HC says no to relocation of industrial unit

MUMBAI, December 15: Will the sudden relocation of an industrial unit which affects the fate of 100 workers amount to an illegal lockout? T...

MUMBAI, December 15: Will the sudden relocation of an industrial unit which affects the fate of 100 workers amount to an illegal lockout? The Bombay High Court has not only ruled that such shifting is illegal, but that it causes impermissible flight of industries out of the state.

Justice F I Rebello ruled that no factory can unilaterally declare shifting of its manufacturing site without seeking the permission of the government. Citing an earlier High Court ruling, Justice Rebello observed that such relocation should be discouraged. “In cities like Mumbai, where the cost of the land has shot up astronomically, industrialists would prefer to close down units and make their fortunes by developing land. This would lead to flight of industries which no state can permit,” the judge said.

He further condemned the tendency of employers to pack off from a particular state solely in order to enjoy tax concessions, low labour wages and reduced cost of production. “If such closures are allowed, industries will only run to states which offer more facilities.”

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The judgement comes in the wake of a writ petition filed by the Sarva Mazdoor Sangh, which protested the relocation of the Parel-based Innovations Garments Limited to distant Mussoorie in Uttar Pradesh.

The Sangh, representing 100-odd workers in the Parel establishment, had earlier moved the Industrial Court against the relocation. However, the court merely ordered the management to grant a fortnight’s time to the workers for shifting to Mussoorie. The company was also directed to pay the workers travelling fare. The workers were dissatisfied with the ruling as “the matter involves a serious question: whether such shifting amounts to a lockout”. Advocate Colin Gonsalves appeared for the Sangh.

Said the company counsel V P Vaidya, the factory was closed due to objections raised by the Brihanmumbai Municipal Corporation. As per the BMC, the company’s activities fell under the non-manufacturing zone. However, it did not produce any correspondence with the corporation.

On the contrary, it was found that a sister concern of the factory stood in the same premises. The petitioners also pointed out that the company has not secured any license for the site at Mussoorie.