2015 Supreme(SC) 187

SUPREME COURT OF INDIA
V.GOPALA GOWDA, C. NAGAPPAN, JJ.
MACKINON MACKENZIE & COMPANY LTD. – APPELLANT
VERSUS
MACKINNON EMPLOYEES UNION – RESPONDENT
CIVIL APPEAL NO. 5319 OF 2008
Decided on: 25-02-2015

MAIN POINTS
No department/unit can be closed without complying with provisions of Sections 25F (a) & (c), 25FFA, and 25G and relevant rules.
Non-compliance with mandatory requirements of section 25FFA attracts penal provisions of section 30A.
Retrenchment of seniors while retaining juniors in violation of the principle of ‘last in first go’ would not be valid.
Court cannot sympathise with a party which gambles in litigation to put off the evil day, and when that day comes, prays to be saved from its own gamble.
Termination in violation of Chapter V-A or V-B would be void ab initio. Workmen would be entitled to reinstatement and full back wages.

Headnote:(a) Industrial Disputes Act, 1947 – Section 2(cc) r/w Sections 25F (a) & (c), 25FFA, and 25G and Rule 81, Industrial Disputes (Bombay) Rules, 1957 – Statement of Reasons nowhere showing that respondents were retrenched due to closure of the units – Further, no department/unit can be closed without complying with provisions of Sections 25F (a) & (c), 25FFA, and 25G and Rule 81, Industrial Disputes (Bombay) Rules, 1957 – Instantly, requirements of these provisions not satisfied – Closure not valid. (Para 26, 35)

       AIR 1954 SC 322; (1999) 3 SCC 422 – Relied upon

       AIR 1960 SC 762; (2006) 11 SCC 684; (2006) 8 SCC 508; (1987) 2 SCC 203; (2001) 2 SCC 87; AIR 1969 SC 90; (2009) 5 SCC 705; (1986) 2 SCC 624 – Referred

       (b) Industrial Disputes Act, 1947 – Section 25F(a) and (c), and section 25FFA – Retrenchment – Requirement of statutory notice or wages in lieu thereof before retrenchment – Not complied with – Mandatory requirements of section 25FFA also not complied with attracting penal provisions of section 30A. (Para 27, 29)

       State Of Uttar Pradesh v. Babu Ram Upadhya; State of Mysore v. V.K. Kangan; Sharif-Ud-Din v. Abdul Gani Lone – Relied upon

       (c) Industrial Disputes Act, 1947 – Section 25G r/w Rule 81, Industrial Disputes (Bombay) Rules, 1957 – Principle of ‘last in first go’ – Not followed – No category wise seniority list of the workmen was displayed on notice board – Retaining juniors and retrenching seniors – Retrenchment not valid. (Para 37, 38)

       (2005) 2 SCC 489; AIR 1980 SC 1454; M/s. Om Oil & Oil Seeds Exchange – Distinguished

       (d) Administration of Justice – Judicial propriety – Appellant-Company not complying with statutory provisions regarding retrenchment – Praying for moulding the relief sought by respondent workmen regarding reinstatement on ground of closure of the department/unit – Undue sympathy – Court cannot sympathise with a party which gambles in litigation to put off the evil day, and when that day comes, prays to be saved from its own gamble. (Para 42)

       AIR 1980 SC 1454 – Relied upon

       (e) Industrial Disputes Act, 1947 – Chapter V-A and V-B – Reinstatement and back wages – Termination in violation of Chapter V-A or V-B – Void ab initio – Workmen entitled to reinstatement and full back wages – No infirmity in impugned judgment. (Para 43)

       (2010) 5 SCC 497; (2013) 10 SCC 324 – Relied upon

       Facts of the case:

       A notice of retrenchment together with the statement of reasons enclosed therewith was served upon approximately 98 workmen by the appellant-Company on the ground of the appellant-Company accumulating losses and the proprietors taking a decision to rationalize its activities.

       The respondent-Union who are the concerned workmen filed the complaint before the Industrial Court. The Company contended that since there was a deviation from the seniority list of some workers in the clearing and forwarding departments and some of the remaining workers from the alleged closed departments of the appellant-Company were to be transferred to the aforesaid retained departments of the appellant- Company, a seniority list of all the workmen in the establishment was also allegedly put up on the notice board. However, the finding of fact recorded by the Industrial Court while answering the relevant contentious issues is that this plea taken by the appellant-Company was not proved.

       The Industrial Court held that the appellant-Company has committed an unfair labour practice by committing breach of Rule 81 of the Industrial Disputes (Bombay) Rules, 1957, by not displaying the seniority list of the workmen of the concerned department/unit of the appellant-Company on the notice board prior to the date of issuance of retrenchment notice to the concerned 98 workmen as contemplated by the MRTU & PULP Act, 1971 and the Bombay Rules. It was further held that the appellant-Company had committed an unfair labour practice by committing breach of Section 25G of the I.D. Act read with Rule 81 of the Bombay Rules by not following the principle of ‘last come first go’. The Industrial Court passed an interim order directing the appellant-Company to continue the employment of retrenched workmen in service and pay them full wages every month. The appellant-Company was further directed by the Industrial Court to pay arrears of all such wages to the retrenched workmen from the date of alleged retrenchment till the date of the said award and also directed the appellant-Company to pay them future wages regularly from the date they are actually allowed or continued to work as per the award of the Industrial Court.

       The award passed by the Industrial Court was challenged by the appellant-Company before the High Court urging various grounds and praying to quash the award passed by the Industrial Court. The High Court dismissed the same.