S. Padmanabhan, J.
1. The petitioner is a public limited company which is an industrial establishment satisfying the requirements of Section 25K of the Industrial Disputes Act, 1947. Permission sought for by the company under Section 25O(1) of the Industrial Disputes Act, 1947, for closure was refused by the Government under Sub-section (2). Exhibit P-6 is copy of the order dated January 17, 1990. Exhibit P-7, review petition, was filed under Sub-section (5) of Section 25O on February 3, 1990. Complaining that the petition was not disposed of, the petitioners moved Original Petition No. 3721 of 1990 for compelling the Government to pass orders on Exhibit P-7. The original petition was allowed by the original of Exhibit P-8 judgment. Subsequently, at the instance of the Company itself, the Government passed Exhibit P-9 order referring the matter to the Industrial Tribunal. By Exhibit P-10 award, the Industrial Tribunal rejected the application holding that there are no grounds for reviewing the decision. Thus, permission to close down the establishment stands rejected. Prayers in the Original Petition are: (1) to strike down Section 25O as unconstitutional, (2) to quash Exhibit P-10 Award of the Industrial Tribunal, and (3) to direct the State to grant permission for closure.
2. On a reference under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, the Board for Industrial and Financial Reconstruction under Exhibit P-l proceedings declared the company as a sick unit. Huge recurring loss consequent on non-availability of raw materials, increase in wages, etc., coupled with the alleged refusal of the Government in giving a helping hand are the reasons in support of the prayer. These reasons were denied and it was alleged that the attempt to close the company is mala fide with ulterior motive. By Exhibit P-6 order and Exhibit P-10 award the grounds alleged were found unreal, insufficient and mala fide. The petitioners would say that the reasons alleged in Exhibits P-6 and P-10 for refusal are not proper. Exhibit P-10 is also said to be in excess of the powers of the Industrial Tribunal. Section 25O of the Industrial Disputes Act, 1947, is alleged to be violative of Articles 14 and 19(1)(g) of the Constitution. These grounds are also denied.
3. The first question for consideration is whether Section 25O is unconstitutional on the ground that it violates Articles 14 and 19(1)(g). If that contention is found in favour of the petitioners, the other questions may not arise. In order to consider that question certain other factors also may be relevant. In the year 1957, Section 25FF was amended in order to make a provision for payment of compensation to workmen in case of transfer of the undertaking and a further provision was made in Section 25FFF for payment of compensation in cases of closing down of undertakings. When an undertaking is closed down, every workman in continuous service for not less than one year shall be entitled to get notice and compensation in accordance with Section 25F as if the workman has been retrenched. Compensation under Section 25F shall be equivalent to fifteen days average pay for every completed year of continuous service or any part thereof in excess of six months. But the proviso to Section 25FFF(1) says that when the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workman under Section 25F shall not exceed his average pay for three months. Explanation to Section 25FFF(1) provides that an undertaking which is closed down by reason merely of (1) financial difficulties including financial loss, or (2) accumulation of un-disposed of stocks, or (3) expiry of the period of lease or licence, or (4) exhaustion of the materials when the undertaking is engaged in mining operations, shall not be deemed to have been closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso. The Explanation has application only in respect of the quantum of compensation. If the undertaking is closed down without permission, the closure shall be deemed to be illegal under Section 25O(6) and the workmen shall be entitled to all the benefits as if the undertaking had not been closed. Thus, there are three different provisions in three different contingencies having a bearing on the question of benefits due to the workmen on closure.
4. Section 25-O is applicable only to big industrial establishments coming within the ambit of Section 25K. But Sections 25F, 25FF, 25FFA, 25FFF, etc., are applicable to Section 25O also as Section 25A indicates. An employer who intends to close down the establishment must apply in the prescribed manner 90 days in advance stating clearly the reasons and serving copies simultaneously on the representatives or the workmen in the prescribed manner. The Government will have to make due enquiries on the application giving reasonable opportunities of being heard to the employer, the workmen and all persons interested in the closure. In considering the application, the Government must have due regard to the genuineness and adequacy of the reasons, interest of the general public and all other relevant factors and reasons will have to be recorded in the order while granting or refusing permission. Copy of the order will have to be communicated to the employer and the workmen. If copy is not so communicated within 60 days from the date of application, permission shall be deemed to have been granted. The Government can suo motu or on application review the order or refer the matter to the Industrial Tribunal. The order will have life only for one year. On a reference, the Tribunal will have to pass award within 30 days. Without the required permission, closure will be illegal and subject to the penalty under Section 25R. In exceptional cases, power is given to the Government to exempt undertakings from the provisions of the sections for specific periods. The right of workman to receive compensation under Section 25F is reserved. These are the salient features of Section 25O, as amended in 1982, consequent on the decision rendered by the Supreme Court in Excel Wear v. Union of India (1978(II) LLJ 527). If the Explanation to Section 25-FF(1) is applicable, reduced compensation alone need be paid.
