Closure of an industrial establishment requires prior governmental permission under the Industrial Disputes Act; failure to comply renders terminations invalid, allowing entitlements to compensation for affected workmen.

JUDGMENT :

TARA VITASTA GANJU, J.

1. The present Petition has been filed under Article 226 of the Constitution of India to challenge an Award dated 31.10.2018 passed by the learned Presiding Officer, Labour Court, South-West District, Dwarka Courts, New Delhi in LIR No. 2194/2016 captioned Sh. Surender Narayan Singh v. Management of M/s Acfolinc [hereinafter referred to as “Impugned Award”]. By the Impugned Award, the learned Labour Court has awarded a lump-sum compensation in the sum of Rs.2.5 lacs to the Respondent/Workman along with default interest of 8% p.a.

2. The principal challenge that has been raised by the learned Counsel for the Petitioner/firm is on the fact that the provisions of Chapter V-B of Industrial Disputes Act, 1947 [hereinafter referred to as “ID Act”] does not apply to the Petitioner/firm and that no issue with respect to the same was made by the Respondent/Workman before the learned Labour Court, despite which a detailed finding of “closure” has been given by the learned Labour Court.

3. Learned Counsel for the Petitioner submits that the Petitioner/firm came into existence on 01.04.1996, however on account of unavoidable reasons and pursuant to an order passed by the Haryana State Pollution Control Board, Panchkula on 28.07.2008, the Petitioner/firm had to be closed with effect from 01.08.2008. It is contended that the intimation of closure was sent to the concerned labour department at Haryana as well. Reliance is placed by the Petitioner/firm on the closure order dated28.07.2008 in this behalf.

4. The Petitioner/firm also relies on documents of closure including surrendering of its registration as well as VAT/SCT by the Petitioner/firm which was done subsequently. Learned Counsel for the Petitioner/firm submits that a dispute was raised by the Respondent/Workman before the learned Labour Court by filing a statement of claim and stating that he had been working with the Petitioner/firm as a field worker and was illegally dismissed on 01.01.2013.

5. Learned Counsel for the Petitioner/firm submits that the only reason that the learned Labour Court has given for the finding for the termination of the Respondent/Workman was the closure of the Petitioner/firm without prior permission from the appropriate Government and non-compliance of other requisite formalities as are set out in Chapter V-B of the ID Act. It is the case of the Petitioner/firm that these provisions do not apply to the Petitioner/firm, however in any event, the Petitioner/firm was not given an opportunity to establish this fact before the learned Labour Court or to establish that the termination was not illegal and contrary to law.

6. Lastly, it is contended by learned Counsel for the Petitioner/firm that one of the pre-requisites of Chapter V-B and Section 25K of the ID Act is that number of workmen in an establishment should be 100 or more. However, the Petitioner/firm was not an establishment of more than 100 workmen employed at a time and thus the provision cannot be made applicable. Learned Counsel for the Petitioner/firm thus submits that the finding of the Impugned Award qua the Award of lump-sum compensation is not in accordance with law.

7. Learned Counsel for the Respondent/Workman submits that the Workman has made a claim not based on working at any factory or establishment which was shut down in 2008 but has filed his statement of claim based on his job as a field boy working for the Petitioner/firm at his office at New Friends Colony, New Delhi. He further submits that some of the documents that have been relied upon show the address of the Petitioner/firm at Noida, Utt