Industrial Disputes Act sec. 25F,25FF sec.25N and Section 17B of I.D. Act - Estopel - Already decided case attained finality - and same was applied with some suitable modifications = Retrenchment of labours temporary having serice of more than 10 years of service with out sufficient notice and with out payment of damages on the trasfer of Unit - are entitled for reinstatement with back wages at 25%
The process
of pumping water is specifically covered under the definition of
“manufacturing process” under Section 2 (k)(ii) of The Factories Act, 1948.
Thus, the workmen concerned were engaged in a “manufacturing process”.
Once that is established, it follows that the activity of the undertaking
in which they were working, constituted a “factory” within the meaning of
Section 2(m) of the said Act.
(ii) The explanation (i) to Section 25A of I.D. Act, 1947, covers the
“factories” within the definition of an “industrial establishment”, and
therefore Chapter VA of the I.D. Act, 1947 applies to “manufacturing
process” of pumping water. Hence, it cannot be denied that the undertaking
in which the workmen concerned were employed was covered under the
provisions of I.D. Act.
20. It is, however, contended on behalf of the appellant that the
said undertaking was being run by the irrigation department of the first
appellant, and the activities of the irrigation department could not be
considered to be an “industry” within the definition of the concept under
Section 2(j) of the I.D. Act.
As noted earlier, the reconsideration of the
wide interpretation of the concept of “industry” in Bangalore Water Supply
and Sewerage Board (supra) is pending before a larger bench of this Court.
However, as of now we will have to follow the interpretation of law
presently holding the field as per the approach taken by this Court in
State of Orissa v. Dandasi Sahu (supra), referred to above.
The
determination of the present pending industrial dispute cannot be kept
undecided until the judgment of the larger bench is received.
In the facts and circumstances of the present case also,
accepting that the termination did result on account of transfer of the
undertaking, the relief to be given to the workmen will have to be moulded
to be somewhat similar to that given to the other group of 10 workmen.
It
will not be just and proper to restrict it to the rigours of the limited
relief under Section 25FF read with 25F of the I.D. Act.
Prior to the
termination of their services on 30.6.1985, many of the workmen concerned
had put in a service of about 10 years.
Inasmuch as so many years have
gone since then, most of them must have reached the age of superannuation.
In the circumstances, there cannot be any order of reinstatement.
However,
they will be entitled to continuity of service, and although they have been
receiving last drawn wages under S 17 B of the I.D Act, 1947, they will be
entitled to 25% backwages and retirement benefits on par with the other 10
workmen. Award of 25% backwages in their case will be adequate
compensation.
In the circumstances, we dispose of the two appeals against the
impugned judgment and order of the learned Single Judge of the Bombay High
Court, dated 14.9.2004, in Writ Petition No.2699 of 1993, which is left
undisturbed by the Division Bench, by passing the following order:-
(i) The 163 workmen concerned in the present matter, will be placed into
three categories, i.e.,
(a) those who have already reached the age of superannuation;
(b) those who are yet to reach the age of superannuation;
and
(c) those who have expired.
They will be entitled to the reliefs in
the following manner.
(ii) The benefits to the workmen in category (a) will be till the date of
their superannuation,
for category (b) till the date of this judgment, and
for those in category (c) till the date of expiry of the workman concerned.
(iii) The workmen of all the three categories will be entitled to
continuity of service until the date of superannuation, or until the date
of this judgment, or until the date on which the workman concerned has
expired, as the case maybe.
(iv) All the workmen will be entitled to 25% backwages over and above the
last drawn wages that they have received under Section 17B of I.D. Act.
The
back wages shall be calculated until the date as mentioned in clause (iii)
above.
(v) All the workmen will be entitled to the same retirement benefits, if
any (depending on their eligibility), as given to the other group of 10
workmen viz. Pandurang Vishnu Sandage and others.
(vi) All the aforesaid payments shall be made directly to the workmen
concerned or their heirs, as the case maybe, within three months from the
date of this judgment.
(vii) There shall not be any order of reinstatement.
(viii) The appellants will, thereafter, file a compliance report in
the Labour Court at Sangli, with a copy thereof to the Registry of this
Court.
(ix) Order accordingly.
(x) Registry to send a copy of this judgment to the Labour Court, Sangli.
30. Both the appeals and all the I.As. moved therein stand disposed
off as above, with no order as to costs.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2565 OF 2006
State of Maharashtra & Anr. … Appellants
Versus
Sarva Shramik Sangh, Sangli & Ors. … Respondents
WITH
CIVIL APPEAL NO.2566 OF 2006
Sarva Shramik Sangh, Sangli … Appellant
Versus
State of Maharashtra & Ors. … Respondents
J U D G E M E N T
H.L. Gokhale J.
Civil Appeal No.2565 of 2006 seeks to challenge the judgment
and order dated 12.9.2005 passed by a Division Bench of the Bombay High
Court in Letter Patents Appeal No.184 of 2005, as well as the judgment and
order dated 14.9.2004 passed by a Single Judge of that High Court in Writ
Petition No.2699 of 1993, wherefrom the said
Letters Patent Appeal arose.
The said Writ Petition had been filed by the respondents to challenge the
award dated 21.5.1992 rendered by the Labour Court, Sangli, in a group
Reference under the Industrial Disputes Act, 1947 (I.D. Act, for short).
The learned Single Judge had allowed the said Writ Petition, by the above
referred order, and the Division Bench had left the said decision
undisturbed.
2. The State of Maharashtra through Secretary Irrigation
Department, and Executive Engineer Irrigation Department, Sangli, are the
appellants herein, whereas Sarva Shramik Sangh, Sangli, a Trade Union
representing the workmen concerned, and two of the workmen in the concerned
Industrial Establishment are the respondents to this appeal.
Facts leading to this appeal are this wise:-
3. The Government of Maharashtra established a corporation named
as the Irrigation Development Corporation of Maharashtra Limited, sometimes
in December 1973.
This Corporation was a Government of Maharashtra
undertaking. It set up 25 lift irrigation schemes to provide free services
to farmers.
The corporation was established in the aftermath of a terrible
drought which afflicted the State in the year 1972.
Some 256 workmen were
employed to work on the irrigation schemes of the said Corporation. Though
it was claimed that the workmen were casual and temporary, the fact remains
that many of them had put in about 10 years of service when they were
served with notices of termination by the appellant No.2 on 15.5.1985.
The
notice sought to terminate their services w.e.f. 30.6.1985, and offered them 15 days compensation for every completed year of service.
The
retrenchment was being effected because according to the appellants the
lift irrigation schemes, on which these workmen were working, were being
transferred to a sugar factory viz. Vasantdada Shetkari Sahakari Sakhar
Karkhana, Sangli.
4. It is not disputed that some of the workmen accepted the
retrenchment compensation, though a large number of them did not.
Some 163
out of them filed Writ Petition bearing No.2376 of 1985, through the first
respondent Trade Union, against the above referred Corporation and the
appellants, seeking to restrain the transfer of the undertaking.
The
petition was dismissed by the Bombay High Court and hence, a Special Leave
Petition was preferred to this Court being SLP No.1386 of 1986.
The
appellants defended the said petition by pointing out that the workmen
concerned were not employees of the Corporation, but were employees of the State.
This Court, therefore, dismissed the said SLP by its order dated
11.11.1986 by observing as follows:-
“Having regard to the statement in the counter affidavit of
the Executive engineer, the State of Maharashtra, that the
Petitioners were employees of the State and not the Corporation,
we do not see how the reliefs sought against the Corporation can
be granted in this petition. If the Petitioners desire to seek
any reliefs against the State Government and if such relief is
permissible, the Petitioners are at liberty to seek appropriate
legal remedy in the matter. The SLP is, therefore, disposed of
accordingly.”
5. This led the workmen to seek Reference of the Industrial Dispute under the I.D. Act.
These References were numbered as Ref. I.D.
Nos.27 to 40, 42 to 70, 72 to 99/97, 1/88 to 35, 54, 63, 65, 72 to 92, 106
to 118/88, 17 to 29/89, 37, 38, 40 to 44/89 covering 163 applicants.
6. In these References, it was contended on behalf of the workmen
that their retrenchment was illegal, inasmuch as the requirement of the
adequate statutory notice as required under the I.D. Act, was not complied
with.
On the face of it, there was a shortfall of a few days in giving the
notice.
