Delhi District Court
Sh. Puran Chand vs M/S Parwati Textile Pvt. Ltd on 29 August, 2008
ID No.179/2004/2000
1
IN THE COURT OF SH. S.K. KAUSHIK,
PRESIDING OFFICER, LABOUR COURT NO. XII,
KARKARDOOMA COURTS, DELHI.
ID No.179/2004/2000
BETWEEN
Sh. Puran Chand
C/o General Mazdoor Lal Jhanda Union
I-441, Karampura,
New Delhi-110 015.
........Workman.
AND
M/s Parwati Textile Pvt. Ltd.
A-26, Rajasthani Udyog Nagar,
Jhangirpuri,
New Delhi-110 033
......Management.
Date of Institution : 19.05.2000
Date of argument : 14.08.2008
Date of award : 29.08.2008
AWARD
1.An Industrial Dispute between the management of M/s Parwati Textile Pvt. Ltd. A-26, Rajasthani Udyog Nagar, Jhangirpuri, New Delhi-
ID No.179/2004/2000 2 110 033 and its workman Sh. Sh. Puran Chand C/o General Mazdoor Lal Jhanda Union I-441, Karampura, New Delhi-110 015 was referred by Secretary (Labour), Government of National Capital Territory of Delhi for adjudication in exercise of powers conferred by Section 10 (1)
(c) and 12 (5) of the Industrial Dispute Act 1947 (in short Act) vide his Order No. F.24 (808)/2000-Lab./15497-501 dated 11.04.2000 with the following terms of reference :
"Whether the services of Sh. Puran Chand have been terminated illegally and/or unjustifiably by the management, and if so, to what relief is he entitled and what directions are necessary in this matter?"
2. Notice of the reference was issued to the workman. Workman appeared and filed statement of claim alleging that he was working as weaver with the management for the last eight years and he was drawing Rs.3000/- per month; that management obtained his signatures on blank papers, voucher and blank appointment letter at the time of giving him service and in case management produces any document alleged to have been signed by him then this would be a forged document; that he was performing his duties to the entire ID No.179/2004/2000 3 satisfaction of the management but despite that management was not maintaining his service record and was also not providing him with any statutory benefit; that for demanding increase in his salary and for improvement of his service condition, he became a member of the union due to which management started nursing grievance against him; that M/s Parwati Textile Pvt. Ltd. A-26, Rajasthani Udyog Nagar, Jhangirpuri, New Delhi- 110 033 is an industrial establishment of the management where it's main product was curtain cloth and apart from this factory, management has another factory in Kundli, Sindhu Border and two other undertakings and the work of all these factories was being looked after by Mr. Pramod Kumar, Pawan Kumar and Shailesh Kumar and they were real brothers and all these three establishments had more than 850 workmen on roll and there were 250 employees in M/s Parwati Textile Pvt. Ltd. A-26, Rajasthani Udyog Nagar, Jhangirpuri, New Delhi- 110 033 and so provision of Industrial Employment (Standing Orders) Act 1946 applies to this establishment and Standing Orders and Modal Standing Orders are applicable upon the management; that management was not maintaining any seniority list and it used to keep its employees temporary so that it could terminate the service of the ID No.179/2004/2000 4 employees at it's will and so management was violating provisions of Section 25 G and 25 H and was adopting unfair labour practice; that when he raised a demand for statutory benefits and for increase in salary, management got annoyed and terminated his service on 11.10.1998 without serving any notice and without paying any retrenchment compensation; that he served a demand notice dated 31.12.1998 to which management did not give any reply and he was also not given duty; that he approached the labour department for reinstatement but management did not cooperate with the labour department and despite the intervention of the labour inspector he was not reinstated; that conciliation proceedings failed as management did not cooperate; that prior to this he raised an industrial dispute before conciliation officer on the basis of which an industrial dispute was referred for adjudication vide number F-24 (2555)/99 Lab./33554-58 dated 28.7.1999 which was under consideration of labour department but he withdrew this claim as the name of the management given in his claim was incorrect; that since termination of his service he is unemployed and could not get any alternate job despite best efforts. He claimed that he is entitled to reinstatement with continuity of service and ID No.179/2004/2000 5 full back wages.