5. Section 25O, before it was amended by the Act 46 of 1982, which came into force in 1984, was in a different form. The Constitutional validity of the unamended Sections 25O and 25R came up for consideration in that decision. It was declared that the unamended Section 25O as a whole and Section 25R, in so far as it relates to awarding punishment for infraction of the provisions of Section 25O, are Constitutionally bad and invalid for violation of Article 19(1)(g). The unamended Section 25O only provided for ninety days' notice stating the reasons (without assigning what the reasons are) and said that the Government may if it is satisfied that the reasons are adequate and sufficient (without any guidelines or time limit) or such a closure is prejudicial to the public interest, by order direct the employer not to close down the undertaking. Other provisions are also there.
6. The contention of the petitioners is that all the infirmities in the unamended section as pointed out by the Supreme Court in Excel Wear's case (supra) for striking it down are there even now and hence the amended section is also violative of Article 19(1)(g). The respondents stoutly denied this fact and said that Section 25O as amended corrected all the infirmities pointed out by the Supreme Court and hence the amended section is perfectly Constitutional. A Constitution Bench of the Supreme Court in the decision in Hathising Mfg. Co. Ltd. v. Union of India (1960-II-LLJ-l) upheld Section 25FFF(1), the proviso and the Explanation as not violative of Articles 14, 19(1)(g) and 20 of the Constitution. That means, when an undertaking is closed down for any reason, every workman having continuous service for not less than one year shall be entitled to notice and compensation as provided in Section 25F and if it is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation under Section 25F(b) shall not exceed the average pay for three months and four conditions in the Explanation by themselves without anything more shall not be deemed to be unavoidable circumstances beyond the control of the employer.
7. After the amendment of Section 25-O consequent on the decision in Excel Wear's case (supra), there was no occasion for the Supreme Court to pronounce on the Constitutional validity of amended Section 25-O. Decisions were rendered by various High Courts. A single Bench of the Karnataka High Court struck down the amended Section 25-O as unconstitutional in the decision in Stumpp, Schuele and Somappa Ltd. v. State of Karnataka (1985-II-LLJ-543). But that decision was reversed in appeal by a Division Bench in Union of India v. Stumpp Scheule and Somappa Ltd. (1989-II-LLJ-4) holding that sufficient changes were made in the amended section justifying its validity. But, on behalf of the petitioners, it was pointed out that the decision is now pending appeal before the Supreme Court. Another single Bench of the Allahabad High Court in Jay Shree Tea and Industries Ltd. Industrial Tribunal (1991-II-LLJ-159) also struck down Section 6-W of the U.P. Industrial Disputes Act, which corresponds to Section 25-O of the Act in question holding that Parliament was not able to remove the basis upon which the Supreme Court in Excel Wear's case (supra) took the view that the old Section 25-O imposed excessive and unreasonable restrictions within the meaning of Article 19(6) of the Constitution. The decision said that even under the present Section 25-O, an employer can be compelled not to close down his undertaking in spite of the fact that both from the point of view of security and finance it will be impossible for him to do so and he can still be compelled to pay minimum wages to the employees even though he is not capable of doing so. The decision went on to say that even now he can be compelled to carry on his business on pain of being completely ruined and eventually annihilated and the Legislature has not given a thought to the via media evolved by the Supreme Court in resolving the conflict between the interest of the employer and the interest of the labour in the event of the closure of an undertaking by providing for a graded compensation or different slabs of compensation to meet different situations. But that decision was rendered mainly on the reasoning given by the single Bench in Stumpp, Schuele and Somappa Ltd. v. State of Karnataka (1985-II-LLJ-543) (supra) without noticing the Division Bench decision in Union of India v. Stumpp, Schuele and Somappa Ltd. (1989-II-LLJ-4) (supra) which reversed it. Another single Judge of the Calcutta High Court also in the decision in Maulins of India Ltd. v. State of West Bengal (1989-II-LLJ-400) struck down amended Section 25-O. That decision is also said to be pending appeal. A Full Bench of the Delhi High Court in the decision in D.C.M. Ltd. v. Union of India (1989-II-LLJ-250) upheld the Constitutional validity of amended Section 25-O and said that in considering the reasonableness of the restrictions imposed by the section one has to bear in mind the Directive Principles of State Policy in furtherance of which it was enacted.
