Judgement

VENKATARAMIAH, J. : - The appellant is M/s. Isha Steel Treatment, Bombay, a firm carrying on the business of metal processing, i.e., heat treatment of metals. In the year 1963 it established a factory (hereinafter referred to as the I Unit) for the purpose of carrying on the business of metal processing, with about 32 workmen. Nearly 12 years after the establishment of the I Unit it established a second factory (hereinafter referred to as the II Unit) for carrying on the same kind of business employing about 75 workmen about 200 yards away from the I Unit. Both the units had independent location, separate factory licences and separate municipal licences. The said two units also had separate stores and maintained separate accounts and balance sheets. The workmen of both the units were also employed independently and there was a separate muster roll in respect of each of the two units. There was no rule or condition regarding the inter-transferability of the workmen. On finding that the workmen of the I Unit " were wilfully slacking their work and that there was growing indiscipline among them, the appellant decided in the year 1981-82 to reduce the three shifts working previously to two shifts. The indiscipline and the lack of production continued and on it becoming impossible for the appellant to carry on with even the aforesaid two shifts as reduced, the appellant came to the unhappy conclusion that it had no alternative but to close down the I Unit altogether. The aforesaid closure of the I Unit (set up in 1963) took effect on 15-2-1982 and closure compensation was offered to the entire staff of the 32 workmen. The workmen of the I Unit raised through their Union, namely, Association of Engineering Workers, Bombay, an industrial dispute before the Deputy Commissioner of Labour (Conciliation), Bombay District Office, Bombay, who in exercise of the, powers delegated to him, under cl. (d), sub-s. (1), S. 10 read with S. 12(5), Industrial Disputes Act, 1947 (hereinafter referred to as the Act) referred to Shri B. L. Borude, Industrial Tribunal, Maharashtra, Bombay, the dispute between the appellant and the workmen employed in the I Unit over the demand for reinstatement with full back wages and continuity of service with effect from 15-2-1982. The said reference was registered as Reference (IT) No. 218 of 1982 before the Tribunal.

2. In the statement of claim filed by the workmen it was urged that the two units which were being run by the appellant had functional integrality and were for all purposes parts of one establishment and that the workmen were mutually transferable from one unit to the other. It was further stated that the workmen were originally members of Mazdoor Congress which, according to them, could not improve their service conditions. Therefore, they decided to join another union, namely, the Association of Engineering Workers and were canvassing amongst themselves for organising under the banner of the Association of Engineering Workers. They further pleaded that on the management coming to know about it, it tried to persuade the workers not to join the said Association. On the workmen not agreeing to the suggestion made by the management, the management in an attempt to retaliate against the move of the workmen, removed 22 workmen on 15-2-1982 alleging that the I Unit was making a loss, that the workmen had resorted to giving less production, that there was indiscipline in the I unit and, therefore, the management was closing down the said unit. The workmen pleaded that the action of the management was arbitrary and was a colourable exercise of the managements power of closure. It was alleged that the impugned action was by way of victimisation for the trade union activities of the said workmen. They claimed that the principle of last come, first go while terminating the services of the workmen having not been followed as required by S. 25-G of the Act, the termination was illegal. The appellant resi