusing to
grant permission is �nal and binding on the parties subject to the provisions
of sub-section (5). Under sub-section (5) of Section 25-O, the appropriate
Government on its own motion or on an application made by the employer or
any workmen review its order granting or refusing to grant closure
permission. Alternatively, instead of reviewing the order itself, the
appropriate Government can also refer the matter to the Industrial Tribunal
for adjudication. Under Proviso to Section 25-O(5), once Reference is made to
the Tribunal, it needs to pass an Award within a period of 30 days from the
date of Reference. Provisions of Section 25-O of the ID Act are as under:
25-O. Procedure for closing down an undertaking.—
(1) An employer who intends to close down an undertaking of an industrial
establishment to which this Chapter applies shall, in the prescribed manner,
apply, for prior permission at least ninety days before the date on which the
intended closure is to become effective, to the appropriate Government,
stating clearly the reasons for the intended closure of the undertaking and a
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copy of such application shall also be served simultaneously on the
representatives of the workmen in the prescribed manner:
Provided that nothing in this sub-section shall apply to an undertaking set up
for the construction of buildings, bridges, roads, canals, dams or for other
construction work.
(2) Where an application for permission has been made under sub-section (1),
the appropriate Government, after making such enquiry as it thinks �t and
after giving a reasonable opportunity of being heard to the employer, the
workmen and the persons interested in such closure may, having regard to
the genuineness and adequacy of the reasons stated by the employer, the
interests of the general public and all other relevant factors, by order and for
reasons to be recorded in writing, grant or refused to grant such permission
and a copy of such order shall be communicated to the employer and the
workmen.
(3) Where an application has been made under sub-section (1) and the
appropriate Government does not communicate the order granting or
refusing to grant permission to the employer within a period of sixty days
from the date on which such application is made, the permission applied for
shall be deemed to have been granted on the expiration of the said period of
sixty days.
(4) An order of the appropriate Government granting or refusing to grant
permission shall, subject to the provisions of sub-section (5), be �nal and
binding on all the parties and shall remain in force for one year from the date
of such order.
(5) The appropriate Government may, either on its own motion or on the
application made by the employer or any workman, review its order granting
or refusing to grant permission under sub-section (2) or refer the matter to a
Tribunal for adjudication: Provided that where a reference has been made to
a Tribunal under this sub-section, it shall pass an award within a period of
thirty days from the date of such reference.
(6) Where no application for permission under sub-section (1) is made within
the period speci�ed therein, or where the permission for closure has been
refused, the closure of the undertaking shall be deemed to be illegal from the
date of closure and the workmen shall be entitled to all the bene�ts under
any law for the time being in force as if the undertaking had not been closed
down.
(7) Notwithstanding anything contained in the foregoing provisions of this
section, the appropriate Government may, if it is satis�ed that owing to such
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exceptional circumstances as accident in the undertaking or death of the
employer or the like it is necessary so to do, by order, direct that the
provisions of sub-section (1) shall not apply in relation to such undertaking
for such period as may be speci�ed in the order.
(8) Where an undertaking is permitted to be closed down under sub-section
(2) or where permission for closure is deemed to be granted under sub-
section (3), every workman who is employed in that undertaking immediately
before the date of application for permission under this section, shall be
entitled to receive compensation which shall be equivalent to �fteen days’
average pay for every completed year of continuous service or any part
thereof in excess of six months.
17) In the present case, Petitioner �led application for closure of its
undertaking at Mahalaxmi under Section 25-O(1) of the ID Act on 3 June 2006
proposing to close the establishment from 31 August 2006. Perusal of the
application would indicate that the Petitioner pleaded several reasons and
produced documents in support of its plea for permission to close the
undertaking. At that time, Respondent No.7 was the recognized union,
representing majority of the workers. Respondent No.8 was an unrecognized
Union. Both the Unions opposed the application seeking permission of
closure by �ling their responses before the Commissioner of Labour. The
Commissioner of Labour passed order dated 29 July 2006 granting permission
for closure of the undertaking. Since the remedy is provided under sub-
section (5) of Section 25-O to seek review of closure permission before the
State Government, Respondent No.7-Union exercised that remedy and �led
application for review of permission before the Government on 1 August
2006. In the pending proceedings for review before the Government, some of
the Respondents jumped in and claimed representation on behalf of 228
workers and they also sought review of the closure permission. Petitioners
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questioned the right of Respondent Nos.1 to 6 to seek independent review
when the recognised union had already �led its own application for review.
18) The Respondent No.7-Union, the only recognised Union,
withdrew its application for review vide letter dated 1 November 2006.
However, Respondent Nos. 1 to 6 continued the review proceedings before the
appropriate Government. Instead of considering whether the closure
permission should be reviewed or not, the appropriate Government decided to
make a Reference for adjudication of the dispute to the Industrial Tribunal. In
the Reference so made, which was registered as Reference (IT) No.64 of 2006,
the impugned Award has been passed setting aside the closure permission
dated 29 July 2006 and dismissing Petitioner's closure application dated 3
June 2006. The Industrial Tribunal has directed to treat the affected workmen
in Petitioner employment by granting consequential bene�ts.
