Coats India (A Division of Madura Coats Limited) and Others vs The State of Bihar and Another

Samarendra Pratap Singh, J.—Heard learned Counsel for the parties.

Petitioner NO. 1 is the Company Coats India represented through his Vice-President-Legal and Company Secretary, Shri Ajay Seth. Petitioner No. 2 is the then President, Marketing (Consumer Thread), M/s Coats India (A Division of Madura Coats Limited) and Petitioner No. 3 is the then Branch Manager (Patna), M/s Coats India (A Division of Madura Coats Limited).

In the instant application, the Petitioners have prayed for quashing the entire prosecution including order dated 5.8.1997 (Annexure-1) passed by the Chief Judicial Magistrate, Patna in Complaint Case No. 882(M) of 1997, whereby he has taken cognizance u/s 10(3) of the Industrial Disputes Act, 1947, against the Petitioners.

Learned Counsel for the Petitioners submits that technically, the Chief Judicial Magistrate, Patna could have taken cognizance u/s 26(2), which is a penal provision and not u/s 10(3) of the Industrial Disputes Act, 1947, as it is a not a penal provision.

The prosecution case made out in the complaint petition filed by Deputy Commissioner (Labour), Patna in short is as follows:

The complainant stated that the Patna Branch of Petitioner No. 1 i.e. Coats India Limited ''Lekhi Bhawan'' issued notice of closure on 20.7.1996 on the ground of ''No Profit''. On 23.7.1996, the affected employees of the Company raised a dispute through Madura Coats Association with a copy to the Labour Minister that they had opposed the closure of the Branch of the Company before the Management on 17.6.1996. The conciliation Officer fixed 7.8.1996 for conciliation. The Management submitted its written reply, which the Respondent No. 2 did not find satisfactory. The complainant alleged that as other Branches of the Company, which were running at loss, were not closed, as such the Patna Branch ought not to have been closed on the ground of no profit and it should be treated as Lock Out and not closure. Further prosecution case is that the dispute was referred to the Labour Court. The authority u/s 10(3) of the Industrial Disputes Act, 1947, banned the Lock Out and intimation to this effect was given to the Management, which was asked to re-open the Branch. However, the Management did not show any inclination to do the same and replied in negative on 22.11.1996. The prosecution case is that as they have not obeyed the orders, they are liable to be prosecuted under Sections 26(2) and 31(2) of the Industrial Disputes Act, 1947.

Learned Magistrate took cognizance of offence u/s 10(3) of the Industrial Disputes Act, 1947. Learned Counsel submits that appropriate Section under which cognizance could have taken, if any, in such circumstances would be Section 26(2) of the Industrial Disputes Act, 1947, which is a penal provision.

The Petitioners submit that they had earlier moved this Court in Cr.W.J.C. No. 292 of 1998 for quashing of the order taking cognizance. A copy of the order has been annexed as Annexure-3 to this application.

This Court noticed in its order 2.11.1998 passed in Cr.W.J.C. No. 292 of 1998 that the Management asserted that it was a closure and the employees termed the same as a ''Lock Out''. This Court further noticed that the Conciliation Officer in apparent agreement with the stand of the workmen held that it was a case of lock out and recommended reference of the dispute to the Labour Court. The State Government vide its notification dated 4.10.1996 referred the following dispute for adjudication to the Labour Court, Patna:

Whether the workmen of M/s Coats India Ltd., who were working at Patna Branch, are entitled to get full payment on the basis of daily attendance after illegal lock out by the management since 20.7.1996? If not, what relief the workmen are entitled to?

This Court further observed that it appeared from conjoint reading of provisions of Section 10(3) and Section 26(2) that penal provision of Section 26(2) would be applicable, if during pendency of the reference an order has been issued by the State Government prohibiting the ''lock out'' or the ''strike out'' as the case may be u/s 10(2) of the Act. This Court held that if no such order is issued, the offence prescribed u/s 26(2) cannot be said to have been committed. This Court further observed that if it is ultimately found that the closure of the Branch of the Petitioner-company was, in fact, a closure as contended by the management and not lock out, as contended on behalf of the workmen, no order as contemplated u/s 10(3) of the said Act could be legally issued and no offence u/s 26(2) would be made out.

This Court further observed that if preliminary issue is decided in favour of the management, the order of the State Government contained in the aforesaid notification dated 4.10.1996 would be without jurisdiction and consequently the complaint would have to be quashed, being abuse of process of law.

Counsel for the Petitioners has brought on record the award dated 31.7.2008 vide Annexure-15 to Supplementary Affidavit, passed by Presiding Officer, Labour Court Patna in Reference Case No. 36 of 1996, whereby the reference itself has been held to be bad. The Labour Court noticed that compensation money has already been paid to the workers.

In this view of matter and as there is no finding that closure of the Branch was a ''Lock Out'' no offence u/s 26(2) or any cause of action u/s 10(3) of the Industrial Disputes Act is made out.

In the result, this application is allowed. The entire criminal prosecution arising out of Complaint Case No. 882(M) of 1997 including order dated 5.8.1997 passed by Chief Judicial Magistrate, Patna taking cognizance u/s 10(3) of Industrial Disputes Act is hereby quashed.