Gujarat High Court
Sintex Industries Limited vs Industrial Court on 21 January, 2014
Author: M.R.Shah
Bench: M.R. Shah
C/SCA/20492/2006 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 20492 of 2006
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE M.R. SHAH
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1 Whether Reporters of Local Papers may be allowed to
see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of
law as to the interpretation of the Constitution of India,
1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
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SINTEX INDUSTRIES LIMITED....Petitioner(s)
Versus
INDUSTRIAL COURT,GUJARAT & 5....Respondent(s)
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Appearance:
MR DARSHAN M PARIKH, ADVOCATE for the Petitioner(s) No. 1
MR AS SUPEHIA, ADVOCATE for the Respondent(s) No. 1 - 2
MR MEHUL M MEHTA, ADVOCATE
for the Respondent(s) No. 3 - 6
MS.DEEPA R SREEKUMAR, ADVOCATE
for the Respondent(s) No. 3 - 6
RULE SERVED for the Respondent(s) No. 1 - 2
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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
Date : 21/01/2014
Page 1 of 14
C/SCA/20492/2006 JUDGMENT
ORAL JUDGMENT
1. By way of this petition under Articles 226 and 227 of the Constitution of India the petitioner have prayed for an appropriate writ, order or direction quashing and setting aside the impugned judgment and award dated 01/07/2006 passed by the Industrial Court, Gujarat in Appeal (I.C.) Nos. 132/2002, 134/2002, 135/2002, 136/2002 and 137/2002 as well as the judgment and award dated 18/10/2002 passed by the Labour Court, Kalol in T Application Nos. 37/1987, 38/1987, 39/1987 , 40/1987 and 41/1987.
2. The facts leading to the present Special Civil Application in a nutshell are as under;
2.1. Respondents nos. 3 to 6 were serving as Apprentice under the Apprentice Act in the petitioner-Company. On completion of their apprenticeship period respondents nos. 3 to 6 alongwith other 22 persons (in all 26 persons) filed Special Civil Application No. 2541/1987 before this Court through Shoshit Kamdar Sangh, Kalol (North Gujarat). In the said petition, initially this Court granted interim relief and directed the petitioner to continue all the 26 persons, inclusive of respondents nos. 3 to 6 pending hearing and final disposal of the said petition. At this stage, it is required to be noted that as such respondents nos. 3 to 6 got the benefit of the said interim relief and were continued in service. It appears that thereafter settlement was entered into between the Shoshit Kamdar Sangh, Kalol (North Gujarat) of the aforesaid Special Civil Application and the petitioner-Company dated 01/09/1987 under which it was agreed that 20 employees, out Page 2 of 14 C/SCA/20492/2006 JUDGMENT of 26 employees enlisted in Annexure - A are resigning from the Company with effect from 01/09/1987 and it was agreed that the above employees enlisted in Annexure - A shall be paid by the Company the following amounts;
(a) one month's wages in lieu of notice;
(b) compensation equivalent to retrenchment
compensation;
(c) gratuity as per the provisions of the payment of
Gratuity Act;
(d) amount equivalent to 80% difference in wages payable
to the employee concerned for the period after one year of the apprenticeship service in the company till 31/08/1987;
(e) difference in payment of bonus payable to the
employee concerned for the period after the
apprenticeship of one year in the company till 31/08/1987 (for the period January, 1987 to 31/08/1987) on pro-rata basis;
(f) for the purpose of computing compensation equivalent to retrenchment compensation and gratuity, the wages payable to the employees concerned after the period of one year apprenticeship in the company will be the same after giving normal annual increments in their respective grades and as become payable under the terms of the awards/settlements with the representative union;
(g) in respect of the difference in wages payable as per Clause (d), the company will contribute its share of the provident fund and ESI while the employees will contribute their share of provident fund and ESI Page 3 of 14 C/SCA/20492/2006 JUDGMENT
(h) two employees, one amongst the clerks and one amongst the technicians concerned alongwith the representative of the Union had sit together with the representative of the Union had sit together with the representative of the Company in the time keeping office of the Company and have worked out the exact amount payable to each employee concerned. The Annexure - A shows the total amount payable to each employee concerned in terms of this settlement.
