2003 (12) TMI 324 - HC - Companies Law

Issues Involved:
1. Validity of retrenchment notices.
2. Right of employees to be transferred/absorbed in the running units of the Corporation.
3. Applicability of the U.P. Absorption of Retrenched Employees of Government and Public Corporation in Government Service Rules, 1991.

Issue-wise Detailed Analysis:

1. Validity of Retrenchment Notices:

The Court examined whether the retrenchment notices were valid and in conformity with sections 6N, 6P, and 6W of the U.P. Industrial Disputes Act, 1947. The retrenchment notices involved questions of fact, such as whether the second notice of retrenchment required reasons and if a valid tender of retrenchment compensation was made. The Court referred to the Supreme Court's decision in Scooters India v. Vijai E.V. Eldred, which held that the High Court should not entertain disputes involving the validity of termination of services directly through writ petitions when alternative remedies under Industrial Laws are available. The Court also cited Chandrama Singh v. Managing Director, UP Co-operative Union, emphasizing that such disputes should be resolved through industrial adjudication.

2. Right of Employees to be Transferred/Absorbed in Running Units:

The petitioners, who were wage board employees, argued for their transfer and absorption in the running units of the Corporation. The Court noted that the petitioners' services were regulated by Certified Standing Orders of the individual mills/units and could not be equated with the Corporation employees who could be transferred. The Court held that the closure of one unit does not imply the closure of the entire business and that the employer cannot be compelled to continue operations in a closed unit. The Court referred to the case of Workmen of the Straw Board Mfg. Co. Ltd. v. Straw Board Mfg. Co. Ltd., which established that closure of a unit does not lead to the closure of other units if they can function independently.

The Court found that the petitioners did not have a legally enforceable right to be absorbed in the running units, as the units were separate and distinct industrial establishments. The letter from the Chairman of the Corporation and the Government order issued before the BIFR sanctioned the rehabilitation scheme could not operate as promissory estoppel against the Corporation.

3. Applicability of the U.P. Absorption of Retrenched Employees of Government and Public Corporation in Government Service Rules, 1991:

The Court addressed the petitioners' claim for absorption under the Absorption Rules of 1991. It held that petitioners appointed before 1-10-1986 had a right to apply for retrenchment certificates and claim appointment from the State Government. However, the Court rejected the argument that the cut-off date in the Rules of 1991 should be extended to 30-6-1998, as the rules operated in different fields with different objectives. The Court clarified that the Absorption Rules of 1991 had been repealed, but those retrenched before the repeal retained their rights under these rules. The Court allowed the writ petitions for employees appointed before 1-10-1986 to be considered for absorption under the Absorption Rules of 1991, provided they accepted the retrenchment compensation and obtained certification from the Corporation.

Conclusion:

The Court dismissed writ petitions that were second petitions on the same cause of action, emphasizing the prohibition against filing successive writ petitions for similar reliefs. For other petitions, the Court directed that employees appointed before 1-10-1986 be considered for absorption under the Absorption Rules of 1991, subject to the acceptance of retrenchment compensation. The Court reiterated that disputes involving the validity of retrenchment should be resolved through industrial adjudication rather than writ petitions.

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