Holding

Workmen are to be treated as continuously employed until the industry restarts at the new location, and can be deemed retrenched only if they expressly opt not to rejoin, not merely for failing to respond to the employer's notices.

Summary

The Supreme Court had ordered the closure of 168 industries, including Birla Textiles, and prescribed that workmen would retain continuity of service and receive full wages until the industries restarted at a new location. The management decided to relocate to Baddi, Himachal Pradesh, and issued several notices requiring workmen to state their willingness to shift, threatening retrenchment for non‑response. The workmen, through unions, replied that they were willing to shift but conditioned their consent on pending review petitions against the Court's order permitting relocation outside Delhi. The Court examined whether the management could compel workmen to give an option to join before the industry actually restarted and whether failure to do so amounted to retrenchment. It held that clauses 9(a) and 9(b) of the 8 July 1996 order guarantee continuous employment until restart, and the industry cannot deem workmen retrenched for not opting to shift earlier. Consequently, all workmen except those who expressly opt not to rejoin must be allowed to report at Baddi and receive back wages and shifting bonus; those who do not report are retrenched as of 30 Nov 1996 with limited compensation.

Issues considered

Whether workmen who did not expressly opt to shift before the stipulated dates can be deemed retrenched under the Supreme Court's 1996 order.
Whether the employer may compel workmen to give an option to join the relocated unit before the industry restarts.
Interpretation of para 9(a) and 9(b) of the 8 July 1996 order regarding continuity of service and payment of wages.
Whether filing a review petition against the Court's order constitutes a breach of that order.
Entitlement of workmen to back wages, shifting bonus, and compensation under the Industrial Disputes Act.

Legislation cited

Industrial Disputes Act, 1947s. 25-B, s. 25-F(b)

Subjects

environmental pollutionindustrial closurerelocation of industrycontinuity of serviceretrenchmentIndustrial Disputes Actback wagesshifting bonusSupreme Court reviewlabour law

Judgment

M.C. MEHTA A
v.
UNION OF INDIA AND ORS.

- DECEMBER 18, 1998

[S. SAGHIR AHMAD AND M. JAGANNADHA RAO, JJ.] B

Constitution of India:

... Articles 32 and 2 I-Environment pollution by industries-By its Order
dated 8. 7. I 996, Supreme Court directed closure of various industries and C
• >- directed them to relocate-While so directing, certain benefits and incentives
were given both to the industries and the workmen vide para 9 (a) to (j)-
By a subsequent order dated 3I.12.1996 Supreme Court modified the order
dated 8.7.1996 permitting relocation outside NC.T. Delhi-Industries, before
; such relocation, issued notice to the workmen to opt by a specified date to D
shift or else they would be deemed to be retrenched w.ej 30.l/.1996-
Workmen, pursuing review of Order dated 31.12.1996, intimated the
management vide their letter dated 6.1.1997 their willingness to relocate
subject to the outcome of their review before Supreme Court - vide clauses
(a) and (b) of para 9 of the order dated 8.7.1996 the workmen had to be
treated in service till the time of restarting of the industries at the relocated E
place-Held, the order dated 31.12.1996 permitting relocation of industry
:>
outside Delhi could not be deemed to amount to an option not to join at the
proposed place of relocation-the letter of the workmen dated 6.1.1997
could not be treated as a conditional option to rejoin because they are not
obligated to give any option to rejoin but they could have opted not to
rejoin-The reliance on clauses (c), (d) and (e) of para 9 of the order dated F
8.7.1996 to contend that workmen not exercising option by 31.12.1996
would be deemed to have been retrenched wef 30.11.1996 is totally
misplaced-As per clauses (a) and (b) of para 9 of the order dated 8.7.1996,
the workmen had to be treated in service till the time of restarting of the
industry at the relocated place-Hence all the workmen except those who G
exercised or would exercise an option not to join, allowed to rejoin at the
... place of relocation under the supervision of Dy. Labour Commissioners of the
relocated place as well as Delhi-Those workmen not joining or refusing to
rejoin by the specified date were directed to be retrenched w.ej 30. l/.1996
and to be paid only one year's (not six year's) wages plus compensation as
725
H
726 SUPREME COURT REPORTS [1998) SUPP. 3 S.C.R.

A per Section 25-F(b) of the Industrial Disputes Act-labour law-
Retrenchment-Compensation-Jndustrial Disputes Act, I 947, Section
25-F(b).

Articles I 37 and 32-Review of Supreme Court order-Held, the right
of any party to seek review of orders is a right which is lawfully exercised
B and cannot be treated as a breach of the order passed against which review
is sought.

