FERTILIZER CORPORATION OF INDIA EASTERN MARKETING ZONE EMPLOYEES ASSOCIATION Vs. HINDUSTAN FERTILIZERS CORPORATION LTD

JUDGEMENT

(1.) RESPONDENT No. 1 Hindustan Fertilizer Corporation Ltd. , a Government of India undertaking (hereinafter referred to as the Corporation ) had 48 member work force, 7 officers and 41 workmen in its marketing division in Madhya Pradesh to market the produce of its fertilizer factories at Baroni, Durgapur and Namroop in Assam and West Bengal. The petitioner is a registered trade union representing the workmen of the said marketing division. Fertilizer is an essential commodity under the Essential Commodities Act requiring allocation order known as E. C. A. allocation issued by the Government for its movement. Probably because of considerations of economy in logistics, the Government of India has stopped such E. C. A. allocation to the Corporation in Madhya Pradesh since last 3 years. This necessitated the winding up of the marketing division in Madhya Pradesh and shifting of its staff to establishments of the Corporation out of M. P. On 7-6-1990 this decision was conveyed to the union representatives in a meeting held at Calcutta and reiterated in next meeting at Delhi. The minutes of the meetings are Annexures A, B and C. Representatives of the petitioner union informed the management in the Calcutta meeting that they will have no objection on their adjustments in other areas but impressed upon the need to explore alternatives to avert a closure which was bound to result in immense difficulties to the workmen who were mostly of Class III and IV in case of their transfer to far flung areas of the country. Petitioner's attempts at the political level to persuade Government of India to release E. C. A. allocation to the Corporation in M. P. to keep its marketing unit going did not yield any result. Ultimately the M. P. unit was closed down from 14-9-1990 and its 35 employees have been transferred to places out of M. P. vide Annexure-K which is sought to be quashed under Articles 226 and 227 of the Constitution of India.

(2.) PETITIONER's contention is that winding up of marketing unit in M. P. amounts to closure as defined in Section 2 (cc) of the Industrial Disputes Act (hereinafter called the Act ). Therefore, the Corporation was required to seek permission from the appropriate Government under Section 25-O of (he Act before the closure. Since no such permission was obtained and the procedure prescribed under Section 25-O was not followed, the closure is illegal and impugned order of transfer of its personnel is liable to be quashed. The closure has also been assailed on the ground of mala fides with a view to victimize the poor employees. It has been stressed that the affected employees are low-paid belonging to class 3 and 4, whose transfers in mid-session to places like Delhi, Patna, Lucknow etc. are bound to cause immense difficulties Although in the transfer orders it is stated that the marketing unit in M. P. is being closed down still some of the employees are transferred to Durg and Bhopal which shows mala fide intention on the part of the Corporation. Doubts have been expressed on the question of protection of seniority in the new set-up where they are transferred. In case they are given bottom seniority at the new place the same is bound to adversely affect prospects of their future promotion. Thus, the impugned transfer order is liable to be quashed being arbitrary and violative of Articles 14 and 16 of the Constitution of India. The petitioner has prayed besides quashing of the mass transfer order. Annexure-K, issuance of a writ in the nature of certiorari/mandamus directing the respondents not to close down its marketing unit in M. P. unless permission is obtained under Section 25-O of the Act, and a direction to the Corporation to prepare a policy in respect of seniority and promotion of the affected employees in consultation with the petitioner before taking any action in this behalf.

(3.) THE Corporation has raised the plea of alternative remedy. As per the Corporation the petitioners remedy lies in raising an industrial dispute under the Act. In fact at petitioners' instance conciliation proceeding has been initiated and is pending before the Asstt. Labour Commissioner, Raipur (Annexure R-2 ). The impugned order of transfer of employees having been passed under express condition of service that they may be transferred anywhere in India (sample service contract Annex. R-1) is not liable to be challenged in a writ petition. It has been denied that the mass transfer order is arbitrary. The petitioner is a public sector undertaking having its officers in districts and States throughout India. Due to non-grant of E. C. A. allocation by Government of India for nearly 3 years, there was no work for its marketing unit in M. P. Therefore, the Board of Directors took a decision to shift the marketing division office of M. P. The employees were given the option to go out of M. P. or to opt for voluntary retirement with retirement benefits. Though the Corporation had absolute right to transfer these employees for gainful utilization of their services to any part of India according to their service condition, yet with a view to maintain goodwill the union representatives and the workmen were told individually to accept a place where they desired to be posted. All this was done to obviate the necessity of retrenchment of workmen. In June 1990, 2 workmen have opted for voluntary retirement and they have left services after taking retirement benefits. Two widows and one driver were accommodated at Bhopal and Durg on grounds of hardship. 7 have accepted posting in union territory of Delhi and only 22 are left out to be accommodated. In fact the work men have been relieved by order dated 14-9-1990 as per relieving order Annexure R-4. The Corporation went to Supreme Court to challenge the ad interim writ and the Supreme Court was pleased to dispose of S. L. P. on 24-1-1991 with a direction to this court to dispose of the matter by the end of April, 1991 (Annexure R-5 ). Shri Sorabji learned counsel for the Corporation before the Supreme Court had indicated that the remaining 22 workmen may disclose their preference for place of transfer and the Corporation will consider the same. In terms of this undertaking the Corporation offered to accommodate the remaining 22 workmen in the adjoining State of UP. However, this offer has been turned down by the petitioner. The Corporation contends that Section 25-O of the Act is not applicable to the present case because the services of the employees are not being terminated and therefore it is not a case of closure. Shifting of business from one place to another as is being done in this case does not amount to closure. The Corporation has no option but to shift its marketing unit of M. P. elsewhere because there was no work for the employees on account of non-grant of E. C. A. allocation. It has been contended that provisions of Section 25-O of the Act will not be attracted because the number of workmen serving in M. P. unit is less than 100. Section 25-O read with Section 25-L and 25-K falls under Chapter VII-B of the Act. Provisions whereof are not applicable to an industrial establishment employing less than 100 workmen on an average per working day for the preceding 12 months. The Corporation in para 4 of its additional return has stated that seniority of workmen being transferred will be fully protected.