Holding

A second application for closure under s.25‑0(1) is maintainable; the withdrawal order is not an order refusing permission and s.25‑0(5) does not apply.

Summary

Century Industries Textiles Ltd., after offering a Voluntary Retirement Scheme that left only 275 workers, filed an application under s.25‑0(1) of the Industrial Disputes Act, 1947 seeking permission to close its mill. The company later withdrew this application to pursue an amicable settlement after a meeting was called by the Deputy Labour Commissioner, and subsequently filed a fresh closure application. The Union representing the remaining workers argued that the withdrawal, made without explicit liberty to re‑apply, barred a second application under s.25‑0(5) and CPC Order XXIII‑R1(4). The Supreme Court held that the withdrawal was bona‑fide, the order allowing withdrawal was not an order refusing permission, and therefore s.25‑0(5) did not apply; CPC provisions governing suits are inapplicable to applications under s.25‑0(1). Consequently, the second closure application was maintainable and the appeal was dismissed, with directions for an expeditious decision on the fresh application.

Issues considered

The maintainability of a second application under s.25‑0(1) after the first application was withdrawn without explicit liberty to re‑apply.
Whether the order permitting withdrawal of the first application amounts to an order refusing permission, thereby invoking s.25‑0(5) of the Industrial Disputes Act.
Applicability of CPC Order XXIII Rule 1(4) and the principle of res judicata to applications under the Industrial Disputes Act.

Legislation cited

Code of Civil Procedure, 1908s. Order XXIII Rule 1(4)
Companies Act, 1956
Industrial Disputes Act, 1947s. 25-0(1), s. 25-0(3), s. 25-0(5)

Subjects

Industrial Disputes ActClosure of millWithdrawal of applications.25‑0(5)CPC Order XXIII Rule 1(4)Res judicataBench huntingVoluntary Retirement SchemeSecond application maintainability

Judgment

/
--1I

•
, SARVA SHRAMIK SANGHATANA (K.V.) MUMBAI A
v.
STATE OF MAHARASHTRA AND OTHERS

NOVEMBER 28, 2007
)
B
[C.K. THAKKER AND MARKANDEY KATJU, JJ.]

Industrial Disputes Act, 1947-s. 25-0 (1) (3) and (5)-
Application for closure ofmill-Withdrawal offor amicable settlement
of the dispute, without liberty to file fresh application-Second c
application seeking same relief after failure of settlement-
Maintainability of-Held: Second application was maintainable-
Withdrawal offirst application was bonafide--Order ofthe authority
>I
allowing to withdraw the first application cannot be deemed to be
' order refusing to grant permission, as the order was not passed on D
merits-Therefore, s. 25-0(5) has no application-An application
under s.25-0(1) is not a suit, therefore, 0.23, r.1(4) CPCwill not apply
to such an application-Code of Civil Procedure, 1908-0r. 23 r. 1
(4).
Judgment-Precedential value of-Ascertainment-Held: E
Precedential value ofa judgment to be ascertained taking into account
facts of the case and not out of the context-Precedent.
.... Respondent No.3- Company, suffered heavy loss. With the
object to reduce its operational cost, it offered Voluntary Retirement F
Scheme (VRS) to its employees. Out of7500 employees, except 275,
all opted for VRS. Manufacturing activities of its mill came to
standstill. Company, therefore, filed an application u/s 25-0 of
Industrial Disputes Act, 1947 seeking permission for closure of the
mill. Respondent-Company received a letter from the Deputy
·'.r G
Labour Commissioner, calling for a meeting, making an effort for
amicable settlement between the parties. Company agreed for the
meeting and in order to settle the dispute, withdrew its application.
However, the effort for settlement failed. Hence, the Company filed
645 H
646 SUPREME COURT REPORTS [2007] 12 S.C.R.
. '
A fresh application u/s 25-0. Appellant-Union opposed the
entertainment of the second closure application on the ground that
it was not maintainable in view of the fact that previous application
for closure was withdrawn without liberty from the concerned
authority to file a fresh application and also filed a writ petition
B seeking direction to the authority concerned for not proceeding
further in relation to the second closure application. High Court
dismissed the writ petition. Hence the present appeal.