The learned Labour Court Judge noted that the notices were issued
on 25.6.1985, and the services were terminated w.e.f. 30.6.1985.
The
workmen contended that the lift irrigation schemes wherein they were
working, were in fact Industrial Establishments, and that inasmuch as more
than 100 workmen were employed therein, the provision of Section 25N of the
I.D. Act (which requires three months’ advance notice prior to termination)
was applicable, but had not been complied with.
The learned Judge of the
Labour Court did not deal with that submission, but held that in any case
there was a violation of Section 25F of the I.D. Act, inasmuch as not even
one month’s notice had been given and hence the termination was illegal.
7. In the Written Statement filed by the appellant No.2 before the
Labour Court, it was stated in paragraph 3, that various schemes were
carried out by the State Government at its own expense.
In paragraph 4 it
was contended that the workmen concerned were the employees of the
Irrigation Department.
In paragraph 14 thereof, it was stated that “the
termination is not by way of victimization but as the irrigation scheme has
been transferred to Shetkari Sahakari Sakhar Karkhana, Sangli, the
employees are not entitled to retain in the services without any work.”
8. In the written statement there was no specific reference to
Section 25FF of the I.D. Act which deals with the transfer of undertakings.
There was no reference to the said section in the judgment of the learned
Judge either.
We may however note that the learned Judge has noted this
submission of the appellants in paragraph 8 of her order in the following
words:-
“8.…..However, in the present case, it is clear that all
those schemes where the Second Party workmen were working were
sold by the State Government to the Vasantdada Shetkari Sahakari
Sakhar Karkhana Ltd., Sangli and on said reason their services
were terminated. As such, it is clear that those schemes are
transferred to the Sugar Industry. Hence, there is no control
of the First Party employer on those schemes…….”
9. The learned Judge, however, noted that workmen concerned were
employed on a temporary basis. Having noted that, the learned Judge relied
upon a judgment of Karnataka High Court between Workmen of Karnataka Agro
Protines Ltd. v. Karnataka Agro Proteins Ltd. and Ors. reported in 1992 LLJ
page 712, on the application of Section 25F and 25FF, and held that the
only claim that the workmen could make was for compensation.
The Karnataka
High Court had referred to and followed the law laid down in Anakapalle Co-
operative Agricultural and Industrial Society Ltd. v. Workmen and Ors.
reported in AIR 1963 SC 1489, and also the subsequent judgment of this
court in Central Inland Water Corporation Ltd. v. The Workmen and another
reported in (1974) 4 SCC 696 to the same effect.
The Labour Court,
therefore, directed that there would not be any reinstatement, but the
workmen will be given the compensation in accordance with Section 25F of
the I.D. Act.
The Award of the Labour Court reads as follows:-
“Award:
I) The claim is partly allowed.
II) All the employees are entitled to receive the retrenchment
compensation under Section 25F of Industrial Disputes Act,
1947 after calculating their service period with the First
Party. The remaining claim stands rejected.
III) However, the First Party is hereby directed to give
preference to all those employees whenever some additional
work to new project are started or work is available.
IV) It is informed that some employees have died. In respect
of such employees their legal heirs are entitled to receive
the compensation amount.
V) The award be implemented within in a month from the date of
publication of this Award.
VI) No order as to costs.”
10. Being aggrieved by that judgment and order, the respondents
filed Writ Petition bearing No.2699 of 1993 before a Single Judge of the
Bombay High Court invoking Article 227 of the Constitution of India. The
learned Single Judge who heard the matter took the view that
the process of
pumping water wherein the workmen were employed, amounted to a
‘manufacturing process’ under Section 2(k) of the Factories Act, 1948, and
therefore, the lift irrigation schemes were in the nature of a ‘factory’ as
defined under Section 2(m) of the said Act, and hence, an ‘Industrial
Establishment’ to which the I.D. Act applied.
11. The learned Single Judge then held that since according to the
State Government, the workmen were employed by the Irrigation Department,
the plea that their services were required to be terminated on account of
the transfer of the undertaking could not be accepted. This was on the
footing since the other activities of the Irrigation Department continued
even after the transfer of the lift irrigation schemes, the workmen
concerned could certainly be absorbed into other activities of the
irrigation department.
12. The learned Single Judge observed that the plea invoking
Section 25FF could not be permitted to be raised in the High Court,
inasmuch as transfer was a mixed question of facts and law. According to
the learned Judge, it was a case of breach of Section 25N, and not merely
25F of the I.D. Act.
Section 25N lays down the conditions precedent to
retrenchment of workmen from Industrial Establishments wherein more than
100 workmen are employed, and sub-section (1)(a) thereof provides for three
months’ notice or pay in lieu thereof in the event of retrenchment.
The
learned Judge, therefore, set-aside the award, since three months’ advance
notice or pay was not given, and held that the workmen were entitled to
reinstatement with continuity of service. The learned Judge awarded 25%
backwages to the workmen.
The operative part of the order of the learned
Judge as contained in paragraphs 11 to 14 of the judgment reads as follows:-
“11.
The award dated 21st May 1992 passed by the Labour
Court, Sangli is set aside.
The workmen concerned in the
References are entitled to reinstatement with continuity of
service and 25% backwages.
All workmen who are interested in
employment must report for duty within two months from the date
of this order.
The Respondents will give them employment by
reinstating them with continuity of service within a month
thereafter.
Backwages shall be paid to the workmen, computed at
25% within three months of their reinstatement in service.
12. There are some workmen who have been absorbed in
other departments of the State Government or have secured
employment elsewhere.
These workmen shall be paid 25% backwages
till the date they secured employment within six months from
today.
13. A few workmen have already reached the age of
superannuation during the pendency of these proceedings.
They
shall be paid the backwages computed at 25% till the date they
attained the age of superannuation within three months from
today.
14. I am informed that some workmen have expired during
the pendency of the proceedings in court.
The Respondents shall
pay to the heirs of these workmen 25% of back wages upto the
date of death of these workmen within three months from today.”
13. It is this order which was challenged in the Letters Patent
Appeal. The Division Bench, however, took the view that a Letters Patent
Appeal was not available against an order passed on the Wirt Petition filed
under Article 227 of the Constitution of India, and therefore dismissed the
said Letters Patent Appeal.
Being aggrieved by this order of the Division
Bench as well as of the learned Single Judge, this appeal has been filed.
Leave was granted in this matter on 8.5.2006, and the operation of the
impugned order was stayed subject to the compliance of the provisions of
Section 17B of the I.D. Act, 1947.
The appeal has been pending since then,
and a number of I.As have been filed by both parties. When the appeal
reached for final hearing, Ms. Madhavi Diwan, learned counsel appeared for
the appellants, and Mr. Vinay Navare, learned counsel appeared for the
respondents.
Submissions on behalf of the appellants:-
14. The principal submission of Ms. Madhavi Diwan, learned counsel
for the appellants is that this is a case of transfer of an undertaking.
That was the very plea taken in paragraph 14 of the written statement as
noted above, and also reflected in the judgment of the Labour Court. The
learned Single Judge had clearly erred in ignoring this fact. Ms. Diwan
submitted that in fact it was also the case of the respondents themselves
that retrenchment of their services took place because of the transfer of
the undertaking. She submits that the lift irrigation schemes constituted
an undertaking, and the ownership of the management of the undertaking was
being transferred, and it was not relevant that the ownership of the
Irrigation Department Corporation was not being transferred. Therefore, in
her submission it is the Section 25FF which applies to the present case,
and neither Section 25N nor Section 25F.
Besides, Section 25F would apply
only as a measure of compensation that is to be provided for, and nothing
more as laid down by a Constitution Bench of this Court in Anakapalle
Society’s case (supra).
In that matter this Court has observed in
paragraph 16 as follows:-
“16. The Solicitor-General contends that the question in the
present appeal has now to be determined not in the light of
general principles of industrial adjudication, but by reference to
the specific provisions of s. 25FF itself. He argues, and we think
rightly, that the first part of the section postulates that on a
transfer of the ownership or management of an undertaking, the
employment of workmen engaged by the said undertaking comes to an
end, and it provides for the payment of compensation to the said
employees because of the said termination of their services,
provided, of course, they satisfied the test of the length of
service prescribed by the section. The said part further provides
the manner in which and the extent to which the said compensation
has to be paid. Workmen shall be entitled to notice and
compensation in accordance with the provisions of s. 25-F, says
the section, as if they had been retrenched. The last clause
clearly brings out the fact that the termination of the services
of the employees does not in law amount to retrenchment and that
is consistent with the decision of this Court in Hariprasad's
case [1957]1SCR121 : AIR 1957 SC 121. The Legislature, however,
wanted to provide that though such termination may not be
retrenchment technically so-called, as decided by this Court,
nevertheless the employees in question whose services are
terminated by the transfer of the undertaking should be entitled
to compensation, and so, s. 25-FF provides that on such
termination compensation would be paid to them as if the said
termination was retrenchment.
