CHINNAPPAN H Vs. KALEESWARAR MILLS LTD

JUDGEMENT

(1.) THIS petition is filed for quashing the order of the presiding officer, labour court, Coimbatore, dated 17 December 1969, holding that the inability of the management of Kaleeswarar Mille, Ltd. , Coimbatore, to give work to the petitioner and the other workers from 18 August 1958 to 31 October 1959, would not amount to lay-off.

(2.) THE Kaleeswarar Mills, Colmbatore, was closed on 8 December 1953, and was reopened on 12 November 1969. It is the contention of the petitioner that there was no closure but only a lay-off during the period in question. The Kaleeswarar Mills, Coimbatore, was running at a loss. The balance sheet, Ex. M. 5. for the year ending with 31 December 1967, showed a loss of Rs. 6,43,765, and the balance sheet, Ex. M. 6, for the year ending 31 December 1958, showed a loss of Rs. 15,21,768. The total loss for the years 1957 and 1958 had amounted to Rs. 22. 75,743. The auditor, who went into the affairs of the mills submitted a report, Ex. M. 32, on 19 May 1958. in the report the auditor pointed out that the proposal to work the factory adopting the lay-off was not advisable, as there would be an additional loss of Rs. 3,47,356. The report pointed out that any decision to keep on the master roll the workmen found therein would only increase the burden of compensation of gratuity payable to them if and when their services were terminated. It was suggested that the only course open to the authorities of the company was the immediate closure of the factory for saving their losses the management considered the auditor's report on 30 July 1958, and resolved, taking into consideration the nine reasons set out in the resolution, to have the factory closed " for the present " on and from 4 August 1958. It also further resolved that the board of directors would review the situation from time to time and if thought fit would reopen the factory as and when the situation improved. It was further resolved to intimate the council of administrators appointed by the High Court in Original Petitioner No. 113 of 1957 about the closure so as to enable them to take step if thought fit to avert the impending closure or reopen the undertaking as early as practicable. In purnunnce of this resolution a notice, Ex. M. 4, was put on the notice-bnard of the Kileeswarar Mills on the same data. It declared that the directors had resolved to close down the factory " for the present" and accordingly the factory would remain closed from 13 August 1959, and that the directors would review the situation from time to time and If thought fit reopen the factory if and when the situation Improved. The workers of the mills protested against the closure of the mills and by their notice, Ex. M. 10, dated 13 August 1958, contended that the closure of the mills was illegal and demanded the immediate reopening of the mills.

(3.) IT was contended by the learned Advocate-General on behalf of the petitioners that on the facts there could have been no closure of the mills but only a lay-off. It was submitted that there was no termination of the employer-servant relationship and that the petitioner and others continued to be in the master-rolls of the mills after the data of the alleged closure. The resolution, Ex. M. 3, and the notice, Ex M. 4, were strongly relied upon in support of the contention that there was only a lay-off and not a closure. It was submitted that the resolution itself made it clear that the factory would remain closed for the present and that the factory board of directors would review the situation from time to time and If thought fit reopen the factory as and when the situation improved. The notice, Ex. M 4, also stated that It was resolved to close down the factory for the present and that the factory would remain closed and the directors would review the situation from time to time and of thought fit reopen the factory if and when the situation improved. On a readirg of Exs M. 3 and M 4 it was submitted that the intention of the management was not to close the mills either permanently or temporarily but to stop the business for the time being, which would not amount to closure. On the facts this contention cannot to upheld, for it is clear from the auditor's report that the affairs of the company ware gone into in detail by the auditor, and it was noted out to the management that a lay-off would not be the remady as it would involve the company in a farther lose of about Rs. 3,50. 000 and that the only course to adout was the immediate closure of the mills for the purpose of saving their losses. The company considered this report and accepted the recommendation of the auditor and directed the closure of the mills. In directing the closure, the company mentioned that the factory was to be closed down for the time being and that the management would review the situation from time to time and if thought, fit reopen the factory if and when the situation improved. From the mare fact that the directors mentioned that the factory would be closed for the time below, it cannot be said that there was no closure permanently or temporarily for the time being, I am satisfied on a reading of the meterial documents that what the company intended was to close the business, at the same time hoping that matrers would improve to foliate the reopening of the mills.