Dismissing the appeal, the Court

C HELD: 1.1. In the instant case, the application for withdrawal
of the first petition under Section 25-0(1) of the Industrial Disputes
Act, 1947 was made bona fide because the respondent-company had
received a letter from the Deputy Labour Commissioner calling for
a meeting of the parties so that an effort could be made for an i.

D amicable settlement. In fact, the respondent-company could have
waited for the expiry of 60 days from the date of filing of its
application under Section 25-0(1), on the expiry of which the
application would have deemed to have been allowed under Section
25-0(3). The fact that it did not do so, and instead applied for
E withdrawal of its application under Section 25-0(1), shows its bona
fide. [Para 20] (654-F, G; 655-A]
Sarguja Transport Service v. State Transport Appellate Tribunal,
Gwalior and Ors., AIR (1987) SC 88, distinguished.
1.2. It cannot be said that the order of the Labour
F
Commissioner allowing the respondent-company to withdraw its first
closure application should be deemed to be an order refusing to grant
permission, and hence a fresh application under Section 25-0(1) could
not be filed before the expiry of one year from the date of the said
order. Section 25-0(5) only applies when an order is passed on merits
G either granting or refusing to grant permission for closure. Since in
the present case no order on merits was passed, but only an order
permitting withdrawal of the closure application was passed, Section
25-0 (5) has no application. [Para 26) [656-C, D, E)
H 1.3. Although the C.P .C. does not strictly apply to proceedings
I
I
SARVA SHRAMIK SANGHATANA (K.V) MUMBAI 647
v. STATE

under Section 25-0(1) of the Industrial Disputes Act, or other judicial A
or quasi-judicial proceedings under in any other Act, some of the
general principles in the CPC may be applicable. However, this does
not mean that all provisions in the CPC will strictly apply to
proceedings which are not suits. No doubt, Order XXIII Rule 1(4)
CPC states that where the plaintiff withdraws a suit without B
permission of the court, he is precluded from instituting any fresh
suit in respect of the same subject matter. However, this provision
will apply only to suits. An application under Section 25-0(1) is not
a suit, and hence, the said provision will not apply to such an

'
application. [Paras 21and24] [655-C, D; 656-A] c
Pondicherry Khadi and Village Industries Board v. P.
Kulothangan and Anr., [2004] l SCC 68, referred to.
UP. State Brassware Corporation Ltd. v. Uday Narain Pandey,
.," [2006) 1sec479, distinguished. D
1.4. Since it has been alleged by the respondent-company that
it is suffering a liability of Rs. 2.84 lakhs per day although the Mill
is lying closed and the concerned workers are getting wages for doing
nothing for a long time, it is directed that the petitioner's application
seeking closure of the mill, be decided very expeditiously by the E
.concerned authority in accordance with law.
[Para 28] [656-F]

2. Observations of courts are neither to be read as Euclid's
theorems nor as provisions of the statute and that too taken out of
F
the context. A little difference in facts or additional facts may make
a lot of difference in the precedential value of a decision. Often
decisions are cited for a proposition without reading the entire
decision and the reasoning contained therein.
[Paras 17, 18and19) [652-G; 653-B; 654-F)
G
·~ Ambica Quarry Works v. State ofGujarat and Ors., [1987] 1 SCC
213; Bhavnagar Universityv. Palitana Sugar Mills Pvt. Ltd, [2003) 2
SCC 111 and Bharat Petroleum Corporation Ltd. and Anr. v.
N R. Vairamani andAnr., AIR (2004) SC 4778, relied on.
H
\'
648 SUPREME COURT REPORTS [2007) 12 S.C.R.