The words "as if" bring out the
legal distinction between retrenchment defined by s. 2(oo) as it
was interpreted by this Court and termination of services
consequent upon transfer with which it deals.
In other words, the
section provides that though termination of services on transfer
may not be retrenchment, the workmen concerned are entitled to
compensation as if the said termination was retrenchment.
This
provision has been made for the purpose of calculating the amount
of compensation payable to such workmen; rather than provide for
the measure of compensation over again, s. 25FF makes a reference
to s. 25-F for that limited purpose, and,
therefore, in all cases
to which s. 25FF applies, the only claim which the employees of
the transferred concern can legitimately make is a claim for
compensation against their employers.
No claim can be made against
the transferee of the said concern.”
This judgment in Anakapalle (supra) has been consistently followed
thereafter, including in a recent judgment of this Court in Maruti Udyog
Ltd. v. Ram Lal and Ors. reported in 2005 (2) SCC 638.
Reply on behalf of the respondents:-
15. As far as the respondents are concerned, they have principally
contended that Section 25FF has no application to the present case, and the
learned Single Judge of the High Court has rightly held that this is a case
which is covered under Section 25N.
It is submitted that in view of
Section 25N(1)(a), the workmen had to be given three months’ prior notice
or notice pay. That having not been done, and the prior permission under
25N(1)(b) of the appropriate government not having been sought, the
retrenchment will have to held illegal under sub-Section (7) of 25N.
The
learned Judge of the Labour Court had in any case held that it was a case
of breach of Section 25F, and the High Court had held that it was a case of
breach of Section 25N.
Either of those findings justified the reinstatement with full backwages.
Reliance was placed in this behalf on
the judgment of this Court in Anoop Sharma v. Executive Engineer, Public
Health Division No.1, Panipat (Haryana) reported in 2010 (5) SCC 497.
16. However, more than that, the respondents have pointed out that
another set of 10 workmen (Pandurang Vishnu Sandage and 9 others) working
on the same lift irrigation schemes had subsequently filed separate
References in the Labour Court bearing Ref. (I.D.A.) No.37 to 45 of 1991
and 1 of 1992, and the Labour Court gave an award on 30.12.1996, that those
10 workmen were entitled to reinstatement with 25% backwages.
That judgment
was challenged by the State of Maharashtra by filing Writ Petition No.2729
of 1997. The said Writ Petition was dismissed by a Single Judge of Bombay
High Court, relying upon the decision in Writ Petition No.2699 of 1993 in
the present matter. An appeal was filed by the appellants by preferring
SLP (C) No.773 of 2006. This Hon’ble Court dismissed the said SLP on the
ground of delay. A Review Petition (Civil) bearing No.379 of 2006 was
filed. That was dismissed by the order passed on 26.9.2006. Thereafter a
Curative Petition No.164 of 2007 was filed. That also came to be dismissed
on 21.2.2008.
It was, therefore, submitted that the appellants are bound
by the decision in the aforesaid case of 10 workmen, and in any case this
Court should not allow the present appeal as it will lead to a different
result in the case of workmen who are similarly situated.
The respondents
relied upon an order of this Court in the case of Warlu v. Gangotribai and
Anr. reported in 1995 (Supp) 1 SCC 37.
It was a matter relating to the
tenancy rights of the appellant, concerning the land spread over three
survey numbers, which belonged to the Respondent no.1. Three writ petitions
arising out of the revenue proceedings filed by him were dismissed by the
High Court. Two SLPs therefrom were found to be time barred and therefore
dismissed. As far as the third SLP is concerned, this Court declined to
entertain the same for the sole reason that any such interference will
result in making conflicting orders regarding tenancy rights in the same
land. It was therefore, submitted by Mr. Navare, the learned counsel for
the respondent that the appellants should suffer by the principle of
estoppel by record.
17. In support of the contention that the orders passed by this
Court in the case of the other 10 workmen should be followed in the present
case, reliance was placed on paragraph 21 of a judgment in the case of
Nirmal Jeet Singh Hoon v. Irtiza Hussain and Ors. reported in 2010 (14) SCC
564.
The judgment impugned in that matter directing eviction of tenant had
already been upheld in an earlier SLP, wherein the Petitioner was also a
party.
Entertaining the second petition, on his behalf, would have
amounted to reviewing the earlier order of this Court.
This Court
dismissed the petition by observing
“The law does not permit two
contradictory and inconsistent orders in the same case in respect of the
same subject matter”.
It was therefore submitted that the order of the
Labour Court in the case of the other 10 workmen had attained finality, and
the appellants cannot be permitted to take a different position in the
present matter when the workmen in both the matters were similarly
situated.
18. The appellants had submitted that the Irrigation Department is
not an industry. In that behalf, it was pointed out on behalf of the
workmen that it is too late to raise this submission in view of the
judgment of this Court in Bangalore Water Supply and Sewerage Board v. A.
Rajappa & Ors. reported in 1978 (2) SCC 213.
As against that, the counsel
for the appellants pointed out that the judgment in Bangalore Water Supply
(supra) is pending for re-consideration before a larger bench of this Court
in view of the order passed by the Constitution Bench in
State of U.P. v. Jai Bir Singh reported in 2005 (5) SCC 1.
The respondents, however,
submitted that in the meanwhile the judgment in Bangalore Water Supply
(supra) will have to be followed until it is overruled, since the
proposition therein continues to hold good.
Reliance is placed in that
behalf, on the approach adopted by this Court in such a situation, in a
matter concerning Arbitration in State of Orissa v. Dandasi Sahu reported
in 1988 (4) SCC 12. In that matter this Court has held that in the
exercise of this Court’s discretion under Article 136, it would not be
justified to allow a party to further prolong or upset adjudication of old
and stale disputes till the decision of the larger bench is received.
Consideration of the rival submissions:-
19. (i) To begin with, we must note that the workmen concerned
were engaged as pump operators and chowkidars etc. on 25 lift irrigation
schemes, which were carrying out the process of pumping water.
The process
of pumping water is specifically covered under the definition of
“manufacturing process” under Section 2 (k)(ii) of The Factories Act, 1948.
Thus, the workmen concerned were engaged in a “manufacturing process”.
Once that is established, it follows that the activity of the undertaking
in which they were working, constituted a “factory” within the meaning of
Section 2(m) of the said Act.
(ii) The explanation (i) to Section 25A of I.D. Act, 1947, covers the
“factories” within the definition of an “industrial establishment”, and
therefore Chapter VA of the I.D. Act, 1947 applies to “manufacturing
process” of pumping water. Hence, it cannot be denied that the undertaking
in which the workmen concerned were employed was covered under the
provisions of I.D. Act.
20. It is, however, contended on behalf of the appellant that the
said undertaking was being run by the irrigation department of the first
appellant, and the activities of the irrigation department could not be
considered to be an “industry” within the definition of the concept under
Section 2(j) of the I.D. Act.
As noted earlier, the reconsideration of the
wide interpretation of the concept of “industry” in Bangalore Water Supply
and Sewerage Board (supra) is pending before a larger bench of this Court.
However, as of now we will have to follow the interpretation of law
presently holding the field as per the approach taken by this Court in
State of Orissa v. Dandasi Sahu (supra), referred to above.
The
determination of the present pending industrial dispute cannot be kept
undecided until the judgment of the larger bench is received.