3. Notice of the claim was issued to the management. Management appeared and filed written statement. Management alleged by way of preliminary objections that the present case is a case of mistaken identity since the correct name of the management has not been given and so claim deserves to be dismissed. Management also alleged that it closed its establishment in compliance of the provision of law and did offer dues accordingly to all the workmen besides notice thereof hence the present reference and the statement of claim do not lie against a closed unit. Management also alleged that claimant worked with the management in the name of Pooran Chand and not in the name of Puran Chand which needs correction otherwise the reference order and statement of claim deserves to be dismissed. Management also alleged that no demand whatsoever was raised by the claimant and hence there was no reason or cause of any dispute coming into existence and so no conciliation proceedings could have been initiated and hence reference made in this case is not legally maintainable. Management also alleged that the statement of claim is false and ID No.179/2004/2000 6 frivolous and deserves to be dismissed. On merits management stated that claimant worked in the name of Pooran Chand and he was employed by the management in the month of July 1994 and his last drawn average wages were Rs.2500/- per month since he used to do the job work on contract rate and he used to collect the wages on completion of job work. Management stated that there was no reason or occasion for getting signatures of the claimant on blank papers, vouchers, appointment letter etc. as it is a law abiding concern and it was providing all benefits to its employees as per the provisions of law and there could be no cause or reason of any complaint from any one and claimant has made false allegation for extorting money. Management refuted all the allegations of the claimant in the statement of claim and stated that management employed on an average 30-40 persons during the relevant period and 850 or 250 workers as alleged were never employed by the management and Sh. Pramod Kumar alone used to look after the work of the management. Management stated that it closed its establishment w.e.f. 30.9.1998 permanently in compliance of provisions of law and it gave notice to all concerned as well as the claimant Pooran Chand and all concerned except Pooran ID No.179/2004/2000 7 Chand collected their dues in full and final on the day and time fixed for this purpose. Management alleged that Pooran Chand demanded more money than due and management did not oblige him by meeting his ill demands due to which he filed the complaint to the labour department. Management alleged that it brought true facts to the notice of all concerned and so the present reference and statement of claim deserve to be dismissed. Management alleged that no demand notice as alleged was served upon the management. Management stated that the claim is without any merit and prayed for its dismissal.
4. In rejoinder workman denied the averments made in written statement and reaffirmed the averments as made in statement of claim.
5. From the pleadings of the parties following issues were framed for trial:
1. Whether order of reference contained incorrect name of the management and if so to what effect? OPM
2. Whether the establishment of the management has been closed and if so to what effect? OPM ID No.179/2004/2000 8
3. As per terms of reference. OPW
4. Relief.
6. Both parties were directed to lead evidence on the issues. Workman filed his affidavit Ex.WW1/A in evidence. He relied upon seven documents Ex.WW1/1 to Ex.WW1/7. Workman was cross-examined by Authorised Representatives for management. Management filed affidavit Ex.MW1/A of its employee MW-1 Sh. Mithilesh Kumar Jha. MW-1 relied upon three documents Ex.MW1/1 to MW1/3. Management examined two other witnesses namely MW-2 Sh. Matadin an official of Provident Fund department who proved the receipt of letter dated 15.1.1999 Ex.MW1/3 on 2.2.1999. MW-3 is another official witness Sh. Rakesh Kumar Khandelwal Assistant in the Divisional Office, ESI who proved the receipt of letter dated 15.1.1999 Ex.MW1/3 from the management on 27.1.1999 whereby management informed ESI department that w.e.f. October 1998 manufacturing activities had been closed. All these witnesses were cross-examined by Authorised Representatives for workman.