A Sarguja Transport Service v. State Transport Appellate Tribunal,
Gwalior and Ors., AIR (1987) SC 88, referred to.
Quinn v. Leathern, (1901) AC 495, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5458 of
B 2007.
From the Judgment dated 16.8.2007 of the High Court of Judicature
at Bombay in W.P. No. 1240 of2007.
K.K. Singhvi, Susheel Madhadeshwar, Uday B. Dube and Kuldip
C Singh for the Appellant. •
K.K. Venugopal, Gopal Jain, Manik Karanjawala, Nandini Gore,
Debmalya Banerjee, Prachi Goel, R.N. Karanjawala and Haripriya
Padmanabhan for the Respondents.
D The Judgment of the Court was delivered by
MARKANDEY KATJU,J. l. Leave granted.
2. This appeal has been filed against the impugned judgment dated
16.8.2007 passed by the High Court of Bombay in Writ Petition No.
E 1240 of2007.
3. Heard learned counsel for the parties and perused the record.
4. Respondent No. 3, Century Industries Textiles Limited, is a
company registered under the Indian Companies Act, 1956. It had about
F 7500 employees in its textile mill at Mumbai which suffered heavy loss
due to high increase in the cost of production and competition both in
the domestic as well as international market. With the object to reduce
its operational cost, agreements dated 6.7.2004 and 5.9.2005 were
entered into by the company with its recognized union for reducing the
G workforce through an offer of Voluntary Retirement Scheme (hereinafter
in short 'VRS'). However, there was hardly any success in this exercise, ..
and only about 800 employees opted for the VRS which left with 6700
employees still on its roll. Finally, a highly upgraded VRS was offered to
the employees unilaterally by the respondent-company on 13.11.2006
H which offer was valid till 12.12.2006. There was an overwhelming
SARVA SHRAMIK SANGHATANA (K.V) MUMBAI 649
v. STATE[MARKANDEYKATJU,J.]

response to the said VRS and more than 6300 employees opted for the A
new VRS, and were accordingly relieved from service on payment ofVRS
benefits and all other legal dues. Only about 275 employees did not accept
the abovementioned VRS and 230 of these were the petitioners before
the High Court.
'
.
B
5. The respondent-company further alleged that its manufacturing
activities in its textile mill came to an end on 13 .12.2006 since it was left
with only 275 workers. All supervisors and departmental heads had left
after taking the VRS. In these circumstances, the respondent-company
was constrained to file an application seeking permission for closure under
Section 25-0 of the Industrial Disputes Act (hereinafter in short 'the Act') c
vide application dated 13.2.2007.
6. Before the aforesaid application under Section 25-0 could be
..:. decided, the respondent-company received a letter dated 5.4.2007 from
.; the Deputy Commissioner of Labour, Mumbai, a copy of which is D
Annexure P-1 to this appeal. This letter states that as per the directions
of the Hon'ble Minister for Labour, Maharashtra Government, a meeting
has been convened for discussing the matter in dispute at 11.00A.M. on
9.4.2007 in the Chambers of the Hon'ble Minister in Vidhan Bhavan.
7. In response, the respondent-company wrote a letter to the Hon'ble E
Minister for Labour dated 11.4.2007 stating that it was willing to discuss
the matter in dispute and would attend the meeting. However, in the same
letter dated 11.4.2007 the respondent-company also mentioned that under
-; Section 25-0(3) of the Industrial Disputes Act, an application under
Section 25-0(1) has to be decided within 60 days, otherwise it would F
be deemed to have been allowed. Since the application was made on
13 .2.2007, the 60 days' limitation was shortly about to expire and then
the application would be deemed to have been allowed. However, in order
to create a conducive atmosphere for discussing the problems of the
remaining employees who had not taken VRS, the respondent-company G
·\· was withdrawing its application under Section 25-0(1 ), but reserving its
right to move fresh application under Section 25-0 as and when necessary.
Accordingly, the Commissioner of Labour, Mumbai by his order dated
12.4.2007 allowed the respondent-company to withdraw its application
under Section 25-0 (1 ). The respondent-company alleged that it could
H
'
650 SUPREME COURT REPORTS [2007] 12 S.C.R.