21. Having stated that however, the objection raised by the
appellants to the judgment rendered by the Single Judge of the Bombay High
Court is required to be looked into viz. that the appellants had effected a
transfer of an undertaking which resulted into termination of services of
the workmen concerned, and that this was not a case of retrenchment
simpliciter. It was submitted that the 25 lift irrigation schemes by
themselves constitute an undertaking. It may be that all the activities of
irrigation department may not have been transferred, but a separate unit
thereof, consisting of these 25 lift irrigation schemes, has come to be
transferred to a sugar factory. As held in Anakapalle Society’s case
(supra), in such a matter the only claim which the employees of the
transferor concern can legitimately make, is a claim for compensation
against the previous employer, since they are not being absorbed under the
new employer. 22. Having stated this, we have also to note the conduct
of the appellants. It appears that many of the workmen concerned were
engaged for a period of about 10 years. Section 25FF contemplates
compensation to be paid to the workmen on account of their retrenchment,
resulting from transfer of the undertaking. The retrenchment, however, is
required to be effected only if the previous employer is not continuing the
workmen concerned in any of his activities or establishments, or when they
are not being absorbed under the new employer. Continuation of service
under the existing employer, or re-engagement under the new one, should be
the preferred approach, when such an occasion arises. Termination of
services should normally be the last resort. In the instant case, the first
appellant – State Government, does not appear to have made any efforts
either to absorb these workmen in other activities of the irrigation
department, or to have insisted upon the sugar factory to absorb them. This
is because the lift irrigation schemes were going to be continued by the
transferee sugar factory, and in any case the Irrigation department has a
very large number of activities, wherein these workmen could have been
absorbed. When the State Government is in the picture, we do expect a
little better attitude than the one which is often displayed by a private
sector employer. It is possible that, in a given situation, the State
Government may have its own economic compulsions which justify termination
of services. But, there must be either an effort to absorb such surplus
workmen, or in any case the difficulties of the Government, if any,
necessitating the termination, ought to be explained. We do not find any
such efforts or explanation placed on record.
23. It is also material to note that the Labour Court had directed
the State Government to consider the absorption of these workmen. The
respondents have placed it on record that in pursuance of a subsequent
advertisement for employment in the irrigation department, the first
respondent-union had written to the authorities concerned to absorb these
workmen, but the Government took a bureaucratic attitude to inform the
Union that no such decision could be taken, since the matter was pending in
the Supreme Court. This attitude was not expected from a Welfare State.
24. In any case, having noted that another petition concerning 10
other workmen from the same lift irrigation schemes was dismissed, and SLP
and Curative Petitions, therefrom, were also dismissed, a question arises
for this Court to consider that assuming this was a case of transfer of
undertaking, should the relief to the affected workmen be restricted only
to the compensation under Section 25F as required by S 25 FF.
25. The learned counsel for the respondents has referred to a few
cases arising out of revenue proceedings and the rent act, indicating what
should be the approach in such a situation. These 163 workmen and the
other 10 workmen viz. Pandurang Vishnu Sandage and others were working on
the same lift irrigation schemes. Those 10 workmen also got an award of
reinstatement with 25% backwages. The writ petition of the appellants
challenging that award was dismissed by the Bombay High Court, relying upon
the judgment of the Single Judge in the present mater. The SLP and the
Curative Petitions therefrom also came to be dismissed, although on the
ground of gross delay. The fact, however, remains that as far as those 10
workmen are concerned, the order of relief in their case viz. reinstatement
with 25% backwages and continuity in service was left undisturbed.
Therefore, a question arises - should the Government having been lethargic
in the case of those 10 workmen, where it suffered an order of
reinstatement with 25% backwages, be now permitted to insist that when it
comes to these 163 workmen, who are similarly situated, they be denied a
comparable relief?
And in any case, should
this Court treat the two sets
of workmen differently, in the matter of relief, only because the SLP
against some of them got dismissed on account of delay,
whereas the SLP
concerning the others survived for final arguments?
26. This Court has the authority to pass an appropriate order in
exercise of its jurisdiction for doing complete justice in a matter pending
before it. This authority under Article 142 of the Constitution will also
have to be read as coupled with a duty to do complete justice in a given
case. In Food Corporation of India Worker’s Union v. Food Corporation of
India & Anr. reported in 1996 (9) SCC 439,
this Court was faced with a
situation where there was a delay in reinstatement of the specified workmen
despite this Court’s earlier order. This was because of long delay of
about 6 years in determining their identity, in the proceeding before the
Industrial Tribunal. Therefore, in view of the ‘human problem’ involved in
the matter, the Court laid down a procedure for identification of the
workmen with a view to do complete justice, and also directed reinstatement
with backwages @ 70% of the ‘normal earnings’ of the workmen at piece rate,
till their reinstatement.
In
L. Parameswaran v. Chief Personal Officer and ors. reported in 2008 (3) SCC
649,
the appellant had worked in an ex-cadre post for a very long time, and
was reverted to his parent post, though not immediately when the policy
decision to repatriate ex-cadre employees was taken. Working in the ex-
cadre post for a long time did not confer any right to continue in that
post or for pay protection. Considering, however, the long time spent in
the ex-cadre post, this Court specifically invoked Article 142 to grant him
protection of pay.
27. In the facts and circumstances of the present case also,
accepting that the termination did result on account of transfer of the
undertaking, the relief to be given to the workmen will have to be moulded
to be somewhat similar to that given to the other group of 10 workmen.
It
will not be just and proper to restrict it to the rigours of the limited
relief under Section 25FF read with 25F of the I.D. Act.
Prior to the
termination of their services on 30.6.1985, many of the workmen concerned
had put in a service of about 10 years.
Inasmuch as so many years have
gone since then, most of them must have reached the age of superannuation.
In the circumstances, there cannot be any order of reinstatement.
However,
they will be entitled to continuity of service, and although they have been
receiving last drawn wages under S 17 B of the I.D Act, 1947, they will be
entitled to 25% backwages and retirement benefits on par with the other 10
workmen. Award of 25% backwages in their case will be adequate
compensation.
28. Civil Appeal No.2566 of 2006 has been filed by the above
referred Trade Union, the respondent in Civil Appeal No.2565 of 2006,
against the same two judgments of the Single Judge and the Division Bench
of Bombay High Court.
The Union is aggrieved by the award of only 25%
backwages to the workmen, and seeks an order of 100% backwages, contending
that if the retrenchment is held to be bad in law, the backwages could not
be restricted to anything less than 100% backwages.
Mr. Navare has
appeared in support of this appeal, and Ms. Diwan has appeared to oppose
the same.
As can be seen from the narration of facts above,
the Union is
claiming reliefs for the present group of workmen on the basis of parity
with the other group of 10 workmen viz. Pandurang Vishnu Sandage and
others, and that submission has been accepted by us.
Those workmen have been awarded only 25% backwages.
That being so, the present group of
workmen cannot be awarded back wages more than what have been awarded to the
other 10 workmen.
The claim for award of higher backwages cannot, therefore, be entertained.
29. In the circumstances, we dispose of the two appeals against the
impugned judgment and order of the learned Single Judge of the Bombay High
Court, dated 14.9.2004, in Writ Petition No.2699 of 1993, which is left
undisturbed by the Division Bench, by passing the following order:-
(i) The 163 workmen concerned in the present matter, will be placed into
three categories, i.e., (a) those who have already reached the age of
superannuation; (b) those who are yet to reach the age of superannuation;
and (c) those who have expired. They will be entitled to the reliefs in
the following manner.
(ii) The benefits to the workmen in category (a) will be till the date of
their superannuation, for category (b) till the date of this judgment, and
for those in category (c) till the date of expiry of the workman concerned.
(iii) The workmen of all the three categories will be entitled to
continuity of service until the date of superannuation, or until the date
of this judgment, or until the date on which the workman concerned has
expired, as the case maybe.
(iv) All the workmen will be entitled to 25% backwages over and above the
last drawn wages that they have received under Section 17B of I.D. Act. The
backwages shall be calculated until the date as mentioned in clause (iii)
above.
(v) All the workmen will be entitled to the same retirement benefits, if
any (depending on their eligibility), as given to the other group of 10
workmen viz. Pandurang Vishnu Sandage and others.
(vi) All the aforesaid payments shall be made directly to the workmen
concerned or their heirs, as the case maybe, within three months from the
date of this judgment.
(vii) There shall not be any order of reinstatement.
(viii) The appellants will, thereafter, file a compliance report in
the Labour Court at Sangli, with a copy thereof to the Registry of this
Court.
(ix) Order accordingly.
(x) Registry to send a copy of this judgment to the Labour Court, Sangli.
30. Both the appeals and all the I.As. moved therein stand disposed
off as above, with no order as to costs.