19) It is strenuously contended on behalf of the Petitioners that once
there is a recognized Union in an establishment, individual workers cannot be
permitted to seek adjudication of correctness of the closure permission.
Reliance is placed by the Petitioners on the provision of Section 36 of the ID
Act, which provides thus:
36. Representation of parties.—
(1) A workman who is a party to a dispute shall be entitled to be represented
in any proceeding under this Act by—
(a) any member of the executive or of�ce bearer] of a registered trade
union of which he is a member:
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(b) any member of the executive or other of�ce bearer of a federation
of trade unions to which the trade union referred to in clause (a) is
af�liated;
(c) where the worker is not a member of any trade union, by any
member of the executive or other of�ce bearer of any trade union
connected with, or by any other workman employed in the industry in
which the worker is employed and authorised in such manner as may
be prescribed.
(2) An employer who is a party to a dispute shall be entitled to be represented
in any proceeding under this Act by—
(a) an of�cer of an association of employers of which he is a member;
(b) an of�cer of a federation of association of employers to which the
association referred to in clause (a) is af�liated;
(c) where the employer is not a member of any association of
employers, by an of�cer of any association of employers connected
with, or by any other employer engaged in, the industry in which the
employer is engaged and authorised in such manner as may be
prescribed.
(3) No party to a dispute shall be entitled to be represented by a legal
practitioner in any conciliation proceedings under this Act or in any
proceedings before a Court.
(4) In any proceeding before a Labour Court, Tribunal or National Tribunal], a
party to a dispute may be represented by a legal practitioner with the consent
of the other parties to the proceedings and with the leave of the Labour
Court, Tribunal or National Tribunal, as the case may be.
20) In relation to State of Maharashtra, there is a amendment to
Section 36 consequent upon enactment of the MRTU & PULP Act and a
Proviso is added to sub-section (1) of Section 36 as under :
Provided that, where there is a recognised union for any undertaking under
any law for the time being in force, no workman in such undertaking shall be
entitled to be represented as aforesaid in any such proceeding (not being a
proceeding in which the legality or propriety of an order of dismissal,
discharge, removal, retrenchment, termination of service, or suspension of an
employee is under consideration) except by such recognised union.
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21) Thus, as per the provisions of Section 36(1) of the ID Act, where
there is a recognized Union in an Undertaking, no workman in the such
Undertaking is entitled to be represented in any proceedings, except
proceedings relating to dismissal, discharge, removal, retrenchment,
termination, suspension, except by such recognised Union.
22) The Industrial Tribunal framed Issue No.1 relating to
maintainability of the Reference and answered the same by holding as under:
19) Herein present case in hand even though Bhartiya Kamgar Sena is also
one of the party in view of order passed by Appropriate Government on
18/11/2006, but failed to appear. This fact clearly shows that, recognized
union do not want to espouse the cause of concerned workmen. As already
stated that, the concerned workmen resigned from the membership of
recognized union. Further the First party has not brought on record that, on
the date of review application the status of recognized union was in existence
and thereafter also. Further not brought on record any material to show that
30% membership of Bhartiya Kamgar Sena is still having. So at this stage it
cannot be said that, Bhartiya Kamgar Sena is functioning still in the capacity
of the recognized union. If considered above two aspects then Section 36(1)
(c) shall be helpful to the concerned workmen as the workmen are not the
members of any trade union. Therefore, they are represented through Shri.
Sunil V. Magar and on these count it cannot be said that Section 36 of the I.D.
Act is helpful to the �rst party for challenging representation of Shri. Sunil V.
Magar. Hence the grounds shown by First party cannot be said legal and
bona�de and therefore I come to the conclusion that reference is
maintainable and accordingly I answered this issue af�rmative.
23) Mr. Bapat has submitted that the provisions of Section 36 of the
ID Act must be read harmoniously with the law relating to the recognition of
trade unions which unequivocally contemplate that where a recognized union
exists, individual workmen must be precluded from individually prosecuting
the proceedings concerning collective industrial disputes. The contention is
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raised mainly on account of the fact that the recognized union gave up the
claim during pendency of review proceedings before the approp riate
Government. Since the Reference is made and �nally adjudicated at the
behest of individual workmen and the decision therein has gone against the
Petitioner, it is making a desperate attempt to save the closure permission by
contending that the Reference itself could not have been referred for
adjudication and in any case, could not have been adjudicated, the moment
recognized union withdrew the review application.
24) In my view, the scheme of closure under Section 25-O of the ID
Act is entirely different and the usual limitations on persons and entities
other than recognized units from seeking adjudication of disputes would not
apply for proceedings relating to closure. As observed above, once an
application for closure is made by the establishment, copy of the application
is required to be served simultaneously on the ‘representatives of the workmen’.
Section 25-O(1) does not stipulate that copy of the application must be served
only on a recognized Union. On the contrary it uses the expression ‘on the
representatives of the workmen’. While adjudicating closure application �led
under Section 25-O(1) and while conducting an inquiry under Section 25-
O(2), the appropriate Government needs to grant an opportunity of hearing to
(i) the employer, (ii) ‘the workmen’ and (iii) the persons interested in such
closure. Under sub-section (5), the order granting or refusing to grant closure
permission can be subject to review by (i) appropriate Government on its own
motion or (ii) on the application made by the employer or (iii) on the
application made by ‘any workman’.
