WORKERS OF N DESAI GOUNDER AND CO Vs. LABOUR COURT

JUDGEMENT

(1.) THIS la an application under Article 226 of the Constitution by twelve employees of a firm of merchants in Coimbatore town called Desai Gounder and Co. , against the receiver in charge of the business of Desai Gounder and Co. , for a writ of certiorari in quash the order of the labour court, Coimbatore, dismissing Industrial Dispute No. 67 of 1958. The facts of the case are the following: Desal Gounder and Co. , was a partnership, one partner of which filed a suit in the Court of the Subordinate Judge of Coimbatore, for dissolution of the firm. A preliminary decree for dissolution was passed on 3 April 1957, which directed dissolution of the firm as and from the date of the preliminary decree. In and by the preliminary decree, a receiver was appointed to carry out the directions in the decree which were mostly in the nature of winding up the business consequent upon the dissolution. The receiver, who took charge of the business, issued notices to the twelve employees concerned in this case terminating their services. Thereupon, one among the petitioners preferred an application under Section 33c (2) of the industrial Disputes Act before the labour court claiming retrenchment compensation under Section 25f of the Act. That application was dismissed by the labour court. Thereupon, the twelve employees approached the Government with a request for reference of the dispute to the labour court and the Government passed G. O. Me. No. 3155, Department of industries, Labour and Co-operation, dated 13 August 1958, whereunder they referred the dispute to the labour court for adjudication. The dispute was described in the Government order in the following terms; Whether the following twelve retrenched workers are entitled to any relief. . . to compute the relief, if any, awarded where it can be so computed.

(2.) THE labour court took the view that the reference was incompetent under Section 10 of the Industrial Disputes Act as the dispute in question was not an industrial dispute since the closure of the business was the result of the decree of the court and, therefore, unavoidable. Against that order the present writ petition has been filed.

(3.) MR. Ramachandran, counsel for the petitioners, contend that the closure of the business by reason of direction of the preliminary decree would not be closure for unavoidable reasons within the meaning of Section 25fff and, consequently, the retrenchment in this case would not be a retrenchment, as on closure of business. Section 2 (oo) no doubt defines "retrenchment" in very wide terms but the Supreme Court had to consider the scope of this definition in two oases in Pipraich Sugar Mills, Ltd. v. Pipraich Sugar Mills Mazdoor Union 1957-I L. L. J. 235 and in Hariprasad v. A. D. Divelkar 1957-I L. L. J. 243. In the latter case the undertaking of a railway company was taken over by the Government and consequently the railway company wound up its business and ceased to exist. The concerned workers of the railway company naturally lost employment. The question arose whether these workers lost employment as the result of retrenchment or whether the cause for their ceasing to be employed was outside the definition of retrenchment in Section 2 (oo) of the Act. The Bombay High Court expressed the view that the cause of cessation of employment fell within the definition of retrenchment in the section mentioned above in the industrial Disputes Act. Differing from this view the Supreme Court ruled thus at p. 252: For the reasons given above, we hold, contrary to the view expressed by the Bombay High Court, that retrenchment as defined in Section 2 (oo) and as used in Section 25f has no wider meaning than the ordinary, accepted connotation of the word; it means the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, and it has no application where the services of all workmen have been terminated by the employer on a real and bona fide closure of business, as in the case of Sri Dinesh Mills, Ltd. , or where the services of all workmen have been terminated by the employer on the business or undertaking being taken over by another employer in circumstances like those of the railway company.