SUNIL AMBWANI, J. - (1.) I .O.L. Ltd. is a company registered under Companies Act, 1956 with its registered office at Oxygen House P -43, Taratala Road, Calcutta. One of the establishment of the company is situate at North Factory Area, Off. Kalpi Road, Kanpur. Petitioner Nos. 2 to 13 were Directors and Officers of the company and petitioner No, 1.3 is the General Manager, Northern Region and have challenged notices Issued dated January 17, 1991, by Additional Labour Commissioner, U. P., Kanpur Region, Kanpur, Under Section 25R of the Industrial Disputes Act, 1947 (in short. Central Act), to show cause as to why petitioners may not be prosecuted for violating the provisions of Section 25O of the Central Act by declaring closure of Its establishment on 10.1.1994 without seeking permission of the State Government.
(2.) THE facts stated in the writ petition are that the unit at Kanpur was engaged in production and distribution of Oxygen Dissolved Acetylene Gases with its Sales Depot at Lucknow. The establishment at Kanpur became uneconomic for several years, and its viability suffered serious setback. The workmen had demanded change in the method of calculation of dearness allowance and its Increase. The matter was adjudicated by the Industrial Tribunal and went up to the Supreme Court. It was pleaded before the Supreme Court that it should give a formula in accordance with which the Kanpur cost living index may be converted into All India Consumers price Index -Simla series. The Supreme Court gave a formula on the basis of which the amount should have been calculated. The company calculated it in accordance with said formula, which was challenged in a contempt application before the Supreme Court. At the hearing the Supreme Court suggested that it being a case of Implementation of award of Industrial Tribunal which was upheld up to the Supreme Court with certain modifications, the workmen should make application under Section 33C(2) of the Central Act to get their claims computed in terms of money. Thereafter workmen appeared before the Labour Court, Kanpur. which passed certain orders against which petitioners came to the High Court and thereafter went to Supreme Court where it was agreed that the controversy may be decided by Mr. Justice O. Chinnappa Reddy. He upheld the order of the labour court. The review application of the orders of Mr. Justice O. Chinnappa Reddy was not accepted, The company found that the award made with retrospective effect, i.e. w.e.f. 1st April. 1977, favours payment of arrears exceeding Rs. 4 crores to the workmen at Kanpur establishment. The company is alleged to have borrowed at considerable rate of interest to discharge the enormous liability in October, 1990. The impact of clearness allowances caused staggering losses and the revised dearness allowances as determined by award caused burden on the company making the establishment at Kanpur unvlable. In order to save future of about 5,000 employees at its other units in the country the company decided to close the establishment at Kanpur and Lucknow. A notice dated 7.11.1990 was served upon the State Government with statement of reasons for closure of the factory at Kanpur with effect from 10.1.1991. It is alleged in paragraph 13 at that time the establishments at Kanpur and Lucknow were employing 156 employees. The notice was under Section 25FFA of the Central Act. The second paragraph of this notice stated, that it is given as a measure of abundant caution without prejudice to their right contentions, notwithstanding the fact that no such notice is contemplated under the provision of U. P. Industrial Disputes Act, 1947 (in short. State Act).
(3.) AFTER hearing the aforesaid notice the company terminated the services of its employees who were on permanent rolls on 10.1.1991, and it is alleged that full retrenchment composition and wages in lieu of one month's notice was paid to them. Thereafter the factory was closed down permanently with effect from 10.1.1991 with only 61 employees remaining, out of 156 employees, as rest of the workmen had taken voluntarily separation on their own accord under the companies voluntarily separation scheme. Before the closure was effected the State Government called the parties for discussion on 7.11.1990, and that by notice dated 5.1.1991, the State Government Informed that on the declaration of the number of employees in its notice dated 7.11.1990 which were stated to be 156, the closure under Section 25O of the Central Act with effect from 10.1.1991 was unlawful. The company replied on 7.1.1991, seeking reasons for declaring the closure to be unlawful. The State Government once again informed the Plant Manager of the company that the action of closure is illegal and the workmen are opposed to it. Thereafter show cause notices were issued by the Deputy Labour Commissioner for prosecution of the Directors and Plant Manager under Section 25R of the Central Act.;