By an order dated 8.7.1996, Supreme Court directed closure of 168
industries and whil1~ so directing various other directions were given
including the grant of incentives and benefits to industries willing to relocate
C and also payment of various amount to the workmen in para 9 (a) to (I) of
its order. Initially the industry was not prepared to relocate and thus sought
to retrench the employees and to pay whatever was payable to the workmen
under order dated 8.7.1996 but at the suggestion of Supreme Court agreed
to reconsider its decision which was recorded by a subsequent order dated
D 4.12.1996. By this order Supreme Court modified direction 9(d) relating to
payment of back wages as "six years wages" instead of "one year wages"
in case the industry decided to close down. After reconsidering the matter,
the industry decided to relocate to Baddi in Himachal Pradesh, and issued
notice to the workmen who were willing to be relocated at the new site and
if they so report they would be entitled to the benefits of the order of Supreme
E Court dated 8.7.1996 and those who were not willing to shift would be deemed
to have been retrenched w.e.f. 30.Jl.1996 provided they were in continuous
service as defined in Section 25-B of the Industrial Disputes Act. Eight
unions of the workmen sent a reply stating that the industry has violated the
orders of Supreme Court as it was relocating to the State of Himachal
F Pradesh rather than in N.C.T. Delhi as envisaged in the Order dated 8.7.1996.
But ignoring this reply, the industry published a notice on 30.12.1996
reiterating its plan to relocate in the State of Himachal Pradesh.

At t!Jis stage, the industries approached Supreme Court for modification
of its order dated 8.7.1996 permitting it to relocate outside Delhi and the
G same was allowed by Supreme Court on 31.12.1996. It also directed that
after the relocation, these industries would be treated on par with those
industries relocating in Delhi. On 4.1.1997, the industry put up a fresh
notice asking the workmen to intimate to the management by 7.1.1997 their
willingness to shift to Baddi upon which salary and wages would be disbursed
to them on 9/10.1.19>97. In reply thereto, seven unions through a Joint
H Action Committee is!med a notice to industry on 6.1.1997 stating that the
M.C. MEHTA v. U.0.1. 727
workmen were willing to move to the State of Himachal Pradesh without A
prejudice to their rights subject to the outcome of review and other
proceedings being pursued before the Supreme Court against its order dated

- 31.12.1996. Industries published a further notice on 8.1.1997 requesting
"each workmen" to give his willingness within one week to shift in terms
of a proforma addressed to the industry but none of the workmen responded B
and hence the industry deemed the employees retrenched w.e.f. 30.11.1996.
However, icdustry gave one more opportunity and issued another notice on
.... 20.5.1997 requesting workmen who were willing to shift to report at Baddi
not later then 7.6.1997.

Hence these I. A.s moved by the workmen for implementation of its C
Order dated 8.7.1996.

It was contended by the workmen that the order dated 8.7.1996 of
Supreme Court guaranteed continuity up to the date of the restart of the
industry at the new location and hence the option asked for by the industry
/
was uncalled for and contrary to its order; the letter of workmen dated D
6.1.1997 contained an unconditional offer to move to the State of Himachal
Pradesh and after this industry could not have treated the applicants as
unwilling to join.
It was contended by the industries that the workmen were not entitled
to give a conditional option as contained in their letter dated 6.2.1997; that E
the workmen having filed review petition for recalling order dated 31.12.1996,
were indeed - even on 6.1.1997 not willing to go to the State of Himachal
Pradesh; and that the letter dated 6.1.1997 was not a valid option; and thus
the industry rightly deemed the employees as retrenched w.e.f. 30.11.1996.
Allowing the I.As. filed by the workmen, this Court
F
HELD: I.I. The two clauses (a) and (b) of para 9 of Order dated
8.7.1996 are crucial and deal with continuity of service of the workmen on
the same terms and conditions and the payment of full wages till the "restart"
at the new place and these conditions cannot be altered to their detriment.
The employees are to be deemed to be in active employment right from the G
date of "closure" of the industry in Delhi till its "restart" at the place of
relocation and they had to be paid their full wages with continuity of service
for the said period. There was, therefore, no question of the industry
compelling the workmen to exercise any option before the date of such
restart informing the industry that they were prepared to rejoin at the place
where the industry was proposed to be started. The industry could not be said H
728 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A to be restarted unless and until it had got the plant installed and obtained
all necessary permission for its being commissioned at the new place. Till
such time, the workmen must be deemed to be in service with continuity. The
said co11tinuum could not be broken by the industry by unilaterally asking
the workmen to exercise an option to join. Such an option on the part of the
B workmen was nowhere contemplated by the order of this Court dated 8. 7.1996.
The industry was nowhere given any right to seek such an option.
(738-F-H; 739-A]

