MADRAS LABOUR UNION Vs. BINNY LTD

JUDGEMENT

(1.) THE facts which are not in dispute can be briefly stated as follows : The Buckingham and Carnatic Mills is more than a century old and it has been working at Perambur in the city of Madras for the last 119 years. Till recently, it has been one of the biggest textiles mills in the whole of Asia, having an installed spindleage capacity of 88,208 spindles, of which 79,072 were utilised. It had an installed loom capacity of 2,074 looms out of which 1,816 looms were utilised. It has a "dye house" or "processing house" and a central power station. It forms part of a company by name Binny Ltd. incorporated under the Companies Act in 1969 by amalgamation of the Binny group of companies comprising Buckingham and Carnatic Co. Ltd. , Bangalore Woollen, Cotton and Silk Mills Company (BWM), Binny and Co. Ltd. and Binny Engineering Works Limited together with two associate companies, viz. , Madura Co. P. Ltd. and the Ganges Transport and Trading Co. Ltd. Their activities are broadly organised under four divisions, viz. , the textile division comprising B and C Mills at Madras and BW Mills (BWM) at Bangalore and a silk mill at Bangalore, the engineering division at Madras mainly engaged in manufacture of sugar mill and rice mill machinery and heavy structures, the service division which is an amalgam of the erstwhile Madura Co. Pvt. Ltd. and Binny and Co. Ltd. dealing with procurement and marketing of engineering and textile products, shipping clearing/forwarding agents and the real estate division at Madras engaged in development of real estate properties owned by the company. The management filed in December, 1990, an application under section 25-O of the Industrial Disputes Act, 1947, hereinafter referred to as "the I. D. Act". seeking permission of the competent authority to close down the mills. The reasons stated by the management were low productivity, excessive work force and non-co-operation of the workers. A reference was also made to a scheme furnished by the Industrial Development Bank of India, hereinafter referred to as "the IDBI", for rehabilitation which suggested shifting of the process house to Bhuvanagiri in South Arcot district. The application was opposed by the Madras Labour Union, the petitioner herein. After hearing the parties, the Commissioner of Labour, who was the authority under section 25-O of the Industrial Disputes Act, passed an order on February 8, 1991, finding that the reasons adduced by the management were genuine and adequate, but holding that there was no justification for imminent closure. The Labour Commissioner observed that it was not beyond the control of the management to convince workers and enter into an amicable settlement for shifting of the process house to Bhuvanagiri, within a reasonable time frame and with the whole hearted support of the workers the process could be carried out.

(2.) AGGRIEVED by the said order, the management filed W. P. No. 5102 of 1991 in this court challenging the correctness of the same. The mill was also closed with effect from April 1, 1991. On April 23, 1991, this court appointed a former Chief Justice of this court as Commissioner to decide the questions whether for a proper and viable working of the mills, the proposal to shift the processing house was justified and any measure to protect the interest of the workmen will be required to be taken by the management and whether shifting of the processing house to Bhuvanagiri will cause prejudice to the Workmen. The commission submitted its report stating that in the absence of certain documents called for from the IDBI, which were not placed before it, it was difficult to hold that the shifting of the process house from Perambur to Bhuvanagiri was the only viable proposal. The commission, however, expressed that it did not draw any adverse inference and it left the matter to the opinion of the court as to whether an adverse inference should be drawn by the non-production of the documents by the IDBI. On the second part of the first question, the commission referred to the stand taken by the management that no permanent worker would be retrenched or compelled to go to Bhuvanagiri and said that the management as well as the representatives of the IDBI and SBI must be equally bound by the said assurance. The commission also recorded the assurance given by the management's counsel that the permanent employees will not be retrenched or asked to go to Bhuvanagiri in the event of shifting to Bhuvanagiri and the same will apply to trainees who had been working for about eight years. The commission said that the undertaking and commitment made by the management in the case of permanent workers would apply to the trainees who had completed three years or who will be completing three years as mentioned therein. The commission expressed its opinion that difficulty of water, difficulty in obtaining requisite quantity and quality of coal and electricity and flash flood and disposal of effluents could be solved and sorted out. On the second question, the commission said that the shifting of the processing house to Bhuvanagiri would cause prejudice to the interests of the workmen and there was a risk of their losing hearth and home in Madras.

(3.) AFTER the receipt of the report of the Commissioner, there was an attempt by the court to bring about an amicable settlement between the management and the union, but in vain. The court proceeded to pass its final order in the writ petition on the merits on September 27, 1991. The court recorded in the judgment that the IDBI had agreed to reconsider its earlier proposal and submit a fresh scheme for rehabilitation. It was also recorded that the management agreed unconditionally to accept any revised proposal which may be made by the IDBI; but the union was not willing to do so and it expressed some reservations. The court found on the merits that the order of the Labour Commissioner was not in accordance with the law as he had failed to take into account certain essential factors and some relevant materials. In that view the court allowed the writ petition and directed the Labour Commissioner to reconsider the application filed by the management for closure and pass fresh orders. The court directed the IDBI to submit its report to the Labour Commissioner as early as possible and fixed the outer time limit therefor.