A have very easily pretended to discuss the matter with the workers' Union
and bided its time till 13.4.2007 and then claimed the benefit of deemed
grant of permission for closure. But, instead of doing so, the respondent-
company decided to bona fide explore the possibility of an overall
settlement with the remaining employees. Since that could not have been
B done within the remaining 4 days, the respondent-company withdrew its ,
application under Section 25-0( 1) so that an attempt for settlement could
be made. Thus, the respondent-company alleged that its conduct was
bona fide in seeking withdrawal of its closure application.
8. It appears, however, that the effort for an amicable settlement
C failed. Hence the respondent-company filed fresh application under
Section 25-0(1) on 11.5.2007 before the Commissioner of Labour,
Mumbai.
9. The appellant, which represents the workmen concerned,
D opposed the very entertainment of the second closure application under
Section 25-0 on the ground that the first application was withdrawn but
without liberty from the concerned authority to file a fresh application. The
appellant filed a writ petition under Article 226 of the Constitution before
the Bombay High Court praying that the Deputy Commissioner of Labour
should be directed not to take any further proceedings in relation to the
E closure application dated 11.5.2007 under Section 25-0. Since that writ
petition was dismissed, hence this appeal by way of Special Leave Petition.
10. Learned counsel for the appellant has strongly relied on the
decision of this Court in Sarguja Transport Service v. State Transport
F Appellate Tribunal, Gwalior and Ors., AIR (1987) SC 88. He has
submitted that in that decision this Court has laid down that if a writ
petition filed in a High Court is withdrawn -without permission to file a
fresh writ petition, a second writ petition for the same relief is barred.
Learned counsel for the appellant submitted that in the order of the Labour
Commissioner dated 12.4.2007, a copy of which is Annexure P-4 to this
G appeal, it is only mentioned that the applicant company is allowed to
withdraw its application under Section 25-0(1) seeking permission for
closure of its textile mill, but there is no mention in the said order that the
Company is given liberty or permission to file a fresh application under
Section 25-0(1 ). Accordingly, he submitted that the decision of Sarguja
H
SARVASHRAMIKSANGHATANA(K.V)MUMBAI 651
v. STATE[MARKANDEYKATJU,J.]
Transport case (supra) squarely applies to the present case. He submitted A
that although the decision in Sarguja Transport case (supra) related to
a writ petition, the ratio of that decision was based on public policy, and
hence it was also application to proceedings under Section 25-0 of the
Industrial Disputes Act.
11. We have carefully examined the decision of the Sarguja B
Transport Service case (supra). In the said decision it is mentioned in
paragraph 8 as follows:
"It is common knowledge that very often after a writ petition is
heard for some time when the petitioner or his counsel finds that C
the Court is not likely to pass an order admitting the petition,
request is made by the petitioner or by his counsel, to permit the
petitioner to withdraw the writ petition without seeking permission
to institute a fresh writ petition. A Court which is unwilling to admit
the petition would not ordinarily grant liberty to file a fresh petition
while it may just agree to permit the withdrawal of the petition." D
12. In paragraph 9 of the said decision, it is also mentioned as follows:
"But we are of the view that the principle underlying R.1 ofO.
XXIII of the Code should be extended in the interest of
administration ofjustice to cases of withdrawal of writ petition also, E
not on the ground of res judicata but on the ground of public
policy as explained above. It would also discourage the litigant
from indulging in bench-hunting tactics. "
13. We are of the opinion that the decision in Sarguja Transport F
case (supra) has to be understood in the light of the observations in
paragraphs 8 & 9 therein, which have been quoted above. The said
decision was given on the basis of public policy that, if while hearing the
first writ petition the Bench is inclined to dismiss it, and the learned counsel
withdraws the petition so that he could file a second writ petition before G
'-~/
what he regards as a more suitable or convenient bench, then if he
withdraws it he should not be allowed to file a second writ petition unless
liberty is given to do so. In other words, bench-hunting should not be
permitted.
14. It often happens that during the hearing ofa petition the Court H
652 SUPREME COURT REPORTS [2007] 12 S.C.R.

