Andhra HC (Pre-Telangana)
Nellimarla Jute Mills Karmika Sangham vs State Of A.P. And Ors. on 30 March, 1994
Equivalent citations: 1994(2)ALT223, (1995)ILLJ507AP
ORDER S. Parvatha Rao, J.
1. The petitioner is Nellimarla Jute Mills Karmika Sangham, represented by its General Secretary, K. Suresh. The petitioner prays for an appropriate writ, order or direction, particularly one in the nature of Writ of Mandamus, directing the respondents i.e., respondents 1 to 4, who are the original respondents in the writ petition, "to allow the workers to work in the factory without insisting upon giving personal undertaking by the workers" etc.
2. Along with the writ petition, the petitioner also filed W.P.M.P. No. 22296 of 1993 for an interim direction directing respondents 1 to 4 "to allow the workers to work in the factory without insisting upon giving personal undertaking by the workers, pending the writ petition and to pass such other order" etc.
3. The writ petition was presented on November 22, 1993. It was admitted on November 24, 1993 and on the same day in W.P.M.P. No. 22296 of 1993 this Court granted interim direction as prayed for until further orders, clarifying as follows:-
"But the members-workers of the petitioner-Sangham shall be entitled for wages only from the date of the resumption of their duties. The 4th respondent shall forthwith allow the intending workmen-members of the petitioner-Sangham soon after receipt of these orders."
As the prayer in the W.P.M.P. is to allow the workers to work in the factory without insisting upon giving personal undertaking by the workers an interim direction as prayed for was granted to the petitioner, respondents 1 to 4 have thus been directed to allow intending workmen-members of the petitioner-Sangham to work in the factory of the 4th respondent i.e., Nellimarla Jute Mills Limited soon after receipt of the said interim directions of this Court.
4. Respondents 5 to 2593 were impleaded in this writ petition and in W.P.M.P. No. 22296 of 1993 as per the orders of this Court in W.P.M.P. No. 23894 of 1993 and W.P.M.P. No. 1345 of 1994 dated January 20, 1994 and January 28, 1994 respectively.
5. In the affidavit of Sri K. Suresh in support of the writ petition, it is stated that the Management of the 4th respondent company i.e., Nellimarla Jute Mills Ltd., (hereinafter referred to as 'the Company') declared lock-out on June 1, 1992 and that the Government of Andhra Pradesh prohibited the said lock-out and directed the Company to open the factory. On August 20, 1992 the petitioner-Sangham entered into an agreement with the Management of the company and as per terms of the said agreement, the Management agreed to open the factory from August 31, 1992; the factory was opened and the workers started working in the factory. Thereafter, the Management of the Company again declared lock-out on July 5, 1993. The Government of Andhra Pradesh issued G.O. Rt. No. 1464, Women's Development Child Welfare and Labour (Lab.I) Department, dated July 27, 1993 under Clause (d) of Sub-section (1) of Section 10 of the Industrial Disputes Act, 1947 (hereinafter referred to as 'the Act') referring the following dispute between the petitioner and the Company to the Industrial Tribunal-cum-Labour Court:
"Whether the Nellimarla Jute Mills Company Limited is justified in short supply of raw material and refusing to give assurance for continued running of mills and denying the wages to the workers for the month of June 1993 on the ground that the workers obstructing the lifting of the finished goods."
If not, to what relief the workers are entitled?"
The Government of Andhra Pradesh also issued G.O. Rt. No. 1465 of the same department dated July 27, 1993 under Section 10(3) of the Act with reference to the lock-out declared by the Management of the Company prohibiting the further continuance of the lock- out by the Management of the Company with immediate effect.
6. It is not in dispute that the said G.O's were issued after the Conciliation Officer and Deputy Commissioner of labour, Visakhapatnam submitted his report in Rc. No. C/3841/91 dated July 18, 1993 stating as follows:-
"In view of the above the conciliation meeting is posted to July 17, 1993 and the Union representatives have attended and Management representatives have not attended. Since the Management is not forthcoming for any amicable settlement for re-opening of factory by lifting the lock-out, they requested to close the proceedings and accordingly the conciliation proceedings are closed having failed under Section 12(4) of Industrial Disputes Act, 1947....."