ID No.179/2004/2000 9
7. I have heard Ld. Authorised Representatives (hereinafter referred as AR) for the parties and also gone through the record. Findings on issues are as under :
ISSUE NO. : 1
8. This issue was framed as management alleged by way of preliminary objection that workman did not give correct name of the management. As per reference name of the management is M/s Parwati Textiles Pvt. Ltd. A-26, Rajasthani Udyog Nagar, Jhangirpuri, New Delhi- 110 033 and this very management is a party to the statement of claim filed by the workman. Thus, this preliminary objection of the management is without any merit. However, management has also alleged in preliminary objection that the workman was given appointment in the name of Pooran Chand and not Puran Chand and for this reason also statement of claim is not maintainable. In my considered view this preliminary objection is again without any merit because on one hand management has alleged that it gave ID No.179/2004/2000 10 appointment to the workman in the name of Pooran Chand and not in the name of Puran Chand but management witness MW-1 Mithilesh Kumar Jha in his affidavit has named the workman as Puran Chand and MW-1 in his affidavit has given the name of the management as M/s Parwati Textile and not Parwati Textile Pvt. Ltd. whereas the management has filed its written statement by stating it's name as M/s Parwati Textile Pvt. Ltd. In my considered view this is very contradictory and hyper technical stand of the management. Accordingly I hold that management has failed to prove that name in the reference is incorrect name of the management and accordingly this issue is decided against the management.
ISSUE NO. : 2
9. This issue was framed because management has alleged in the written statement that it closed its establishment w.e.f 30.9.1998 permanently by complying with all the relevant provisions of law and by giving notice to all the concerned as well as claimant. When management has alleged the closure of the establishment then it is for ID No.179/2004/2000 11 the management to prove the same. In the judgment reported as J.K. Synthetic vs. Rajya Trade Union Kendra : (2001) 2 Supreme Court Cases 87 the dispute referred for adjudication to Industrial Tribunal by Government of Rajasthan was whether retrenchment in four divisions of J.K. Synthetics was justified and if not to what relief the workers are entitled to. Tribunal also framed an issue whether there is in fact any closure of the undertaking. Thereafter Tribunal gave an award that there was a closure of the textile section of the nylon plant. Management filed writ petition challenging the award of the Industrial Tribunal in the Rajasthan High Court. Ld. Single judge upheld the award of the Industrial Tribunal. Judgment of the single judge was challenged before the division bench. The division bench held that since the question of closure was never referred to the Industrial Tribunal and so the Tribunal could not have gone into that question. Thereafter this matter came up before the Apex Court. Their Lordships in para 22 of the judgment held that Industrial Tribunal was required to go into the question whether or not retrenchment was justified and the appellant has sought to justify the retrenchment of 164 workers on the basis that there was a closure of a section of nylon plant and so in ID No.179/2004/2000 12 order to come to the conclusion whether or not retrenchment was justified the Industrial Tribunal necessarily had to first decide whether or not there was a closure.
10. In the present case management has alleged that it had closed its establishment w.e.f. 30.9.1998 and all other workmen received their closure compensation and workman Pooran Chand did not accept the closure compensation as he wanted to extort money and so his service came to an end due to closure of the business of the management. In view of this plea of the management and in view of the judgment of Apex Court noted as above, this court has to decide whether management has proved that there was closure of its establishment functioning at A-26, Rajasthani Udyog Nagar, Jhangirpuri, Delhi.
11. Section 25 FFA lays down that an employer has to give 60 days notice of closing down any undertaking to the appropriate government stating clearly the reasons for intended closure but this provision is not applicable to an undertaking having less than 50 workers on an average per working day on it's roll in the preceding 12 months. As per ID No.179/2004/2000 13 section 25 O of I.D. Act an employer who intends to close down an undertaking in which not less than 100 workers were employed, he shall apply for prior permission at least 90 days before the date on which the intended closure is to become effective stating clearly the reasons for the closure. Management has alleged in the written statement that it closed its establishment as per provisions of law and it offered dues to all the workmen besides notice. Management has also alleged that it employed on an average 30-40 persons during the relevant period. Thus, as per pleading of management provision of Section 25 FFA and 25 O of I.D. Act were not applicable because on an average there were 30-40 persons in the establishment. He submitted that as per judgment reported as Payment of Wages Inspector vs. B.E.S. & I. Co. : AIR 569 SCC 590 section 25 FF and 25 FFF do not contain any condition precedent as in the case of retrenchment U/s 25 F and so as per this judgment of the Apex Court the closure cannot be held illegal even if no notice was given to the workmen. I have carefully considered the judgment cited by the AR for management. In my considered view the judgment of Apex Court in Payment of Wages Inspector's case (supra) is distinguishable from the facts of this case because in this judgment ID No.179/2004/2000 14 the question for consideration before Their Lordships was not pertaining to the applicability of Section 25 FFA of the Act but the question before Their Lordships was whether the compensation payable U/s 25 FFF could be termed as wages and so this judgment is distinguishable from the facts of the present case.