…………..…………………..J.
[ H.L. Gokhale ]
……………………………J.
[ Ranjan Gogoi]
New Delhi
Dated : October 21, 2013
-----------------------
28
The process
of pumping water is specifically covered under the definition of
“manufacturing process” under Section 2 (k)(ii) of The Factories Act, 1948.
Thus, the workmen concerned were engaged in a “manufacturing process”.
Once that is established, it follows that the activity of the undertaking
in which they were working, constituted a “factory” within the meaning of
Section 2(m) of the said Act.
(ii) The explanation (i) to Section 25A of I.D. Act, 1947, covers the
“factories” within the definition of an “industrial establishment”, and
therefore Chapter VA of the I.D. Act, 1947 applies to “manufacturing
process” of pumping water. Hence, it cannot be denied that the undertaking
in which the workmen concerned were employed was covered under the
provisions of I.D. Act.
20. It is, however, contended on behalf of the appellant that the
said undertaking was being run by the irrigation department of the first
appellant, and the activities of the irrigation department could not be
considered to be an “industry” within the definition of the concept under
Section 2(j) of the I.D. Act.
As noted earlier, the reconsideration of the
wide interpretation of the concept of “industry” in Bangalore Water Supply
and Sewerage Board (supra) is pending before a larger bench of this Court.
However, as of now we will have to follow the interpretation of law
presently holding the field as per the approach taken by this Court in
State of Orissa v. Dandasi Sahu (supra), referred to above.
The
determination of the present pending industrial dispute cannot be kept
undecided until the judgment of the larger bench is received.
In the facts and circumstances of the present case also,
accepting that the termination did result on account of transfer of the
undertaking, the relief to be given to the workmen will have to be moulded
to be somewhat similar to that given to the other group of 10 workmen.
It
will not be just and proper to restrict it to the rigours of the limited
relief under Section 25FF read with 25F of the I.D. Act.
Prior to the
termination of their services on 30.6.1985, many of the workmen concerned
had put in a service of about 10 years.
Inasmuch as so many years have
gone since then, most of them must have reached the age of superannuation.
In the circumstances, there cannot be any order of reinstatement.
However,
they will be entitled to continuity of service, and although they have been
receiving last drawn wages under S 17 B of the I.D Act, 1947, they will be
entitled to 25% backwages and retirement benefits on par with the other 10
workmen. Award of 25% backwages in their case will be adequate
compensation.
In the circumstances, we dispose of the two appeals against the
impugned judgment and order of the learned Single Judge of the Bombay High
Court, dated 14.9.2004, in Writ Petition No.2699 of 1993, which is left
undisturbed by the Division Bench, by passing the following order:-
(i) The 163 workmen concerned in the present matter, will be placed into
three categories, i.e.,
(a) those who have already reached the age of superannuation;
(b) those who are yet to reach the age of superannuation;
and
(c) those who have expired.
They will be entitled to the reliefs in
the following manner.
(ii) The benefits to the workmen in category (a) will be till the date of
their superannuation,
for category (b) till the date of this judgment, and
for those in category (c) till the date of expiry of the workman concerned.
(iii) The workmen of all the three categories will be entitled to
continuity of service until the date of superannuation, or until the date
of this judgment, or until the date on which the workman concerned has
expired, as the case maybe.
(iv) All the workmen will be entitled to 25% backwages over and above the
last drawn wages that they have received under Section 17B of I.D. Act.
The
back wages shall be calculated until the date as mentioned in clause (iii)
above.
(v) All the workmen will be entitled to the same retirement benefits, if
any (depending on their eligibility), as given to the other group of 10
workmen viz. Pandurang Vishnu Sandage and others.
(vi) All the aforesaid payments shall be made directly to the workmen
concerned or their heirs, as the case maybe, within three months from the
date of this judgment.
(vii) There shall not be any order of reinstatement.
(viii) The appellants will, thereafter, file a compliance report in
the Labour Court at Sangli, with a copy thereof to the Registry of this
Court.
(ix) Order accordingly.
(x) Registry to send a copy of this judgment to the Labour Court, Sangli.
30. Both the appeals and all the I.As. moved therein stand disposed
off as above, with no order as to costs.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2565 OF 2006
State of Maharashtra & Anr. … Appellants
Versus
Sarva Shramik Sangh, Sangli & Ors. … Respondents
WITH
CIVIL APPEAL NO.2566 OF 2006
Sarva Shramik Sangh, Sangli … Appellant
Versus
State of Maharashtra & Ors. … Respondents
J U D G E M E N T
H.L. Gokhale J.
Civil Appeal No.2565 of 2006 seeks to challenge the judgment
and order dated 12.9.2005 passed by a Division Bench of the Bombay High
Court in Letter Patents Appeal No.184 of 2005, as well as the judgment and
order dated 14.9.2004 passed by a Single Judge of that High Court in Writ
Petition No.2699 of 1993, wherefrom the said
Letters Patent Appeal arose.
The said Writ Petition had been filed by the respondents to challenge the
award dated 21.5.1992 rendered by the Labour Court, Sangli, in a group
Reference under the Industrial Disputes Act, 1947 (I.D. Act, for short).
The learned Single Judge had allowed the said Writ Petition, by the above
referred order, and the Division Bench had left the said decision
undisturbed.
2. The State of Maharashtra through Secretary Irrigation
Department, and Executive Engineer Irrigation Department, Sangli, are the
appellants herein, whereas Sarva Shramik Sangh, Sangli, a Trade Union
representing the workmen concerned, and two of the workmen in the concerned
Industrial Establishment are the respondents to this appeal.
Facts leading to this appeal are this wise:-
3. The Government of Maharashtra established a corporation named
as the Irrigation Development Corporation of Maharashtra Limited, sometimes
in December 1973.
This Corporation was a Government of Maharashtra
undertaking. It set up 25 lift irrigation schemes to provide free services
to farmers.
The corporation was established in the aftermath of a terrible
drought which afflicted the State in the year 1972.
Some 256 workmen were
employed to work on the irrigation schemes of the said Corporation. Though
it was claimed that the workmen were casual and temporary, the fact remains
that many of them had put in about 10 years of service when they were
served with notices of termination by the appellant No.2 on 15.5.1985.
The
notice sought to terminate their services w.e.f. 30.6.1985, and offered them 15 days compensation for every completed year of service.
The
retrenchment was being effected because according to the appellants the
lift irrigation schemes, on which these workmen were working, were being
transferred to a sugar factory viz. Vasantdada Shetkari Sahakari Sakhar
Karkhana, Sangli.
4. It is not disputed that some of the workmen accepted the
retrenchment compensation, though a large number of them did not.
Some 163
out of them filed Writ Petition bearing No.2376 of 1985, through the first
respondent Trade Union, against the above referred Corporation and the
appellants, seeking to restrain the transfer of the undertaking.
The
petition was dismissed by the Bombay High Court and hence, a Special Leave
Petition was preferred to this Court being SLP No.1386 of 1986.
The
appellants defended the said petition by pointing out that the workmen
concerned were not employees of the Corporation, but were employees of the State.
This Court, therefore, dismissed the said SLP by its order dated
11.11.1986 by observing as follows:-
“Having regard to the statement in the counter affidavit of
the Executive engineer, the State of Maharashtra, that the
Petitioners were employees of the State and not the Corporation,
we do not see how the reliefs sought against the Corporation can
be granted in this petition. If the Petitioners desire to seek
any reliefs against the State Government and if such relief is
permissible, the Petitioners are at liberty to seek appropriate
legal remedy in the matter. The SLP is, therefore, disposed of
accordingly.”
5. This led the workmen to seek Reference of the Industrial Dispute under the I.D. Act.
These References were numbered as Ref. I.D.
Nos.27 to 40, 42 to 70, 72 to 99/97, 1/88 to 35, 54, 63, 65, 72 to 92, 106
to 118/88, 17 to 29/89, 37, 38, 40 to 44/89 covering 163 applicants.
6. In these References, it was contended on behalf of the workmen
that their retrenchment was illegal, inasmuch as the requirement of the
adequate statutory notice as required under the I.D. Act, was not complied
with.
On the face of it, there was a shortfall of a few days in giving the
notice.
The learned Labour Court Judge noted that the notices were issued
on 25.6.1985, and the services were terminated w.e.f. 30.6.1985.
