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High Court Of Delhi
D.C.M.LIMITED - Appellant
Versus
LIEUTENANT GOVERNOR UNION TERRITORY OF DELHI - Respondent
Civil Writ 2476 of 1988
Decided On : 03/01/1989
INDUSTRIAL DISPUTES ACT, 1947 - SECTION 25-O - CLOSURE OF INDUSTRIAL UNDERTAKING - PERMISSION - MANDATORY PROVISIONS OF MASTER PLAN REQUIRING PERMANENT CLOSURE OF MILL - NO APPLICATION OF MIND BY LT. GOVERNOR - PUBLIC INTEREST - WORKERS' CONSENT TO CLOSURE - COURT'S POWER TO ISSUE WRIT OF MANDAMUS.
Fact of the Case:
The petitioners, Delhi Cloth Mills Ltd. (DCM), sought permission from the Lt. Governor of Delhi to close its industrial undertaking, Bara Hindu Rao Mills, Delhi, under Section 25-O of the Industrial Disputes Act, 1947 (ID Act). The petitioners cited reasons such as the mill's location in a non-conforming area, economic unviability, and heavy losses. The Lt. Governor initially refused permission, but a Full Bench of the Delhi High Court quashed the order and directed the Lt. Governor to reconsider the application. However, the Lt. Governor again refused permission, prompting the petitioners to challenge the decision in the present petition.
Finding of the Court:
The High Court found that the Lt. Governor failed to genuinely address the mandatory provisions of the Master Plan, which required the mill to permanently cease operations from its present site by January 1989. The Court also held that the Lt. Governor erred in his approach to the issue of pollution caused by the mill's discharge of toxic effluents. Furthermore, the Court considered the workers' consent to the closure, the settlement agreement between the petitioners and the workers' unions, and the public interest involved.
Issues: 1. Whether the Lt. Governor properly considered the mandatory provisions of the Master Plan requiring the mill's closure. 2. Whether the Lt. Governor erred in his approach to the issue of pollution caused by the mill's discharge of toxic effluents. 3. Whether the workers' consent to the closure and the settlement agreement between the petitioners and the workers' unions should be considered in determining the public interest.
Ratio Decidendi: 1. The Court held that the Lt. Governor failed to genuinely address the mandatory provisions of the Master Plan, which required the mill to permanently cease operations from its present site by January 1989. The Court found that the Lt. Governor did not provide any reasons for rejecting this ground and that his decision was, therefore, capricious and entitled to be struck down. 2. The Court held that the Lt. Governor erred in his approach to the issue of pollution caused by the mill's discharge of toxic effluents. The Court noted that the Central Pollution Control Board had denied consent for the mill to continue discharging effluents and that the continued discharge of toxic effluents was against the larger interest of the public. The Court found that the Lt. Governor failed to consider these factors and that his decision was, therefore, vitiated. 3. The Court considered the workers' consent to the closure, the settlement agreement between the petitioners and the workers' unions, and the public interest involved. The Court found that the workers had overwhelmingly opted for the closure of the mill in the hope of receiving adequate compensation. The Court also found that the settlement agreement provided for reasonable compensation to the workers and that the public interest was not adversely affected by the closure of the mill.
Final Decision: The High Court quashed the impugned orders of the Lt. Governor and directed the Lt. Governor to grant permission to the petitioners to close the mill within 7 days. The Court also held that the petitioners would be bound by the undertakings given to the Court in the scheme of settlement for payment of compensation to the workmen.
( 1 ) THIS petition under Article 226 of the Constitution of India challenges the decision of the Lt. Governor, Delhi dated October 29, 1988. refusing the petitioners permission under Section 25-0 of the Industrial Disputes Act 1947 to close its industrial undertaking Delhi Cloth Mills at Bara Hindu Rao, Delhi.
( 2 ) THE petitioners had earlier filed a petition, being C. W. P. 1281/85 ("d. C. M. Ltd. v. Union of India and Others") under Article 226 of the Constitution of India seeking a writ of certiorari to quash the decisions of the Lt. Governor, Delhi communicated in the letter dated April 16, 1985 rejecting the petitioners application dated March 27, 1985 and refusing-the petitioners premission under Section 2-0 of the Industrial Disputes Act, r-47 (for short called the ID Act) to close its industirial undertaking Deibi Cloth Mills at Bara Hindu Rao, Delhi (for short called the Mill) with effect from July, 1985. The furthei relief claimed was to declare that the provision of Section 25 0 ID Act as inserted by Act 46 of 1982 are ultra vires Article 14 and 19 (l) (g) of the Constitution of India.
( 3 ) THE stand of the petitioners of that petition was that the Mill is located in a non-conforming area and it can no longer continue the industrial activities at the present site and in fact the heavy and large scale industries are not permitted to be located in the Union Territory of Delhi. Apart from it, the contention was that the industrial undertaking per se is economically unviable and unprofitable. The losses suffered by the industrial undertaking of the petitioners over the past years from 1978-79 to 1983-84 were detailed in para 36 of the amended writ petition. The reasons for the alleged recurring heavy losses being suffered by the Mill were detailed in para 37 of the amended writ petition According to the petitioners, it is not possible to convert the present industrial undertaking into a modern plant at the present site for various reasons, inter alia that the industrial undertaking is located in a non-conforming area, that the buildings are very old and not designed for the installation of modern equipments and that the cost of renovation and modernization will not be substantially less than the cost of installing a new and modern unit projected at about Rs. 50 crores It was submitted that in view of the recurring loss being suffered, the Mill being 428 located in non-conformng area and other factors the petitioners were compelled to take the decision to close down the industrial undertaking.
( 4 ) A Full Bench of this Court comprising of S. S. Chadha GC Jain and Sunanda Bhandare, JJ. upheld the vires of the provisions of Section 25-0 of the ID Act. That Full Bench recalled the provisions of the Delhi Development Authority Act, 1957 (for short called the Act) and the provisions of the Master Plan prepared in accordance with the procedure laid down by the Act by the Delhi Develpment Authority (for short called the Authority ). The Master Plan as prepared by the Authority was approved by the Central Government under Section 9 (2) of the Act. It was published in the Gazette of India on September 1,1962 in compliance with the provisions of Section II of the Act and Regulation 2 (1) of the Delhi Develpment Authority (Publication of Approval of Plan) Regulations, 1962. It was duly published by affixing copies thereof in the offices of the Authority, M. C. D. , N. D. M. C. and Delhi Administration Secretariat. It was also published by advertisement in the local newspapers. The Master Plan thus came into operation from the date of first publication of notice of September 1, 1962 once a plan has come into force operation, it cannot be altered of modified except as provided in Section 11 A of the Act. The user of land and buildings in contarvention of the Plan is prohibited by Section 14 of the Act. Any person using any land or building contrary to the provisions of the Master Plan. after it came into operation, w
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