IMPORTANT POINT
The Labour Court or the High Court have no authority in law to direct payment of any additional sum by way of ex gratia payment otherwise than what is provided under the statute when the act of the management in closing down the establishment is found to be valid and all legally payable amounts have been paid or offered in time.

JUDGMENT

Santosh Hegde, J.-Though the cause-title of the appeal shows two civil appeal numbers, we are informed that in reality there is only one appeal challenging the judgment of the High Court of Judicature at Madras which arose from a single industrial dispute before the Principal Labour Court, Madras, hence, even though two civil appeal numbers are given in the cause-title, we treat it as a single appeal against the said judgment of the High Court of Madras. The facts necessary for the disposal of this appeal are as follows:

2. The appellant before us was a trading agency being managed under the name and style of Gordon Woodroffe Agencies P. Ltd. at the then Madras now known as Chennai. Said Company came to be closed w.e.f. 31.5.1984 because it had incurred heavy losses in its business. At that time the appellant had less than 50 workmen. It is also the case of the appellant that the closure being a genuine, it offered to all its workmen, closure compensation as prescribed by law and other legal entitlements like provident fund, gratuity etc. due to the workmen. The appellant also states that many workmen received the said compensation. However, the respondent workmen herein alone chose not to receive the same, primarily contending that they were entitled to alternate employment in a sister concern of the appellant known as Gordon Woodroffe Ltd. which was a manufacturing company. The appellant in regard to this claim of the respondent workmen had contended that Gordon Woodroffe Ltd. was a separate company and the question of providing alternate employment in the said company did not arise. Therefore, according to the appellant, they were only entitled to the closure compensation and other benefits which were already offered to all the employees including the respondent workmen herein.

3. In view of the above dispute between the workmen and the management, the Government of Tamil Nadu in G.O. Ms. No. 1015, Labour Department, dated 10.5.1984 made a reference under section 10(1)(c) of the Industrial Disputes Act (the Act) for adjudication of the issue relating to justification or otherwise of the stoppage of work in the appellant s establishment w.e.f. 31.5.1984 as a genuine case of closure or lock-out and to grant appropriate relief, if any.

4. The said dispute came up for consideration before the Principal Labour Court, Madras, which by its order dated 18.3.1985 came to the definite conclusion that the closure of the appellant s establishment cannot be held to be invalid or unjustified. In other words, the Labour Court held that the closure was genuine and justified in law. The Labour Court also came to the conclusion that in the process of closure, the appellant had issued appropriate notices which amounted to substantial compliance of the provisions of the Act, and the reason assigned in the said closure notice was valid. It also came to the conclusion that the contention of the workmen that the act of the appellant was in reality not a closure but a lock-out, was also rejected.

5. Having come to the above conclusion, the Labour Court came to the conclusion that on the facts of this case, there was substantial ground for awarding enhanced compensation to the respondent workmen on compassionate grounds by applying the principle of social justice which according to the Labour Court is linked with industrial adjudication. Therefore, it directed the appellant-management, apart from the closure compensation and other legally payable amounts offered to the workmen, to pay to the respondent-workmen ex gratia amounts in addition to closure compensation and other legal entitlements to which they are entitled, at the rate of 15 days wages on the last drawn salary for the remaining years of service till the date of superannuation by treating 6 months or more as one year of service. Over and above this, the Labour Court directed as consolidated sum of Rs. 3,000/- payable as solatium to each one of them.

6. Being aggrieved by the said