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25) Thus, the statutory scheme of Section 25-O permits ‘any
workman’ to oppose a closure application as well as to seek a review. The
right to oppose or seek a review is not restricted to a recognized union, and
the same may be exercised by an individual workman as well. In relation to
the State of Maharashtra, Section 25-O has been amended and substituted by
following Section:
25-0. Application to be made for obtaining permission to close down
any undertaking ninety days before closure.-
(1) An employer, who intends to close down an undertaking of an industrial
establishment to which this Chapter applies, shall submit, for permission, at
least ninety days before the date on which the intended closure is to become
effective, an application, in the prescribed manner, to the appropriate
Government, stating clearly the reasons for the intended closure of the
undertaking. A copy of such application shall be served by the employer
simultaneously on the representatives of the workmen in the prescribed
manner:
Provided that nothing in this sub-section shall apply to an undertaking set up
for the construction of buildings, bridges, roads, canals, dams, or other
construction works.
(2) On receipt of an application under sub-section (1), the appropriate
Government, after holding such inquiry as it deems �t, and after giving a
reasonable opportunity of being heard to the applican t and the
representatives of the workmen, may, for the reasons to be recorded in
writing, by order grant the permission for closure, or if it is satis�ed that the
reasons given for the intended closure of the undertaking are not adequate
and suf�cient, or are not urged in good faith or are grossly unfair or unjust,
and in any case such closure would be prejudicial to the interests of the
general public, it may, for the reasons to be recorded in writing, by order
refuse to grant the permission and direct the employer not to close such
undertaking. A copy of any decision given by the appropriate Government
under this sub-section shall be sent by it simultaneously to the
representatives of the workmen.
(3) Where an application for permission has been made under sub-section (1),
and the appropriate Government does not communicate the refusal to grant
the permission to the employer, within a period of sixty days from the date of
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receipt of the application by it, the permission applied for shall be deemed to
have been granted on the expiration of the said period of sixty days.
(4) Any employer or any workman affected by any order made under sub-
section (2) or any workman affected by the permission deemed to be granted
under sub-section (3), may, within thirty days from the date of the order or
from the date from which the permission is deemed to be granted, as the case
may be, prefer an appeal to such Industrial Tribunal as may be speci�ed by
the appropriate Government by noti�cation in the Of�cial Gazette for such
area or areas or for the whole State, as may be speci�ed therein. The
Industrial Tribunal shall, after holding such inquiry as it deems �t, as far as
possible within thirty days from the date of �ling the appeal, pass an order,
either af�rming or setting aside the order of the appropriate Government or
the permission deemed to be granted, as the case may be.
(5) Any order made by the appropriate Government under sub-section (2) or
any permission deemed to be granted under sub-section (3), subject to an
appeal to the Industrial Tribunal, and any order made by the Industrial
Tribunal in such appeal, shall be �nal and binding on all the parties
concerned.
(6) Any order refusing to grant permission for closure made by the
appropriate Government under sub-section (2) shall remain in force for a
period of one year from the date of such order, unless it is set aside earlier by
the Industrial Tribunal in appeal.
(7) When no application for permission under sub-section (1) is made, or
where the permission for closure has been refused, the closure of the
undertaking shall be deemed to be illegal from the date of closure, and the
workman shall be entitled to all the bene�ts under any law for the time being
in force, as if no notice has been given to him.
(8) Notwithstanding anything contained in sub-section (1), the appropriate
Government may, if it is satis�ed that owning to such exceptional
circumstances as accident in the undertaking or death of the employer or the
like, it is necessary so to do, by order, direct that the provisions of sub-section
(1) shall not apply in relation to such undertaking for such period as may be
speci�ed in the order.
(9) Where an undertaking is permitted to be closed down under sub-section
(2) or where permission for closure is deemed to be granted under sub-
section (3), every workman in the said undertaking, who has been in
continuous service for not less than one year in that undertaking
immediately before the date of application for permission under this section,
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shall be entitled to notice and compensation as speci�ed in section 25-N, as if
the said workman has been retrenched under that section.
26) Thus, even in relation to the State of Maharashtra, a reasonable
opportunity of being heard needs to be granted to the representatives of the
workmen under sub-section (4) of Section 25-O and even a workman affected
by closure order can prefer an appeal to the Industrial Tribunal. The
Legislature has not restricted the remedy of �ling an appeal to a recognized
union alone, even in relation to the State of Maharashtra.
27) In my view therefore the remedy of prosecuting the reference
cannot be restricted only to a recognized union and even a workman can
prosecute the same.
28) Also, Petitioner had challenged the Reference order dated 18
November 2006 by �ling Writ Petition No. 1228 of 2007 which is dismissed by
order dated 29 June 2007. After dismissal of the Petition, the Petitioner
participated in the reference proceedings and now is turning around and
questioning the maintainability of the reference at the instance of individual
workman. In any case, even if the aspect of dismissal of Writ Petition No. 1228
of 2007 is ignored, the statutory scheme of Section 25(O) clearly permits an
individual workman also to question the closure permission.