8. Excel Wear v. Union of India (supra) which struck down the unamended Section 25-O itself, felt pp.536-542 of (1978-II-LLJ-527) that the two extreme contentions raised on behalf of the employer and the employees cannot be accepted. One cannot be compelled to start a business. That is just like the freedom of speech, freedom to form associations or freedom to acquire or hold property. Under no circumstance, a person could be compelled to speak, to acquire property or to form association. But, by imposing a reasonable restriction, he can be compelled not to speak, not to form association or not to acquire or hold property. As held in Cooverjee B. Bharucha v. Excise Commissioner AIR 1954 SC 220 and Narendra Kumar v. Union of India AIR 1960 SC 430 total prohibition of business is possible by putting restrictions which are reasonable within the meaning of Article 19(6) on the right to carry on business. But, as pointed out in Narendra Kumar v. Union of India (supra) the greater the restriction, the more the need for strict scrutiny by the Court. In applying the test of reasonableness, the Court has to consider the question in the background of the facts and circumstances under which the order was made, taking into account the nature of the evil sought to be remedied by such law, the ratio of the harm caused to the individual citizens by the proposed remedy and to the beneficial effect reasonably expected to result to the general public. Whether the restriction caused by law is what is more than necessary in the interest of general public is also a matter that has to enter the judicial verdict.
9. Right to close down the business is an integral part of the right to carry it on. At the same time, the right to close down cannot be equated with the right not to start or carry on a business. The extreme proposition canvassed on behalf of the employers was thus rejected. So also, the extreme position put forward on behalf of the labour unions that the right to close down is not an integral part of the right to carry on a business, but it is a right appurtenant to the ownership of the property or that it is not a fundamental right was also rejected. Right to close down was also accepted as a fundamental right, embedded in the right to carry on any business guaranteed under Article 19(1)(g). But the right to close down was held to be not an absolute right. It can be restricted, regulated or controlled by law in the interest of the general public. That is the law laid down by the Supreme Court in that decision. In a State-owned undertaking, the Government or the Government company is the owner. If they are compelled to close down the undertaking, they may protect labour by several other modes. But in a private sector, the position may be different. But there also even though the business is run for the profit of the employer, it has a bearing on the growth of the national economy. Therefore, it is only proper that the law could provide for measures to prevent reckless, unfair, unjust or mala fide closures.
10. The decision in Excel Wear v. Union of India (supra) struck down Section 25-O not merely on the ground that the restrictions are unreasonable within the meaning of Article 19(6), but also because the procedural safeguards were not there. Section 25-O did not require giving of reasons in the order refusing permission. Even when the reasons given are correct, permission should have been refused if they were not considered adequate or sufficient. It was not necessary to give reasons. The Government was not enjoined to pass an order under Sub-section (2) within the period of 90 days' notice. An unreasonable order was possible because of the unreasonableness of the law. There was no provision for review or correction of the order. In the absence of guidelines to the authority granting or refusing permission, it could have whimsically and capriciously refused permission to close down even in genuine cases, simply stating that the reasons for closure are 'not adequate and sufficient or such closure is prejudicial to the public interest'. On these matters, there was no guideline. These and others are the unreasonableness found by the Supreme Court.The requirement of prior permission was on principle accepted as a valid condition precedent to closure provided refusal was on grounds germane within the meaning of Article 19(6).
