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Rashtriya Mill Mazdoor Sangh and Others Vs. R.N. Gawande, Industrial Tribunal and President Industrial Court - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtMumbai High Court
Decided On
Case NumberW.P. No. 179 and 244 of 1984, etc.
Reported in(1985)87BOMLR218; [1985(50)FLR401]; (1985)IILLJ524Bom
ActsIndustrial Disputes Act, 1947 - Sections 25-ITO, 25-O(6) and 36
AppellantRashtriya Mill Mazdoor Sangh and Others
RespondentR.N. Gawande, Industrial Tribunal and President Industrial Court
industrial disputes act (xiv of 1947), sections 25 order 36--industrial disputes rules, 1957, rule 82-b(h)--application for closure of textile mill mainly on ground of losses incurred by it--losses incurred by mill not found real reason for proposed closure--industrial tribunal treating closure application as lis between parties in civil suit--rival trade union not served with notice of closure application as contemplated by rule 82-b(3)--rule 82-b(3) whether has retrospective effect--closure of textile mill whether in public interest.;;(i) that the lossess incurred by the textile mill was not the real reason for proposed closure but it was only a smoke-screen laid to cloud the vision from true reasons.;(ii) that none of the other grounds could possibly justify the proposed closure.;(iii).....1. the petitioners seek to set aside the judgment and order passed by the industrial court on 18th november, 1983 granting permission to close down mukesh textile mills.2. the facts and points for determination in both the writ petitions are common except that in writ petition no. 244 of 1984 an additional ground of challenge is levelled. a consolidated judgment.hereunder the facts :-(a) since 1975, transport corporation of india (t.c.i.) a public limited company owns and manages mukesh textiles mills (referred to hereafter as 'the mills'). t.c.i. also owns and manages three other units with which these petitions are not concerned. (b) rashtriya mills mazdoor sangh (the 1st petitioner in writ petition no. 179 of 1984) is registered trade union. it claims to have amongst its members the.....

1. The petitioners seek to set aside the judgment and order passed by the Industrial Court on 18th November, 1983 granting permission to close down Mukesh Textile Mills.

2. The facts and points for determination in both the Writ Petitions are common except that in Writ Petition No. 244 of 1984 an additional ground of challenge is levelled. A consolidated judgment.

Hereunder the facts :-

(A) Since 1975, Transport Corporation of India (T.C.I.) a public limited company owns and manages Mukesh Textiles Mills (referred to hereafter as 'the Mills'). T.C.I. also owns and manages three other units with which these petitions are not concerned.

(B) Rashtriya Mills Mazdoor Sangh (the 1st petitioner in Writ Petition No. 179 of 1984) is registered Trade Union. It claims to have amongst its members the majority of the workers of the Mill. This is admitted by T.C.I. Maharashtra Girini Kamgar Union (the 1st petitioner in Writ Petition No. 244 of 1984) claims that the majority of the Mill's workers are its members. This is denied by T.C.I.

(C) On 17th January, 1982 the textile strike commenced in Bombay. On 25th June, 1982 T.C.I. made an application under S. 25-O of the Industrial Disputes Act for closure of the Mill from 24th September, 1982 on certain grounds. Permission was refused by an order passed by the Deputy Minister, Labour, on 20th August, 1982.

(D) On an appeal filed by the Mill, the Industrial Tribunal by its order dated 7th December, 1982 remanded the matter to the State Government of ascertain whether the Mill was a separate and distinct unit and whether T.C.I. had only one unit, namely the Mill, and whether the Mill and/or any other unit of T.C.I. had only we separate and distinct units. These directions were given in order to determine whether for the purpose of granting or refusing closure permission, T.C.I.'s financial position as a whole should be looked into or only that of the Mill.

(E) On 30th March, 1983, the Minister of State, Labour, passed his order refusing T.C.I.'s application for closing down the Mill. This order was set aside by the Industrial Tribunal on 18th November, 1983 and closure permission was granted. Hence the present petitions.

4. It is no longer in dispute that except for the fact that T.C.I. finances the running of the Mill, the Mill is a separate and distinct unit having no functional integrality with T.C.I.