29) Mr. Bapat has placed reliance on judgment of this Court in Asian
Paints India Ltd. (supra). However, the issue before this Court in Asian
Paints India Ltd. was entirely different. In that case, Reference was made
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under Section 10 of the ID Act. Maintainability of the dispute was questioned
since the worker had appeared in the individual capacity in the said
Reference. In that case, the Company had closed its parent department
whereby 14 workers had lost their jobs, and the recognised Union had
accepted the closure. An unrecognized union raised industrial dispute
relating to termination of services of the workers. During pendency of the
Reference, 13 workers settled their claims on monetary claims whereas only
one worker did not agree with the settlement and continued to prosecute the
reference. It is in those peculiar facts of the case where the closure was
admitted and not questioned and this Court held that an individual workman
was not competent to prosecute the Reference. The judgment has no
application to the facts of the present case.
30) Mr. Bapat has also relied upon judgment of Single Judge of this
Court in M/s. Godrej & Boyce Manufacturing Company Pvt. Ltd. which is
referred to in the judgment in Asian Paints India Ltd. Again, the issue in M/s.
Godrej & Boyce Manufacturing Company Pvt. Ltd. was entirely different i.e.
capacity of an unrecognized union to represent workers in proceedings
relating to an industrial dispute where a recognized union already existed.
The judgment therefore has no application for deciding the issue involved in
the present case. Mr. Bapat has also relied upon judgment in Hind Kamgar
Sanghatana (supra) in which reference was made under Section 12(5) of the
ID Act in relation to demand for increase in allowances, wages and other
bene�ts. In the light of such demand, the issue before this Court was whether
it was permissible for non-recognized union to prosecute the Reference. The
judgment therefore has no application for deciding the issue as to whether
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individual workmen can seek adjudication of disputes relating to closure of
the establishment.
31) Therefore, the objection of locus of Respondent Nos. 1 to 6 to
prosecute the reference sought to be raised on behalf of the Petitioner
deserves outright rejection.
32) Coming to the merits of the decision of the Industrial Tribunal, it
is seen that the Petitioner had pleaded several reasons for seeking closure
permission in the application dated 3 June 2006. After the Reference was
made for adjudication, the Petitioner challenged the Reference order dated 18
November 2006, by �ling Writ Petition No. 1228 of 2007. One of the issues
before this Court was about the burden of proof in respect of existence of
valid reasons for closure. This Court held that the burden of proof was on the
Petitioner. Thus it was the responsibility of the Petitioner to prove existence
of circumstances warranting closure of the establishment. Accordingly,
Petitioner �led Statement of Claim in Reference (IT) No.64 of 2006 pleading
various reasons for justifying the closure.
33) The Industrial Tribunal framed Issue No. 2 as to wheth er
Petitioner proved the reasons pleaded in paras-3(a) to 3(f) in the Statement of
Claim. However, the reasons were pleaded in para-3(a) to (t) of Statement of
Claim. Be that as it may, there can be a typographical error in framing Issue
No.2 and it is not necessary to delve deeper into the said error. The Tribunal
conducted a factual inquiry into the Petitioner proving existence of reasons
for closure and proceeded to answer Issue No.2 in the negative. The �ndings
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recorded by the Industrial Tribunal on Issue No.2 are challenged by the
Petitioner in the present petition. I accordingly proceed to examine whether
the Petitioner has made out a case of gross perversity in the �ndings recorded
by the Industrial Tribunal.
34) The Petitioner had contended in the statement of claim that the
continuation of manufacturing operations had become a totally unviable
business proposition and that the prospects of the business had become
extremely bleak and uncertain. The Petitioner had pleaded that the cost of
furnace oil used for melting the glass and light diesel oil for conditioning the
oil had become uneconomical and very high. That the competitors had
already started using natural gas in substitution of fuel such as furnace oil
and light diesel oil. Petitioner contended that the cost of furnace oil and light
diesel oil was about 25% of total sales revenue and that higher prices of
furnace oil had affected company’s cost of production making it totally
unviable. Petitioner claimed that it had suffered losses to the tune of Rs. 4
crores by the �nancial year 2005-06. Petitioner produced Balance Sheets for
the years ending 31 March 2004, 31 March 2005 and 31 March 2006. The
Industrial Tribunal examined the Balance Sheets, but proceeded to hold that
on the basis thereof, it could not be assumed that the continuation of
operations had become an unviable business proposition or that the
prospects of the business had become bleak or uncertain. I am in broad
agreement with the �ndings recorded by the Industrial Tribunal. The balance
sheets may depict losses suffered in two out of the three years and increase in
the cost of fuel. However from the balance sheets it cannot be concluded that
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it became impossible to continue the operations. May be it was tough for the
Petitioner to ensure pro�ts every year but it cannot be concluded only on the
basis of the balance sheets that the only option left was to close the
establishment. This is discussed in greater details in the later part of the
judgment.