The
workmen contended that the lift irrigation schemes wherein they were
working, were in fact Industrial Establishments, and that inasmuch as more
than 100 workmen were employed therein, the provision of Section 25N of the
I.D. Act (which requires three months’ advance notice prior to termination)
was applicable, but had not been complied with.
The learned Judge of the
Labour Court did not deal with that submission, but held that in any case
there was a violation of Section 25F of the I.D. Act, inasmuch as not even
one month’s notice had been given and hence the termination was illegal.
7. In the Written Statement filed by the appellant No.2 before the
Labour Court, it was stated in paragraph 3, that various schemes were
carried out by the State Government at its own expense.
In paragraph 4 it
was contended that the workmen concerned were the employees of the
Irrigation Department.
In paragraph 14 thereof, it was stated that “the
termination is not by way of victimization but as the irrigation scheme has
been transferred to Shetkari Sahakari Sakhar Karkhana, Sangli, the
employees are not entitled to retain in the services without any work.”
8. In the written statement there was no specific reference to
Section 25FF of the I.D. Act which deals with the transfer of undertakings.
There was no reference to the said section in the judgment of the learned
Judge either.
We may however note that the learned Judge has noted this
submission of the appellants in paragraph 8 of her order in the following
words:-
“8.…..However, in the present case, it is clear that all
those schemes where the Second Party workmen were working were
sold by the State Government to the Vasantdada Shetkari Sahakari
Sakhar Karkhana Ltd., Sangli and on said reason their services
were terminated. As such, it is clear that those schemes are
transferred to the Sugar Industry. Hence, there is no control
of the First Party employer on those schemes…….”
9. The learned Judge, however, noted that workmen concerned were
employed on a temporary basis. Having noted that, the learned Judge relied
upon a judgment of Karnataka High Court between Workmen of Karnataka Agro
Protines Ltd. v. Karnataka Agro Proteins Ltd. and Ors. reported in 1992 LLJ
page 712, on the application of Section 25F and 25FF, and held that the
only claim that the workmen could make was for compensation.
The Karnataka
High Court had referred to and followed the law laid down in Anakapalle Co-
operative Agricultural and Industrial Society Ltd. v. Workmen and Ors.
reported in AIR 1963 SC 1489, and also the subsequent judgment of this
court in Central Inland Water Corporation Ltd. v. The Workmen and another
reported in (1974) 4 SCC 696 to the same effect.
The Labour Court,
therefore, directed that there would not be any reinstatement, but the
workmen will be given the compensation in accordance with Section 25F of
the I.D. Act.
The Award of the Labour Court reads as follows:-
“Award:
I) The claim is partly allowed.
II) All the employees are entitled to receive the retrenchment
compensation under Section 25F of Industrial Disputes Act,
1947 after calculating their service period with the First
Party. The remaining claim stands rejected.
III) However, the First Party is hereby directed to give
preference to all those employees whenever some additional
work to new project are started or work is available.
IV) It is informed that some employees have died. In respect
of such employees their legal heirs are entitled to receive
the compensation amount.
V) The award be implemented within in a month from the date of
publication of this Award.
VI) No order as to costs.”
10. Being aggrieved by that judgment and order, the respondents
filed Writ Petition bearing No.2699 of 1993 before a Single Judge of the
Bombay High Court invoking Article 227 of the Constitution of India. The
learned Single Judge who heard the matter took the view that
the process of
pumping water wherein the workmen were employed, amounted to a
‘manufacturing process’ under Section 2(k) of the Factories Act, 1948, and
therefore, the lift irrigation schemes were in the nature of a ‘factory’ as
defined under Section 2(m) of the said Act, and hence, an ‘Industrial
Establishment’ to which the I.D. Act applied.
11. The learned Single Judge then held that since according to the
State Government, the workmen were employed by the Irrigation Department,
the plea that their services were required to be terminated on account of
the transfer of the undertaking could not be accepted. This was on the
footing since the other activities of the Irrigation Department continued
even after the transfer of the lift irrigation schemes, the workmen
concerned could certainly be absorbed into other activities of the
irrigation department.
12. The learned Single Judge observed that the plea invoking
Section 25FF could not be permitted to be raised in the High Court,
inasmuch as transfer was a mixed question of facts and law. According to
the learned Judge, it was a case of breach of Section 25N, and not merely
25F of the I.D. Act.
Section 25N lays down the conditions precedent to
retrenchment of workmen from Industrial Establishments wherein more than
100 workmen are employed, and sub-section (1)(a) thereof provides for three
months’ notice or pay in lieu thereof in the event of retrenchment.
The
learned Judge, therefore, set-aside the award, since three months’ advance
notice or pay was not given, and held that the workmen were entitled to
reinstatement with continuity of service. The learned Judge awarded 25%
backwages to the workmen.
The operative part of the order of the learned
Judge as contained in paragraphs 11 to 14 of the judgment reads as follows:-
“11.
The award dated 21st May 1992 passed by the Labour
Court, Sangli is set aside.
The workmen concerned in the
References are entitled to reinstatement with continuity of
service and 25% backwages.
All workmen who are interested in
employment must report for duty within two months from the date
of this order.
The Respondents will give them employment by
reinstating them with continuity of service within a month
thereafter.
Backwages shall be paid to the workmen, computed at
25% within three months of their reinstatement in service.
12. There are some workmen who have been absorbed in
other departments of the State Government or have secured
employment elsewhere.
These workmen shall be paid 25% backwages
till the date they secured employment within six months from
today.
13. A few workmen have already reached the age of
superannuation during the pendency of these proceedings.
They
shall be paid the backwages computed at 25% till the date they
attained the age of superannuation within three months from
today.
14. I am informed that some workmen have expired during
the pendency of the proceedings in court.
The Respondents shall
pay to the heirs of these workmen 25% of back wages upto the
date of death of these workmen within three months from today.”
13. It is this order which was challenged in the Letters Patent
Appeal. The Division Bench, however, took the view that a Letters Patent
Appeal was not available against an order passed on the Wirt Petition filed
under Article 227 of the Constitution of India, and therefore dismissed the
said Letters Patent Appeal.
Being aggrieved by this order of the Division
Bench as well as of the learned Single Judge, this appeal has been filed.
Leave was granted in this matter on 8.5.2006, and the operation of the
impugned order was stayed subject to the compliance of the provisions of
Section 17B of the I.D. Act, 1947.
The appeal has been pending since then,
and a number of I.As have been filed by both parties. When the appeal
reached for final hearing, Ms. Madhavi Diwan, learned counsel appeared for
the appellants, and Mr. Vinay Navare, learned counsel appeared for the
respondents.
Submissions on behalf of the appellants:-
14. The principal submission of Ms. Madhavi Diwan, learned counsel
for the appellants is that this is a case of transfer of an undertaking.
That was the very plea taken in paragraph 14 of the written statement as
noted above, and also reflected in the judgment of the Labour Court. The
learned Single Judge had clearly erred in ignoring this fact. Ms. Diwan
submitted that in fact it was also the case of the respondents themselves
that retrenchment of their services took place because of the transfer of
the undertaking. She submits that the lift irrigation schemes constituted
an undertaking, and the ownership of the management of the undertaking was
being transferred, and it was not relevant that the ownership of the
Irrigation Department Corporation was not being transferred. Therefore, in
her submission it is the Section 25FF which applies to the present case,
and neither Section 25N nor Section 25F.
Besides, Section 25F would apply
only as a measure of compensation that is to be provided for, and nothing
more as laid down by a Constitution Bench of this Court in Anakapalle
Society’s case (supra).
In that matter this Court has observed in
paragraph 16 as follows:-
“16. The Solicitor-General contends that the question in the
present appeal has now to be determined not in the light of
general principles of industrial adjudication, but by reference to
the specific provisions of s. 25FF itself. He argues, and we think
rightly, that the first part of the section postulates that on a
transfer of the ownership or management of an undertaking, the
employment of workmen engaged by the said undertaking comes to an
end, and it provides for the payment of compensation to the said
employees because of the said termination of their services,
provided, of course, they satisfied the test of the length of
service prescribed by the section. The said part further provides
the manner in which and the extent to which the said compensation
has to be paid. Workmen shall be entitled to notice and
compensation in accordance with the provisions of s. 25-F, says
the section, as if they had been retrenched. The last clause
clearly brings out the fact that the termination of the services
of the employees does not in law amount to retrenchment and that
is consistent with the decision of this Court in Hariprasad's
case [1957]1SCR121 : AIR 1957 SC 121. The Legislature, however,
wanted to provide that though such termination may not be
retrenchment technically so-called, as decided by this Court,
nevertheless the employees in question whose services are
terminated by the transfer of the undertaking should be entitled
to compensation, and so, s. 25-FF provides that on such
termination compensation would be paid to them as if the said
termination was retrenchment.