5. Supporting the closure application, T.C.I.'s learned Counsel Mr. Ganesh urged that even if T.C.I. has unlimited financial resources, it is inconceivable to expect T.C.I. to indefinitely keep on financing the running of the Mill in the teeth of losses running into Rs. 439 lakhs incurred by the Mill from 1975, with no hope that the Mill can even turn the corner. Mr. Ganesh fairly and frankly stated (I quote his exact words taken down by me and read over to him for confirmation) that 'if the Mill is not allowed to be closed down, T.C.I. will not go into bankruptcy or be annihilated but a great strain will be placed on T.C.I.'s resources and liquidity'. Quoting the observations of the Supreme Court in Excel Wear v. Union of India 1978 II L.L.J. 527. Mr. Ganesh urged that the right to close down a business is an integral part of the right to carry it on and that it is wrong to say that an employer has no right to close down a business once he starts it; public interest does not require that the employer should be compelled to incur losses year after year in order that the workers' employment should continue as long as the employer is not allowed to be whimsical or capricious and ignore the interests of labour altogether; every employer has the right to minimise his losses by running his undertaking in the most efficient manner possible and for this purpose to re-organise his enterprises, even if this has the result of workmen being rendered surplus and their services terminated; if the termination of services has been resorted to only to cut losses or to increase efficiency, the Industrial Tribunal does not have the power in law to permit the same; public interest and social justice do require the protection of the labour. But it is reasonable to give them protection against all unemployment after affecting the interests of so many persons interested and connected with the management apart from the employers Is it possible to compel the employer to manage the undertaking even when he does not find it safe and practicable to manage the affairs Can he be compelled to go on incurring losses year after year A situation may arise both from the point of view of law and order and financial aspect that the employer finds it impossible to carry on the business any longer. Every closure results in some unemployment and if permission to close is refused on that ground, then in no case would permission ever be granted; the interest of labour must be balanced against the fundamental right of the employer and this balance is struck by permitting the employer to close down when losses are being incurred year after year and by refusing such permission when the employer is acting in a whimsical and capricious manner. Such were the observations relied on by Mr. Ganesh in Excel Wear case.

6. Reliance was also placed by Mr. Ganesh on Parry & Co. v. Judge IInd I.T. Cal (2) and Workmen of Indian Leaf Tobacco v. Indian Leaf Tobacco Dev. Co. Ltd. (3). In Parry's case the business was two fold viz. (i) selling agency and (ii) engineering workshop. The selling agency was closed down. It was held that managerial discretion exercised bona fide by the employer to organise and arrange his business in the manner he considers best was not tantamount to closure of the company's business as a whole. In Workmen's case, it was held that closure of 8 out of 21 depots may be treated as a managerial act of stoppage of part of the company's activity or business entirely in the discretion of the management.

7. On the strength of those decisions, Mr. Ganesh's summation was that when T.C.I. want to close down its undertaking, viz. the Mill, on the ground that the Mill is incurring huge losses year after year and is irredeemably sick, it cannot possibly be said that the reasons for the intended closure of the Mill are (i) not adequate or sufficient, or (ii) not urged in good faith, or (iii) grossly unfair or unjust so as to warrant refusal for such closure under S. 25-O of the Industrial Disputes Act.

8. Mr. Ganesh concluded that the losses incurred by the Mill (I quote his words) 'is evidence of sickness and cannot be equated with sickness' if the Mill is not permitted to close down, the result will be that the other units of T.C.I. will indefinitely have to meet the Mill's losses to the extent of Rs. 6 to Rs. 7 lacs a month, with the Mill remaining a totally dead and nonviable unit, greatly hampering the working of the other units and adversely affecting T.C.I.'s financial position as a whole. There would year after year be a massive and limitless loss of national resources contrary to public interest.