The said report states that the Management of the Company issued a notice dated June 30, 1993 to the workmen of the Nellimarla Jute Mills to co-operate with them and to allow the normal movement of finished goods to avoid further complications in smooth running of the factory and that subsequently the Management declared lock-out of the mill with effect from 6-00 A.M. on July 5, 1993" on the plea that the movement of finished goods were obstructed by the workmen and about 5750 workmen were affected". The Conciliation Officer states that he convened a joint meeting on July 7, 1993 to explore the possibilities of resolving the issue of lock-out of the Company and that the Management did not attend the said meeting and sent a telegram stating that the Chief Executive of the Mill was out of station. The Union representatives were present. The conciliation meeting was then fixed on July 12, 1993 but the Management of the Company again did not attend the said meeting sending a telegram that they could not attend the meeting because of expected threats given by the Union leaders for attack on lives of the executives of the mill. The conciliation meeting was again fixed on July 16, 1993. On that date two Management representatives attended the conciliation meeting. The deliberations that took place in the conciliation meeting on July 16, 1993 are stated as follows in the said report;
"It has been stated by the Management that they have got stock for 6 days and the Union representative/workers have been obstructing free flow of finished goods and this has caused money constraint and ultimately this had led to lock-out with effect from July 5, 1993. If the material of finished goods are allowed to be taken out to market the Management is prepared to re-open the factory by lifting the lock-out. The wages of June, 1993 could not be paid due to this, and if once the finished goods are allowed to be transported, due wages of workmen will be paid. The Union has stated that they do not have any objection for free flow of finished goods provided the mill is reopened by lifting the lock-out and on assurance that they will not declare lock-out and the workmen/Union will not go on strike; and if there is any problem that will be solved out at Deputy Commissioner of Labour. Office without resorting to go-slow and strike. During the discussion) it is suggested that the mill shall be reopened immediately as there is stock for six days and raw material will also arrive as usual without resorting to lock-out by Management and without resorting to go slow/strike by workmen/Union, to which the Union agreed, whereas the Management representative asked for one day time to consult higher management."
As already stated above, on the next day i.e., on July 17, 1993 to which date the conciliation meeting was adjourned, the Union representatives were present but he Management representatives did not attend and therefore, the conciliation proceedings were closed.
7. The Management of the Company did not lift the lock-out in spite of the Government of Andhra Pradesh prohibiting its continuance under Sub-section (3) of Section 10 of the Act. It required each of its workmen to give a personal undertaking in the following proforma dated November 11, 1993 a copy of which has been filed by the Company itself before this Court as Annexure-I (Item 6 of the material papers):
Date: November 11, 1993 "PERSONAL UNDERTAKING I, Sri .................. son of Sri late................ residing in village ................... bearing LB No ............. P.F. No................ and E.SI. No. .................. joined this mill on ............... I am fully conversant with the present problems of the factory.
The Union and their followers blocked despatches of finished goods and interfered with normal functions of the factory. Management having run out of funds and when union still remained rigid after repeated appeals, management having no other alternative declared lock-out of the factory from July 5, 1993. After conciliation failed as union still remained adamant, Govt. Andhra Pradesh by its order No......... referred the dispute to the Industrial Tribunal and simultaneously by another order No...... Prohibited continuation of Lock-out. Management appealed to Govt. by saying that the said lockout was entirely a result of unconstitutional and adament attitude of the Union. Govt., with a view to resolve the issue, called a meeting of management and union on....
where besides parties, a large number of village representatives as well as Jt. Labour Commissioner, Labour Commissioner, Hon'ble Labour Minister and Minister for Sugar Industries were present. Union did not accept the management condition of withdrawing their unconstitutional movements and hence talks failed. Talks having failed and workmen having been passing through a very hard time, en-masse requested the Hon'ble Minister for Sugar Industries to intervene and pave the way for settlement. Hon'ble Minister in a public meeting on November 4, 1993 in Nellimarla took the mass opinion about how the mill can open and run smoothly and therefore, I, as a worker of the ested party agree with the proposal of the Minister personally and undertake to commit for the following clauses:-
(1) That I do not demand any wages for the period of lock-out of 1992, from June 1, 1992 till I resumed this was as for commitment given by union to the Hon'ble officials present in the meeting dated August 20, 1992.
(2) That I also do agree to the decision of "No work no pay" during lock-out period of 1993 declared on July 5, 1993.
(3) That I undertake to never indulge in any act that can be interpreted interference with the business affairs of the company and also undertake whole heatedly with hard labour to achieve and maintains the targeted production in order to make the factory viable. This target is achieved by the collective efforts without excuse.
(4) That the deposit made as for agreement of Rs. 5/- per day (C.D.N) will be discontinued after the duration of the agreement and I agree to it.
(5) That after my present undertaking, and management after selling the full stock on hold in the factory may consider for paying some advance for maintaining during these hard days.