1.2. This Court gave an option to the workmen for 'not joining' and not
'for joining' at the relocated place. Till the time of the 'restart' of the
C industry at the relocated place, it was open to the workmen to say that they
would not rejoin. The only consequence is that if they exercised such an
option on any date after the date of closure and before restart, they would
still be deemed to have been retrenched w.e.f. 30.11.1996 and not with effect
from the date on which they exercised their option not to rejoin. In other
words, if they opt not to rejoin, they would not be entitled to wages from the
D date of closure till the date they exercised their option not to rejoin -
inasmuch as any suc:h refusal to rejoin at Baddi, communicated to the
industry before the da1te of restart would result in their being deemed to have'
been retrenched from 30.11.1996. (739-B-C)

E 1.3. The industry proceeded on a total misconception of the order of
this Court dated 8.7.1996 and adopted a procedure which ran quite contrary
to scheme which was envisaged by this Court for the benefit of workmen.
(739-DJ

1.4. The fact that during the period before the industry was relocated,
F the workmen approac:hed this Court for recall of the order dated 31.12.1996
which order permitted relocation of the industry outside Delhi could not be
deemed to amount to an option not to rejoin at the proposed place of relocation.
In fact, the letter dated 6. 1.1997 of the workmen could not be treated as a
conditional option to rejoin because they were not obligated to give any option
G to rejoin but they could have, if they so chose, opted not to rejoin. The letter
dated 6.1.1997 could not be treated as a letter exercising option not to rejoin
at the place of relocation. This is because it specifically contained an offer
to rejoin. The fact that the workmen subjected their intention to rejoin
subject to orders of this Court did not convert an intention to join into an
intention not to join at the relocated place. Further, the right of any part to
H seek review of orders of this Court is a right, which is lawfully exercised
M.C. MEHTA v. U.0.1. 729
and cannot be treated as a breach of the order of this Court dated 8. 7.1996. A
(739-E-G)

1.5. Industries are, therefore, directed to allow all the workmen except

- those who exercised or would exercise an option not to rejoin at Baddi. In
order to avoid any scope for future disputes, it is directed that all those who
are willing to rejoin at Baddi, to report there along with their identity cards B
or other evidence to identify them and sign or put their thumb-mark in a
register in the joint presence of the Dy. Labour Commissioner having
jurisdiction over it and Dy. Labour Commissioner of N.C.T. (Delhi). These
officers shall countersign in the register certifying that the particular
workman had reported. All such workmen who rejoin shall be entitled to the C
benefits of the orders of this Court dated 8.7.1996 and subsequent orders,
in respect of continuity, back wages from date of closure till date of such
rejoining, in addition to one year's wages towards shifting bonus.
(739-G-H; 740-A-B(

1.6. In respect of such of the workmen who do not so report or who D
otherwise give it in writing to the Dy. Labour Commissioners of Baddi and
Delhi that they are not willing to rejoin, they shall be deemed to have been
retrenched w.e.f. 30.11.1996 and shall be entitled to one year's wages and
also to Section 25F(b) compensation as per the orders of this Court dated
8.7.1996. (740-C-D)

M.C. Mehta v. Union of India, [1996) 4 SCC 750, explained.
E

M.C. Mehta v. Union of India, (1997) 11 SCC 327, referred to.

CIVIL ORIGINAL JURISDICTION: I.A. No. 202 in I.A. No. 22 Etc.
Etc. Writ Petition (C) No. 4677 of J 985 Etc.
F
IN

(Under Article 32 of the Constitution of India.)

Ms. Indira Jaisingh, D.K. Agarwal, S.B. Sanyal, Kapil Sibbal, Dipankar
Gupta, Dushyant Dave, Ms. Neeru Vaid, A. Shenoy, S. Ghosh, S.R. Bhatt, G
Ashok Agarwal, Dinesh Kumar, R.S. Sodhi, Sudhir Walia, M.S. Dehiya, Mahesh
Srivastava, Pramod Swarup, P. Chakravarty, J.B. Dadachandji, O.P. Khaitan,
A.T. Patra, S. Sukumaran, M.C. Mehta, (Ranjit Kumar) (AC), D.B. Mehra and
S.N. Sikka, for the appearing parties.

The Judgment of the Court was delivered by H
730 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A M. JAGANNADHA RAO, J. The dispute in this batch of I.As is between
the Workmen and Management of Mis Birla Textile (Prop. Textiles Ltd.,
Calcutta). Common question arise in all these I.As.