A makes oral observations indicating that it is inclined to dismiss the petition.
At this stage the counsel may seek withdrawal of his petition without
getting a verdict on the merits, with the intention of filing a fresh petition
before a more convenient bench. It was this malpractice which was sought
to be discouraged by the decision in Sarguja Transport case (supra).
B
15. On the subject of precedents Lord Halsbury, L. C., said in Quinn
v. Leathern, (1901) AC 495:
"Now before discussing the case of Allen v. Flood (1898) AC 1
and what was decided therein, there are two observations of a
c general character which I wish to make, and one is to repeat what
I have very often said before, that every judgment must be read
as applicable to the particular facts proved, or assumed to be
proved, since the generality of the expressions which may be found
there are not intended to be expositions of the whole law, but are
governed and qualified by the particular facts of the case in
D
which such expressions are to be found. The other is that a case
is only an authority for 'What it actually decides. I entirely deny that
it can be quoted for a proposition that may seem to follow logically
from it. Such a mode of reasoning assumes that the law is
necessarily a logical Code, whereas every lawyer must
E acknowledge that the law is not always logical at all."
We entirely agree with the above observations.
16. lnAmbica Quarry Works v. State a/Gujarat & Ors., [1987]
1 SCC 213 (vide paragraph 18) this Court observed:-
F
"The ratio of any decision must be understood in the background
of the facts of that case. It has been said a long time ago that a
case is only an authority for what it actually decides, and not what
logically follows from it"
G 17. In Bhavnagar University v. Palitana Sugar Mills Pvt. Ltd,
[2003] 2 SCC 111 (vide paragraph 59), this Court observed:-
"lt is well settled that a little difference in facts or additional
facts may make a lot of difference in the precedential value
of a decision. "
H
SARVA SHRAMIK SANGHATANA (K.V) MUMBAI 653
v. STATE[MARKANDEYKATJU,J.]
18. As held in Bharat Petroleum Corporation Ltd. & Anr. v. A
NR. Vairamani & Anr., AIR (2004) SC 4778, a decision cannot be relied
on without disclosing the factual situation. In the same Judgment this Court
also observed:-
"Courts should not place reliance on decisions without discussing
as to how the factual situation fits in with the fact situation of the B
decision on which reliance is placed. Observations ofCourts are
neither to be read as Euclid's theorems nor as provisions of
the statute and that too taken out of the context. These
observations must be read in the context in which they appear to
have been stated. Judgments of Courts are not to be construed C
as statutes. To interpret words, phrases and provisions of a statute,
it may become necessary for judges to embark into lengthy
discussions but the discussion is meant to explain and not to define.
Judges interpret statutes, they do not interpret judgments. They
interpret words of statutes; their words are not to be interpreted D
as statutes.
In London Graving Dock Co. Ltd. v. Horton, (1951) AC 737
at page 761), Lord Mac Dermot observed:
"The matter cannot, of course, be settled merely by treating E
the ipsissima vertra of Willes, J. as though they were part of
an Act of Parliament and applying the rules of interpretation
appropriate thereto. This is not to detract from the great weight
to be given to the language actually used by that most
distinguished judge."
F
In Home Office v. Dorset Yacht Co., [1970] 2 All ER 294 Lord
Reid said, "Lord Atkin' s speech .... is not to be treated as if it
was a statute definition; it will require qualification in new
circumstances." Megarry, J. in (1971)1 WLR 1062 observed:
"One must not, of course, construe even a reserved judgment G
of Russell L. J. as ifit were an Act of Parliament."
And, in Herrington v. British Railways Board, (1972) 2 WLR
537 Lord Morris said:
"There is always peril in treating the words of a speech or H
654 SUPREME COURT REPORTS [2007] 12 S.C.R.