9. The applicability of the decision relied on and the sentiments expressed by Mr. Ganesh, must be tested in the light of the facts appearing in T.C.I.'s closure application, on the basis whereof T.C.I. want to close down the Mill. The application starts by narrating that over a period of 6 years since 1975 when T.C.I. purchased the Mill, Rs. 65 lacs were invested on fixed assets to provide for modern machinery and Rs. 23 lacs for its maintenance. Then the losses aggregating to Rs. 439 lacs are recounted as under :-

'For the year ended Losses incurred

30th June (Rs. in lacs)

1975 (for one month) 6.85

1976 110.67

1977 83.26

1978 84.72

1979 56.15

1980 42.82

1981 54.57

The application then states that in addition, bank borrowings for working capital is nearly Rs. 85 lacs and Rs. 80 lacs have been drawn against loans of Rs. 180 lacs sanctioned by I.D.B.I., I.F.C.I. and I.C.I.C. I for modernisation of the Mill. The fixed costs which the Mill has been incurring since the textile strike which commenced on 18th January, 1982 is about Rs. 5 lacs a month, thus resulting in a loss of nearly Rs. 25 lacs since the past 5 months. As and when the mill is reopened after the strike :-

'... the management will have to incur an additional expenditure of apprx. Rs. 25/30 lacs during the period the mill is put in the normal state of working.'

The application goes on that T.C.I. has been able to mobilise financial resources to meet these substantial losses and has invested till now a total sum of Rs. 570 lacs in its endeavour to make the Mill a viable unit. Further that :-

'The company has been carrying on the working of the mill in the hope that with better management and with modern machineries and its proper maintenance the mill may turn the corner.

'With this hope the company also undertook a modernisation programme of Rs. 225 lacs in a hope of making this mill viable. The estimates prepared in latter half of 1980 while presenting the scheme to institutions, showed a small cash profit from 1981-82 onwards. The profits estimated from 1983-84 onwards were enough to repay institutional loans. But since January, '81 onwards the costs of all inputs, namely, cotton, dyes and chemicals, power and fuel went up very steeply. The continuous increase in consumer price index resulted in higher D.A. increasing the wages of workmen by nearly Rs. 125 per month per worker in a period of ten months since January, 1981. This overall increase, coupled with the recession that has set in the textile industry since last one year making it impossible for mill to increase prices, resulted in a loss of Rs. 54.6 lacs (cash loss Rs. 37 lacs) in 1980-81 and a loss of about Rs. 67 lacs (cash loss Rs. 59 lacs) in first 9 months of 1981-82. Also the strike has delayed the implementation of modernisation scheme which will ultimately increase the cost of scheme due to escalation in machinery prices apart from making the repayment schedule of term loans impossible to adhere to.

'Taking into consideration the above stated facts, the present market conditions and the illegal strike of last five months which ultimately will lead to additional wage burden, there are no hopes that the mill will make profits even after modernisation.

'Thus the company's expectations about this mill have been completely belied and the future outlook of the mill is bleak in view of above stated facts and the veritable chaos that has encompassed the textile industry.

'The company has therefore come to the conclusion that this mill will continue to be a drain on the resources of parent company, which the parent company cannot allow to continue for an indefinite period.'

The application concludes :-

'The company has therefore much against its wishes come to the decision that it has no other option but to close down the mill.'

10. Thus in a nut-shell T.C.I.'s grounds for closure are (i) heavy losses, (ii) steep rise in the cost of inputs, (iii) higher D.A. and wages, (iv) recession in the textile industry and (v) the textile strike.

11. I shall deal with each ground separately. Starting with the losses, at first flush, no doubt the aggregate loss of Rs. 431 lacs shown in the closure appears to be formidable. But, as will immediately appear from an analysis of the figures themselves, the Mill was about to turn corner, Mr. Ganesh's protestations to the contrary notwithstanding. To start with, there was an appreciable and perceptible reduction of loss from Rs. 110.67 lacs in 1976 to Rs. 54.57 lacs in 1981, except for an insignificant increase in loss from Rs. 83.26 lacs in 1977 to Rs. 84.72 lacs in 1978 and a marginal loss of less than Rs. 12 lacs from Rs. 42.82 lacs in 1980 to Rs. 54.57 lacs in 1981. There was thus a general and appreciable downward trend in the losses from 1976 till 1981 : the loss of Rs. 54.57 lacs in 1981 being less than half the loss of Rs. 110.67 lacs in 1976.