12. AR for management submitted that as per judgment reported as Poonvasi and others vs. Crown Silk Weaving and Industries and others :
Manu/MH/0422/1994 even otherwise notice U/s 25 FFA is not a condition precedent for closure and breach of requirement of this section does not render the order of closure illegal. AR for workman submitted that judgment of Bombay High Court in Poonwasi's case was given by a single judge bench and division bench of Gujarat High Court in the judgment reported as D.S. Vasadada Textile Labour Association vs. Regional Provident Fund Commissioner, Gujarat State : 1985 I LLJ 263 held that mere closure without notice or closure simultaneously with putting up notice would not satisfy the requirement of Section 25 FFA.
I have carefully considered the judgment of division bench of Gujarat High Court cited by AR for workman. In this judgment Their Lordships ID No.179/2004/2000 15 in para 10 observed as under:
"As we have already said, mere closure without notice or closure, simultaneously with putting up a notice would not satisfy the requirement of S. 25 FFA. Closure, specifically keeping employees in service, would negative the very concept of termination of service. Even the closure in regard to one of the mills. Viz. no.6 would not operate to terminate their services, for S. 25 FFF requires notice and compensation as if in a retrenchment."
13. In view of judgment of division bench of Gujarat High Court as above I hold that the judgment of Bombay High Court delivered by a single judge bench and relied upon the management does not help the management in support of the contention that even otherwise the notice U/s 25 FFA is not a condition precedent for closure.
14. AR for management also cited a judgment reported as Pottery Mazdoor Panchayat vs. Perfect Pottery Co. Ltd. and another : (1979) 3 ID No.179/2004/2000 16 Supreme Court Cases 762 and submitted that labour court cannot question the proprietory or justification of closure of a business. I have carefully considered this judgment relied upon by the management. In my considered view this judgment is distinguishable from the facts of the present case because point for consideration before this court is whether management has proved that there was closure and the point as to what was the reason for closure and whether closure was justified or not is not under consideration. AR for management also cited a judgment reported as Hathisingh Manufacturing Co. vs. Union of India :
AIR 1960 Supreme Court 923 and submitted that notice upon the workman was not necessary. I have carefully considered this cited judgment. In fact Their Lordships considered provision of section 25 FFF of the Act and provision of section 25 FFA was not subject matter of the petition. In my considered view facts of this judgment are distinguishable from the facts of the present case.
15. Now adverting to the point whether management has proved that it had closed its establishment w.e.f. 30.9.1998 permanently. Management has not proved on record as to how many workers were ID No.179/2004/2000 17 on its rolls and as to how many workers were working on an average during the last preceding 12 months from the alleged closure. When management has alleged that it was having just 30-40 workers meaning thereby that provision of Section 25 FFA was not applicable then it was required to establish the same by leading cogent and reliable evidence and by producing the relevant record. Since management has failed to produce its record in support of its plea that there were 30-40 workers on rolls, I hold that management has failed to prove that it's case is covered by the exception U/s 25 FFA (1) of I.D. Act. In my considered view management was either required to prove it's case under exception to Section 25 FFA (1) I.D. Act or was required to prove that it complied with the provisions of section 25 FFA (1) of the Act and that it gave 60 days notice to the appropriate government before the date on which intended closure was to become effective but management has failed to establish either of these facts.
16. Management has also alleged that all its workmen except Pooran Chand had received the closure compensation but that has also not been proved except that there is a bare statement of MW-1 in his ID No.179/2004/2000 18 affidavit and management did not produce any record in support of its plea that all other workmen had received the closure compensation. By producing it's record management could have established it's plea that there were only 30-40 workers on roll and so it was not required to give 60 days notice to the appropriate government U/s 25 FFA of I.D. Act.