11. Now, in the amended section, an application has to be filed in the prescribed manner stating in detail the reasons which are clear from the form prescribed and the nature of the information required as is evident from Central Rule 76(c) and Form Q-A. Copies will have to be given to the workmen or their representatives. An enquiry is necessary with opportunities for hearing to the employer, workmen and other persons interested in the closure. Genuineness and adequacy of the reasons in relation to required information, interest of the general public and all other relevant facts should enter the verdict in granting or refusing permission with recorded reasons. It will have to be communicated within sixty days. Failure will lead to the presumption of grant of permission. There is provision for revision suo motu or on application, and there is the further provision for referring the matter to adjudication. The award has to come within 30 days. The order granting or refusing permission will have life only for one year. That means, a fresh application is possible after one year. The result of the amended provision is that only by a reasoned order for which proper guidelines are given, permission could be either granted or refused. In such a case, as pointed out by the Supreme Court in Comptroller and Auditor General v. K.S. Jagannathan AIR 1987 SC 537, and Gujarat Steel Tubes Ltd v. Gujarat Steel Tubes Mazdoor Sabha (1980-I-LLJ-137) quoted with approval therein, the aggrieved party could approach the High Court. Under Article 226, the High Court has the power to issue writs or orders or directions where the Government failed to exercise or wrongly or mala fide exercised the discretion. The High Court itself can, in appropriate cases, pass orders or give directions which the Government itself could have passed or given even without a remand or direction for that purpose. Section 25-O, as it now stands, is not lacking in any procedural safeguards to avoid or correct arbitrariness. What is possible is only wrong orders in individual cases which could be corrected by a review or interference by High Court or even by a fresh application after the expiry of one year. As held in Maneka Gandhi v. Union of India, AIR 1978 SC 597 when power is given to a high body like the Government, chances of misuse are very remote.
12. Now the question for consideration is whether the amended Section 25-O imposes unreasonable restrictions on a fundamental right guaranteed under Article 19(1)(g)226 or otherwise whether it suffers substantially from the same defect and unreasonableness on the basis of which it was struck down in Excel Wear v. Union of India, (supra). As observed by their Lordships in Union of India v. Stumpp, Scheule and So-mappa Ltd., (1989-II-LLJ-4) no employer has a fundamental right to close down an industry unreasonably or for reasons which are mala fide. Closure has to be for just and inevitable reasons as it affects a large number of employees, members of the general public, production of the country, etc. Most of the industries were started by availing of sufficient concessions and benefits from Government and Governmental instrumentalities and, therefore, their closures are to be the subject of proper enquiry by the Government. After having taken advantage of several concessions or incentives and facilities offered by the State and after having invited a large number of persons to join the industry as employees, the employer cannot choose his own time and terms to close down the industry. A quasi-judicial power placed in the Government in that respect under Section 25-O is definitely justifiable. It could be expected that the power will be reasonably exercised. If not, it could be corrected in individual cases. As observed in Delhi Cloth Mills Ltd. v. Union of India (supra) Section 25-O, so far as it empowers the Government to refuse permission to an employer to close down his industrial undertaking does not infringe the fundamental rights under Articles 14 and 19(1)(g) as it is saved by Article 19(6) by safeguards as well as by the Directive Principles of State Policy behind it.
13. The concept of public interest is so wide that it is not possible to define it in a formula governing all situations. The decision in Excel Wear v. Union of India, (supra), itself accepted that proposition. That explains the reasons for absence of specific grounds in Section 25-O(1) and (2). Hearing all concerned would assist the Government to come to a correct and fair conclusion on all aspects in the light of the detailed information as to whether the reasons are genuine and adequate in a given case considering the interest of the general public and all other relevant factors. In Excel Wear v. Union of India, (supra) the Supreme Court did not make any observation on the scope or effect of Section25-O. It is not possible to think that the decision struck down the unamended Section 25-O because the restrictions imposed were unreasonable on substantive aspects. After having considered the reasons and conclusions arrived at in the decisions in Union of India v. Stumpp, Schedule and Somappa Ltd. (supra) and Delhi Cloth Mills Ltd v. Union of India (supra) I do not find any ground to disagree with the opinion that amended Section 25-O does not suffer from any Constitutional infirmity especially when the order is operative only for a temporary period of one year. The amended provision has sufficiently regulated the balancing factors in order to protect and balance the interest of the employer, workmen and the general public for which strait-jacket guidelines are not possible as applicable in all cases. On behalf of the Union of India, counsel represented before me that apart from the provision of the Act, administrative directions were also given.
