DHIRENDRA SINGH BHADHORIA Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) THIS is a writ petition under Articles 226 and 227 of the Constitution of India for quashing the order dated 29-1-2001 (Annexure P-14) issued under Section 25-O (7) of the Industrial Disputes Act, 1947 (hereinafter to be referred to as 'the Act') and also the orders dated 31-3-2001 by which the petitioners have been retrenched.

(2.) IT is not in dispute that respondent No. 3 M. P. Leather Development Corporation Limited was incorporated as a Company in the year 1981 under the Companies Act, 1956 and it was being financed by the State Government. The payment of salary of the employees was being made from the funds received from the Government. The financial condition of this Corporation from the very beginning was not very sound. It was incurring heavy losses. There was a Cabinet decision of the State Government on 11-3-1998 to close and wind up this Corporation. Accordingly the Board of Directors of the Corporation took a similar decision on 2-6-1998. The Finance Department of the Government by the letter dated 26-8-2000 (Annexure R-3-1) asked the Corporation to discontinue the business operation and by this letter a Voluntary Retirement Scheme was floated, so that the employees do not suffer as a consequence of closure. Some of the employees opted for this Scheme. There were others who did not. The number of employees of the Corporation was more than 100 and therefore the provision of Section 25-O of the Act was attracted. An application dated. 11-12-2000 (Annexure P-4-a) under Section 25-O (7) of the Act was submitted by the Corporation before the State Government for exemption from the provision in Section 25-O (1) of the Act. It was dealt with by the Labour Department. After hearing the Managing Director of the Corporation and the Union of the Employees the impugned order dated 29-1-2001 (Annexure P-14) was passed by the Government. The poor financial condition of the Corporation was dealt with at length. It was found that the State Government during ten years from 1991-92 to 2000-01 provided an amount of Rs. 398. 03 lacs to the Corporation and still it has not become a viable undertaking. It was stated that there was already a policy decision by the Government to wind up this Corporation. For the reasons given in the order the Corporation was exempted from the provision in Section 25-O (1) of the Act. However, no period as required by sub-section (7) was specified in this order. After obtaining the exemption from Section 25-O (1) of the Act, the Corporation has retrenched many of the employees who did not avail of the Voluntary Retirement Scheme.

(3.) THERE are 41 petitioners in the present case. They were the employees of the Corporation. They have not availed the VRS. They have challenged the 'closure' of the Corporation and their retrenchment. According to them there were no 'exceptional circumstances' within the meaning of the words used in sub-section (7) of Section 25-O to enable the Government to grant the exemption. It is also stated that this exemption could be "for such period as may be specified in the order" and as no such period was specified in the order dated 29-1-2001 the exemption is not according to law. The 'closure' is said to be illegal as no permission for closure was obtained under Section 25-O (2) of the Act. There was no enquiry and there was no finding with regard to "genuineness and adequacy of the reasons" for permitting the closure.