Registered trade unions retain their status despite non-filing of annual returns until officially cancelled, allowing for lawful conduct of elections to determine majority representation.

ORDER :

Nagesh Bheemapaka, J.

Petitioner, one of the oldest paper mills in the country, originally established during 1939-1940 in the then backward area of Adilabad District, with commercial production having commenced in 1942 at Sirpur Kagaznagar. They are engaged in manufacture of various kinds of paper and paper boards, having market presence even outside India. It is stated that petitioner provides employment to nearly 850 regular staff and workers and about 1,400 contract workers. A full-fledged township comprising schools, markets, police station, recreational facilities and hospitals was developed primarily for the benefit of employees of petitioner.

1.1. It is contended that for reasons beyond the control of the then management, petitioner company became a sick industrial unit and its net worth was eroded. Owing to severe lack of working capital, petitioner stopped its operations in 2014. Thereafter, operational creditors initiated proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016, which were admitted by the National Company Law Tribunal and registered as CP (IB) No. 52/9/HDB/2017. A resolution plan submitted by the Resolution Professional and approved by the Committee of Creditors came to be sanctioned by NCLT by order dated 19.07.2018. Pursuant thereto, the management of petitioner company was taken over by J.K. Paper, and the company is presently being operated strictly in accordance with the approved resolution plan.

1.2. It is stated, prior to suspension of operations in 2014, as many as 15 trade unions were functioning in petitioner factory. The factory remained non-functional for more than four years and during this prolonged closure period, trade unions also became defunct. According to petitioner, most of these trade unions failed to submit annual returns from 2009 up to 2023 and also did not comply with the statutory requirements under the Trade Unions Act, 1926, including payment of necessary fees to the Registrar of Trade Unions, thereby rendering their registrations invalid. It is further stated that after revival of the unit pursuant to NCLT-approved resolution plan, petitioner entered into a Memorandum of Settlement under Section 12(3) read with Section 18(1) of the Industrial Disputes Act, 1947 with the representatives of the Works Committee. The said settlement was signed in the presence of and attested by the Joint Commissioner of Labour, Warangal, on 03.01.2023. The settlement, according to petitioner, has statutory force and is valid till 31.03.2026. It is contended that the said settlement governs various service conditions and grievance redressal mechanisms for workmen during its subsistence.

1.3. Petitioner states that when one of the trade unions requested the Deputy Commissioner of Labour, Adilabad, to recognize a union by conducting a secret ballot election, the said authority addressed the letter dated 22.10.2024 to petitioner seeking information regarding trade unions functioning in the factory. Petitioner replied to the said communication on 28.10.2024, informing the authority that trade unions which existed prior to closure of factory in 2014 had failed to file annual returns and comply with the provisions of the 1926 Act, therefore, according to petitioner, there was no validly-existing trade union in the factory.

1.4. It is contended that thereafter, the Joint Commissi