12. Even T.C.I. did not expect that the losses would continue for any appreciable length of time. On T.C.I.'s own showing the estimates prepared in the latter half of 1980 showed a small cash profit from 1981-82 and better still, the profits estimated from 1983-84 onwards were enough to repay even the institutional loans running into, on T.C.I.'s showing. Rs. 165 lacs. Thus in a short time the Mill would have broken even and thereafter showed a profit.

13. Even the losses shown in the closure application are not attributed to the workers. For that matter, when the closure application was made, the mill was functioning at full pitch. All the 22368 spindles installed were utilised. The annual production showed a substantial increase during 1978-79/1980-81; the value of the work in progress was as much as Rs. 58,53,547; all aspects of the work was done by the Mill itself in as much as there was no off loading or sub-contracting; the Mill worked a full 6-day week the spinning, weaving and processing sections had daily 3 shifts with 640 workers, 2 shifts with 380 workers and one shift with 110 workers respectively. The inventory position item-wise and value-wise for 12 months preceding January, 1982 was under :-

FINISHED GOODS RAW MATERIAL COMPONENTSCloth Yarn Cotton & fibre1981 Rs. Rs. Rs. Rs.JANUARY 15,25,170 10,49,018 38,50,960 14,34,696FEBRUARY 22,56,436 1,46,704 37,90,008 13,94,312MARCH 3,17,839 2,33,509 44,70,055 13,51,495APRIL 9,38,397 5,64,104 45,56,174 14,01,340MAY 17,25,556 2,64,504 28,20,813 13,36,425JUNE 14,69,754 5,01,151 21,11,440 13,59,403JULY 12,45,116 8,53,468 23,99,097 14,90,656AUGUST 20,36,202 7,53,827 24,00,653 14,25,027SEPTEMBER 28,02,778 3,03,856 18,67,296 15,48,276OCTOBER 40,23,071 3,75,207 28,34,034 15,01,905NOVEMBER 21,25,173 2,43,979 42,60,738 14,78,665DECEMBER 35,97,379 53,573 31,91,595 14,19,702 The annual figures from 1978-79, 1980-81 are as under :- 1978-79 1979-80 1980-81Rs. (lacs) Rs. (lacs) Rs. (lacs)CLOTH 205.50 326.51 379.45YARN 63.70 30.98 82.74------- -------- ---------TOTAL 269.20 357.49 462.19-------- -------- ---------

The month-wise sales figures for 12 months preceding January, 1982were as under :-

1981 Cloth Yarn

JANUARY 28,62,038 6,97,649

FEBRUARY 18,84,670 16,79,558

MARCH 52,75,097 8,38,479

APRIL 24,80,317 5,87,556

MAY 26,53,000 8,21,000

JUNE 42,22,853 4,91,899

JULY 36,81,221 5,14,251

AUGUST 34,21,275 6,79,771

SEPTEMBER 20,90,116 11,53,106

OCTOBER 15,65,095 9,49,870

NOVEMBER 43,98,497 6,19,791

DECEMBER 29,16,495 4,18,932

In 1979-80 and 1980-81 the number of spindles and looms were 39408 and 676 respectively. In 1979 cloth production was 8913077 meters and, yarn production was 125549 meters. In 1980-81 with the same number of spindles and looms, cloth production increased to 9998655 meters and yarn production to 350624 meters. If despite all this, there were losses, which even T.C.I. does not attribute to the workers, the workers cannot be penalized with the threat of closure.