A judgment as though they are words in a legislative enactment,
and it is to be remembered that judicial utterances are made
in the setting of the facts of a particular case."
Circumstantial flexibility, one additional or different fact may
make a world ofdifference between conclusions in two cases.
B Disposal of cases by blindly placing reliance on a decision is not
proper. The following words of Lord Denning in the matter of
applying precedents have become locus classicus:
"Each case depends on its own facts and a close similarity
between one case and another is not enough because even a
c single significant detail may alter the entire aspect, in
deciding such cases, one should avoid the temptation to decide
cases (as said by Cardozo, J. ) by matching the colour of one
case against the colour of another. To decide therefore, on
which side of the line a case falls, the broad resemblance to
D another case is not at all decisive."
*** *** ***
"Precedent should be followed only so far as it marks the
path ofjustice, but you must cut the dead wood and trim
E · off the side branches else you will find yourself lost in
thickets and branches. My plea is to keep the path of justice
clear of obstructions which could impede it."
19. We have referred to the aforesaid decisions and the principles
F laid down therein, because often decisions are cited for a proposition .
\vithout reading the entire decision and the reasoning contained therein.
In our opinion, the decision of this Court in Sarguja Transport case
(supra) cannot be treated as a Euclid's formula.
20. In the present case, we are satisfied that the application for
G withdrawal of the first petition under Section 25-0(1) was made bona
fide because the responden~company had received a letter from the
Deputy Labour Commissioner on 5.4.2007 calling for a meeting of the
parties so that an effort could be made for an amicable settlement. In fact,
the respondent-company could have waited for the expiry of 60 days from
H the date of filing of its application under Section 25-0(1 ), on the expiry
-f
SARVA SHRAMIK SANGHATANA (K.V) MUMBAI 655
v. STATE[MARKANDEYKATJU,J.]
of which the application would have deemed to have been allowed under A
Section 25-0(3). The fact that it did not do so, and instead applied for
withdrawal of its application under Section 25-0(1 ), shows its bona fide.
The respondent-company was trying for an amicable settlement, and this
was clearly bona fide, and it was not a case of bench hunting when it
) found that an adverse order was likely to be passed against it. Hence, B
Sarguja Transport case (supra) is clearly distinguishable, and will only
apply where the frrst petition was withdrawn in order to do bench hunting
or for some other ma/a fide purpose.
21. We agree with the learned counsel for the appellant that although
the Code of Civil Procedure does not strictly apply to proceedings under c
Section 25-0(1) of the Industrial Disputes Act, or other judicial or quasi-
judicial proceedings under in any other Act, some of the general principles
in the CPC may be applicable. For instance, even if Section 11 of the
·-,i CPC does not in terms strictly apply because both the proceedings may
, not be suits, the general principle of res judicata may apply vide D
Pondicheny Khadi & Village Industries Board v. P. Kulothangan and
Anr., [2004] 1 SCC 68. However, this does not mean that all provisions
in the CPC will strictly apply to proceedings which are not suits.
22. Learned counsel for the appellant has relied on an observation
in the decision of this Court in UP. State Brassware Corporation Ltd. E
v. Uday Narain Pandey, [2006] 1 SCC 479, in paragraph 38 of which
it is stated:
"Order 7 Rule 7 of the Code of Civil Procedure confers powers
.. upon the court to mould relief in a given situation. The provisions
F
of the Code of Civil Procedure are applicable to the
proceedings under the Industrial Disputes Act.
23. It may be noted that the observation in the aforesaid decision
that the provisions of the CPC are applicable to proceedings under the
Industrial Disputes Act was made in the context of Order 7 Rule 7 of G
• _\f the Code of Civil Procedure which confers powers upon the court to
4
mould relief in a given situation. Hence, the aforesaid observation must
be read in its proper context, and it cannot be interpreted to mean that
all the provisions of the CPC will strictly apply to proceedings under the
Industrial Disputes Act. H
656 SUPREME COURT REPORTS [2007] 12 S.C.R.

A 24. No doubt, Order XXIII Rule Rule 1(4) CPC states that where
the plaintiff withdraws a suit without pennission of the court, he is precluded
from instituting any fresh suit in respect of the same subject matter.
However, in our opinion, this provision will apply only to suits. An
application under Section 25-0( I) is not a suit, and hence, the said
B provision will not apply to such an application.
25. Learned counsel for the appellant has relied upon Section 25-
0 (5) of the Act which states:
"An order of the State Government granting or refusing to grant
permission shall, subject to the provisions of sub-section (6), be
c final and binding on all the parties and shall remain in force for
one year from the date of such order."
26. Leaned counsel submitted that the order of the Labour
Commissioner dated 12.4.2007 allowing the respondent-company to
D withdraw its closure application dated 1.2.2007 should be deemed to be '
an order refusing to grant permission, and hence a fresh application under
Section 25-0(1) could not be filed before the expiry of one year from
the date of the said order. We do not agree. In our opinion, Section 25-
0(5) only applies when an order is passed on merits either granting or
refusing to grant permission for closure. Since in the present case no order
E
on merits was passed, but only an order permitting withdrawal of the
closure application was passed, Section 25-0(5) has no application.
27. For the reasons given above this appeal fails and is hereby
dismissed. There shall be no order as to costs.
F 28. Since it has been alleged by the respondent-company that it is
suffering a liability of Rs. 2.84 lakhs per day although the Mill is lying
closed and the concerned workers are getting wages for doing nothing
for a long time, we direct that the petitioner's application dated 11.5.2007
be decided very expeditiously by the concerned authority in accordance
G with law, preferably within a period of two months of production of copy
of this order to it. '. •.._
K.K.T. Appeal dismissed.