The words "as if" bring out the
legal distinction between retrenchment defined by s. 2(oo) as it
was interpreted by this Court and termination of services
consequent upon transfer with which it deals.
In other words, the
section provides that though termination of services on transfer
may not be retrenchment, the workmen concerned are entitled to
compensation as if the said termination was retrenchment.
This
provision has been made for the purpose of calculating the amount
of compensation payable to such workmen; rather than provide for
the measure of compensation over again, s. 25FF makes a reference
to s. 25-F for that limited purpose, and,
therefore, in all cases
to which s. 25FF applies, the only claim which the employees of
the transferred concern can legitimately make is a claim for
compensation against their employers.
No claim can be made against
the transferee of the said concern.”
This judgment in Anakapalle (supra) has been consistently followed
thereafter, including in a recent judgment of this Court in Maruti Udyog
Ltd. v. Ram Lal and Ors. reported in 2005 (2) SCC 638.
Reply on behalf of the respondents:-
15. As far as the respondents are concerned, they have principally
contended that Section 25FF has no application to the present case, and the
learned Single Judge of the High Court has rightly held that this is a case
which is covered under Section 25N.
It is submitted that in view of
Section 25N(1)(a), the workmen had to be given three months’ prior notice
or notice pay. That having not been done, and the prior permission under
25N(1)(b) of the appropriate government not having been sought, the
retrenchment will have to held illegal under sub-Section (7) of 25N.
The
learned Judge of the Labour Court had in any case held that it was a case
of breach of Section 25F, and the High Court had held that it was a case of
breach of Section 25N.
Either of those findings justified the reinstatement with full backwages.
Reliance was placed in this behalf on
the judgment of this Court in Anoop Sharma v. Executive Engineer, Public
Health Division No.1, Panipat (Haryana) reported in 2010 (5) SCC 497.
16. However, more than that, the respondents have pointed out that
another set of 10 workmen (Pandurang Vishnu Sandage and 9 others) working
on the same lift irrigation schemes had subsequently filed separate
References in the Labour Court bearing Ref. (I.D.A.) No.37 to 45 of 1991
and 1 of 1992, and the Labour Court gave an award on 30.12.1996, that those
10 workmen were entitled to reinstatement with 25% backwages.
That judgment
was challenged by the State of Maharashtra by filing Writ Petition No.2729
of 1997. The said Writ Petition was dismissed by a Single Judge of Bombay
High Court, relying upon the decision in Writ Petition No.2699 of 1993 in
the present matter. An appeal was filed by the appellants by preferring
SLP (C) No.773 of 2006. This Hon’ble Court dismissed the said SLP on the
ground of delay. A Review Petition (Civil) bearing No.379 of 2006 was
filed. That was dismissed by the order passed on 26.9.2006. Thereafter a
Curative Petition No.164 of 2007 was filed. That also came to be dismissed
on 21.2.2008.
It was, therefore, submitted that the appellants are bound
by the decision in the aforesaid case of 10 workmen, and in any case this
Court should not allow the present appeal as it will lead to a different
result in the case of workmen who are similarly situated.
The respondents
relied upon an order of this Court in the case of Warlu v. Gangotribai and
Anr. reported in 1995 (Supp) 1 SCC 37.
It was a matter relating to the
tenancy rights of the appellant, concerning the land spread over three
survey numbers, which belonged to the Respondent no.1. Three writ petitions
arising out of the revenue proceedings filed by him were dismissed by the
High Court. Two SLPs therefrom were found to be time barred and therefore
dismissed. As far as the third SLP is concerned, this Court declined to
entertain the same for the sole reason that any such interference will
result in making conflicting orders regarding tenancy rights in the same
land. It was therefore, submitted by Mr. Navare, the learned counsel for
the respondent that the appellants should suffer by the principle of
estoppel by record.
17. In support of the contention that the orders passed by this
Court in the case of the other 10 workmen should be followed in the present
case, reliance was placed on paragraph 21 of a judgment in the case of
Nirmal Jeet Singh Hoon v. Irtiza Hussain and Ors. reported in 2010 (14) SCC
564.
The judgment impugned in that matter directing eviction of tenant had
already been upheld in an earlier SLP, wherein the Petitioner was also a
party.
Entertaining the second petition, on his behalf, would have
amounted to reviewing the earlier order of this Court.
This Court
dismissed the petition by observing
“The law does not permit two
contradictory and inconsistent orders in the same case in respect of the
same subject matter”.
It was therefore submitted that the order of the
Labour Court in the case of the other 10 workmen had attained finality, and
the appellants cannot be permitted to take a different position in the
present matter when the workmen in both the matters were similarly
situated.
18. The appellants had submitted that the Irrigation Department is
not an industry. In that behalf, it was pointed out on behalf of the
workmen that it is too late to raise this submission in view of the
judgment of this Court in Bangalore Water Supply and Sewerage Board v. A.
Rajappa & Ors. reported in 1978 (2) SCC 213.
As against that, the counsel
for the appellants pointed out that the judgment in Bangalore Water Supply
(supra) is pending for re-consideration before a larger bench of this Court
in view of the order passed by the Constitution Bench in
State of U.P. v. Jai Bir Singh reported in 2005 (5) SCC 1.
The respondents, however,
submitted that in the meanwhile the judgment in Bangalore Water Supply
(supra) will have to be followed until it is overruled, since the
proposition therein continues to hold good.
Reliance is placed in that
behalf, on the approach adopted by this Court in such a situation, in a
matter concerning Arbitration in State of Orissa v. Dandasi Sahu reported
in 1988 (4) SCC 12. In that matter this Court has held that in the
exercise of this Court’s discretion under Article 136, it would not be
justified to allow a party to further prolong or upset adjudication of old
and stale disputes till the decision of the larger bench is received.
Consideration of the rival submissions:-
19. (i) To begin with, we must note that the workmen concerned
were engaged as pump operators and chowkidars etc. on 25 lift irrigation
schemes, which were carrying out the process of pumping water.
The process
of pumping water is specifically covered under the definition of
“manufacturing process” under Section 2 (k)(ii) of The Factories Act, 1948.
Thus, the workmen concerned were engaged in a “manufacturing process”.
Once that is established, it follows that the activity of the undertaking
in which they were working, constituted a “factory” within the meaning of
Section 2(m) of the said Act.
(ii) The explanation (i) to Section 25A of I.D. Act, 1947, covers the
“factories” within the definition of an “industrial establishment”, and
therefore Chapter VA of the I.D. Act, 1947 applies to “manufacturing
process” of pumping water. Hence, it cannot be denied that the undertaking
in which the workmen concerned were employed was covered under the
provisions of I.D. Act.
20. It is, however, contended on behalf of the appellant that the
said undertaking was being run by the irrigation department of the first
appellant, and the activities of the irrigation department could not be
considered to be an “industry” within the definition of the concept under
Section 2(j) of the I.D. Act.
As noted earlier, the reconsideration of the
wide interpretation of the concept of “industry” in Bangalore Water Supply
and Sewerage Board (supra) is pending before a larger bench of this Court.
However, as of now we will have to follow the interpretation of law
presently holding the field as per the approach taken by this Court in
State of Orissa v. Dandasi Sahu (supra), referred to above.
The
determination of the present pending industrial dispute cannot be kept
undecided until the judgment of the larger bench is received.
