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CASE NO.: Appeal (civil)  14136 of 1996

PETITIONER: Hindalco Industries Ltd.                                         

RESPONDENT: Union of India & Ors.    

DATE OF JUDGMENT: 27/11/2003

BENCH: K.G. BALAKRISHNAN & P.VENKATARAMA REDDI

JUDGMENT: J U D G M E N T K.G. Balakrishnan, J.

       The appellant is a Public Limited Company having its registered office at  Bombay, engaged in the business of producing aluminium metal and its alloys  and its factory is located at Renukoot in Uttar Pradesh.    Bauxite being a raw  material required for the manufacture of aluminium, the appellant obtained  various mining leases in Bihar under the provisions of the Mines & Minerals  Regulations and Development Act, 1957.  Appellant was thus having a bauxite  mining lease which was known as Maidanpat Bauxite Mine.  The mining  operations at the Maidanpat Bauxite Mine were being done in forest land as well  as non-forest land.  On 24th July, 1993, the Divisional Forest Officer, Ranchi  West Forest Division, issued a letter to the appellant to stop the mining activities  in the forest land of the Maidanpat Bauxite Mines. The appellant was asked to  submit map and the records for decision to be taken in the matter.  The appellant  sent a reply stating that their lease was valid upto January, 1997 and that they  may be permitted to continue mining operations.   According to the appellant, the  Divisional Forest Officer did not accede to its request and the mining operations  were abruptly stopped and as there was no work for the workmen, a lay off was  declared from 31st July, 1993.  The appellant alleged that lay off compensation  was paid to the workmen.

       The learned counsel for the appellant further contended that request was  made to the forest authorities but no favourable response was received from  them and the appellant had to close the mine w.e.f. 19th August, 1993 and this  fact was intimated to the Divisional Forest Officer on 20th August, 1993.   Thereafter, a notice of closure under Section 25-FFF of the Industrial Disputes  Act, 1947 (hereinafter being referred as "the I.D. Act") was sent to the concerned  authorities.  The appellant further contended that though Section 25-O of the I.D.  Act had no application, in abundant caution the appellant made an application to  the Union of India for permission to effect closure.  The application filed by the  appellant was not entertained, as it was not filed within ninety days before the  date of intended closure.  The appellant thereafter explained the position of  closing of the mine on 19th August, 1993 for which the permission could not be  obtained in advance.  The first respondent after hearing the appellant as well as  the representatives of the workmen passed an order on 6th December, 1993.  In  that Order passed by the first respondent, the permission was granted subject to  the following conditions:-

(i)     The closure would be as per provisions of Section 25-O of the  Industrial Disputes Act, 1947; (ii)    Compensation and notice salary would have to be paid to the  workmen as per provisions contained under Section 25-O(8) of the  Industrial Disputes Act, 1947; (iii)   Whenever a fresh permission is granted to the Management for  mining in the State of Bihar, the retrenched workmen would be  employed as per the provisions contained in Section 25-H of the  Industrial Disputes Act.

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This permission shall take effect from the date of issue of this  letter."

The appellant challenged the order of the first respondent dated 6th  December, 1993 before the High Court  by contending that Section 25-O of the  I.D. Act had no application to the facts of the case as the closure of the work was  not intended by the appellant but as a result of the direction given by the  Divisional Forest Officer.  According to the appellant, a voluntarily, planned and  intended closure of an undertaking alone would attract Section 25-O of the I.D.  Act and only under such circumstances, prior permission of at least ninety days  before the date of intended closure is required to be obtained by the employer.   The appellant had also contended before the High Court that the various  conditions incorporated in the impugned order of the first respondent were not  warranted.  But all the pleas raised by the appellant were rejected by the Division  Bench of the High Court and aggrieved by the same, the present appeal is filed.

       We heard the learned Counsel for the appellant and also the learned  Counsel for the Union of India as well as for the workmen.  The learned Counsel  for the appellant strenuously contended before us that Section 25-O of the I.D.  Act has no application and no prior permission was required for the closure of the  mining activities as the appellant never intended to close it down before the  expiry of the lease period.  The learned Counsel for the appellant further  contended that as Section 25-O of the I.D. Act has no application, the appellant  is liable to pay compensation to the workmen only under Section 25-FFF of the  I.D. Act.  On a closer analysis of the various provisions contained in the I.D. Act,  it is clear that the pleas raised by the appellant are not acceptable.  Section 25-O  of the I.D. Act reads as follows:- 25-O    "(1)An employer who intends to close down an undertaking  of an industrial establishment to which this Chapter applies shall, in  the prescribed manner, apply, for prior permission at least ninety  days before the date on which the intended closure is to become  effective, to the appropriate Government, stating clearly the  reasons for the intended closure of the undertaking and a copy of  such application shall also be served simultaneously on the  representatives of the workmen in the prescribed manner:

Provided that nothing in this sub-section shall apply to an  undertaking set up for the construction of buildings, bridges, roads,  canals, dams or for other construction work.