The I.A. 202 of 1992 (in I.A. 22 in W.P. 4677of1985) has been filed on
behalf of2800 workers of Mis. Birla Textiles (Proprietor Textiles Ltd., Calcutta)
B (the "Industry") who claim to have worked for various periods ranging from
5 to 30 years and whose services are in jeopardy upon the closure of the
industry at Delhi, consequent to orders of this Court. The reliefs sought for
in this I.A. are (i) payment offull back wages w.e.f. 1.12.1996 along with 18%
interest (ii) to treat the workmen as in continuous employment for 1.12.1996
C (iii) to direct the industry to deem that the workmen have exercised option to
shift in accordance with order of this Hon'ble Court (iv) to direct the industry - _,-
to give I year's wages as shifting bonus (v) to direct the industry to ask the
workmen to report at the selection sites after the factory is fully set up and
commenced production, with basic amenities for the workers and the families.

D The following are the facts: By an order dated 8.7.j.996 in M.C. Mehta
v. Union of India, [1996] 4 SCC 750, this court directed closure of 168
industries including the industry in question. Various directions were given
including the grant of incentives and benefits to industries desiring to relocate
and also for payment of various amounts to the workmen. We are mainly ~ A
concerned with din:ctions 9(a) to (f) issued in the above case which read as
E follows:-

"(9) The workmen employed in the above-mentioned 168 industries
shall be entitled to the rights and benefits as indicated hereunder:

(a) The workmen shall have continuity of employment at the new town
F and place where the industry is shifted. The terms and conditions of
their employment shall not be altered to their detriment;
(b) The period between the closure of the industry in Delhi and its
restart at the place of relocation shall be treated as active employment
and the workmen shall be paid their full wages with continuity of
G service;
(c) All those workmen who agree to shift with the industry shall be !'--
given one year's wages as "shifting bonus" to help them settle at the
new location;
(d) The workmen employed in the industries which fail to relocate and
H the workmen who are not willing to shift along with the relocated
M.C. MEHTA v. U.O.l. [M. JAGANNADHA RAO, J.] 731
industries, shall be deemed to have been retrenched with effect from A·
30.11.1996 provided they have been in continuous service (as defined
in Section 25-B of the Industries Disputes Act, 1947) for not iess than
one year in the industries concerned before the said date. They shall
be paid compensation in terms of Section 25-F(b) of the Industrial
Disputes Act, 1947. These workmen shall also be paid, in addition, B
one year's wages as additional compensation;

.. (e) The "shifting bonus" and the compensation payable to the workmen
in terms of this judgment shall be paid by the management before
31.12.1996.

(f) The gratuity amount payable to any workmen shall be paid in C
··- addition."

Initially, the industry was not prepared to relocate elsewhere and,
therefore, it informed this Court that it would retrench the employees and pay
whatever was payable to the workmen under the above order. But pursuant D
to the suggestions of this Court, the industry reconsidered the matter and this
Court in its order dated 4.12.96 in MC. Mehta v. Union of India, [ 1997] 11
sec 327 observed that the learned counsel for the industries had accepted
· "" the Court's suggestion to have a "fresh look" into the matter. In the same
order dated 4.12.96, this Court modified the direction 9(d) relating to payment
of back wages as "six years' wages" instead of 'one year wages' in case the E
industry decided to close down. That would mean that in the event of non-
relocation, the workmen would have to be paid 6 years wages and not merely
I year wages.

Subsequently, in supersession of an earlier notice dated 28.11.96, the
industry published a fresh 'notice' on its Notice Board that it had reconsidered F
'
the matter as per the order of this Court dated 4.12.96 and decided to relocate
the industry in Baddi, District Solan (H.P.) and that the workmen who were
willing to be relocated at the new site 'Baddi' should inform the management
in writing by 25.12.96. If they reported, they would be entitled to continuity,
their terms and conditions would not be altered, the period between the G
closure of the unit at Delhi and its re-start at Baddi would be treated as active
employment and they would be paid full wages with continuity of service.
Further, all those workmen agreeing to shift would get 1 year's wages as
'shifting bonus' to help them to settle at Baddi. Those who were not willing
to shift would be deemed to have been retrenched w.e.f. 30.11.96, provided
they were in continuous service (as defined in Section 25-B of the Industrial H
732 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A Disputes Act, 1947) for not less than one year in this unit before the said date.
They would be paid compensation in terms of Section 25F(b) of the Industrial
Disputes Act and in. addition, one year's wages as additional compensation.
It was further notifi1!d that the shifting bonus to the workmen who agreed to
,..... ,_
shift and the compensation for those unwilling to shift to 'Baddi" would be
paid before 31.12.1996, as per directions of this Court.
B
On 23.12.96, eight unions of workmen of this industry sent a reply
stating that the industry had violated the order of this Court as it was . ~

relocating in the State of Himachal Pradesh rather than in the National Capital
Territory of Delhi as envisaged in the order dated 8.7.96 and that, therefore,
c it was not proper for the industry to ask the employees to shift to the State
of Himachal Pradesh. But ignoring this reply the industry published a notice
on 30.12.96 reiterating its plan to relocate in the State ofHimachal Pradesh.
-··
At that stage, this Court was approached by the industries for
modification of the order dated 8.7.96 and for permitting relocation outside
D N.C.T. (Delhi). On that, this Court passed an order on 31.12.1996 permitting
relocation in Haryana, Punjab, Himachal Pradesh, Rajasthan and Uttar Pradesh
and said that if they were so relocated, the industries would be treated on
par with those industries relocating in N .C.T. (Delhi). This order was to be
treated as a clarification of the order dated 8. 7 .1996.