35) The Industrial Tribunal thereafter went into the reasons pleaded
in para 3(b) of the Statement of Claim about increase in the prices of furnace
oil and light diesel oil. It has recorded following �ndings on this aspect:
So far as reason 3(b) is concerned, it is admittedly since years together the
�rst party was using furnace oil and light diesel oil. So the �rst party was well
aware about the day to day cost of furnace oil and light diesel oil. First party
compared to other competitors who were using natural gas and therefore,
their production cost is upto 7 to 15% to sales revenue and �rst party
company's cost is upto 35% to the sales revenue. So far as percentage of cost
is concerned, no documentary material produced along with closure
application. The cost of production shall be depend on particular functioning
of undertaking. If the �rst party was known to them they would have to be
utilized natural gas; but they failed to take proper steps and simply stated
that suf�cient natural gas was not available. Might be the natural gas shall be
preferable for reducing the cost of product. But did not �nd on record really
the �rst party had taken any experiment to use natural gas.
36) The Tribunal has recorded a �nding that no documentary material
was produced with the closure application to demonstrate percentage of costs
required for furnace oil and light diesel oil. Mr. Bapat has invited my attention
to the balance sheets to demonstrate the �gures of power, fuel, and water
charges. He has submitted that for the year 2003-2004, the expenditure for
power, fuel and water charges was Rs. 12,62,86,183/-as against the revenue
�gure of Rs.43.61 crores. However Rs. 12.62 crores is indicated as the cost of
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power, fuel, and water and not just for the fuel. Also, if Rs. 12.62 crores is
compared with the total revenue of Rs. 43.61 crores, the percentage is 28%
and not 35% as claimed by Petitioner. The Tribunal is, therefore, not entirely
wrong in holding that there is no documentary evidence regarding the
percentage of fuel costs as compared to sales revenue.
37) Going further, the Tribunal has faulted the Petitioner for failing
to take appropriate steps to commence manufacturing activities using natural
gas and has merely treated the non-availability of suf�cient supply of natural
gas as a pretext. The Tribunal has accepted that natural gas was preferable for
reducing the cost. However, it has held that the Petitioner ought to have
started at least experimenting use of natural gas. The Petitioner had produced
a letter dated 12 April 2006 addressed by Mahanagar Gas Limited, wherein
Mahanagar Gas Limited had agreed to supply 5000-6000 cubic meter gas per
day. Petitioner claims that it needed 25000 cubic meter gas per day. It is
contended that the Tribunal has failed to appreciate the peculiarity of the
business and manufacturing process of glass. It is further contended that the
technology does not permit shifting from furnace oil to natural gas like
pressing a tab and that the manufacturer cannot use gas for some time and
furnace oil at other times. It is further contended that the furnace needs to
run for 24 hours failing which the molten gas solidi�es and that therefore, use
of natural gas cannot be undertaken merely as a matter of experimentation,
as erroneously held by the Industrial Tribunal. However the letter of
Mahanagar Gas Limited is dated 12 April 2006 and in two months thereafter,
Petitioner �led application for closure of its establishment. By using
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expensive fuel also, it had managed to earn pro�ts of Rs. 1,05,66,622/- as on
31 March 2005. Therefore it cannot be held that the �ndings of the Tribunal
about non-supply of gas by Mahanagar Gas Limited was used by Petitioner as
a pretext is perverse by any standard. It is a plausible �nding.
38) Coming to the aspect of alleged losses claimed by the Petitioner,
the Industrial Tribunal has refused to believe that the Petitioner faced losses
as claimed. It has recorded following �ndings in this regard:
Whatever as alleged loss shown of Rs. 4 crore in the �nancial year ending 31
March 2006 cannot be said on the fault of workmen, but it is the
responsibility of �rst party how to maintain the cost of product for these
types of manufacturing. If perused balance sheet at Exh. C-43 for year ending
31 March 2004 actual production is of 2,05,118 pieces and cost of power, fuel
and water charges is Rs. 1,26,86,183/- and loss of Rs. 74,64,551/-. For the year
ending 31 March 2005 actual production is 2,12,103 and pro�t is Rs.
1,05,66,622/- excluding the loss of Rs. 74,64,551/- of previous year. If peruse
the balance sheet for the year ending 31 March 2006 actual production is
1,92,568 and again loss is shown Rs. 2,26,12,522/- without considering pro�t
of Rs. 1,05,66,622/- of previous year. If considered pro�t of Rs. 1,05,66,622/-
for the year as on March 2005 then loss of Rs. 2,26,12,522 shall reduce to the
extent of Rs. 79,54,100/-. Even though the �rst party in its application
contended loss of Rs. 4 crore which is beyond the �gures of balance sheet. To
know that, the cost of furnace oil and light diesel oil is higher and therefore,
the functioning of �rst party was unviable, did not �nd �gure in the balance
sheet. Further, did not �nd much loss. Of course in the year 2006 there is loss
of at about 80,00,000/- but the �rst party was required to consider that, since
1956 the Company is functioning and some time loss can be happened and
some time they shall be in pro�t. If considered pro�t for years together it
cannot be said that, the �rst party totally was unviable to continue its
business activities.
