Non-compliance with the mandatory provisions of Section 25FFF of the Industrial Disputes Act, 1947, which requires prior payment of compensation to workmen before closure, renders the closure illegal and void ab initio.

1. THE petitioners before me are the workmen of Jenson and Nicholson (India) Ltd., being the respondent No. 3 herein. In this writ petition, they challenge an award made by the Third Industrial Tribunal, West Bengal dismissing the reference made to it by the State Government on the question of legality of closure of the head office of the company. THE closure was declared on 17th June 2003. THE two issues referred to the Tribunal by the State Government were:-

"(1) Whether the closure of the head office of the Company at 225, A.J.C. Bose Road, Kolkata-700 020 declared by the management w.e.f. 17.06.2003 is justified? (1) What relief, if any, are the workmen entitled to?"

2. PRIOR to effecting closure, it is the admitted position that 48 employees of the company were disbursed arrear salary of 15 days and one month's pay in lieu of notice. What was computed as closure compensation was sought to be paid by 18 postdated cheques of diverse sums for the individual workmen. Through these cheques, closure .compensation was sought to be disbursed on equal monthly instalments (EMI) basis. In course of hearing, it was submitted by Mr. Sengupta, learned Counsel appearing for the petitioners that none of the workmen had encashed the cheques through which such closure compensation was sought to be disbursed. The Tribunal found the closure of the head office bona fide. The Tribunal further held that under those circumstances it had no jurisdiction to entertain the reference or to adjudicate upon the issues referred to it. Mr. Sengupta drew my attention to the provisions of section 25FFF of the Industrial Disputes Act, 1947, as operational in West Bengal and submitted that the requirement of the said provision was not complied with by the management of the respondent company while declaring closure. On this ground, he argued, decision of the Tribunal confirming closure was not sustainable. The provision relating to closure is contained in the said section of the Act. Sub-section (1) of the said provision is relevant for adjudication of the present proceeding, which stipulates:

"[25FFF. Compensation to workmen in case of closing down of undertakings. - (1) Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of sub-section (2), be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched: Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workman under clause (b) of section 25F, shall not exceed his average pay for three months. [Explanation-An undertaking which is closed down by reason merely of- (i) financial difficulties (including financial losses); or (ii) accumulation of undisposed stocks; or (iii) the expiry of the period of the lease or licence granted to it; or (iv) in case where the undertaking is engaged in mining operations, exhaustion of the minerals in the area in which operations are carried on, shall not be deemed to be closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to this sub-section.]"

3. THE aforesaid provision was further amended by West Bengal Act 57 of 1980, which provides:-

"(1) before the existing proviso, insert the following proviso, namely:- "Provided that prior payment of compensation to the workman shall be condition precedent to the closure of any undertaking."; (b) in the existing proviso, for the words "provided that", substitute the words "Provided further that"

4. IN the present case, main argument of Mr. Sengupta is that since no prior payment of compensation was made by the company, and the condition precedent for effecting closure was not satisfied, the Tribunal committed error of law i