State Must Consider Parity in Employee Absorption and Dues Clearance Following Cooperative Sugar Mill Closure

The petitioners were employees of the Kissan Sehkari Cheeni Mill (Cooperative Sugar Mill), Sitarganj, Udham Singh Nagar.

Following continuous financial losses and unsuccessful revival attempts, the State Government issued a Government Order dated 05.12.2017 to close the mill.

The petitioners challenged this closure, seeking a declaration that the lockout was illegal, and requested absorption into other state sugar mills, citing a similar benefit previously extended to employees of the Gadarpur Sugar Unit via Government Order dated 29.09.2015.

The respondents contended that the petitioners were offered Voluntary Retirement Scheme (VRS) benefits which they failed to exercise, and argued that the writ petition was not maintainable as the petitioners had an alternative remedy under the Industrial Disputes Act.

1. Whether the employees of the Sitarganj Sugar Mill are entitled to the same benefits of absorption/adjustment in other cooperative sugar mills as provided to the employees of the Gadarpur Sugar Unit under the Government Order dated 29.09.2015.

2. Whether the petitioners are entitled to the release of pending service dues and statutory interest following the closure of the mill.

The principle of Article 14 of the Constitution of India regarding equality and non-discrimination in state action, specifically ensuring that similarly situated employees in the cooperative sector receive uniform treatment regarding rehabilitation/absorption.

The principle of Natural Justice, emphasizing the obligation of the state/employer to communicate and settle statutory dues and service benefits upon the closure of an industrial unit.

The Court observed that since both the Sitarganj and Gadarpur mills operated within the cooperative sector, the petitioners' claim for parity regarding absorption/adjustment warranted consideration.

Although the State argued that the petitioners failed to opt for VRS, the petitioners countered that they were never given a formal opportunity to exercise such rights.

The Court noted that the sugar mill's counsel could not provide evidence of any specific communication sent to the employees regarding the settlement of their dues.

Consequently, the Court determined that the ends of justice would be served not by adjudicating on the closure's legality under industrial law at this stage, but by directing the State to evaluate the petitioners' representation for absorption based on the precedent set by the Gadarpur unit's closure.

Additionally, the Secretary must pass orders regarding the release of all pending dues and determine the eligibility for statutory interest within the same timeframe, and any existing interim orders were vacated.