- (1.) The facts arising in the case which led to the present dispute are in brief as follows: The respondent-company [respondent no. 2 herein] was formed in the year 1982 with the object of rendering computer services to its customers relating to collection and maintenance of information and to develop company software application to suit the special requirements of the customers; that in March 1983, the second respondent set up a data processing division which undertook data processing services such as preparation of pay rolls, financial accounting and inventory control related statements; that subsequently there was a decline in the demand for the services of the data processing division of the second respondent on account of availability of indigenously manufactured computer and in the year 1989, the division became non-viable and, therefore, the second respondent was forced to close down the same. As on 4/1/1989, 46 persons were employed in the data processing division and they were informed of the decision to close down the unit. On 30/1/1989, a notice under Section 25 FFA of the Industrial Disputes Act, 1947 [hereinafter transferred to as 'the ID Act'] was sent to the State Government intimating the Government that the data processing operations would be closed down with effect from 3/4/1989. The services of the workmen in the data processing division were terminated on account of closure of the unit and by October, 1989, the software division of the second respondent also was closed and the services of 71 workmen had been terminated after paying the closure compensation in terms of the provisions of the ID Act.
(2.) Disputes were raised which were referred to the labour court on the question whether the closure of the data processing division rendering the appellants unemployed is justified or not. Before the labour court, three issues were raised, viz. , [i] whether the second respondent establishment is a factory; [ii] whether on the date of closure of the establishment, the second respondent was employing more than 100 workmen requiring protection from the specified authority for closure of the establishment; and [iii] to what relief the workmen are entitled to.
(3.) Before the labour court, it was contended on behalf of the second respondent that it manufactures software and thereafter sells the same and, therefore, it is not an establishment as defined under Section 25l of the ID Act, much less a factory as defined under Section 2 (m) of the Factories Act, 1948 [hereinafter referred to as 'the Act'] and, thus the dispute referred to the labour court cannot be an industrial dispute in terms of Section 2 (a) of the ID Act. The labour court overruled the objections raised by the second respondent and held that the ID Act covers the establishment of the second respondent and directed reinstatement of the workmen with back wages. The labour court also rejected the argument that the second respondent is not a factory; that the second respondent employed more than 100 persons at the time the services of the workmen were terminated and was, therefore, required to comply with the provisions of Chapter V-B of the ID Act inasmuch as prior permission of the State Government had not been obtained as required under Section 25-0 of the ID Act; that the closure was unjustified; that the establishment of the first respondent and the second respondent are interconnected as they belong to the same group of companies.;