(6) I agree with the contention of management that good discipline and constant achievement of targeted production can save the factory and management assures uninterrupted running of the factory in case my efforts are honest.
These are my wilful declaration without any outside influence and I am personally fully responsible for this understanding."
The Company also did not comply with the interim directions of this Court in W.P.M.P. No. 22296 of 1993 dated November 24, 1993 but came up with W.P.M.P. No. 2529 of 1993 presented on December 20, 1993.
8. Respondents 5 to 2593 also filed W.P.M.P. No. 2465 of 1993 for vacating the interim directions in W.P.M.P. No. 22296 of 1993 dated November 24, 1993. In the counter affidavit in support of the said W.P.M.P. filed by Sri K.S. Sambasiva Raju, respondent No. 973, it is stated as follows:-
"Consequent to the illegal acts committed by the 1st respondent Union, (petitioner-Sangham), the Management has once again declared lock-out from July 5, 1993 and thereby throwing the majority of the innocent workers into the streets and consequently majority of the workmen are facing untold hardship and misery for want of earnings/wages to eke-out their livelihood and are not in a position to give education to their children. I submit in this economic crisis, majority of the workmen have approached the 4th respondent (3rd respondent in the Writ Petition) who is a local M.L.A. and Hon'ble Minister for Sugar Industry and requested him to intervene in the matter and use his good office to solve their grievances amicably. In turn the 4th respondent (3rd respondent in the Writ Petition) advised the majority of the workmen to approach the Management for redressal of their grievances. Accordingly majority of the workmen have approached the 5th respondent (the Management of the Company) to consider their plight as the 1st respondent Union Leaders (petitioner-Sangham) have taken unreasonable and unjust stand against the interest of the majority of the workers and kept the Industry to a stand-still which is already a sick industry.
XXX XXX XXX XXX I submit sometimes to safe-guard the interest of majority of the working class and also to provide employment to provide them livelihood, it is necessary for the working class to sacrifice something to achieve longer prospective otherwise in these harden days it is very difficult to secure any alternative employment as no other Industry is in existence to provide employment to such a large number of workers..... I submit majority of the workers have voluntarily signed the undertaking having understood pros and cons. I therefore submit the allegation of the 1st respondent (Petitioner-Sangham) that the Management coercing and intimidating the working class to give an undertaking is absolutely false and baseless. I respectfully submit the 1st respondent-Union (petition-Sangham) having lost majority, now resorting to this type of gymics and other tactics in order to retain in power."
9. On behalf of the company Sri N. Venkata Rao, Manager Personnel, gave affidavit dated December 16, 1993 and rejoinders dated December 18, 1993 and January 27, 1994. In the counter affidavit dated December 16, 1993 the fact of declaration of lock-out from July 5, 1993 is admitted. It is also admitted mat on July 6, 1993 as there was no authorised official available, there was no representation on behalf of the Management. It is stated that the issue for conciliation was:
"The obstruction of free movement of finished goods of the Nellimarla Jute Mills Co. Ltd., Nellimarla into the market for the last two weeks by the workmen and its representing body, causing cancellation of orders and affecting inflow of funds etc.,"
and that the management was asked to attend the conciliation proceedings on July 12, 1993 "with all relevant information documentary or other pertaining to the dispute without fail". It is stated that the said meeting could not be attended by the managerial staff of the Company "as there was a threat to the lives of persons in the Management of the Company".
10. It has to be noted that no mention has been made in the counter affidavit filed by Sri N. Venkata Raoof the Conciliation meeting held on July 16, 1993 on which day, as per the conciliation report, he attended the said meeting along with Sri R.C. Nair and Sri N. Satyanarayana as representatives of the Company. Thus there is no denial on behalf of the Company of what happened at the said meeting on July 16, 1993 as recorded in the said report. This is of crucial importance because the said report states that during the discussion it was suggested that the mill should be reopened immediately as there was stock for 6 days and raw material would also arrive as usual, without resorting to lock-out by the Management and without resorting to go slow/strike by the workmen/Union, to which the Union agreed, whereas the management representatives asked for one day time to consult the Management. The next day, the Management representatives did not attend the meeting, the union representatives attended. The counter affidavit is also silent about this and no reason is given as to why the Management skipped this meeting.