E
There was some controversy that when this order was passed in
chambers on 31.12.1996, all parties were not present. But the counsel for the
industries disputed this contention. Be that as it may, it is not necessary to
go into this dispute - particularly, when some latter applications filed by the
workmen for recalling this order dated 8.7.96 did not fructify.
F ~
Therefore, i.e., after 31.12.96, the industry put up a fresh notice on
4 .1.1997 stating that:

"As per the directions of the Hon'ble Supreme Court, those workmen
who are willing to shift would be entitled to receive salary/wages for
G December, 96 and for subsequent months, the workmen should intimate
to the management by January 7th 1997 their willingness to shift to P" _,
Baddi, upon which the salary/wages for December, 1996 will be
disbursed to them on 9th and 10th January, 1997."

On the same day, 4.1.1997, a further notice was put up on the Notice Board
H that though the industry took steps for payment on 29, 30, 3 lst December,
M.C. MEHTA v. U.0.1. [M. JAGANNADHA RAO, J.) 733

1996, no workmen had come to collect the cheques. Hence, it was requested A
that the workmen might come and collect the cheques. ··

In reply thereto, seven unions through a Joint Action Committee issued
a notice on 6.1.97 to the industry stating that the workmen were willing to
move to the State of Himachal Pradesh. The said notice read as follows:
B
"That all the workmen and employees of Birla Textiles Mills hereby
give their willingness for relocation/shifting without prejudice to their
rights subject to the outcome of the review and other proceedings
being pursued by our lawyers before this Hon'ble Supreme Court of
India, against the order dated 31.12.96 passed by the Hon 'ble Supreme
Court of India." c
It is the main contention for the industry (respondent) through its
senior counsel Shri Kapil Sibal and Shri Dipankar Gupta that the option
exercised by the workmen in the above letter agreeing to shift to Baddi was
not an unconditional one but was conditional inasmuch as it stated that they
were exercising the option subject to the result of certain applications filed D
by them in this Court i.e. for recall of the order dated 31.12.96. According to
respondents, such a conditional option was not within the scope of the order
of this Court dated 8.7.96. Further, the counsel contended that there was no
proof that the individual workman of these unions were parties to this reply.
In fact, the status or authority of the Joint Action Committee was not clear, E
according to them.

In the belief that the conditional offer was bad and the Joint Action
Committee had no locus standi to send the reply dated 6.1.97, the industry
published a further notice on 8.1.97 requesting "each workman" to give his
willingness within one week to shift in terms of the following proforma, to F
be addressed to the industry:·

"Dear Sirs,

I am willing to shift to Baddi, Distt. Solan (H.P.), when the Delhi Unit
of Birla Textiles is being relocated." G
On 19.5.97, the Labour Commissioner, N.C.T. (Delhi) directed the industry
to pay the various amounts payable to the employees. The industry put up
a further notice on 20.5.97 that in view of the reply of the unions dated 6.1.97
· agreeing to shift to Baddi, the industry had put up a notice on 8.1.97 requesting
the individual workman to respond in a week. None of the workmen responded. H
734 SUPREME. COURT REPORTS [1998) SUPP. 3 S.C.R.

A The industry then said that it was deeming the employees as retrenched w.e.f.
30.11.1996. This was stated in the furthe.r notice dated 20.5.97 and it reads as
follows:

"We have been legally advised that those workmen who have not
expressed in writing their willingness to shift within the stipulated
B time as per the above referred two notices, be deemed to have been
retrenched with effect from 30th November, 1996 as per the order of
the Hon 'ble Supreme Court dated 8th July, 1996..........."

However, the industry wanted to give one more opportunity and issued
another notice on 20.5.97 that those who were willing to shift were to report
C at Baddi on or before 7.6.1997. The said notice dated 20.5.97 stated as follows:

"Such workmen who now give their consent to shift are requested to
report at Baddi immediately, in any case, not later than June 7, 1997......"

D The Labour Commissioner gave a notice to the industry on 28.5.97 to
conform to the directions of this Hon'ble Court regarding payment of shifting
bonus etc. On 30.3.98, on account of the delay in the matter, this Court
directed 3 months wages to be paid.