39) The Tribunal has thus recorded a �nding that the losses of Rs. 4
crores incurred during the �nancial year ending 2005-2006 could not be
attributed to any fault on the part of the workmen. Whether losses result out
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of fault of the workmen or not is an irrelevant consideration. The relevant
consideration is whether Petitioner indeed faced losses and whether closure
of the undertaking was really required due to such losses. The Tribunal has
held that for the year ending 31 March 2004, the loss was only Rs.74,64,551/-.
According to Mr. Bapat, the actual loss for that year is Rs.1,77,94,080/- and
that the Tribunal has erroneously picked up the �gure of Rs.74,64,551/-
indicated against entry ‘balance carried to balance sheet’ for assuming the
same as the loss may be the actual loss suffered during the year ending 31
March 2004 is Rs.1.77 crores. It however appears that Petitioner made
adjustment of taxation of (-) Rs.1,64,00,000 and Rs.2,27,92,000/- and
therefore the actual loss came to Rs. 1,14,17,084/-. To that �gure surplus of
the last year balance sheet of Rs. 39,52,533/- was added and this is how �nal
loss �gure of Rs. 74,64,551/- for the year 2003-04 was determined. Therefore,
there was pro�t for the year ending 31 March 2005 of Rs.1,05,66,622/-. The
losses for the year ending 31 March 2006 were Rs. 3,82,54,412/- and after
adjusting the carried over pro�t of Rs.1,05,66,622/-, the actual loss is shown
as Rs.2,76,87,790/-. Also, in only two out of the three years, there was loss
and in one year, Petitioner had made pro�ts. Thus the actual loss suffered by
the Petitioner during the 3 years of operation is �nally Rs. 2.76 crores and not
4 crores as sought to be projected by the Petitioner.
40) While discussing the Balance Sheet �gures, the Tribunal has
recorded a �nding that the alleged increase in the cost of furnace oil and light
diesel oil is not re�ected in the balance sheet. However, if one compares the
�gures of expenditure towards fuel and water charges for the year 2003-04 of
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Rs. 12,62,86,183/- with the �gure of Rs. 13,13,91,754/- for the year 2004-05, it
shows a 4.04% rise in the cost of power, fuel and water charges. The �gure
went up to Rs. 15,95,02,400/- during 2005-06. Thus, increase in the cost of
power, fuel and water charges was discernible from the Balance Sheets. But
the same is against the elements of power, water and fuel. Even if it is
assumed that there was some increase in the fuel cost, the Petitioner was still
able to generate pro�t of Rs.1,05,66,622/- in 2004-05.
41) The Tribunal thereafter considered the life of the furnace and the
cost criteria for its replacement. The Tribunal has held Petitioner responsible
in not making arrangements for replacing the furnace by holding as under:
If company is engaging in said business then they should have to take care to
replace the furnace from time to time when normal life is over. So that
irregularity on the fault of company cannot be compelled on workmen and
public at large and that cannot be genuine and bonfaide reason for closure of
undertaking.
xxx
So far as replacing cost of furnace is concerned that was up to the �rst party
and it can be said that, this was negligence on the part of First Party.
42) According to Mr. Bapat, the cost of replacing the furnace was
Rs.12 to 15 crores whereas according to the Respondent, the same was in the
range of Rs.7 to 8 crores. Be that as it may, it appears that the company had
reported losses in two out of the preceding three years. After adjusting the
pro�t �gure of Rs. 1,05,66,622/- of 2004-05, its actual loss for the year 2005-
06 was 2.76 crores. May be in such circumstances, Petitioner did not desire to
spend monies on purchase of new furnace.
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43) The Tribunal once again adverted to the aspect of supply of gas
by Mahanagar Gas Ltd. and has recorded a �nding that the Petitioner failed to
accept the offer of Mahanagar Gas Ltd. This is clear from the following
�ndings:
Further the �rst party company sought natural gas at about 25,000 cubic
meter per day, but the Mahanagar Gas Ltd. assured to provide 5000 to 6000
cubic meters natural gas per day. If perused the letter of Mahanagar Gas Ltd.
it appears that, this document clearly shows that, the Mahanagar Gas Ltd.
Initially was ready to provide natural gas, but the �rst party declined to
accept offer of Mahanagar Gas Ltd. Further the �rst party nowhere justi�ed
that per day 25000 cubic meters gas was required and further nowhere given
bifurcation to that effect by orally or documentary. In fact the �rst party was
required to utilize initially offered Natural Gas and thereafter it was possible
to consider the decision of closure. This fact clearly shows that, knowing the
fact that Mahanagar Gas Ltd. was unable to provide quantity as asked by the
First party put up the demand of 25,000 cubic meter gas and had taken
disadvantage of this fact. At least as per availability of gas �rst party was
required to continue its activities and was required to wait and watch further
development. Therefore reason assigned by �rst party not seems bona�de
and genuine for closure.
44) The requirement of Petitioner was 25,000 cubic meters gas per
day whereas Mahangar Gas Limited had assured to provide gas in the quantity
of only 5,000-6,000 cubic meters per day. The offer made by Mahanagar Gas
Limited was subject to the condition that it could stop the gas supply at any
point of time. It would be apposite to reproduce relevant portion of letter
dated 12 April 2006 of Mahanagar Gas Limited, which reads thus:
1. Initially, we would consider supply of PNG in the range of 5000 to 6000
SCMD to you.
