Possible Unemployment Of Workers Cannot Be Ground To Refuse Closure Of Loss Making Establishment: Bombay High Court

General Motors applied for the closure of Talegaon Plant in November, 2020 which was rejected by the government on January 18, 2021. Subsequently, on filing review application, the government referred the matter to the Industrial Tribunal on March 19, 2021. During Covid-19 pandemic, lay-off notices were issued and around 484 workers availed separation benefit of INR 25 to 35 Lakhs each under its Voluntary Separation Scheme and others were terminated. Subsequently, the union filed an application claiming that the reference had become infructuous which was rejected by the tribunal on April 28, 2023. Thereafter, the Talegaon plant was sold to Hyundai in 2023 and the company filed a second closure application during pendency of reference before Industrial Tribunal.

The Industrial Tribunal eventually passed an award permitting closure of the Talegaon plant on June 30, 2023 which along with the order of April 28, 2023 was challenged before the Bombay High Court in Writ Petition No. 7992 and 9311 of 2023. After noting accumulated loss of INR 9656.87 Crores till 2022, the Hon’ble Bombay High Court upheld the impugned orders passed by the Industrial Tribunal allowing General Motors to close its Talegaon Plant and dismissed both writ petitions filed by the union.