14. Strain as suggested by Mr. Ganesh on T.C.I.'s resources is not tantamount to liquidation or annihilation. Even T.C.I. does not say it will go into liquidation or be annihilated. On the contrary, T.C.I.'s learned Counsel's statement recorded by me earlier discloses that it will not. Even the plea of strain on T.C.I.'s financial resources must be regarded with some skepticism. If T.C.I. with reserve of not less than Rs. 4 1/4 crores as on 1st July, 1979 and not less than Rs. 5 crores as on 1st July, 1980 (according to the petitioners the reserves are Rs. 12 1/2 crores and nearly Rs. 14 crores respectively), could afford to issue 24 lacs shares of the value of Rs. 2,40,00,000/- as bonus shares in the ratio of 1 : 1, then surely it ill-suits T.C.I. to plead financial strain and ask for closure of the Mill. No one grudges T.C.I.'s shareholders a bonus issue. But at the same time not at the costs of rendering 1600 workers out of employment and facing them and their dependents with starvation.

15. It is therefore manifest that the losses incurred by the Mill was not the real reason for the proposed closure. That was only a smoke-screen laid to cloud the vision from the true reasons. What were they ?

16. The answer is to be found in T.C.I.'s closure application itself, namely (a) steep rise in the cost of inputs, namely, cotton, dyes, chemicals, power and fuel since January 1981; (b) increase in consumer price index resulting in higher dearness allowance and increase in wages by nearly Rs. 125/- per month per worker; (c) recession in the textile industry since the past one year and (d) the textile strike.

17. None of these reasons can possibly justify the proposed closure. Rise in prices is a universal factor, as also rise in dearness allowance and wages. This was not the only Mill hit by recession; the entire textile industry was. This was not the only Mill hit by the textile strike; all the mills in Bombay were. If such reasons, individually or collectively, are to be countenanced for closure, each and every employer would like to close down even though he can afford not to, and disgorge millions of workers into unemployment.

18. The difficulties set out in T.C.I.'s closure application are not unique to T.C.I. alone. From time to time several industries have faced the same difficulties, the shipping industry being one of them today. These difficulties have been overcome in the past. And there is no reason why T.C.I. with its financial resources and its capacity to give bonus issues cannot do the same.

19. No capital can also be made from the fact that according to T.C.I.'s closure application, Rs. 25 to Rs. 30 lacs will have to be spent to put the Mill in a working condition after the textile strike. Mr. Ganesh says the figure will be higher today.

20. T.C.I. can afford it, and even Mr. Ganesh does not say it cannot. If today T.C.I. has to spend more than Rs. 25 to Rs. 30 lacs than it would have done in 1982, the fault must rest squarely on T.C.I. who instead of restarting the Mill, chose to file a closure application and persist in it.

21. None of the aspects set out in paras 11 to 20 have been weighed or even considered by the Tribunal. The Tribunal only proceeded on the basis of the losses and in that too, disregarded their appreciably general downward trend. The Tribunal treated the matter as a lis between the parties as in a civil suit instead of itself endeavoring to probe the true position. Such approach was, with respect, not appropriate. And thereby the tribunal misguided itself, necessitating interference in exercise of writ jurisdiction.

22. Mr. Ganesh says the Mill can never be revived. He says R.B.I. has classified the Mill in Category III, viz. 'Units which were bad/sick before the strike and whose position would have worsened further'. Says Mr. Ganesh, though a viability study was carried out by I.D.B.I. in respect of other Category III units, no such study was carried out in respect of this Mill as Government found that it was not a potentially viable unit, with the result while the management of other mills was taken over by the Textile Undertakings (Taking Over of Management) Act (40 of 1983), the management of this Mill was not.

23. To start with the R.B.I. report was made on 17th November, 1982, i.e. 5 months after T.C.I.'s closure application. T.C.I. for reasons best known to itself, did not choose to have that report produced. Mr. Ganesh was unable to state what considerations or guidelines R.B.I. took into account. Here it may be stated that the reason for the R.B.I. report was for the consideration of the immediate credit requirements of textile mills in Bombay and only on that basis were the textile units classified in 3 categories. Because the Mill got burnt down as stated in the report prepared by the Task Force., I.D.B.I. did not carry out a viability study in respect of the Mill. Be that as it all may, the most telling answer is that this very Mill was in T.C.I.'s own closure application shown having substantially reduced its losses by over 50% in 6 short years, with a small estimated profit from 1981-82 and estimated Profits from 1983-84 onwards sufficient enough even to repay the large loans taken from banks and financial institutions which on T.C.I.'s showing was Rs. 165 lacs.

