BINNY LIMITED AGRAHARAM ROAD BANGALORE-560023 REPRESENTED BY MR. M. NATARAJAN DEPUTY MANAGER (PERS. AND ADMN.) Vs. THE GENERAL SECRETARY BINNY MILLS WORKERS UNION NO.1, PALACE ROAD, BANGALORE 560001 AND OTHERS

JUDGEMENT

(1.) THIS appeal assails the order of the learned Single Judge dated 21.10.2005 passed in W.P.No.21718/2000, upholding the Award dated 03.11.1999 passed by the Industrial Tribunal Bangalore in I.D.No.9/1990. The Tribunal had passed orders declaring that the closure of the Mills by the appellant -Binny Limited for the period 26.12.1988 to 06.08.1989 to be illegal, and directing the Management to pay wages and other consequential benefits for the said period to each of the Workmen.

(2.) BEFORE us, a feeble endeavor had been made by Mr. Kasturi, learned senior counsel for the appellant -Binny Mill Limited to contend that in actuality, no closure of the Mill had taken place. He sought to contend that the Workmen had left service of their volition from time to time, with the result that the workforce has now dwindled only to a few Workmen today. This contention has to be summarily rejected, in view of the notice dated 25.10.1988 issued by the appellants under Section 25FFA of the Industrial Disputes Act 1947 (hereafter referred to as 'the I.D. Act'). The said provision stipulates that an employer who intends to close down an undertaking shall serve, at least sixty days before the date on which the intended closure is to become effective, a notice on the appropriate Government, stating clearly the reasons for the intended closure of the undertaking. The focal issue is whether the provisions of Section 25 -0, which uncontrovertedly have not been complied with, should have mandatorily been adhered to by the appellant. This provision is reproduced for ease of reference: - 25 -0. Procedure for closing down an undertaking:

(3.) THE consequence of the failure on the part of the Management to adhere to the mandatory requirements of the provisions of Section 25 -0 of the Industrial Disputes Act has been elaborately considered in Oswal Agro Furane Ltd. and Another Vs. Oswal Agro Furane Workers Union and Others, JT (2005) 2 SC 260 . In particular, the Apex Court had to decide whether a settlement arrived at between the Management and the Workmen would obviate compliance with the provisions of Section -25 -O. Their Lordships clarified the law in these words: 15. A settlement within the meaning of. Section 2(p) read with sub -section (3) of Section -18 of the Act undoubtedly binds the Workmen but the question which would arise is, would it mean that thereby the provisions contained in Sections 25 -N and 25 -O are not required to be complied with?. The answer to the said question must be rendered in the negative. A settlement can be arrived at between the employer and Workmen in case of an industrial dispute. An industrial dispute may arise as regards the validity of a retrenchment or a closure or otherwise. Such a settlement, however, as regards retrenchment or closure can be arrived at provided such retrenchment or closure has been effected in accordance with law. Requirements of issuance of a notice in terms of Sections 25 -N and 25 -0, as the case may be and/or a decision thereupon by the appropriate Government are clearly suggestive of the fact that thereby a public policy has been laid down. The State Government, before granting or refusing such permission is not only required to comply with the principles of natural justice by giving an opportunity of hearing both to the employer and the Workmen but also is required to assign reasons in support thereof and is also required to pass an order having regard to the several factors laid down therein. One of the factor besides others which is required to be taken into consideration by the appropriate Government before grant or refusal of such permission is the interest of the Workmen. The aforementioned provisions being imperative in character would prevail over the right of the parties to arrive at a settlement. Such a settlement must conform with the statutory conditions laying down a public policy. A contract which may otherwise be valid, however, must satisfy the tests of public policy not only in terms of the aforementioned provisions but also in terms of Section -23 of the Indian Contract Act. 16. It is trite that having regard to the maxim "ex turpi causa non oritur action", an agreement which opposes public policy as laid down in terms of Sections 25 -N and 25 -0 of the Act would be void and of no effect. Parliament has acknowledged the governing factors of such public policy. Furthermore, the imperative character of the statutory requirements would also be borne out from the fact that in terms of sub -section (7) of Section 25 -N and sub -section (6) of Section 25 -O, a legal fiction has been created. The effect of such a legal fiction is now well known. (See East End Dwellings Co. Ltd. Vs. Finsbury Borough Council, Om Hemrajani Vs. State of U.P. and Maruti Udyog Ltd Vs. Ram Lal).