11. It is also significant that in the counter affidavit of Sri N. Venkata Rao dated December 16, 1993 it is not denied that the wages of the workmen for June, 1993 were not paid. Thus the significant fact that emerges is that the Management of the Company has resorted to starving the workmen by not paying the workmen their wages for June, 1993 and locking out the Company with effect from July 5, 1993 in spite of G.O. Rt. No. 1465 and in spite of the Government prohibiting its continuance under Section 10(3) of the Act on July 27, 1993 and in spite of the interim directions of this Court dated November 24, 1993.
12. The case of the Management of the Company is that the non-co- operative attitude of, and threat to the Management Personnel by, the workmen compelled the company to declare a lock-out. In the rejoinder dated December 18, 1993 it is also alleged that the office bearers of the petitioner-Sangham have contacts with Naxalites, who are known for militancy. It is further stated in the counter affidavit:
"It is submitted that it is impossible to run a factory with 6000 work force in an environment of continued hostile, non- cooperative and/or militant attitude of the workmen without checking the indiscipline among workers and their interference in the Management function."
From this it is clear that the Management wants to bring the workers down to their knees and surrender totally to its diktat. The Management believes that majority of the workmen have come to accept that position because in the rejoinder dated January 27, 1994 it is stated:
"It is submitted that considering the practical difficulty of the Company majority of the workmen have agreed to resume their duties without insisting for payment of wages and salaries for the lock-out period and assured the management that they would maintain discipline and peace and they would never interfere in the working of the management and would achieve targeted production. Since the Union leaders were not willing to come to arrive at an amicable settlement, the majority workmen came to an agreement/understanding and accordingly gave undertaking for resumption of work. The mill commenced work from November 15, 1993 as per the agreement/undertaking and the same was acted upon. However, the Union leaders after receipt of the interim orders dated November 24, 1993 from this Hon'ble Court resorted to threat and violence on the workmen who were attending to the work. In view of the illegal and riotous acts of the office bearers of the petitioner union and outsiders, it has become impossible and impracticable to the management to run the mill."
It is further stated in the said rejoinder as follows:-
"It is submitted that the workers should give an undertaking that they would maintain a good discipline which is an essential condition for creating an atmosphere for achievement of the targeted production. If the workers do not agree to give the undertaking as agreed by the majority of the workmen, they would not maintain discipline in the society. From their such conduct it is apparent that they would create problems for the smooth running of the mill."
13. It is not in controversy that the Company is sick. It is before the Board for Industrial and Financial Reconstruction (B.I.F.R). It is stated in the rejoinder that:
"In a fresh scheme submitted before Board for Industrial and Financial Reconstruction various concessions and reliefs have been envisaged. One of the sources for bringing long term funds was by way of deposit from each worker at the rate of Rs. 5/- per day. The Company is repaying the said deposit to the workers as per terms."
There is no clarification forthcoming from the Management of the Company about this repayment. However, from this it follows that the workers are also participants in the capital of the Company. Otherwise also they are vitally interested in the good and continued working of the company as their daily sustenance depends upon the functioning of its Jute Mills at Nellimarla -it is their livelihood. Therefore, the Management is expected to have a sympathetic understanding of the anxiety of the workmen and the Management should see that the Jute Mills of the Company continue to work and work continuously without stopping. Therefore, the workers 'interestedness in seeking that the Jute Mills are not starved of the raw material cannot be looked at as interference with the Management of the Company. When a large working force of about 6000 are admittedly involved in the functioning of the Jute Mills, it is imperative that the Management should see that workers, interests are well protected instead of meting a humiliating treatment to them which would inevitably lead them to militancy. It is no way to wean the workers from militancy by adopting harsh and testy methods driving them and all those dependant on them to desperate and despondent extremes. The Management cannot afford to reduce the workers to total surrender.
14. As stated in National Textile Workers' Union v. P.R. Ramakrishnan (1983-I-LLJ-45) (SC), the concept of company has undergone radical transformation in the last few decades. The participant character of worker is brought out as follows :(pp. 54.57) ".......... Today social scientists and thinkers regard a company as a living, vital and dynamic social organism with firm and deep rooted affiliations with the rest of the community in which it functions. It would be wrong to look upon it as something belonging to the shareholders. It is true that the shareholders bring capital, but capital is not enough...................".
