In a recent decision, the Bombay High Court dealt with a long-standing argument about the break-up of a partnership business and the rights of its workers. Here's a breakdown of the case and the court's decision.
The Case Background
The case was about a partnership business, M/s. Ahmed Oomarbhoy, which made and sold cooking oil under the brand 'Postman'. The business had over 500 workers, including permanent and temporary ones. Arguments among the partners led to one partner, Mr. Ramesh Desai, asking for the business to be broken up in 2000. This started a series of legal actions that affected the workers' jobs.
Overseer Appointed
- Overseer's Role: In December 2000, the High Court appointed an overseer to manage the business's property, planning to sell them as the business was to be broken up.
- Impact on Workers: The factory stopped working, and workers were locked out from September 2001. They were not paid after December 2001.
Workers' Legal Fight
- Union's Complaint: The Mumbai Labour Union made a complaint in 2004, claiming unfair treatment and asking for unpaid wages from January 2002, along with interest.
- Industrial Court Decision: In 2007, the Industrial Court sided with the workers, ordering the payment of wages with interest and reopening the factory.
High Court's Decision
- Judge Sandeep V. Marne's Decision: The High Court canceled the Industrial Court's order, saying the partnership business was already broken up by notice, and closing the business was valid.
- Payment and Bonus: The Court told the overseer to pay closing compensation and bonus to the workers, with 6% interest from January 2002.
Key Points from the Decision
- No Factory Reopening: The order to reopen the factory was canceled as it was not possible or requested by the workers.
- Closing Compensation: Workers are entitled to 15 days' wages for each year they worked as closing compensation.
- Bonus Payment: The Court stressed the need for paying bonuses to all eligible workers.
Final Directions
- Payment Process: The overseer must calculate and pay the closing compensation and bonus within four months, using the business's property if needed.
- Interest on Dues: Simple interest at 6% will apply to the dues from January 2002.
This decision highlights the difficulties of partnership break-ups and the protection of workers' rights in such situations.
Disclaimer: The names used in this report are made up and have been added for privacy reasons.