On the basis of the above facts, learned senior counsel for the appellants
E Ms. Indira Jaisingh, Shri D.K. Agarwal and others submitted for the workmen
that the industry had violated the orders of this Court, and that there was no
question of askin1~ individual workmen to give their options in a proforma.
According to counsel, the attitude of the industry revealed that it was bent
on retrenching th€: workmen and taking local employees from the H.P. State
on lesser wages inasmuch as, if the workmen of the industry were to be
F continued in employment, they would have to be paid the same wages as
were being paid while at Delhi while the minimum wages payable in H.P. to
the locals were much lower.

Shri S.B. Sanyal, learned senior counsel for the workmen contended that
G as per the order of this Court dated 8. 7.96, there was no question of the
industry seeking the option of the employees. Such an obligation to exercise
option would arise only after the new industry started functioning at H.P.
According to counsel, this Court, in its order dated 8.7.96, guaranteed
continuity up to the date of restart of the industry at the new location and ·
hence the option asked for by the indu~try was uncalled for and contrary to
H orders of this Court.
M.C. MEHTA v. U.O.l. [M. JAGANNADHA RAO, .I.] 735

Counsel for petitioners-workmen in I.A. No.201/97 referred io a letter A
written by one of the workmen Mr. Ramakant who stated in his letter dated
23.6.97 that all the workmen were willing to rejoin at Baddi. According to
learned couns~l, this letter of the workman superseded the offer dated 6.1.1997
made by the employees and that this letter contained an unconditional option
to move to the State of Himachal Pradesh. According to learned counsel, after
this, the industry could not have treated the applicants as unwilling to join B
at Baddi. Shri Ranjit Kumar and other counsel also made like submissions on
behalf of the workmen.

On the other hand, Shri Kapil Sibal, learned senior counsel for the
industry, submitted that the workmen were not entitled to give a conditional C
option as contained in their letter dated 6.1.97, that the workmen having filed
review petitions etc. in this Court for recalling the order dated 31.12.96, were
indeed - even on 6.1.97 - not willing to go to Solan, H.P. and that the letter
dated 6.1.97 was not a valid option, and hence the industry rightly deemed
the employees as retrenched w.e.f. 30.11.96. Several opportunities were given
by the industry even later to these workmen to come and join at Baddi. As D
the Joint Action Committee was not a recognised entity, options had to be
called from individual workmen. According to him, out of the total number of
2522 workmen as on 30.11.96, those who opted to shift to Baddi, Solan within
the time specified, were only 7 workmen, that 595 workmen did not accept the
payment and 10 cheques were lying with the workmen or with the postal r,
authorities. In regard to the payment of 3 months salary, as directed by this
court on 30.03.98, it was stated that 1938 workmen were eligible to receive the
said amount, that 1891 persons took it and cheques of 4 7 workmen were lying
with the industry.

... In reply to the contention of the learned senior counsel for the workmen F
that the workmen had time to join at the new location till the industry was
ready for being "restarted'', the learned senior counsel Shri Kapil Sibal and
.
Shri Dipankar Gupta contended that that would not be a proper. interpretation
of the order dated 8.7.96 because under para 9(e) of the said order the
'shifting bonus' and the comµensation were payable before 31.12.96 and G
hence this court intended that the workmen should join before 31.12.96. The_y
pointed out that even so, the industry extended the time by issuing several
public notices. As the workmen did not opt to go to Baddi before 31.12.96
or by the extended dates as per para 9(d) of the order of this Court dated
8.7.96, they were rightly deemed to have been retrenched by 30.11.96 and local
people of Himachal Pradesh have already been ertiployed. . . H
736 SUPREME COURT REPORTS [1998) SUPP. 3 S.C.R.
A Learned senior counsel, Shri Kapil Sibal also referred to the conduct of
the workmen which according to him disentitled the workmen to any relief.
He submitted that before and after 6. L97 (the date of notice of the various
unions that they were willing to shift to Baddi, subject to the orders in
pending applications), the workmen were totally unwilling to go to Baddi.
They were repeatedly making attempts by filing review petitions to see that
B the 31.12.96 order permitting relocation outside N.C.T. of Delhi, H.P., Rajasthan,
Haryana, was recalled. Shri Kapil Sibal referred to the review petition No. 39/
97 filed by the workmen seeking review of the order dated 31.12.96 permitting
the industries to shift to H.P., Rajasthan, Haryana and Punjab outside the
N.C.T. (Delhi). According to the plea of the workmen, the Court was to deem
C industries which were not relocating in N.C.T. (Delhi) as "closed" in view of
the orders dated 8. 7.96 and 4.12.96. Counsel submitted that the workmen were
interested morn in getting the 6 years salary as compensation by treating the
industries as closed and as if they were not relocating. Reference was also
made to IA 52/97 filed by the Government ofN.C.T. (Delhi) for review of the
order dated 31.12.96. IA 144 was also similar. These !As were dismissed by
D this Court on 16.3.98 and on other dates. Learned counsel pointed out that
·even in the body of the affidavits filed in IA Nos. 201, 202 and 203, where
several other reliefs were asked for, the workers urged that the industries De
located in N.C.T. (Delhi). Though some ancillary reliefs were prayed for in
these !As, the entire tenor of the affidavits, according to Sri Sibal, was that
E the order dated 31.12.96 should be recalled. Counsel stated that the workmen
had, in fact, physically prevented the industry from removing its articles from
Delhi to H.P., even as late as on 20.5.97. Shri Dipankar Gupta, learned senior
counsel appearing for the respondents also made similar submissions. He also
submitted that Baddi was a well developed place with a large number of
industries and Banks etc. and all normal facilities were available there if the
F workmen really desired to shift. According to both counsel, out of 7 unions
only 2 unions had file4 these !As while the other unions remained silent.
They also submitted th~t the workmen ought to have helped the industry
during relocation and for that purpose, they should have shifted to Baddi
even before the industry re-started functioning at that place.
G
The party-in-person who appeared in CP 532 wanted that he be paid the
6 years wages e>n the basis that the industry was closing and not shifting.
In other words, he was not willing to go to Baddi. The counsel for respondents
Shri kapil Sibal stated that a letter with cheque which was sent to him got
returned. But if the industry was relocating and he was not shifting, he would
H get only I year wages plus compensation under Section 25F(b) as per the
M.C. MEHTA v. U.0.1. [M. JAGANNADHA RAO, J.) 737
order dated 8.7.1996. The industry was agreeable to pay him 1 year wages in A
addition to Section 25F(b) compensation.