There is another equally, if not more, important factor of production and that is labour. Then there are the financial institutions and depositors, who provide the additional finance required for production and lastly, there are the consumers and the rest of the members of the community who are vitally interested in the product manufactured in the concern...... A company, according in the product manufactured in the concern ................ A company, according to the new socio-economic thinking, is a social institution having duties and responsibilities towards the community in which it functions.
xxx xxx xxx It is clear from what we have stated above that it is not only the shareholders who have supplied capital who are interested in the enterprise which is being run by a company but the workers who supply labour are also equally, if not, more, interested because what is produced by the enterprise is the result of labour as well as capital. In fact, the owners of capital bear only limited financial risk and otherwise contribute nothing to production while labour contributes a major share of the product. While the former invest only a part of their moneys, the latter invest their sweat and toil, in fact their life itself................... It is therefore idle to contend thirty two years after coming into force of the Constitution and particularly after the introduction of Article 43-A in the Constitution that the workers should have no voice in the determination of the question whether the enterprise should continue to run or be shut down...."
This delination of the working of the modern Company and the relationship it bears to the workers involved-especially, when it is involved in a labour intensive enterprise -has to be borne in mind in resolving the issue in the present matter,
15. On the other hand, there is no denying the fact that the Company is in a difficult financial position as revealed from its annual report for the year 1992. The balance of loss carried to the balance-sheet as at March 31, 1992 was Rs. 569.9 lakhs though the working of the mill during 1991 and 1992 resulted in a profit of 51.03 and 10.89 lakhs respectively - carried forward loss was thus brought down from 599.87 lakhs at the beginning of the financial year 1991 to Rs. 569.89 lakhs at the end of the financial year 1992. Secured loans were Rs. 371.3 lakhs and unsecured loans were Rs. 29.25 lahs. It is stated that a scheme was framed under Section 391 of the Companies Act, 1956 for payment to the unsecured creditors as on March 15, 1988 in a phased manner and that petition for approval of the said scheme is pending before the Calcutta High Court. It is also stated that rehabilition scheme for the revival of the Company is pending before the Board for Industrial and Financial Reconstruction, but the Calcutta High Court stalled the proceedings before the B.I.F.R. It is also stated that the Company was under lock-out between May 9, 1991 and September 20, 1991 due to illegal strike by the workers from May 7, 1991 and that "there had been changes in the leadership of the Workers' Union and as a result the workers had adopted militant attitude towards Management on several occasions and the Company had to declare again a lock-out in its factory on June 1, 1992 which continued upto August 24, 1992." The company declared lockout from June 1, 1992 alleging that the workers did not take any steps to increase production and productivity as earlier agreed. The lock-out was lifted pursuant to an arrangement arrived at between the Union and the Management at a meeting held in the presence of the Honourable Minister for Labour and the Honourable Minister for Transport as Sri P. Sambasiva Raju was then. It is stated in the said minutes that the lock-out from June 1, 1992 was declared alleging that the workers did not take any steps to increase production and productivity as agreed in their memorandum of settlement dated June 15, 1988 and January 4, 1990 and that the workers resorted to demonstration, gherao, go- slow tactics. The arrangement arrived at the said meeting was as follows:-
"1. The representatives of the union assured to co-operate in maintaining the existing production under the existing conditions. The union further assured to make efforts even to increase the production over and above the existing levels with the co- operation of the management.
2. The management and the union agreed for appointment of an expert committee acceptable to both the parties. The Committee so appointed shall study the working conditions i.e., men, machinery and material by involving both the management as well as union and submit their report on production and productivity within three months. On receipt of the committee's report, both the parties shall discuss and come to a unanimous understanding on the production levels and the same will be binding on both the parties and it will be implemented within one month.
3. The union expressed to extend their whole hearted co-operation in smooth functioning of the industry and also to co-operate in achieving their optimum production and that they will not resort to any direct action and in case of any problem in the Industry they will have bilateral discussion and sorted out without resorting to direct action, go-slow and approach the conciliation machinery in case the issues are not settled in the bilaterial discussions. The management also assured that they will not take any vindictive attitude either against the union or the workmen and they will create mutual confidence for further growth of industry and take it out from the present general crisis."
16. It is unfortunate that this understanding was given a go-by. The Management of the Company complaints in the notice of lock-out of 1993 that the workmen and its representing body continued to obstruct the free movement of the finished goods into the market "for the last two weeks" which caused cancellation of orders and that negotiations with the representing body of the workmen proved futile. It is also stated that indiscipline and hostile attitude had grown up among the workmen which resulted in considerable loss of production and productivity which further weakened the financial position of the mills and that there is no alternate remedy except lock-out of the factory with effect from 6 A.M. of July 5, 1993. Nothing is stated in this notice as regards threat to any of the managerial personnel, and yet the representatives of the Management did not attend the conciliation proceedings except on one day.