17. Further management examined MW-2 and MW-3 for proving that it had served notice upon Provident Fund and ESI Departments. MW-2 proved the receipt of the letter dated 15.1.1999 Ex.MW1/3 from the management. MW-3 proved that the ESI office received the letter dated 15.1.1999 Ex.MW1/2 from the management delivered on 27.1.1999 whereby management informed that it had closed its manufacturing activities w.e.f. October 1998. in my considered view these notices sent to Provident Fund and ESI departments do not satisfy the requirement of section 25 FFA.
18. In view of foregoing discussion I hold that management has failed to prove that it had closed its establishment w.e.f. 30.9.1998. This issue is decided against the management.
ID No.179/2004/2000 19 ISSUE NO. : 3
19. This issue is as per terms of reference. The terms of reference in this case is about termination of service of the workman and about legality and illegality of the termination of service of workman by the management. Management has alleged that the service of the workman was not terminated but he alongwith other workers was legally retrenched by tendering the closure compensation to all the workmen but this workman did not accept the closure compensation as he wanted some more money whereas other workers received the closure compensation as management had closed its establishment at A - 26 Rajasthani Udyog Nagar, Jahangir Puri w.e.f. October 1998. Thus according to management service of this workman was legally retrenched. As held while deciding issue No.2, management has failed to establish that it had closed its establishment w.e.f. October 1998. Retrenchment of the workman due to closure of the establishment could be held legal only when management had proved closure. Accordingly obvious conclusion is that service of the workman was terminated by the ID No.179/2004/2000 20 management.
20. Now coming to the question whether termination was illegal. Termination of the service of a workman is illegal when his service is terminated without paying or tendering retrenchment compensation under Section 25F ID Act. According to management this workman was in continuous service of the management since July 1994. Since workman was in continuous service of the management and management has not alleged that he had not worked for 240 days during the period of preceding 12 calender months, workman was entitled to be paid the retrenchment compensation. Management has alleged that it tendered the closure compensation which was the retrenchment compensation but management has failed to establish this fact. I therefore hold that the termination of the service of the workman was illegal as management has failed to prove that it paid retrechment compensation to the workman. This issue is accordingly decided in favour of the workman and against the management.
ID No.179/2004/2000 21 RELIEF
21. AR for management submitted that workman is not entitled for any relief because he did not serve any demand notice upon the management. I have considered this submission of AR for management. Workman in his affidavit deposed that he sent demand notice dated 31.12.98. Workman has placed on record photocopy of this demand notice as Ex.WW1/1. The photocopy of the postal receipt pertaining to sending of this demand notice through registered post is Ex.WW1/2 as deposed in the affidavit by the workman. In my considered view there is no reason to disbelieve this deposition of the workman in his affidavit Ex.WW1/A. Even otherwise as per the judgment of the Hon'ble Supreme Court reported as Shambhu Nath Goyal Vs. Bank of Baroda Jullundur: 1978(1) LLJ 484 no written demand notice is necessary for the purpose of ascertaining the existence of an Industrial Dispute. I therefore hold that this contention of AR for management is without any merit.
