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2007(5) Supreme 951
Supreme Court of india
(From Punjab and Haryana High Court)
G.P. Mathur & P.K. Balasubramanyan, JJ.
District Red Cross Society — Petitioner
versus
Babita Arora & Ors. — Respondents
Appeal (civil) 3735-3738 of 2007
(Arising out of SLPetition (C) Nos.17874-17877 of 2003)
Decided on : 14-08-2007
AIR 1970 SC 860; 1973 Lab.IC461; (1974) 1 LLJ 499 – Relied upon.
(b)Industrial Disputes Act, 1947 – Section 25FFF – In order to attract Section 25FFF it is not necessary that the entire establishment of an employer should be closed – If a unit or part of an undertaking which has no functional integrity with other units is closed, it will amount to closure within the meaning of Section 25FFF of the Act – The closure need not be of the entire plant – A closure can also be of a part of the plant. (Para 9)
(2001) 2 SCC 87; (2005) 2 SCC 638 – Relied upon.
(c)Industrial Disputes Act, 1947 – Section 25 FFF – Well settled that if the entire establishment of the employer is not closed down but only a unit or undertaking is closed down which has no functional integrity with other units or undertaking, the provisions of Section 25FFF of the Act will get attracted and the workmen are only entitled to compensation as provided in Section 25FFF of the Act which has to be calculated in accordance with Section 25F of the Act – The Maternity Hospital functioning as a distinct entity and not receiving any grant from the Government; had to be closed down due to financial stringency – The other three units, viz., were receiving grants from government and were functioning as separate entities – Therefore the mere fact that they had not been closed down, could not lead to the inference that the termination of services of the respondent was by way of retrenchment which was illegal on account of non-compliance of the provisions of Section 25F of the Act. (Para 9)
(d)Industrial Disputes Act, 1947 – Section 25 FFF – In view of the Maternity Hospital which was a separate entity and not receiving any grant from Government and the retrenchment being fully covered by section 25 FFF, the respondent held entitled to compensation only – The award for reinstatement in service with back wages passed by the Tribunal which was affirmed by the High Court could not be sustained and held liable to be set aside. (Para 10)
Facts of the case :
Babita Arora filed a claim petition before the Presiding Officer, Industrial Tribunal-cum-Labour Court, Karnal, on the ground, inter alia, that she was appointed as staff nurse in the appellant District Red Cross Society, Karnal, by the order dated 20.3.1992 and she continuously worked on the said post till her services were terminated on 30.9.1998, due to the closing down of the Red Cross Maternity Hospital, but the management had not followed the procedure laid down in Sections 25F to 25H of the Industrial Disputes Act which was a clear violation of the statutory provisions. The management had also not followed the principle of ‘first come last go’ while terminating her services and had thereby contravened Section 25G of the Act. No retrenchment compensation was paid to her at the time of termination of her services. The alleged closing down of the Maternity Hospital was only a paper transaction as the Out Patient Department was still functioning and the patients were being given treatment by the doctors as well as other staff. Tubectomy operations were still being conducted in the hospital. Her case further was that there were several other schemes/projects under the appellant, like, Family Welfare Scheme, Drug De-addiction-cum-Research Centre, etc., where the respondent could be absorbed. It was accordingly prayed that an award may be passed directing the appellant to reinstate her in service with continuity of service and full back wages.
The appellant District Red Cross Society, Karnal, took the stand that claim petition was not maintainable as the hospitals and social organizations were not covered under the Industrial Disputes Act. The services of the respondent were terminated on account of closing down of the Red Cross Maternity Hospital w.e.f. 30.9.1998. It was further pleaded that on account of closure of the charitable Maternity Hospital, the services of the entire staff working therein had been terminated and no one was retained in service. The respondent was, however, offered a post in another organization, viz., Drug De-Addiction-cum-Rehabilitation Centre, Karnal, wherein a post of nurse was sanctioned by the Government on 2.11.1998, but the respondent refused to accept the said offer.
The Tribunal gave an award directing her reinstatement with continuity of service and full back wages from the date of demand notice i.e. 6.11.1998. The appellant challenged the awards of the Tribunal by filing four writ petitions in the High Court. The writ petitions were dismissed.
Findings of the Court :
The respondent would be entitled to compensation only in terms of Section 25 FFF of the Industrial Disputes Act, 1947.
Result : Appeals allowed.
JUDGMENT
G.P. Mathur, J.—
1.Leave granted.
2.These appeals, by special leave, have been preferred against the judgment and order dated 24.10.2002 of High Court of Punjab and Haryana, by which four writ petitions filed by the appellant herein were dismissed by a common order. In the writ petitions challenge was raised to the awards dated 7.9.2001 of Industrial Tribunal-cum-Labour Court, Karnal, in Reference Nos.1433 to 1436 of 1999.
3.We will give the facts of Civil Writ Petition No.1236 of 2002 which was directed against the award made in Reference No.1433 of 1999. Babita Arora (respondent herein) filed a claim petition before the Presiding Officer, Industrial Tribunal-cum-Labour Court, Karnal, (hereinafter referred to as ‘the Tribunal’) on the ground, inter alia, that she was appointed as staff nurse in the appellant District Red Cross Society, Karnal, by the order dated 20.3.1992 and she continuously worked on the said post till her services were terminated on 30.9.1998, due to the closing down of the Red Cross Maternity Hospital, but the management had not followed the procedure laid down in Sections 25F to 25H of the Industrial Disputes Act (hereinafter referred to as ‘the Act’) which was a clear violation of the statutory provisions. The management had also not followed the principle of ‘first come last go’ while terminating her services and had thereby contravened Section 25G of the Act. No retrenchment compensation was paid to her at the time of termination of her services. The alleged closing down of the Maternity Hospital was only a paper transaction as the Out Patient Department was still functioning and the patients were being given treatment by the doctors as well as other staff. Tubectomy operations were still being conducted in the hospital. Her case further was that there were several other schemes/projects under the appellant, like, Family Welfare Scheme, Drug De-addiction-cum-Research Centre, etc., where the respondent could be absorbed. It was accordingly prayed that an award may be passed directing the appellant to reinstate her in service with continuity of service and full back wages.
4.The appellant District Red Cross Society, Karnal, filed written statement on the ground, inter alia, that claim petition was not maintainable as the hospitals and social organizations were not covered under the Industrial Disputes Act. The services of the respondent were terminated on account of closing down of the Red Cross Maternity Hospital w.e.f. 30.9.1998 as the hospital was being run on donations and not on government grant. The donations had considerably reduced and due to financial constraints and heavy expenditure, the appellant had no option but to close the maternity hospital. It was further pleaded that on account of closure of the charitable Maternity Hospital, the services of the entire staff working therein had been terminated and no one was retained in service. The respondent was, however, offered a post in another organization, viz., Drug De-Addiction-cum-Rehabilitation Centre, Karnal, wherein a post of nurse was sanctioned by the Government on 2.11.1998, but the respondent refused to accept the said offer.
5.The parties adduced oral and documentary evidence in support of their case. The appellant employer examined Brahm Dutt, Clerk, incharge of the District Red Cross Society, Karnal, who stated that the management carried on social work and the same was done on charitable basis from the donations received from public. The appellant Society was also running a Drug De-Addiction-cum-Rehabilitation Centre, a Family Planning Centre and a Viklang Kendra, which were being run as separate establishments as they were receiving grants from the Government to the extent of 90% to 100%. A decision was taken in a meeting held on 4.9.1998 to close down the Maternity Hospital on account of extreme financial stringency as it was not receiving any aid from the Government and was being run entirely from donations. In the said me
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