17. There is no doubt that continuing the lock-out after G.O. Rt. No. 1465 dated July 27, 1993 prohibited the continuance of the same under Section 10(3) of the Act. Under Sub-section (1) of Section 24 of the Act, a lock-out shall be illegal if "it is continued in contravention of an order made Sub-section (3) of Section 10.........". Section 25 of the Act provides that "no person shall knowingly expend or apply any money in direct furtherance or support of any illegal strike or lock-out". Sub-section (2) of Section 26 of the Act provides for penalty for illegal strikes and lock-outs as follows:-
"Any employer who commences, continues, or otherwise acts in furtherance of a lock-out which is illegal under this Act, shall be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to one thousand rupees, or with both."
In General Labour Union (Red Flag), Bombay v. B.V. Chavan (1985-I-LLJ-82)(SC), the Supreme Court said this about lock-out and illegal lock-out: (p.84):
"In lock-out the employer refuses to continue to employ the workmen employed by him even though the business activity was not closed down nor intended to be closed down. The essence of lock- out is the refusal of the employer to continue to employ workman. Theres is no intention to close the industrial activity............... Section 23 prohibits an employer from declaring a lock-out in any of the eventualities mentioned therein. Lock-out in contravention of Section 23 is declared illegal. Section 26 of the I.D. Act provides that any of the practices listed in Schedules II, III and IV would be an unfair labour practice. Imposing and continuing a lock-out deemed to be illegal under the Act is an unfair labour practice."
In view of this clear legal position, the Management of the Company cannot take a rigid stand that workmen are not entitled to pay because they did not work during the period of the lock- out which has been declared as illegal. The principle of 'no work no pay' would apply when the workmen strike work as clarified by the Supreme Court in Bank of India v. T.S. Kelawala (1990-II-LLJ-39)(SC). That principle is not attracted straightway in the case of a lock-out, especially when the lock-out has been declared as illegal. At any rate that matter cannot be foreclosed by forcing the workmen to give up their claim for wages during the lock-out period at the same time continuing the lock-out indefinitely and refusing to lift it until the workmen agree for it. That is militancy on the part of the Management.
18. A reading of the Personal Undertaking dated November 11, 1993 which is extracted earlier in the judgment, shows that the workmen should admit everything against them. The references therein to the failure of the conciliation are factually incorrect because the Management did not participate in the conciliation proceedings that were initiated after the lock-out of July 5, 1993. Reference was made in the said undertaking to the hard time that the workmen were passing through, but that was because of the attitude of the Management in continuing the lock-out. The learned counsel for the petitioner as well as for respondents 5 to 2593 have agreed that the workmen would readily agree for Clauses 3, 4 and 6. They have also agreed to abide by the decision of the Industrial Tribunal on the question whether the workmen are entitled to wages for the periods during the lock-outs in 1992 and 1993. But the learned counsel for the Management stated that the Management does not agree for this.
19. The main contention advanced by the learned counsel for the Company Mr. P.R. Ramachandra Rao, is that a writ of mandamus does not lie against a mere Company registered under the Companies Act. But there is an answer to this by P.A. Choudary, J., in T. Gattaiah v. Commissioner of Labour, Hyderabad (1981 (1) APLJ 280). In that case, the learned Judge was dealing with retrenchment of workmen contrary to Section 25-N of the Act occurring in Chapter V-B of the said Act. As regards such retrenchment, the learned Judge held as follows;-
"A reading of Chapter V-B would therefore make it clear that the Parliament intended not merely to forbid the respondent-Company from retrenching the petitioners in the particular way in which the retrenchment was brought about by the respondent-company, but also intended to make the action of such a retrenchment into a crime punishable under law. It is elementary that such an illegal action should be denied all legal validity. It is well known that a corporate body has no legal capacity to act outside the limits imposed by the charter of its incorporation. Any action of a legal person such as that of a corporate body outside its field mapped by the incorporating chapter would be wholly void and would be incapable of producing any legal consequences. (See Vol. 9 Halsbury's Laws of England, 4th Edition, paras 1332 and 1333). In law, therefore, it is beyond doubt that the retrenchment of the petitioners by the Respondent-Company is without any legal effect and that therefore in the eye of law the petitioners still continue to be workmen of the respondent-Company entitled to all the wages and benefits of their employment. Whatever may be the position of a natural person where doctrine of ultra vires would apply subject to conditions and limitations, the position of an artificial person like an incorporated company is peculiarly subject to law of ultra vires. All the shareholders put together could not have retrenched those petitioners except in accordance with the provisions of the applicable law."