(2)     Where an application for permission has been made under sub- section (1), the appropriate Government, after making such enquiry  as it thinks fit and after giving a reasonable opportunity of being  heard to the employer, the workmen and persons interested in such  closure may, having regard to the genuineness and adequacy of  the reasons stated by the employer, the interests of the general  public and all other relevant factors, by order and for reasons to be  recorded in writing, grant or refuse to grant such permission and a  copy of such order shall be communicated to the employer and the  workmen.

(3)     Where an application has been made under sub-section (1) and the  appropriate Government does not communicate the order granting  or refusing to grant permission to the employer within a period of  sixty days from the date on which such application is made, the  permission applied for shall be deemed to have been granted on  the expiration of the said period of sixty days.

(4)     An order of the appropriate Government granting or refusing to  grant permission shall, subject to the provisions of sub-section (5),  be final and binding on all the parties and shall remain in force for  one year from the date of such order.

(5)     The appropriate Government may, either on its own motion or on

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the application made by the employer or any workman, review its  order granting or refusing to grant permission under sub-section (2)  or refer the matter to a Tribunal for adjudication:

Provided that where a reference has been made to a Tribunal   under this sub-section, it shall pass an award within a period of  thirty days from the date of such reference.

(6)     Where no application for permission under sub-section (1) is made  within the period specified therein or where the permission for  closure has been refused, the closure of the undertaking shall be  deemed to be illegal from the date of closure and the workmen  shall be entitled to all the benefits under any law for the time being  in force as if the undertaking had not been closed down.

(7)     Notwithstanding anything contained in the foregoing provisions of  this section, the appropriate Government may, if it is satisfied that  owing to such exceptional circumstances as accident in the  undertaking or death of the employer or the like it is necessary so  to do, by order, direct that the provisions of sub-section (1) shall not  apply in relation to such undertaking for such period as may be  specified in the order.

(8)     Where an undertaking is permitted to be closed down under sub- section (2) or where permission for closure is deemed to be granted  under sub-section (3), every workman who is employed in that  undertaking immediately before the date of application for  permission under this section, shall be entitled to receive  compensation which shall be equivalent to fifteen days’ average  pay for every completed year of continuous service or any part  thereof in excess of six months."

       Section 25-O states that if an employer intends to close down an  undertaking of an industrial establishment, he shall seek permission at least  ninety days before the date of intended closure is to become effective.  The  reason for the intended closure also should be given in detail and the copy of  such application shall be served on the representatives of the workmen in the  prescribed manner.  The contention of the appellant that Section 25-O would  apply only to a voluntary and intended closure of an undertaking is without any  force.  If the undertaking of an industrial establishment is to be closed for reasons  beyond the control of the employer, provisions have been made under sub- Section 7 of Section 25-O of the I.D. Act.  In the present case, the appellant was  asked to stop the mining activities in the forest land by the Divisional Forest  Officer by letter dated 24th July 1993.  This letter does not say that the mining  activity shall be closed immediately or with effect from any particular date.  The  appellant was asked to produce map and other relevant records within a period  of 5 days and it is important to note that the appellant declared lay off on 31st  July, 1993 itself and according to the appellant, the mines were closed on 19th  August, 1993.  In the letter dated 24th July, 1993, it is stated that the decision  would be taken after the receipt of the records from the appellant.  No order has  been produced by the appellant to show from which date the mining operations  were directed to be stopped by the forest authorities.  The appellant has also not  produced any other documents.  From these facts also, it is not very clear  whether the appellant was disabled from obtaining prior permission of the first  respondent at least ninety days before the date of closure of the mining  operations.      

The next contention urged by the appellant’s learned Counsel is that the  mining operations were stopped due to unavoidable circumstances, and,  therefore, the appellant is liable to pay compensation only under Section 25-FFF  of the I.D. Act.  This plea is also devoid of merit in view of the specific Section 25- K of the I.D. Act.  Section 25-K Chapter V-B reads as under:- 25K.(1) The provisions of this Chapter shall apply to an  industrial establishment (not being an establishment of a

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seasonal character or in which work is performed only  intermittently) in which not less than [one hundred]  workmen were employed on an average per working day  for the preceding twelve months.

(2)     If a question arises whether an industrial establishment is  of a seasonal character or whether work is performed  therein only intermittently, the decision of the appropriate  Government thereon shall be final."

Admittedly, the appellant had an establishment where more than 100  workmen were employed on an average per working day.  This fact is not  disputed by the appellant.  In that event, the provisions contained in Chapter V-B  of the I.D. Act would apply to the appellant.  Section 25-O being the provision  contained in Chapter V-B of the I.D. Act, they are the relevant provisions  regarding the procedure for closing down of an undertaking.  This clearly shows  that Section 25-FFA and Section 25-FFF of Chapter V-A would not apply in  respect of the closure of the mining operations of the appellant.  The appellant  admits that about 211 employees had been retrenched.  Under sub-Section 8 of  Section 25-O special provision has been made for the payment of compensation  to workers when a permission for closure is granted.

In view of the aforesaid circumstances, the plea of the appellant that  Section 25-O of the I.D. Act applies to only planned and intended closure by the  employer is devoid of merits and Section 25-O of the I.D. Act will govern the  situation.  We find no error of jurisdiction or illegality in the impugned judgment.   The appeal is without any merits and is dismissed.  If the workers are not so far  paid their due compensation, the appellant shall pay the same within a period of  two months.