KHEM CHAND AND OTHERS Vs. STATE OF HARYANA

JUDGEMENT

(1.) This writ petition has been preferred by 62 workmen, who are aggrieved by the order dated 09.08.2002 (Annexure P-12) passed by the State of Haryana granting permission to respondent No. 2-M/s Whirlpool of India Limited, Faridabad, under Section 25-O of the Industrial Disputes Act, 1947 to close down its 'Evaporator Section', and order dated 17.01.2003 (Annexure P-16), vide which the Review Petition preferred by The Whirlpool of India Employees Union (Regd.) against the order dated 09.08.2002 stands rejected. Apart from praying for quashing of the above two orders, the petitioners have also sought quashing of the order in the form of notice dated 13.08.2002 (Annexure P-9) informing the workmen of the evaporator Section about the order dated 09.08.2002 (Annexure P-12) leading to the termination of the services of the petitioners-workmen.

(2.) Respondent No. 2-M/s Whirlpool of India Limited, Faridabad, took over Kelvinator of India Ltd. in the year 1996 and continued to manufacture the same products. According to the Company, it was running into losses and, therefore, had to introduce new technology to compete with other companies who were producing these products and to bring down the cost of production, had to reduce the manpower by introducing the Voluntary Retirement Scheme. Despite cutting down the manpower, the Company could not break even its expenses and accordingly, the Compressor Division was transferred to M/s. Tecumesh on 'as is where is' basis without affecting the terms and conditions of the employment of the employees. The Plastic Division was transferred to M/s. Brite Brothers in the year 2001 because of the fact that the technology with regard to manufacture of plastic components used in the refrigerators had undergone a sea change and the Company was not in a position to meet with the requirements of fixing quality components of plastic, which were used by the other competitors in the market.

(3.) The Company while manufacturing the refrigerators was using clinch tube type evaporators. With the change in technology world-wide in respect of the conventional evaporators, roll bond evaporators were introduced, which were much more economical, efficient and consumed less energy. The competitors of the Company switched over to the said technology and were, therefore, having an edge over the Company-respondent No. 2. Apart from this, another compelling circumstance for use of roll bond evaporators was that as per The Montreal Convention, 1987, on Environment, to which India was one of the participants, had emphasized that gases which tend to deplete ozone layers in the atmosphere should not be used. The Government of India, accordingly, framed the Ozone Depleting Substance (Regulation and Control) Rules, 2000 (hereinafter referred to as 'Rules, 2000') under the Environment Protection Act, 1986, in which the use of gases, which tend to deplete the ozone layers, was prohibited. The conventional clinch tube type evaporators, which were being manufactured by respondent No. 2-Company, used gases which tend to deplete ozone layers and were now prohibited under the Rules, 2000. As per these Rules, this prohibition was to come into effect from the end of 2002 and before that the use of these gases was required to be stopped by the manufacturers of refrigerators. Taking into consideration all these factors, respondent No. 2- Company decided to switch over to the use of roll bond evaporators in the refrigerators. As it did not have the necessary expertise to manufacture the roll bond evaporators in its factory, it decided to purchase the same from outside sources. Another aspect, which forced the Company to take this step, was that the roll bond evaporators had been designed and manufactured by M/s. EAR Canal SA Pvt. Ltd., Spain, which had got the design patented under the law. All other competitors of respondent No. 2-Company in India in the refrigerator industry were purchasing the said evaporators from this very Company. The effect of this decision was that the entire machinery already lying in the Evaporator Section was rendered redundant except that it had to be sold as scrap. Over and above, it required an expenditure of Rs. 8 to 9 crores in the infrastructure for fixing the roll bond evaporators purchased from outside to be fitted in the refrigerators manufactured in the factory of respondent No. 2. Under these compelling circumstances, a decision was taken to close down the Evaporator Section to keep itself afloat in the cut throat competitive market adhering to and complying with the requirement of the statutory provisions. Therefore, an application for seeking permission to close down the Evaporator Section was moved to the appropriate Government i.e. Government of Haryana under Section 25-O of the Industrial Disputes Act, 1947.