The points for consideration are:

( 1) Whether the management was right in its submissions that the
workmen, though given opportunity in various letters to give their option for B
reporting at Baddi, failed to exercise option and must be deemed to have been
retrenched on 30.11.96 in terms of the order dated 8. 7 .96 and 31.12.96 of this
Court?

(2) Whether the workmen were right in contending that the management
had no right to seek options from the workmen even before the industry was C
relocated and started functioning at Baddi?

These two points reflect the rival contentions and can be disposed of
together.

In our opinion, the true answer to the contentions can be found in the D
order dated 8.7.96 read with the order dated 31.12.96. We have already extracted
the various clauses in para 9 of the order of this Court dated 8.7.96. We shall
briefly refer to them again. Sub-Clause (a) emphatically says that

"the workmen shall have continuity of employment at the new town
and place where the industry is shifted. The terms and conditions of E
their employment shall not be altered to their detriment."

Sub-clause (b) is important and it says that

"The period between the closure of the industry in Delhi and its
restart at the place of relocation shall be treated as active employment F
and the workmen shall be paid their full wages with continuity of
service."

The words "continuity" and "restart" used in sub-clauses (a) and (b) of para
9 bring about the main intendment of the order. It is clear, from a plain reading
of these clauses that the workmen were to be treated as if they were in service G
till the time the industry restarted at the relocated place and till such time, their
services were to be treated as continuous. If that be so, there was no question
of the employer asking them for an option to agree to shift and fix an earlier
time limit than the date of starting of the industry at Baddi.

Learned senior counsel for respondents Shri Kapil Sibal and Shri H
738 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A Dipankar Gupta arguecl that that could not be the true meaning of clauses (a)
and (b). The crucial clause according to them was clause (e) which stated that

"the 'shifting bonus' and the compensat\on payable to workmen in
terms of this judgment shall be paid by the management before
31.12.96."
B
The 'shifting bonus' was referred to sub-clause (c) and the payment of
compensation was referred to in clause (d) and these amounts had to be paid
by 31.12.96, as stated in clause (e). According to learned counsel, the option
to join at Baddi must have, therefore, been exercised before 31.12.96. They
rely on Clause (d) which reads as follows:
c "the workmen employed in the industries which fail to relocate and the
workmen who are not willing to shift along with the relocated industries,
shall be deemed to have been retrenched with effect from 30.11.96 ...... .
and be paid ... :.... one years wages as additional compensation."