14. I am not in a position to agree with the decision in Maulins of India Ltd. v. Union of India (supra) that even now the Government could refuse permission in cases where there are genuine and good reasons for closure. The Government will have to assign reasons which are justifiable by this Court under Article 226. The decision in Delhi Cloth Mills Ltd. v. Lt. Governor, Delhi (supra) cited on behalf of the petitioners, does not appear to support their case. That decision was concerned only with the correctness of an order passed under Section 25-O. The decision said that procedural safeguards of recording reasons are now incorporated in the section and such reasons should not only be intelligible, but should also deal with the substantial points that have been urged. That is the position in relation to the decision in Associated Cement Companies Ltd. v. Union of India (1989-I-LLJ-599) also. The amended Section 25-O is not, therefore, violative of Article 19(1)(g) as the restrictions are reasonable within the limits of Article 19(6). The provision cannot be violative of Article 14 also, because the classification is on a rational basis as between big establishments and small ones having intelligible differentia and reasonable nexus to the object. No arbitrariness is involved in Section 25-O. It is not, therefore, liable to be struck down.
15. That takes us to the question whether Exhibit P-10 is liable to be quashed and the Government directed to grant permission to close down as prayed for. In this connection, a preliminary objection was raised on behalf of respondents Nos. 1 to 5 by advocate, Mr. M. Ramachandran. It is said that the original petition is not maintainable. His objection was that after having submitted to the jurisdiction of the authorities under Section 25-O, the petitioners are estopped from now challenging the vires of the provision when they had to suffer adverse decision. Estoppel, as is well known, is a rule of evidence, which prohibits one party from denying the existence of a fact which he represented as existing and upon such representation, another person has been induced to act to his detriment. The moment the representation made by a party was acted upon by another and he changes position to his detriment, the first party cannot go back on the representation he made. No such contingencies could arise in this case. In the first place, the petitioners made it clear that permission was sought subject to their challenge against the Constitutional validity of Section 25-O. Further, there cannot be any estoppel in challenging a statutory or Constitutional provision. So also, that question cannot arise when it is found that Section 25-O is Constitutionally valid. At any rate, there cannot be any question of estoppel in challenging the correctness of Exhibit P-10 order. What is challenged is violation of fundamental right, which cannot be surrendered by any admission or concession operating as estoppel.
16. Mr. S.V. Balakrishna Iyer, on behalf of the Union of India, argued that Exhibit P-6 order, dated January 17, 1990 is valid only for one year and when the original petition was filed on April 11, 1991, that order was not in force. Therefore, according to him, the only course open to the petitioners was to file a fresh application under Section 25-O. For this reason, he said that the original petition is not maintainable. But Section 25-O(4) says that the finality and binding nature of the order is subject to the provision for review contained in Sub-section (5). Exhibit P-10 award was passed only on March 2, 1991. It was, therefore, argued that the original petition is not maintainable for the further reason that Exhibit P-10 award alone is challenged and Exhibit p-6 order was not challenged. When Exhibit P-6 order is superseded by Exhibit P-10, I do not think there is any necessity for a separate and specific challenge against Exhibit P-6. I am, therefore, inclined to hold that the original petition is maintainable.
17. I do not find any force in the contention of the petitioners that the Industrial Tribunal went beyond its power in passing Exhibit P-10. What is contemplated under Section 25-O(5) is not a limited review within the meaning of Order XLVII, Rule 1 of the Code of Civil Procedure. What is intended is a reconsideration of the entire matter, including the facts and law omitted while passing the first order as well as new developments that took place after the original order was passed. That may be the reason why both sides agreed to the incorporation of the oral and documentary evidence in I.D. No. 2 of 1988. Those items of evidence were considered without objection. The object of the provision for review is to do justice between the parties by considering whether the original decision is legal or correct. The question whether such reconsideration is necessary or not is treated as industrial dispute though the reference is only made optional. On reference, the Industrial Tribunal is having all powers of the Government to consider all the relevant questions in order to decide whether the order refusing permission required reconsideration and whether permission has to be given. Exhibit P-10 is evidently one passed with jurisdiction.
