Non-compliance with the provisions of Section 25F of the Industrial Disputes Act, 1947 renders retrenchment illegal.

JUDGMENT

M. S. Sonak, J. - Heard Mr. A. Nigalye learned counsel for the Petitioner.

2. The challenge in this petition is to the following:-

(a) Award and order of the Labour Court dated 6th October 2017 made in Case No. LC-II/IT/19/2015; and

(b) The recovery certificate No. CLE/(REC-1)/2018/4068 dated 25th September 2018 issued by the Commissioner of Labour and Employment to recover the dues in terms of the aforesaid impugned award.

3. The operative portion of the impugned award dated 6th October 2017 reads as follows:-

"1. It is held that the action of M/s Menezes Chemicals (Goa) Private Limited, Curti, Ponda Goa, in retrenching all the 34 workmen named in the present order of reference employed at it's factory, with effect from 15/06/2014, is illegal and unjustified.

2. It is further held that all the workmen under reference are entitled to payment of all back wages from the date of termination of their services till the date of the present order. In the event, M/s. Menezes Chemicals (Goa) Pvt. Ltd., recommences its operations or any other person whether natural or artificial succeeds to the Company and continues with the business, all the workmen under reference shall be entitled to reinstatement in service subject to their not having crossed the age of superannuation.

3. No Order as to Cost.

Inform the Government accordingly.".

4. Mr. Nigalye, learned counsel for the Petitioner submits that in this case the possession of the Petitioner factory was taken over on 22nd September 2014 by the bank and financial institutions by taking resort to the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the SARFAESI Act). He, therefore, submits that this is not a case of retrenchment of any workmen but rather this is a case of closure of industry. On instructions, he concedes that the closure compensation which was required to be paid has not been paid to the workmen. However, he submits that the payment of closure compensation was never a condition precedent and this aspect has not been appreciated by the Labour Court in making the impugned award.

5. Mr. Nigalye submits that the Petitioner in paragraphs 3, 4, and 7 of its written statement had clearly pleaded and thereafter even proved that there was no retrenchment as such but it is the workmen who themselves ceased to work in the factory. He pointed out that it is because the workmen stopped the work, the Petitioner could neither carry out any production nor pay any dues to the bank. He submits that in such a situation, there could have been no obligation for payment of retrenchment compensation or otherwise comply with the provisions of Section 25F of the Industrial Disputes Act, 1947 ( the said Act). Mr. Nigalye submits that even this aspect has not been properly appreciated by the Labour Court and therefore the impugned award deserves to be set aside.

6. Mr. Nigalye submits that since the recovery certificate seeks to recover the amount based on the impugned award which is itself illegal and without jurisdiction, even the recovery certificate is required to be set aside.

7. Without prejudice Mr. Nigalye submits that there was no compliance with the principles of natural justice before issuing the recovery certificate since the notice was addressed to the factory, which to the knowledge of the Authorities was already closed. He further pointed out that a recovery certificate seeks recovery from the directors which is also not permissible.

8. For all these reasons, Mr. Nigayle submits that even the impugned recovery certificate is required to be quashed and set aside.

9. As noted earlier, in the present case, the impugned award holds that the Petitioner has retrenched its 34 workmen and since there was no compliance whatsoever to the provisions of Section 25F of the said Act, such retrenchment is illegal and unjustified.

10. Normally the Labour Court after concluding that the retrenchment was null and void was required to grant r