2. You will strictly adhere to gas drawl limited to your NQ in day to day basis.
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3. Yours gas supply would be on a fall back basis, treated separately from our
other industrial customers In case of gas availability problems, you would
shutdown gas consumption completely within 3 hours of such notice to you.
45) May be Petitioner is right in contending that Mahangar Gas
Limited did not assure supply of requisite quantity of gas and made the
supply subject to the condition of stoppage in the event of availability of
problems. However, as observed above, the letter was received by the
Peitioner on 12 April 2006 and immediately thereafter Petitioner made
closure application on 3 June 2006. If it was possible to earn pro�ts despite
increase in fuel cost in 2004-05, may be the Petitioner could have attempted
continuation of operations for some more time by taking measures like
increasing cost of manufactured products, etc. May be Petitioner could have
also pursued the matter with Mahangar Gas Limited for increasing the
quantity of supply. In my view therefore continuation of operations for some
more time was advisable in the facts of the present case.
46) The Industrial Tribunal then went into the aspect of salary costs
which was claimed to be 21 to 23% of total revenue. The Tribunal has however
recorded a �nding that the Petitioner did not produce any material either
before the appropriate Government or before it to indicate the costs of salary.
However, the Balance sheet indicated the costs incurred towards salary. To
illustrate, for the year 2005-06, the salary cost was at Rs. 5.90 crores as
compared to the total income �gure of Rs.45.80 crores. This would constitute
cost of salary to be only about 12.88% as compared to the revenues. Therefore
though the Tribunal is not correct in holding that Petitioner did not produce
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any material. The claim of Petitioner of salary cost constituting 21 to 23 % of
revenues does not appear to be correct. Also in a labour-intensive industry
the cost of labour is bound to be high. Even if 21 to 23 % is considered, it
cannot be said that the labour cost was astronomically high in the present
case. Even with the alleged high cost of labour, Petitioner was able to report
pro�t of Rs.1,05,66,622/- for the year ending 31 March 2005.
47) One of the main reasons pleaded for closure of the undertaking
was absence of demand of glass bottles by various industries. Mr. Bapat
contends that it is a matter of public knowledge that over the years, soft drink
manufacturers have switched from glass bottles to plastic bottles and that the
liquor industry in India has also switched over to the plastic bottles. But was
that the position in 2006 when closure was effected? Petitioner was also
manufacturing glass bottles for pharma industry. No concrete evidence of
decline in orders for glass bottles was proved. As a matter of fact, despite the
alleged decline in demand, Petitioner still reported pro�t of Rs.1,05,66,622/-
in FY 2004-05.
48) Another factor considered relevant by the Industrial Tribunal for
setting aside approval to closure is retention of some of the staff by the
Petitioner after closure. The Tribunal has recorded that a factory manager and
personnel of�cer were continued in the employment even in the year 2010.
The Tribunal has questioned as to how factory manager could be continued in
2010. It is the case of Respondent Nos. 1 to 6 that almost 50 staff members are
still working at the factory. In my view however, continuation of staff
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members by the Petitioner is a less relevant factor. In my view, the relevant
factor is whether the Petitioner-Company continued its manufacturing
activities after the closure permission. There is no �nding by the Tribunal
that business of the Petitioner continued after the closure. It is not the case
even of the Respondents that the manufacturing activity was outsourced or
that Petitioner replaced the services of the permanent workers with
temporary/contract workers and continued the business of manufacture and
sale of glass bottles.
49) Respondent Nos. 1 to 6 highlighted the position that t he
Petitioner purchased a land at Taloja out of the pro�ts earned out of the
business of glass factory at Mahalaxmi. Purchase of land at Taloja is proved
before the Tribunal. It is also established that the Petitioner had plans to shift
the factory to Taloja. However, the Petitioner ultimately did not start any
manufacturing activity at Taloja. There is also no evidence on record to
suggest that closure was effected with a view to get rid of permanent workers
at Mahalaxmi and manufacturing activity was continued through other
workers at Taloja. On the other hand, it is an admitted position that even at
Taloja, there is no manufacturing activity.
50) Petitioner was running a glass factory at a busy location in the
heart of the city at Mahalaxmi. Most of the industries in Mumbai city have
been moved out. Continuation of manufacturing activity in busy residential
area was otherwise feasible. According to the Petitioner, the industry
manufacturing glass has been classi�ed as a red category by Maharashtra
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Pollution Control Board. Therefore, it is not known whether the Petitioner
would otherwise been permitted to continue the manufacturing activities in
busy residential location.
51) Considering the above position, in my view, though the Petitioner
could not conclusively prove before the Tribunal about existence of
circumstances warranting closure, there are certain mitigating circumstances
in favour of the Petitioner since the factory is actually closed and Petitioner
did not manufacture similar products or any other products either in the
concerned factory or at any other premises. There is absolutely no evidence of
any manufacturing activity by the Petitioner during last 20 long years.
52) Petitioner has also sought to raise the issue about violation of
timeline of 30 days by the Industrial Tribunal for adjudicating the Reference.