18. The wide discretion and powers exercis-able by the Industrial Tribunal may not be available to the High Court while exercising the power under Article 226 or the power of superintendence under Article 227. This is in spite of the fact that the High Court is a superior court. Even though the High Court is entitled to scrutinise the orders and awards, it could be only be within the well accepted limits. Though the High Court is entitled to quash an award in an appropriate case and remand the matter or even decide the matter itself, the High Court is not entitled to exercise the right of an appellate Court-Jitendra Nath Rathore v. Baidyanath Ayurved Bhawan Ltd. (1984-II-LLJ-10). The main question for consideration under Article 227 is whether the Tribunal acted within the bounds of its authority or exceeded the same, though the High Court can interfere when the Tribunal committed an error of law apparent on the face of the record or when the findings are perverse in relation to factual or legal questions J.D. Jain v. State Bank of India, (1982-I-LLJ-56). In a proceeding under Articles 226 and 227, the High Court cannot sit in appeal over the findings recorded by a competent Tribunal for the purpose of reappraisal of the evidence for itself in order to arrive at an independent conclusion, State of Orissa v. Murlidhar, AIR 1963 SC 404. Denial of the principles of natural justice is another area justifying interference. Such a question has not arisen in this case. The High Court can also interfere and set aside the order if the findings are not supported by any evidence at all. Exercise of jurisdiction depends upon the facts of each individual case subject to the limitations involved. No hard and fast guidelines could be given. The decision in Jitendra Nath Rathore v. Baidyanath Aurved Bhawan Ltd. (supra) and Kalinga Tubes Ltd. v. Their Workmen, (1969-I-LLJ-557) cited on behalf of the petitioners by Barrister Mr. P.K. Kurien, cannot improve the position in any way. If the order is against the object and spirit of Section 25-O and the allied provisions of the Industrial Disputes Act, undoubtedly, this Court can interfere and, in an appropriate case, even direct that permission must be granted.
19. 'Genuine' and 'adequate' reasons occurring in Section 25-O are of great importance. Reasons will have to be tested in the light of the Directive Principles of State Policy considering the interest of the general public and other relevant factors involved depending upon the facts and circumstances. Though unemployment of labour, which is the natural corollary of closing down, cannot be a deciding factor by itself, that also could be one of the factors to be considered. As the Supreme Court itself said in Excel Wear v. Union of India (supra) the right to close down the business is not an absolute right and it can be restricted, regulated or controlled by law in the interest of the general public, which is paramount. Genuineness and reasonableness of the reasons will have to be decided in the context of the nature and incidence of the rights which the employer has. If the situation requiring closure was brought about mala fide and deliberately by the employer, that is also a relevant factor to be considered against him. Financial difficulties and financial loss making the employer unable to continue the business may really be a genuine ground even though that by itself could not be taken to be an unavoidable circumstance beyond the control of the employer entitling him to the concession in the matter of compensation. Financial crisis is possible even in a thriving concern for temporary periods due to various reasons. If it is a genuine ground, incapable of being corrected by the employer in spite of earnest attempts that is a ground for permission for closure even under Section 25-O, as held in Excel Wear v. Union of India, (supra) and Associated Cement Companies Ltd. v. Union of India, (supra). But, in such a situation, when the financial difficulties and financial losses are contended to be the creation of the employer as a ruse for closing down, he will have to satisfy that he has taken all measures to avert the situation. A loosing concern incapable of revival cannot be compelled to be continued.
20. But in such a situation, the question of bona fides is one of the essential factors. Legislature wanted to be strict in the matter in order to avoid situations of closure which are not unavoidable. That is because public interest may be involved in such closures which are not bona fide. Consequences may be loss of employment, non-availability of products for the needs of the public, loss of marketing facilities for the producers of raw materials, danger to the economy of the country and the like. An employer who made sufficient fortune out of the venture may attempt to close it down without making earnest attempts to overcome difficulties. Refusal of permission, in such a situation, cannot be challenged as unreasonable restriction on the right to carry on business. It is up to the Government or the Industrial Tribunal, as the case may be, to probe into all the circumstances in order to arrive at a conclusion regarding the genuineness and adequacy of the reasons for closure tested in the light of the interest of the general public and all other relevant factors mentioned in Section 25-O.