ID No.179/2004/2000 22
22. When illegal termination of the service of a workman stands established then point for consideration is as to what relief is to be granted to the workman. In a judgment reported as Indian Hydraulic Industries Pvt. Ltd. Vs Kishan Devi and Bhagwati Devi and Others:
ILR (2007) I Delhi 219 Their Lordships in paragraph 5 of the judgment observed that it is now settled law that even if the termination of a person is held illegal, Labour Court is not supposed to direct the reinstatement alongwith full back wages and the relief can be moulded according to the facts and circumstances of each case. In the present case the management has alleged that it closed its establishment in which workman was employed as a Weaver. Workman has alleged that management is a Pvt. Ltd. Company and this company has not been wound up as per Companies Act and this company is running its two other factories at Kundali (Haryana). AR for the workman submitted that workman is entitled to reinstatement if not in the factory at Jahangirpuri then in one of the other two factories at Kundali (Haryana). Now point for consideration is whether workman can be ordered to be reinstated in one of the other two factories at Kundali (Haryana). For deciding this ID No.179/2004/2000 23 point cross examination of the workman needs to be considered. During cross examination workman admitted that the material that was manufactured in Jahangirpuri factory was not being manufactured now (i.e. as on 03.4.06 the date of cross examination of the workman). Workman also admitted that the material that was being manufactured in the factory at Jahangirpuri is not manufactured in the factories functioning in Kundali (Haryana). From these admitted facts by the workman during cross examination, it appears that workman was appointed for manufacturing such material as was being manufactured in the factory at Jahangirpuri. In view of these facts and circumstances, I hold that it would not be appropriate to order for reinstatement of the workman in one of the two other factories of the management in Kundali (Haryana). In my considered view under these facts and circumstances award of compensation in lieu of reinstatement and back wages to the workman would be the appropriate relief. However, for the purpose of computation of the compensation amount it has to be deemed that workman continued in service of the management till the closure of manufacturing activities proved on record. In the judgment reported as J.U. Akhtar vs. The Management of M/s Markfed Agro : 2006 VIII AD ID No.179/2004/2000 24 (Delhi) 33 Their Lordships awarded compensation to the workman equivalent to full back wages with effect from the date of termination of service to be computed on the basis of the last drawn wages till his superannuation. By relying upon the principle of law laid down by Their Lordships in the here-in-above referred judgment, I hold that just and reasonable compensation in this case has to be computed on the basis of the quantum of back wages to which workman may be found to be entitled to be paid by the management.
23. Workman has alleged that his last drawn salary was Rs.3000/- per month whereas management has alleged that his last drawn salary was Rs.2500/- per month. Thus Rs.2500/- per month as the last drawn salary stands admitted by the management. I therefore take that last drawn salary of the workman is to be taken as Rs.2500/- per month. Now coming to the aspect of the gainful employment. Workman has alleged that he remained unemployed since the date of termination of his service and could not get any employment despite his best efforts. He has deposed this very fact in his affidavit. This deposition of the workman in his affidavit was not challenged by AR for the management.
ID No.179/2004/2000 25 Management has not brought any material on record which could show that workman was gainfully employed after termination of his service. However, workman is a skilled weaver and so it is difficult to believe that he could survive without earning anything. In my considered view taking 60% of the last drawn wages for computing the compensation amount would be neither inadequate nor excessive. Now point for consideration is as to for what number of months workman is to be held entitled to his deemed continuity of his service. In my considered view this period of deemed continuity of his service has to be taken from October 1998 i.e. month of termination of his service to March 2006 i.e. the month preceding the month of suggested stoppage of manufacturing activities in the Jahangirpuri Factory by the management and admitted by the workman during his cross examination conducted on 03.4.2006 which comes to 90 months period. By taking into consideration these factors the just and adequate compensation amount comes to Rs. 1,35,000/-. In my considered view award of compensation of Rs.1,35,000/- (Rs. One Lakh Thirty Five Thousand Only) would be just and adequate compensation to the workman in lieu of reinstatement and back wages. I accordingly award a compensation of Rs.1,35,000/- (Rs. One Lakh ID No.179/2004/2000 26 Thirty Five Thousand Only) to the workman. On receiving this compensation amount workman shall have no claim against the management for reinstatement and back wages. Management is directed to pay this compensation amount to the workman within three months of the award becoming enforceable failing which workman would be entitled to recover the compensation amount with interest @9% per annum from the date of the award. Award stands passed as per foregoing findings and reference stands answered accordingly.
24. Copy of the award be sent to learned Secretary (Labour) Government of National Capital Territory of Delhi for necessary action. The award be also sent to server (www.delhicourts.nic.in). The file be consigned to record room.
ANNOUNCED IN THE OPEN COURT ON 29th DAY OF AUGUST 2008 S.K.KAUSHIK PRESIDING OFFICER LABOUR COURT NO.XII, KARKARDOOMA COURTS, DELHI.