1990 PLP 501 (PLC)

S.M. Arif for Respondents Nos. 3, 4, 7 and 8. Nemo for the Remaining Respondents. Date of hearing: 29th September, 1987. This is a revision reporting that the order dated 1‑4‑1987 recorded by the learned Presiding Officer, Punjab Labour Court No. 4, Faisalabad dismissing the application brought under Standing Order 11‑A of the Standing Orders Ordinance, 1968 for permission to close down the Bank, is wrong and improper. 2. The case of the petitioner is that the shares of the petitioner Bank were sold to Union Bank and the business of the petitioner bank was closed, therefore, permission was sought. On the cessation of the banking business of the petitioner bank, the services of the employees were terminated in all the branches i.e. Karachi, Multan and Faisalabad with effect from 30‑12‑1985 on payment of one month's salary in lieu of notice besides other legal dues. Some of the terminated persons had challenged the orders of their termination and they had been ordered to be reinstated in service. 3. The learned lower Court has refused permission under Standing Order 11‑A for the sole reason that after closing down the business and terminating the services of the employees, permission was sought, whereas according to Standing Order 11‑A, taking of prior permission was necessary. A Supreme Court's ruling reported in 1975 S C M R 49 was also cited before the learned lower Court but it was not followed for the reason that it was not ascertainable as to at what stage the company had moved the application before the Labour Court in that case for seeking its permission under Standing Order 11‑A to close down its establishment. The ruling was not followed for this reason also that the point had not been agitated before the High Court and had been raised for the first time before the Supreme Court. The Supreme Court being the highest and last judicial forum in the country, its decisions are binding upon all the Courts including Tribunals. Even in the Constitution the provision is that the judgments of the Supreme Court are binding. Even obiter dicta findings of the Supreme Court are binding. The Supreme Court has held: "Standing Order 11‑A does not stipulate that the application to the Labour Court for permission to close down should be the first step in the process. All that it prescribes is that no employer shall close down the whole of its establishment without prior permission of the Labour Court in this behalf. Thus the Labour Court's permission might indeed be the last step in the process of closing down, or an application in this behalf may be made by the employer simultaneously with any other step that he may have to take to wind up the business and' to close down his establishment. The Standing Order does not appear to spell out any sequence in which the various steps for closing down an establishment may be taken by the employer." It is clear from the ruling that the act of closing down an establishment cannot be the single act but series of acts may be done in this respect. During course of doing acts towards the closing down of the establishment if an application is made under Standing Order 11‑A, it cannot be said that such an application was given not prior to the closing down. According to the observation made by the Supreme Court, Labour Court's permission can be the last step in the process of closing down. A perusal of the written statement shows that no express objection was taken to the effect that the application under Standing Order 11‑A had been made after completely closing down the bank. The preliminary objection taken by the respondents was that the application had been made in violation of the provisions of Standing Order 11‑A as amended uptodate. It was not made clear how the provisions of Standing Order 11‑A had been violated. If a clear cut objection had been raised in this respect, the petitioner may have produced evidence to show that before the bank was completely closed, application under Standing Order 11‑A had been submitted. The rendition of accounts is also a part of closing down and if before rendition of accounts, recovery of debts due to the bank or discharge of liabilities an application under Standing Order 11‑A is made, it may not be said that it had not been given prior to the closing down. The simple reason that a resolution to close down the bank had been passed and the services of the employees had been terminated is not sufficient to say that permission was not sought prior to the closing down. The act of the petitioner in terminating the services of the employees without permission obtained under Standing Order 11‑A may be wrong, but it does not mean that the whole closing down of the bank had been done before moving the application. 4. Learned counsel for the respondents has argued that since in the resolution passed by the shareholders it is said that the petitioner bank was merged with the Union Bank, the business could not be closed and thus there was no justification for making an application for permission to close down the bank. No doubt in the resolution it is said that the petitioner bank was merged with the Union Bank but it does not mean that in spite of the merger the petitioner can continue to run the business, independently or separately. Admittedly, the petitioner bank was an independent and separate entity and before closing down the business, it was running the business without the participation or indulgence of any other establishment. The application is to close down the independent business and not for closing down the business which is to be carried on after the merger alongwith the Union Bank. After merger the business is to be carried on in the name and style of Union Bank and not by the petitioner Bank. So the mere fact that the petitioner bank has merged with the Union Bank is no ground to refuse the permission to close down the business which the petitioner bank was previously running independently. 5. Learned counsel for the respondents has made reference to telex Exh. R‑2 and has said that since it is mentioned therein that the petitioner bank shall have separate entity, therefore, permission to close down the business cannot be given. Exh. R‑2 is by Chairman and according to the learned counsel for the respondents, the Chairman of the Union Bank sent this telex. The Chairman of the Union Bank cannot have any say in the matter of the business which the petitioner Bank was previously running separately and independently. It is, the resolution made by the shareholders of the petitioner Bank which counts. In the said resolution it is not mentioned that the petitioner Bank would be a separate entity or it would continue to run the business of banking as previously in the name and style, of Dubai Bank. This is noteworthy that this is not the case of the respondents that in reality Dubai Bank did not sell the shares and did not stop the business of banking and that the transaction of selling the shares to Union Bank and closing down the business was fictitious. It, therefore, can be said that in reality the petitioner bank has ceased to exist and has abandoned the running of business of banking. This being so, there appears to be no reason to withhold the permission sought for. 6. As a result of the discussion made above, I set aside the impugned order of the learned lower Court and allow the application brought under Standing Order 11-A with the observation that this permission would not affect the claim of the workers for reinstatement, whose services on account of closure of business have been terminated, if otherwise the termination suffers from any illegality. A.E./438/Lb. P Revision accepted.