Case Note & Summary
The dispute arose from an application by an industrial employer for closure of an industrial unit at Andheri, Bombay, under Section 25-O(1) of the Industrial Disputes Act, 1947. The company claimed that the unit became a heavily losing business venture, incurring losses from 1991-92, and ceased manufacturing activity on November 3, 1992. Of 774 workmen originally employed, 454 accepted a voluntary retirement scheme, but 320 did not. The company sought permission to close the unit; the State Government rejected the application on October 12, 1992. The company then filed a review application on February 23, 1993 under Section 25-O(5) of the Act, which was within one year of the rejection order. Instead of reviewing the rejection, the State Government, after notice and hearing, made a reference to the Industrial Tribunal on April 7, 1994 under Section 25-O(5) read with Section 10(1) of the Act for adjudication of the closure case.
Headnote
A) Industrial Disputes - Closure of Undertaking - Review of Order - Industrial Disputes Act, 1947, Sections 25-O(4) and 25-O(5) - The order passed under Section 25-O(2) remains subject to the provisions of sub-section (5), and if a review application is filed within one year from the date of such order, the order does not attain finality; the State Government retains jurisdiction to consider the review application on merits even after expiry of one year. Held that the High Court erred in holding that the power of review automatically comes to an end after one year despite a timely review application. (Paras not mentioned)
B) Industrial Disputes - Reference to Industrial Tribunal - Jurisdiction of State Government - Industrial Disputes Act, 1947, Section 25-O(5) read with Section 10(1) - A reference made by the State Government to the Industrial Tribunal after the expiry of one year from the order under Section 25-O(2), but while a review application filed within that one year remains pending, is valid and within jurisdiction. Held that the State Government is empowered to refer the matter to a tribunal for adjudication during pendency of a timely review application. (Paras not mentioned)
C) Industrial Disputes - Interpretation of Statutes - Harmonious Construction - Industrial Disputes Act, 1947, Sections 25-O(4) and 25-O(5) - Sub-section (5) operates in harmony with sub-section (4); the one-year period mentioned in sub-section (4) is not absolute when a review application is made within that period, as the finality of the order is enlarged until the review application is disposed of. Held that such construction gives meaningful effect to the review remedy and avoids rendering the review application infructuous. (Paras not mentioned)
Issue of Consideration
Whether the State Government's power to review or refer the matter under Section 25-O(5) of the Industrial Disputes Act, 1947 lapses after expiry of one year from the date of order under Section 25-O(2), even if the review application was filed within that one year period, and whether a reference made after one year but during pendency of such review application is without jurisdiction.
Final Decision
The Supreme Court allowed the appeal, set aside the judgment of the Division Bench of the Bombay High Court, and upheld the reference made by the State Government to the Industrial Tribunal under Section 25-O(5) read with Section 10(1) of the Industrial Disputes Act, 1947.
Law Points
- Order under Section 25-O(2) remains subject to review under Section 25-O(5)
- one-year period in Section 25-O(4) subject to sub-section (5)
- review application filed within one year prevents finality of order under Section 25-O(2)
- State Government retains jurisdiction to consider review or make reference even after one year if review application timely filed
- reference under Section 25-O(5) read with Section 10(1) valid during pendency of timely review application.
Case Details
1996 AIR 1282, 1996 SCC (2) 118, JT 1996 (1) 129, 1996 SCALE (1)181
Maharashtra General Kamgar Union and Another
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Nature of Litigation
Appeal before the Supreme Court against a Division Bench judgment of the Bombay High Court quashing a reference made by the State Government to the Industrial Tribunal under Section 25-O(5) read with Section 10(1) of the Industrial Disputes Act, 1947.
Remedy Sought
The appellant company sought to set aside the High Court's judgment and restore the reference made to the Industrial Tribunal, thereby allowing the closure application to be adjudicated.
Filing Reason
The High Court held that the reference was invalid because it was made after expiry of one year from the order rejecting the closure application, despite a timely review application, and thus quashed the reference.
Previous Decisions
The Single Bench of the Bombay High Court dismissed the writ petition filed by the respondent union challenging the reference. The Division Bench allowed the union's appeal and set aside the Single Bench's order, quashing the reference.
Issues
Whether the power of the State Government to review or refer the matter under Section 25-O(5) of the Industrial Disputes Act, 1947 lapses after one year from the order under Section 25-O(2), even if the review application was filed within that one-year period.
Whether a reference to the Industrial Tribunal made after one year from the order under Section 25-O(2), but during pendency of a timely filed review application, is without jurisdiction.
Submissions/Arguments
The appellant contended that the one-year period in Section 25-O(4) is subject to Section 25-O(5); if a review application is filed within one year, the order under Section 25-O(2) does not attain finality and the State Government retains jurisdiction to consider the review application on merits.
The appellant argued that any construction imposing an embargo on exercise of review jurisdiction after one year would violate the very purpose of review and render the review application abortive and infructuous.
The appellant submitted that the State Government was empowered to make a reference under Section 25-O(5) during the pendency of the review application, even after one year had elapsed.
Ratio Decidendi
An application for review under Section 25-O(5) of the Industrial Disputes Act, 1947, if filed within one year from the date of order under Section 25-O(2), prevents the order from attaining finality and keeps the matter pending. Consequently, the State Government retains jurisdiction to either review the order itself or refer the matter to a tribunal for adjudication, even after the expiry of one year from the original order, until the review application is finally disposed of.
Judgment Excerpts
It has been held by the Division Bench that: (1) in terms of Section 25 (O) (4) of the Act, the order passed on the application for closure remains operative for one year from the date of such order and after expiry of such period, the power of review of the order automatically comes to an end.
Mr. Bobde has submitted that for giving appropriate meaning to sub-section (4) and sub-section (5) of Section 25(O) of the Act, it should be held that the order passed under sub-section (2) remains valid and operative for one year from the date of such order under sub-section (2) if within the said period of one year, no application for review of the order has been made. But if such application is made within the aforesaid time frame, the order under Section 25(O)(2) does not attain finality but remains operative subject to order by way of review.
Procedural History
The company applied for closure permission on August 14, 1992 under Section 25-O(1) of the Industrial Disputes Act, 1947. The State Government rejected the application on October 12, 1992. The company filed a review application on February 23, 1993 under Section 25-O(5), within one year of the rejection. Instead of reviewing, the State Government made a reference to the Industrial Tribunal on April 7, 1994. The respondent union challenged the reference by filing Writ Petition No. 1446 of 1994 before the Bombay High Court, which was dismissed by the Single Bench on June 22, 1994. The union appealed, and the Division Bench allowed the appeal on August 9, 1994, setting aside the Single Bench's order and quashing the reference. The company then appealed to the Supreme Court, which granted leave and heard the appeal.
Acts & Sections
- Industrial Disputes Act, 1947: Section 25-O, Section 10(1)