24. It hardly speaks well of T.C.I.'s bona fides, that it made the closure application when the banks and financial institutions declined to advance further loans. Thus while T.C.I. ran the Mill assisted with loans amounting to Rs. 165 lacs taken from banks and financial institutions, it was not prepared to run the Mill once the loans stopped even though T.C.I. could afford to do so without going into bankruptcy or being annihilated. Those who borrow public funds must also accept public responsibility. T.C.I.'s public responsibility is not to take shelter under spurious grounds and create avoidable unemployment for not less than 1600 workers and bring starvation at their door-step and those dependent on them. To do so would be against public interest. It is not the cotton that you weave nor the yarn that you spin (the pun unintended) but human creatures' lives you play with where comes the question of public interest.

25. Mr. Ganesh says that once closure is permitted the workers will be entitled to receive the statutory compensation.

26. The statutory compensation thus dangled is no palliative for a regular employment and a steady wage. 'BUT STILL THE GREAT HAVE KINDNESS IN RESERVE/THEY HELP'D TO BURY WHOM THEY HELP'D TO STARVE'.

27. On behalf of the petitioners it was urged that T.C.I. had an oblique motive in making the closure application, namely, to make a vase profit by re-developing the land, for which purpose on 5th December, 1979 T.C.I. had even applied for permission under S. 22(2) of the Urban Land Ceiling Act. It was urged that the land could not be re-developed unless the Mill was closed down, hence the closure application. T.C.I.'s stand is that the essence of its Scheme as shown in the Plan submitted to the Authority was not to re-develop the entire land but only to demolish dilapidated workman's quarters for the purpose of reconstruction and no part of the factory building was intended to be touched. This in turn is denied by the petitioners.

28. This a highly disputed question of fact. It necessitates evidence and cannot, in a writ petition, be resolved merely from correspondence and conflicting oral statements hurled across the Bar. I therefore express no opinion. In any event, in light of the view I have taken, this aspect becomes academic in the present petitions. This controversy is however left open for determination should T.C.I. make a fresh closure application, as needed it is entitled to do by virtue of S. 25-O(6) of the Industrial Disputes Act.

29. On behalf of the petitioners it was urged that T.C.I.'s mala fides were manifest from the fact that T.C.I. wants to pocket a substantial amount received by way of an insurance claim. In 1981 the Mill was insured for Rs. 5 crores, raised to Rs. 6 crores by an insurance policy taken out in January 1982. On 13th December, 1982 a disastrous fire broke out in the Mill. T.C.I. made a claim of Rs. 120 lacs from the insurance company which assessed the value at Rs. 82 lacs and made an on-account payment of Rs. 70 lacs to T.C.I. According to the petitioners, under the insurance policy, which was a reinstatement policy, T.C.I. had the option to receive from the insurance company either the full value of the plant and machinery as on the date of the fire or re-instatement of the materials in specie : T.C.I. however opted not for the latter but to receive the money for its own aggrandisement instead of utilising it to re-start the Mill. A thinly veiled suggestion that this was a providential fire within 6 months from the closure application so as to face the workers with a fati accompli, was denied by Mr. Ganesh with some acerbity he is not normally prone to.

30. The suggested providentially of the fire is not within the ken of these petitions. What however is a matter of some wonderment is that if there had been any bona fides on the part of T.C.I. surely an amount as substantial as Rs. 70 lacs could well have been utilised in endeavouring to re-start the Mill instead of persisting in closing it down.

31. And now to the additional point raised in Writ Petition No. 244 of 1984 filed by the Maharashtra Girni Kamgar Union (M.G.K.U.)