21. Having stated that however, the objection raised by the
appellants to the judgment rendered by the Single Judge of the Bombay High
Court is required to be looked into viz. that the appellants had effected a
transfer of an undertaking which resulted into termination of services of
the workmen concerned, and that this was not a case of retrenchment
simpliciter. It was submitted that the 25 lift irrigation schemes by
themselves constitute an undertaking. It may be that all the activities of
irrigation department may not have been transferred, but a separate unit
thereof, consisting of these 25 lift irrigation schemes, has come to be
transferred to a sugar factory. As held in Anakapalle Society’s case
(supra), in such a matter the only claim which the employees of the
transferor concern can legitimately make, is a claim for compensation
against the previous employer, since they are not being absorbed under the
new employer. 22. Having stated this, we have also to note the conduct
of the appellants. It appears that many of the workmen concerned were
engaged for a period of about 10 years. Section 25FF contemplates
compensation to be paid to the workmen on account of their retrenchment,
resulting from transfer of the undertaking. The retrenchment, however, is
required to be effected only if the previous employer is not continuing the
workmen concerned in any of his activities or establishments, or when they
are not being absorbed under the new employer. Continuation of service
under the existing employer, or re-engagement under the new one, should be
the preferred approach, when such an occasion arises. Termination of
services should normally be the last resort. In the instant case, the first
appellant – State Government, does not appear to have made any efforts
either to absorb these workmen in other activities of the irrigation
department, or to have insisted upon the sugar factory to absorb them. This
is because the lift irrigation schemes were going to be continued by the
transferee sugar factory, and in any case the Irrigation department has a
very large number of activities, wherein these workmen could have been
absorbed. When the State Government is in the picture, we do expect a
little better attitude than the one which is often displayed by a private
sector employer. It is possible that, in a given situation, the State
Government may have its own economic compulsions which justify termination
of services. But, there must be either an effort to absorb such surplus
workmen, or in any case the difficulties of the Government, if any,
necessitating the termination, ought to be explained. We do not find any
such efforts or explanation placed on record.
23. It is also material to note that the Labour Court had directed
the State Government to consider the absorption of these workmen. The
respondents have placed it on record that in pursuance of a subsequent
advertisement for employment in the irrigation department, the first
respondent-union had written to the authorities concerned to absorb these
workmen, but the Government took a bureaucratic attitude to inform the
Union that no such decision could be taken, since the matter was pending in
the Supreme Court. This attitude was not expected from a Welfare State.
24. In any case, having noted that another petition concerning 10
other workmen from the same lift irrigation schemes was dismissed, and SLP
and Curative Petitions, therefrom, were also dismissed, a question arises
for this Court to consider that assuming this was a case of transfer of
undertaking, should the relief to the affected workmen be restricted only
to the compensation under Section 25F as required by S 25 FF.
25. The learned counsel for the respondents has referred to a few
cases arising out of revenue proceedings and the rent act, indicating what
should be the approach in such a situation. These 163 workmen and the
other 10 workmen viz. Pandurang Vishnu Sandage and others were working on
the same lift irrigation schemes. Those 10 workmen also got an award of
reinstatement with 25% backwages. The writ petition of the appellants
challenging that award was dismissed by the Bombay High Court, relying upon
the judgment of the Single Judge in the present mater. The SLP and the
Curative Petitions therefrom also came to be dismissed, although on the
ground of gross delay. The fact, however, remains that as far as those 10
workmen are concerned, the order of relief in their case viz. reinstatement
with 25% backwages and continuity in service was left undisturbed.
Therefore, a question arises - should the Government having been lethargic
in the case of those 10 workmen, where it suffered an order of
reinstatement with 25% backwages, be now permitted to insist that when it
comes to these 163 workmen, who are similarly situated, they be denied a
comparable relief?
And in any case, should
this Court treat the two sets
of workmen differently, in the matter of relief, only because the SLP
against some of them got dismissed on account of delay,
whereas the SLP
concerning the others survived for final arguments?
26. This Court has the authority to pass an appropriate order in
exercise of its jurisdiction for doing complete justice in a matter pending
before it. This authority under Article 142 of the Constitution will also
have to be read as coupled with a duty to do complete justice in a given
case. In Food Corporation of India Worker’s Union v. Food Corporation of
India & Anr. reported in 1996 (9) SCC 439,
this Court was faced with a
situation where there was a delay in reinstatement of the specified workmen
despite this Court’s earlier order. This was because of long delay of
about 6 years in determining their identity, in the proceeding before the
Industrial Tribunal. Therefore, in view of the ‘human problem’ involved in
the matter, the Court laid down a procedure for identification of the
workmen with a view to do complete justice, and also directed reinstatement
with backwages @ 70% of the ‘normal earnings’ of the workmen at piece rate,
till their reinstatement.
In
L. Parameswaran v. Chief Personal Officer and ors. reported in 2008 (3) SCC
649,
the appellant had worked in an ex-cadre post for a very long time, and
was reverted to his parent post, though not immediately when the policy
decision to repatriate ex-cadre employees was taken. Working in the ex-
cadre post for a long time did not confer any right to continue in that
post or for pay protection. Considering, however, the long time spent in
the ex-cadre post, this Court specifically invoked Article 142 to grant him
protection of pay.
27. In the facts and circumstances of the present case also,
accepting that the termination did result on account of transfer of the
undertaking, the relief to be given to the workmen will have to be moulded
to be somewhat similar to that given to the other group of 10 workmen.
It
will not be just and proper to restrict it to the rigours of the limited
relief under Section 25FF read with 25F of the I.D. Act.
Prior to the
termination of their services on 30.6.1985, many of the workmen concerned
had put in a service of about 10 years.
Inasmuch as so many years have
gone since then, most of them must have reached the age of superannuation.
In the circumstances, there cannot be any order of reinstatement.
However,
they will be entitled to continuity of service, and although they have been
receiving last drawn wages under S 17 B of the I.D Act, 1947, they will be
entitled to 25% backwages and retirement benefits on par with the other 10
workmen. Award of 25% backwages in their case will be adequate
compensation.
28. Civil Appeal No.2566 of 2006 has been filed by the above
referred Trade Union, the respondent in Civil Appeal No.2565 of 2006,
against the same two judgments of the Single Judge and the Division Bench
of Bombay High Court.
The Union is aggrieved by the award of only 25%
backwages to the workmen, and seeks an order of 100% backwages, contending
that if the retrenchment is held to be bad in law, the backwages could not
be restricted to anything less than 100% backwages.
Mr. Navare has
appeared in support of this appeal, and Ms. Diwan has appeared to oppose
the same.
As can be seen from the narration of facts above,
the Union is
claiming reliefs for the present group of workmen on the basis of parity
with the other group of 10 workmen viz. Pandurang Vishnu Sandage and
others, and that submission has been accepted by us.
Those workmen have been awarded only 25% backwages.
That being so, the present group of
workmen cannot be awarded back wages more than what have been awarded to the
other 10 workmen.
The claim for award of higher backwages cannot, therefore, be entertained.
29. In the circumstances, we dispose of the two appeals against the
impugned judgment and order of the learned Single Judge of the Bombay High
Court, dated 14.9.2004, in Writ Petition No.2699 of 1993, which is left
undisturbed by the Division Bench, by passing the following order:-
(i) The 163 workmen concerned in the present matter, will be placed into
three categories, i.e., (a) those who have already reached the age of
superannuation; (b) those who are yet to reach the age of superannuation;
and (c) those who have expired. They will be entitled to the reliefs in
the following manner.
(ii) The benefits to the workmen in category (a) will be till the date of
their superannuation, for category (b) till the date of this judgment, and
for those in category (c) till the date of expiry of the workman concerned.
(iii) The workmen of all the three categories will be entitled to
continuity of service until the date of superannuation, or until the date
of this judgment, or until the date on which the workman concerned has
expired, as the case maybe.
(iv) All the workmen will be entitled to 25% backwages over and above the
last drawn wages that they have received under Section 17B of I.D. Act. The
backwages shall be calculated until the date as mentioned in clause (iii)
above.
(v) All the workmen will be entitled to the same retirement benefits, if
any (depending on their eligibility), as given to the other group of 10
workmen viz. Pandurang Vishnu Sandage and others.
(vi) All the aforesaid payments shall be made directly to the workmen
concerned or their heirs, as the case maybe, within three months from the
date of this judgment.
(vii) There shall not be any order of reinstatement.
(viii) The appellants will, thereafter, file a compliance report in
the Labour Court at Sangli, with a copy thereof to the Registry of this
Court.
(ix) Order accordingly.
(x) Registry to send a copy of this judgment to the Labour Court, Sangli.
30. Both the appeals and all the I.As. moved therein stand disposed
off as above, with no order as to costs.
…………..…………………..J.
[ H.L. Gokhale ]
……………………………J.
[ Ranjan Gogoi]
New Delhi
Dated : October 21, 2013
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