NAVBHARAT POTTERIES PVT LTD Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) The petitioner is a private limited company incorporated under the Companies Act, and is engaged in manufacture and sale of ceramic crockeries. The registered office and factory of the petitioner is situate at Sewree and the petitioner had employed about 200 workmen. On August 27, 1970 the service conditions of the employees were adjudicated by an award passed by the Industrial Tribunal presided over by Shri R.D. Tulpulet. A year after the date of the award, the workmen joined the union of Bombay Mazdoor Sabha and from the year 1972 onwards resorted to unfair labour practices, like indiscipline, go slow, assaults, etc. The Sabha submitted demand for revision of pay scales, dearness allowance, etc., and the demand was referred for adjudication to the Industrial Tribunal. The Tribunal did not give relief as the financial position of the petitioner was extremely precarious and it was not possible for the petitioner to bear the additional burden. As the workers failed to secure any benefits under the award, the workers left the Sabha and joined Bombay General Kamgar Union. The petitioner thereupon entered into a settlement on Nov. 3, 1980 with the Union, whereby a consolidated ad hoc increase of Rs. 2/- in the daily total emoluments was given to the workers with retrospective effect from August 1, 1980. After signing the settlement, the workers left Bombay General Kamgar Sabha and joined Maharashtra General Karngar Union led by Dr. Datta Samant. Thereafter again the workmen indulged in indiscipline and go slow tactics and refused to give the requisite production. The conduct of the workers right from the year 1972 onwards led to serious losses and put the petitioner in extremely hopeless financial position. The petitioner was required to borrow heavy loans from the financial institutions and Canara Bank, to whom the petitioner owed Rs. 30 lakhs, suggested to the Government of Maharashtra to treat the petitioner as a sick unit. The accumulated losses as on December 31, 1979 were to the tune of Rs. 58 lakhs.

(2.) On Nov. 27, 1979 the petitioner applied to the State Government under Section 36 of the Bonus Act for granting exemption for payment of bonus for the year 1978. Another application dated July 25, 1980 was filed for the identical purpose for the year 1979. The petitioner set out in detail the behaviour of the workers all along and the losses suffered by the petitioner and its inability to pay even the minimum bonus. The applications for the years 1978 and 1979 were rejected by the State Government and the decision was communicated to the petitioner by letter dated Oct. 1, 1981, a copy of which is annexed at Exhibit 'Q'. The petitioner thereafter filed a review application before the Minister for Industries, Energy and Labour, but the decision to reject the exemption applications was upheld and the decision was communicated to the petitioner by letter, dated Feb. 10, 1982, copy of which is annexed as Exhibit 'T' to the petition. In the meanwhile the Union had made demand for payment of 20% bonus and on failure of the conciliation proceedings, the State Government decided to refer the dispute for payment of bonus for the years 1978 and 1979 for adjudication to the Industrial Tribunal presided over by Shri Talathi. The reference order was made on Nov. 5, 1981. The petitioner, feeling aggrieved by refusal to grant exemption from payment of bonus for the years 1978 and 1979 and the action of making reference for adjudication of dispute to the Industrial Tribunal, filed the present petition under Article 226 of the Constitution of India in this Court on March 29, 1982. The learned single Judge by order dated April 22, 1982 granted rule only in respect of the prayer for setting aside the order of the Government refusing to grant exemption. The learned Judge also granted interim relief in respect of the order passed by the Government refusing to grant exemption. The learned Judge did not entertain the petition in respect of the challenge to the order of reference, but gave directions to the Tribunal to dispose of the reference by end of October 1982.

(3.) Shri Ramaswami, learned counsel appearing on behalf of the petitioner, challenged the action of the State Government in declining to grant exemption under Section 36 of the Bonus Act by submitting that the reasons given for rejecting the application clearly demonstrate non-application of mind. The Learned counsel also urged that the State Government has ignored the relevant factors and proceeded on totally unsustainable grounds. The learned counsel urged that the State Government completely ignored that exemption was granted to the petitioner for the years 1976 and 1977 and it was not in dispute that the financial condition of the petitioner has gone from bad to worse subsequent to the year 1977, There is considerable merit in the submission of Shri Ramaswami. The order communicated to the petitioner recites that in the opinion of the State Government it will not be in the public interest to grant exemption from payment of bonus and three reasons are set out in reaching that conclusion-