32. On behalf of M.G.K.U., its learned Counsel Mr. Kapadia invited me to set aside the tribunal's order on the ground that the Tribunal should have given notice to M.G.K.U. to enable it to appear and make its submissions. To that end Mr. Kapadia relied on Rule 82-B(3) of the Industrial Dispute Rules 1957. Rule 82-B pertains to application for closure permission. Sub-rule (3) reads as under :

'A copy of application shall simultaneously be served either personally or by Registered Post Acknowledgment Due on the President or the Secretary or Secretaries of the Trade Union or Unions of workmen employed in the undertaking, wherever such union exists or unions exist.'

Mr. Kapadia urged that under this rule service must be effected on all Unions, whether recognised or not, as closure effects each and every worker who may or may not be a member of the recognised Union.

33. In this submission there is a basic fallacy in the context of the present closure application. The closure application made by T.C.I. was on 25th June, 1982. The old Rule 82-B which then was in force, required service only on the State Government. That was effected and the rule complied with. It was by Government Notification dated 15th July, 1982 that the new Rule 82-B came into force. There is nothing in Sub-rule (3) to indicate either expressly or by necessary implication that it has retrospective effect. For that matter, even Mr. Kapadia does not say it has. Hence the question of effecting service on M.G.K.U. under sub-rule (3) did not arise.

34. However according to Mr. Kapadia whom the matter was remanded by the Tribunal on 7th December, 1982 and the Minister passed his order on 3rd March, 1983, sub-rule (3) had come into force, hence service should have been effected on M.G.K.U.

35. No. The remand by the Tribunal on 7th December, 1982 did not constitute a new proceeding. Nor could it be equated with a fresh application for closure. It was merely a continuation of the closure application already initiated before the new Rule 82-B having no retrospective effect, came into force. Hence the question of service on M.G.K.U. under Rule 82-B(3) did not arise.

36. But then Mr. Kapadia says that service should have been effected on M.G.K.U. because it was as a result of the call given by M.G.K.U.'s leader Dr. Datta Samant, that the workers in the entire textile industry went on strike.

37. I deal with this submission not for the sake of its validity but as a concession to the solemnity with which it is made. Perhaps it is best answered by an analogy as far-fetched as Mr. Kapadia's submission itself. Indisputably, the call for the textile strike was given by Dr. Datta Samant. Indisputably also, Karl Marx gave his call : 'Workers of the World Unite/You Have Nothing To Lose But Your Chains'. To carry Mr. Kapadia's argument to its logical conclusion, for even strike or agitation which followed that call throughout the world, service would have to be effected on Karl Marx and he would have had to be given a hearing. The poor man would have his work cut out for him and DAS KAPITAL would never have been written.

38. Mr. Kapadia says that before the textile strike and even at present, three-fourths of the Mill's workers were and are members of M.G.K.U. This is a disputed question of fact which cannot be gone into in these petitions. However question may legitimately to asked : What was M.G.K.U. doing all these years when indisputably it was aware of the closure application A copy of that application was put up on the notice board and was even published in newspapers on 4th July, 1982. M.G.K.U.'s leader Dr. Datta Samant even gave press statements which received due prominence. Yet strangely enough, when it came to appear before the authorities, M.G.K.U. displayed a remarkable coyness which its ebullient leader is not said to possess.

39. The only answer that Mr. Kapadia could manage to muster was that unless served with a copy of the closure application, M.G.K.U. was under no obligation to appear. He likened M.G.K.U.'s seemingly strange reluctance to a person knowing that an ex-parte decree will be passed against him but still not appearing because he was not served with the writ of summons. The parallel is feeble. It can summarily be dismissed without comment.

40. Mr. Kapadia's reliance on the proviso to S. 36 of the Industrial Disputes Act can also be of no avail. The proviso contemplates case inter alia of termination of service. T.C.I.'s application was for closure of the Mill and cannot be equated with one for termination of service, though the latter would be the concomitant of the former, if granted. Proceedings for permission to close are something anterior to what follows, viz., termination of service. Closure is not termination of service, for despite a closure order an employer is entitled to change his mind and not close.

41. The judgment and order passed by the Tribunal on 18th November, 1983 are liable to be set aside, though not on the grounds urged by Mr. Kapadia. That I hereby do. T.C.I. shall pay to the petitioners the costs of each petition. Rules is made absolute accordingly.

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