Then the learned Judge considered wither the illegally retrenched can be granted any relief under Article 226 of the Constitution. In that case also Mr. P.R. Ramachandra Rao contended that the Company was not a statutory corporation, but a company incorporated under the Companies Act and as it enjoyed no sovereign power and exercises no State authority, it was not liable to be corrected by this Court under Article 226 of the Constitution. After an elaborate discussion of the legal position, the learned Judge held as follows:-
"In this case Praga Tools Corporation v. C.V. Immanual (1969-II-LLJ-749)(SC), there is no doubt that Chapter V-B of the Industrial Disputes Act imposes a public duty on the respondent-company not to retrench the petitioners except in accordance with the conditions laid down by the Parliament. Those limitations are conceived not merely in the interest of individual workman but in the general interest of industrial peace. In an unreported judgment in W.P. No. 3086 of 1978, this Court has held that Chapter V-B of the Industrial Disputes Act imposes public duties on the manufacturing concerns. Following that, I hold that the respondent-Company is under a public duty to observe those conditions mentioned in Chapter V-B of the Industrial Disputes Act. If so for the reasons which are mentioned above, I hold that a writ of mandamus should issue against the respondent-company not to retrench the petitioners except in accordance with the conditions laid down by the Parliament. According to the Praga Tools case, (supra) it is not the body that matters, but it is the nature of the duty that is important. A statutory duty cast on a private body so long it is public duty can be mandamussed, according to that decision. The body must be functionally assessed to find out whether it is performing public duty or not. For the purpose of this assessment, the question whether a body is private body or a public body is immaterial. As I held that the respondent-Company is under a public duty to observe the conditions mentioned in Chapter V-B of the Industrial Disputes Act, I hold that a writ of mandamus is competent to issue to the respondent-Company."
This judgment has been upheld by a Division Bench of this Court in I.D.L. Chemicals Limited, Kukatpally, Hyderabad v. T. Gattaiah (Judgment in Writ Appeal No. 16 of 1981, dated December 4, 1981). The Division bench held as follows:-
"Article 226 of the Constitution of India is in very wide terms and empowers the High Court to issue writs to any person or authority not only for the enforcement of the fundamental rights but for any other purpose (underlinining is ours). Even in England an order of mandamus is granted ordering that to be done which a statute requires to be done and for this rule to apply it is not necessary that the party or corporation on whom the statutory duty is imposed should be a public official or an official body. In order, however, for an order of mandamus to issue for the enforcement of a statutory right, it must appear that the statute in question impose, a duty, the performance or non-performance of which is not a matter of discretion, and if a power or discretion only, as distinct from a duty, exists an order of mandamus will not be granted by the Court. (Vide Halsbury's Laws of England, Fourth Edn. Vol.1 paragraph 99). Again in paragraph 121 it is stated that the order is only granted to compel the performance of duties of a public nature. It will not, accordingly, issue for a private purpose, that is to say, for the enforcement of a merely private right. The emphasis therefore is not on the question whether the body to whom the order or mandamus is issued is an individual or a private corporation or a public body but whether the body performs a statutory or a public duty. In this case though the appellant is only a corporation registered under the Indian Companies Act, there is a statutory duty to comply with the provisions of Section 25F of the Industrial Disputes Act while retrenching its workmen. As it has failed to perform the statutory duty, the courts, is empowered to direct the appellant to conform to the statute. ........... In this case a number of workmen were retrenched contrary to the provisions of the statute namely Section 25-F of the Industrial Disputes Act. This is not a case of a single employee or a few of employees whose terms of service were affected by an order of corporation. This is a case where a large number of workmen were retrenched contrary to the provisions of the statute. We therefore feel that this is a case where there is a breach of statutory duty or public duty and this is not a case of interfering merely with the contractual rights."
The view of P.A. Choudary, J., in T. Gattaiah's case (supra) was referred to with approval by another Division Bench of this Court in Sarvaraya Sugars Ltd. and Ors. v. Andhra Pradesh State Civil Supplies Corporation Limited and Ors. (Judgment in Writ Appeal Nos. 515 and 516 of 1981, dated June 17, 1981.) as follows :-
"However, in our view having regard to the pronouncement of the Supreme Court in Ajay Hasia v. Khalid Mujib (1981-I-LLJ-103)(SC) a writ can be issued to enforce a public duty whether it be imposed on a private individual or a public body. In fact as far back as in Rohtas Industries v. Its Union (1976-I-LLJ-274)(SC) the Supreme Court held that a writ can be issued against a private person also. Recently one of our learned brothers P.A. Choudary, J., in T. Gattaiah and Ors. v. The Commissioner of Labour, Hyderabad and Anr. (supra) held that a writ can be issued even against a private person, provided he was discharging a public duty. We are therefore of the view that the sugar producers in the State of Andhra Pradesh are bound to sell the levy- free sugar to the writ petitioner at the rate fixed by the Central Government under statutory order.......".