D [of course by order dated 4.12.96 in case the industry did not relocate,
they had to pay 6 years wages and not merely wages for one year]

On the basis of clauses (c), (d) and (e), the learned senior counsel for the '·
respondents argue that if the workmen did not exercise option by 31.12.96, .,.,
they were to be deemed as retrenched by 30.11.96.
E
ln our opinion, the contention of the learned senior counsel for the
respondents is based upon a misconception of the true import of this Court's
order dated 8.7.96. As already stated, the two clauses (a) and (b) are crucial
and deal with continuity of service of the workmen on the same terms and
conditions and the payment of full wages till the "restart" at the new place
F and these conditnons cannot be altered to their detriment. The employees are
to be deemed to be in active employment right from the date of "closure" of
the industry of Delhi till its "restart" at the place of relocation and they had
to be paid their full wages with continuity of service for the said period. There
was, therefore, no question of the industry compelling the workmen to exercise
G any option before the date of such restart informing the industry that they
were prepared to rejoin at the place where the industry was proposed to be
started. The industry could not be said to be restarted unless and until it had
got the plant installed and obtained all necessary permissions for its being
commissioned at the new place. Till such time, the workmen were to be
deemed to be in s,ervice with continuity. In our view, the said continuum could
H not be broken by the industry by unilaterally asking the workmen to exercise
M.C. MEHTA v. U.0.1. [M . .IAGANNADHA RAO, J.] 739
"/an option to join. Such an option on the part of the workmen was nowhere A
contemplated by the order of this Court dated 8.7.96. The industry was
nowhere given any right to seek such an option.

_, This Court gave an option for the workmen for 'not joining' and not 'for
joining' at the relocated place. Till the time of 'restart' of the industry at the
relocated place, it was open to the workmen to say that they would not rejoin. B
The only consequence is that if they exercised such an option on any date
after the date of closure and before restart, they would still be deemed to have
been retrenched w.e.f. 30.11.96 and not with effect from the date on which
they exercised their option not to rejoin. In other words, if they opt not to
rejoin, they would not be entitled to wages from the date of closure till the C
date they exercised their option not to rejoin - inasmuch as any such refusal
to rejoin at Baddi, communicated to the industry before the date of restart
would result in their being deemed to have been retrenched from 30.11.1996.

The industry in our opinion, proceeded on a total misconception of the
order of this Court dated 8. 7.96 and adopted a procedure which ran quite D
contrary to scheme which was envisaged by this Court for the benefit of the
workmen.

The fact that during the period before the industry was relocated, the
workmen approached this Court for recall of the order dated 31.12.96 which
order permitted relocation of the industry outside N.C.T. (Delhi) could not, in E
our opinion, be deemed to amount to an option not to rejoin at the proposed
place of relocation. In fact the letter dated 6.1.1997 of the workmen could not
be treated as a conditional option to rejoin because they were not obligated
to give any option to rejoin but they could have, if they so chose, opted not
to rejoin. The letter dated 6.1.1997 could not be treated as a letter exercising
option not to rejoin at the place of relocation. This is because it specifically F
contained an offer to rejoin. The fact that the workmen subjected their intention
to rejoin to orders of this Court did not convert an intention to join into an
intention not to join at the relocated place. Further, the right of any party to
seek review of orders of this Court is a right which is lawfully exercised and
cannot be treated as a breach of the order of this Court dated 8.7.1996. G
For the aforesaid reasons, we reject the contention of the respondents.
We accordingly direct the industry to allow all the workmen except those who
exercised or would exercise an option not to rejoin - to rejoin at Baddi. In order
to avoid any scope for future disputes, we direct all those who are willing to
rejoin at Baddi, to report there at Baddi on 14.1.99 and 15.1.99 along with their H
740 SUPREME COURT REPORTS [1998) SUPP. 3 S.C.R.

A identity cards or oth1~r evidence to identify them and sign or put their thumb-
mark in a register in the joint presence of the Dy. Labour Commissioner having
jurisdiction over Baddi, District Solan, Himachal Pradesh and the Dy. Labour
Commissioner of N.C.T. (Delhi). These officers shall counter sign in the
register certifying that the particular workmen had reported at Baddi. All such
B ~_rkmen who rejoin shall be entitled to the benefits of the orders of this Court
dated 8.7.96 and subsequent orders, in respect of continuity, back wages from
date of closure till date of such rejoining, in addition to one year's wages
towards shifting bo.irns. The said amount shall be paid by the respondent-
industry to each of these workmen, within one week of the rejoining at Baddi.
In respect of such of the workmen who do not so report by 15.1.1999 as
C aforesaid or who otherwise give it in writing to the aforesaid authority that
they are not willing to rejoin, they shall be deemed to have been retrenched
w.e.f. 30.11.96 and shall be entitled only to one year's wages and also to
Section 25F(b) compensation as per the order of this Court dated 8.7.96. The
said amount shall be disbursed to these employees within one week from
15.1.1999 by the respondent-industry.
D
The applications of the workmen of the industry working at Delhi are
accordingly allowed and disposed of in the manner stated above.

As the petitioner in the contempt case (party-in-person) is not willing
to join at Baddi the industry will pay him one year's salary plus Section 25F(b)
E compensation within 15 days from today, if not already paid. The contempt
case is disposed of accordingly.

R.K.S. I. As. allowed and Petition disposed of.