21. On behalf of the petitioners, it was argued by Mr. G.B. Pai and Mr. Kurien, based on several records, including balance-sheet and profit and loss account that from 1983 onwards, the company is continuously incurring huge financial losses and it is due to factors beyond the control of the management. That is said to be due to non-availability of tapioca, which is the main raw material, its increased price, increased cost of labour, inadequacy of power supply, over-staffing, competition from other sources, etc. So also, it was pointed out that the Government did not give a helping hand to get over the situation by giving possible concessions or facilities. Their grievance is that Exhibit P-6 order did not consider any of these aspects and refused permission solely on the ground that financial stringency by itself is not a ground justifying permission for closure. But, Exhibit P-6 is not under challenge in the original petition and Exhibit P-10 alone is challenged. Exhibit P-10 award considered all these aspects, after considering the oral and documentary evidence on both sides. On the basis of facts and figures, Exhibit P-10 came to the conclusion that the above contentions of the management are not acceptable. The Tribunal found that the starch factory, which had its modest beginning in 1954, had grown considerably over the years. It entered new fields of trading activities and built up a sister unit at Hyderabad. Plea of non-availability of tapioca was found not bona fide. Tribunal found that what is involved is only refusal of the petitioners to purchase tapioca because of the availability of substitute raw materials elsewhere. Plea of heavy increase in the cost of materials and labour was also not fully accepted. On the basis of the materials available, it was held that any increase on those aspects were more than sufficiently compensated by the increased price of products. Financial crisis was found to be a creation, one of the aspects being huge commissions on sales paid to an agency, of which the managing partner was the Chairman of the company. This fact was admitted, but it was contended, on the basis of Exhibit M-49, that the said agency was already stopped. But it was found by the Tribunal that the commission, which was only Rs.28.06 lakhs in 1983, rose up to Rs.71.53 lakhs in 1986. The Industrial Tribunal, on the basis of the evidence before it, found that boosted sales commission and inflated office expenditure are some of the factors on which the contention of loss was based. That means, Tribunal suspected the correctness of the facts and figures supplied by the management.
22. On behalf of respondents Nos. 1 to 5, Mr. Ramachandran and on behalf of respondents Nos. 6 and 8, Government Pleader, Mr. S. Vi-jayan Nair, said that the attempt of the management to close down the establishment is not due to any bonafide need but only to intimidate the claims of the workmen for better service conditions. On the basis of the evidence on record, the Industrial Tribunal found, prima facie, that there is no basis for this contention also. Admittedly, I.D. No. 2 of 1988 is even now pending. At first, Government referred the demands of the workers alone to the Tribunal. The Company moved for reduction of wages. That was initially not referred. Therefore, the petitioners filed an original petition to compel the Government to refer that aspect also. Now that matter is also pending before the Tribunal in I.D. No.2 of 1988. Barrister Mr. P.K. Kurien on the basis of the decision in Crown Aluminium Works v. Their Workmen (1958-I-LLJ-1) said that if the Tribunal is satisfied that a case for reduction in wage structure has been established, it would be open to the Tribunal to accede to the request of the employer to make appropriate reduction in the wage structure, subject to the conditions as to time or otherwise as the Tribunal may deem fit or expedient to impose. It was in the wake of these facts and circumstances that the move for closure came. I cannot say that the finding of the Tribunal, in these circumstances, is not reasonable. At any rate, the Management could have waited till the industrial dispute was over and the award passed. The move appears to be premature. The argument of Mr. S. Vijayan Nair and Mr. Ramachandran was that on the basis of the boosted figures in the account, the Management wanted to close down its Kerala unit in order to stall the claims of the workers and wanted its activities to be confined to other States where cost of labour and material are cheaper. These are aspects which cannot be considered and decided in a proceeding under Articles 226 and 227 because they may require evidence. Anyhow, the Industrial Tribunal found the claim not bona fide. All the claims including overstaffing, inadequacy of power supply, etc., were found incorrect. There is also a contention that the move for closing down is an unfair labour practice. The petitioners will be at liberty to move again for permission. The claim could again be considered on the merits under the changed circumstances and availability of new materials. The Industrial Tribunal could be directed to expedite I.D.No. 2 of 1988. With the available materials, I think that it may not be possible to find that the reasoning and conclusions in Exhibit P-10 are not correct.
23. It is seen from Exhibit P-10 that immediately after the Government referred the dispute which is the subject-matter of I.D.No. 2 of 1988, the management filed an original petition and got it stayed. When the original petition was disposed of and the Industrial Tribunal was about to pass an award, a petition for permission to close down the undertaking came. The Industrial Tribunal found in paragraph 17 of Exhibit P-10 that the company which started with Rs. 15 lakhs in 1944 was able to boost its assets to Rs.650 lakhs in 1978 and that the present move is not bonafide. Anyhow, the fact remains that the company, according to the available materials, is running at a loss. Reasons for the loss and possibility of revival are matters on which parties could join issue again if a fresh petition is filed. I do not think that there is any scope for interference with Exhibit P-10 also.
24. The original petition is dismissed. The petitioners will be at liberty to move a fresh petition under Section 25-O. There will be a direction to the Industrial Tribunal to dispose of I.D. No.2 of 1988 as early as possible. No costs.