This view gains support from the decision of (he Supreme Court in Shri Anadi Mukta Sadguru S.M.V.S.J.M.S. Trust v. V.R. Rudani (1989-II-LLJ-324)(SC), wherein it has been held as follows: (p.330):
"The term 'authority' used in Article 226, in the context, must receive a liberal meaning unlike the term in Article 12, Article 12 is relevant only for the purpose of enforcement of fundamental rights under Article 32. Article 226 confers power on the High Courts to issue Writs for enforcement of the fundamental rights as well as non-fundamental rights. The words 'any person or authority' used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owed by the person or authority to the affected party. No matter by what means the duty is imposed, if a positive obligation exists, mandamus cannot be denied."
The following passage in Praga Tools Corporation case (supra) has been referred to: (p.754):
"It is, however, not necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body. A mandamus can issue, for instance, to an official of a society to compel him to carry out the terms of the statute under or by which the society is constituted or governed and also to companies or corporations to carry out duties placed on them by the statues authorising their undertakings. A mandamus would also lie against a company constituted by a statute for the purpose of fulfilling public responsibilities. (See Halsbury's Laws of England) (3rd Ed. Vol. II. p.52 and onwards)."
Thereafter, referring to De Smith, the Supreme Court held as follows: (p. 330-331):
"Here again we may point out that mandamus cannot be denied on the ground that the duty to be enforced is not imposed by the statute. Commenting on the development of this law, Professor De Smith States: 'To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duty to have been imposed by charter, common law, custom or even contract'. (Judicial Review of Administrative Act 4th Ed. p. 540). We share this view. The judicial control over the fast expanding maze of bodies affecting the rights of the people should not be put into watertight compartment It should remain flexible to meet the requirements of variable circum-
stances. Mandamus is a very wide remedy which must be easily available 'to reach injustice wherever it is found'. Technicalities should not come in the way of granting that relief under Article 226. We, therefore, reject the contention urged for the appellants on the maintainability of the writ petition,"
It is also relevant to note the decision of the Supreme Court in Shiv Shanker Dal Mills v.
State of Haryana , wherein V.R. Krishna Iyer, J., held as follows referring to American Jurisprudence:
"Article 226 grants an extraordinary remedy which is essentially discretionary, although founded on legal injury. It is perfectly open for the court, exercising this flexible power, to pass such order such as public interest dictates and equity projects.
'Courts of equity may, and frequently do, go much further both to give and withhold relief in furtherance of the public interest than they are accustomed to go where only private interests are involved. Accordingly, the granting or withholding of relief may properly be dependant upon considerations as of public interest.....'."
20. In the present case also in view of the prohibition of the lock-out by the Government under Section 10(3) of the Act, the Company is bound to lift the lock-out and open the mill. Continuation of the lock-out by the Company after July 27, 1993 i.e., after G.O. Rt. No. 1465 was issued, is illegal and is punishable under Section 24 of the Act. It is also an unfair labour practice. In the counter affidavit of the Additional Commissioner of Labour dated February 9, 1994 it is stated that now two disputes are pending adjudication before the Industrial Tribunal-cum- Labour Court, Visakhapatnam. It is also stated therein that the management of the Company "should talk to the recognised union to settle all pending issues or demands and they should not insist on individual undertakings". By the continuation of the illegal lock-out the workers are deprived of their livelihood. This is not a case pertaining to one or two individual workers. It concerns all the workers of the Company numbering about 6,000, more than 3,000 of whom are regular workers. Thus there is a public duty to lift the illegal lock-out unconditionally. Therefore, following the decision of this Court in T. Gattaiah's case (supra), I am of the view that the present Writ Petition is maintainable and that a writ can be issued to the Company.
21. The Management of the Company cannot insist that the workmen should give up their just claims for wages as a condition precedent for lifting the lock-out which is illegal and an unfair labour practice. The Management can only seek a just settlement or adjudication of the disputes relating to the claims of the workmen for their wages for the earlier periods.
22. As already pointed out by me, the petitioner is agreeing to abide by Clauses 3, 4 and 6 of the undertaking dated November 11, 1993 without the preamable part
23. In the circumstances, the writ petition is allowed. No costs.