M/S Endurance Technologies Limited vs. State Of Haryana & Others

Held

The Court held that the impugned notification dated August 27, 2018, was arbitrary, unreasonable, and discriminatory, and thus quashed it. The Court found that the order was a non-speaking order, vague, and cryptic, based on personal opinion and apprehension without tangible grounds or objective data to support the claim of potential industrial disturbance. It was also found that the authorities failed to apply independent mind and crucially, did not provide the petitioner and affected workers an opportunity of being heard, thereby breaching the principles of natural justice and the rule of audi alteram partem. The Court noted that the newly added proviso to Section 25-K of the Haryana Act, which allows for such notifications, requires satisfaction based on objective criteria and data, which was absent. The Court also observed that the statement of reasons presented by both sides were not considered. The ratio is that administrative actions, especially those impacting fundamental rights and livelihoods, must be based on objective assessment, due process, and adherence to principles of natural justice, not mere apprehension or conjecture. The Court granted the petition and quashed the notification, allowing the State Government to pass a fresh order in accordance with law. Pro-tem directions were issued regarding renegotiation of compensation, consideration of alternative employment, and oversight by the Assistant Labour Commissioner.

Facts

M/s Endurance Technologies Ltd. (the petitioner) sought to close down its industrial establishment. The State of Haryana issued a notification dated August 27, 2018, bringing the establishment under Chapter VB of the Industrial Disputes Act, 1947, which imposes conditions on retrenchment and closure. The petitioner challenged this notification, arguing it was issued arbitrarily and without proper application of mind or hearing the affected parties. The State contended that the notification was necessary to prevent labour unrest and victimization of workers, citing a recommendation from the Assistant Labour Commissioner. The petitioner had offered enhanced compensation packages to its 168 workers.

Key Issues

1. Whether the impugned notification dated August 27, 2018, issued by the State of Haryana, bringing the petitioner's industrial establishment under Chapter VB of the Industrial Disputes Act, 1947, is arbitrary, unreasonable, and discriminatory, violating the petitioner's fundamental rights? Petitioner's arguments: The petitioner argued that the notification was a non-speaking, vague, and cryptic order based on personal opinion and apprehension rather than objective data. They contended that the authorities failed to apply independent mind, did not provide an opportunity of being heard (breach of natural justice), and passed the order based on conjecture. The petitioner also argued that the proviso to Section 25-K of the Haryana Act, under which the notification was purportedly issued, was misapplied as no empirical data supported the claim of potential regional disturbance. They relied on Section 25FFA of the Act, under which they had served notice of closure. Respondents' arguments: The respondents (State of Haryana and others) contended that the notification was issued to prevent labour unrest and victimization of workers, based on the recommendation of the Assistant Labour Commissioner, who apprehended misuse of Section 25FFA by the employer. They argued that the notification was necessary to cover the unit under Chapter VB if it was not already covered.