There appears to be no judgment holding that the Industrial Tribunal
becomes functus of�cio upon expiry of the period of 30 days as speci�ed in
Section 25-O. In my view, therefore there is no warrant for interference in the
impugned order on the ground of failure to adjudicate the Reference within
30 days. I therefore consider it unnecessary to deal with various judgments
cited by the learned counsel appearing for the rival parties on the aspect of
Industrial Tribunal’s failure to adjudicate the Reference within a period of 30
days.
53) Mr. Anilkumar has relied on judgment of this Court in Britania
Industries Ltd. in support of his contention that the Tribunal can go into the
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10 September 2026
Neeta Sawant WP. NO. 10306 OF 2018
reasons for closure to �nd out as to whether it is genuine and that it also has
power to revise the permission for closure including on the ground of public
interest. Mr. Anilkumar has also relied on judgment of the Apex Court in
Orissa Textile & Steel Ltd. in support of his contention that restrictions can
be imposed on closure on the basis of reasonableness and general public
interest. Mr. Anilkumar has also relied on judgment of the this Court in
Voltas Employees Union, Mumbai in support of his contention that the
Tribunal can go into the issue of genuineness and adequacy of reasons for
closure and that application for closure must indicate speci�c measures
undertaken by the employer to avoid a proposed closure.
54) Considering the overall conspectus of the case, it is seen that
Petitioner could not establish consistent sufferance of losses for three years
before closure. It did earn pro�ts in one out of the three years. Just about one
year before the closure it had earned pro�t of Rs. 1,05,66,622/- . Therefore, it
is not possible to draw a conclusive presumption that sufferance of losses by
the Petitioner in future was eminent. What if the Petitioner was to make
pro�ts in the year ending 31 March 2007 as it did two years earlier in 2005?
Therefore, Petitioner could have continued its activities for couple of years
more for examining the feasibility of running the business in pro�ts.
Therefore, technically the closure permission ought to have been rejected and
Petitioner ought to have made a fresh application for closure in the next year
after examining the feasibility to run the operations. Petitioner thus hurriedly
went for closure option. However, while holding that the closure was in a
hurry, it must also be borne in mind that rejection of closure permission
would entail liability to pay wages to the workers without any manufacturing
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Neeta Sawant WP. NO. 10306 OF 2018
activity happening in the factory. As observed above, there are mitigating
circumstances in favour of the Petitioner as it believed that continuation of
the manufacturing activities would have led to further losses. Now a period of
20 long years has elapsed from halting of the manufacturing activities. It is
now too late in a day to expect the Petitioner to commence the glass bottle
manufacturing activities in the factory. It has also come on record that the
activity is red �agged by the MPCB and cannot be carried out in busy
residential area. Petitioner owns a large tract of land in south Mumbai which
now is worth a fortune. In these circumstances in my view, it would be
appropriate to award lump sum compensation to 472 workers, whose details
are provided at Annexure-A1 to the closure application as well as at Exhibit G
to the Interim Application No. 3399 of 2020. Petitioner can raise funds by
providing security of the land or by entering into agreement for sale and pay
the compensation to the workers. Considering the �ndings recorded that the
operations could have been continued for a couple of more years, the workers
can be awarded compensation by considering loss of wages for about 2-3
years and some interest component. Therefore compensation of Rs. 2,00,000/-
can be awarded uniformly to each of the workers to prevent complicated
computations. The �nancial liability to the Petitioner would be in the
range of Rs. 9,44,00,000/- for 472 workers. Considering the land value of
hundreds of crores, not much prejudice would be caused to the Petitioner on
account of award of compensation of Rs. 2,00,000/- to 472 workers. This
would balance the equities. Petitioner has apparently not dealt with the
factory land due to pendency of the litigation. Once the awarded
compensation is paid, Petitioner can develop or sell the land, which is now
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10 September 2026
Neeta Sawant WP. NO. 10306 OF 2018
worth hundreds of crores. Considering the facts and circumstances of the
case, it would be appropriate to award compensation of Rs. 2,00,000/- to each
worker over and above what is already paid to them.
55) I am of the view that the impugned order passed by the Industrial
Tribunal deserves to be modi�ed by awarding lumpsum compensation of Rs.
2,00,000/- to each worker.
56) Accordingly, I proceed to pass the following order:
(i) The judgment and award dated 31 October 2017 passed by the
learned Member Industrial Tribunal in Reference IT No. 64 of
2006 is modi�ed by directing that Petitioner shall pay to each of
the 472 workers/their legal heirs lump sum compensation of Rs.
2,00,000/- each within a period of 4 months.
(ii) The workers/legal heirs shall submit details of account numbers
to the Petitioner for transmission of compensation expeditiously.
(iii) Beyond the lump-sum compensation so awarded to the workers,
they shall not be entitled to any other service-related
bene�ts/payments from the Petitioner.
57) The Writ Petition is partly allowed in above terms. Rule is partly
made absolute. There shall be no order as to costs. Interim Application also
disposed of.
(SANDEEP V. MARNE, J.)
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10 September 2026
NEETA
SHAILESH
SAWANT
Digitally
signed by
NEETA
SHAILESH
SAWANT
Date:
2026.09.10
20:55:51
+0530
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