3. The said settlement, which was signed by Shri L.P. Mishra, General Secretary, Soshit Kamdar Sangh, Kalol , Shri Bharat C. Tripathi, Shri Vipinchandra J. Desai, Factory Manager, Bharat Vijay Mills Ltd., Shri P.N Raval, representative of 26 employees and the respective advocates was placed before the Division Bench of this Court and by order dated 01/09/1987 the Division Bench disposed of the aforesaid Special Civil Application in terms of the settlement entered into between the parties. It appears that thereafter respondents nos. 3 to 6 filed applications before the Labour Court, Kalol, being T Application Nos. 37/1987, 38/1987, 39/1987, 40/1987 and 41/1987 alleging interialia that termination from services with effect from 01/06/1987 is bad in law and contrary to the provisions of the Industrial Disputes Act, more particularly, Section 25(F) of the Industrial Disputes Act. At this stage, it is required to be noted that in paragraph 4 of the T Applications it was stated by the respective respondents that earlier they have preferred Special Civil Application No. 2541/1987 in which High Court granted the stay against the termination, however, subsequently, the said Special Civil Application has been dismissed as withdrawn on the ground that the Gujarat High Page 4 of 14 C/SCA/20492/2006 JUDGMENT Court has no jurisdiction to entertain and decide the dispute raised in the aforesaid Special Civil Application. Thus, incorrect and wrong/false statement was made that aforesaid Special Civil Application No. 2541/1987 was dismissed as withdrawn. However, as stated hereinabove, as such the said Special Civil Application was disposed of in terms of the settlement dated 01/09/1987. The petitioner filed reply to the aforesaid T Applications specifically pointing out that in view of the settlement entered into and the Division Bench disposing of the aforesaid Special Civil Application in terms of the settlement entered into, the said T Applications are not maintainable. Despite the above and despite the order passed by this Court in disposing of the aforesaid Special Civil Application in terms of the settlement, by the impugned judgment and award, the Labour Court allowed all the T Applications without going into into the legality and validity of the settlement entered into in the aforesaid Special Civil Application and observing that as respondents nos. 3 to 6 were not signatory to the settlement/consent terms entered into between the parties in the aforesaid Special Civil Application, the same is not binding to respondents nos. 3 to 6 and has allowed the said T Applications directing the petitioner to reinstate respondents nos. 3 to 6 with 30% backwages. Being aggrieved and dissatisfied with the order passed by the Labour Court in T Applications, the petitioner preferred appeals before the Industrial Court and by impugned judgment and order the Court has dismissed the said Appeals. Being aggrieved and dissatisfied with the impugned judgment and award passed by the Labour Court, Kalol confirmed by the Industrial Court, the petitioner has preferred the present Special Civil Application under Articles 226 and 227 of the Page 5 of 14 C/SCA/20492/2006 JUDGMENT Constitution of India.
4. Shri Parikh, learned advocate appearing on behalf of the petitioner has vehemently submitted that the impugned judgment and order passed by the Labour Court in T Applications confirmed by the Industrial Court is absolutely illegal and without jurisdiction. It is further submitted that once there was a settlement entered into between the parties before this Court and the said Special Civil Application came to be disposed of in terms of the settlement, it was not thereafter open for respondents nos. 3 to 6 to initiate further proceedings and file T Applications challenging their alleged termination with effect from 01/06/1987, which as such was subject matter of Special Civil Application No. 2541/1987. It is submitted that as such false and incorrect statement was made in T Applications that Special Civil Application No. 2541/1987 was dismissed as withdrawn for want of jurisdiction by this Court.
4.1. It is further submitted by Shri Parikh, learned advocate appearing on behalf of the petitioner that in any case unless and until settlement arrived at between the parties to Special Civil Application No. 2541/1987 was challenged, (though it need not have been challenged) in view of the order passed by the Division Bench disposing of the Special Civil Application in terms of the settlement, it was not open for the Labour Court to enter into the legality and validity of the consent terms entered into between the parties to the Special Civil Application on the basis of which the Division Bench disposed of the aforesaid Special Civil Application in terms of the settlement. It is submitted that as such by passing the Page 6 of 14 C/SCA/20492/2006 JUDGMENT impugned judgment and award passed by the Labour Court, the Labour Court has sat as an appellate authority against the order passed by the Division Bench, which is not permissible. It is submitted that therefore the impugned judgment and order passed by the Labour Court confirmed by the Industrial Court is wholly without jurisdiction, which cannot be sustained.
4.2. It is further submitted by Shri Parikh, learned advocate appearing on behalf of the petitioner that even on merits also the Labour Court has materially erred in holding that the settlement to the aforesaid Special Civil Application was not binding to respondents nos. 3 to 6. It is submitted that the aforesaid Special Civil Application was filed by the Union for and on behalf of 26 employees. It is further submitted that the said settlement was signed by Shri L.P. Mishra, General Secretary, Soshit Kamdar Sangh, Kalol , Shri Bharat C. Tripathi, Shri Vipinchandra J. Desai, Factory Manager, Bharat Vijay Mills Ltd., Shri P.N Raval, representative of 26 employees and the respective advocates, whose names were mentioned at Annexure - A to the Special Civil Application No. 2541/1987. It is submitted that as such when respondents nos. 3 to 6 took the advantage of the interim order passed by this Court in the aforesaid Special Civil Application and were continued in service, pursuant to the order passed by this Court in the aforesaid Special Civil Application, thereafter, it was not open for respondents nos. 1 to 6 to contend that as they are not signatory to the settlement, the same is not binding to them. It is submitted that therefore, the finding given by the Labour Court that the settlement entered into in the aforesaid Special Civil Application and in terms of which the Division Bench disposed of the aforesaid Special Civil Application is not Page 7 of 14 C/SCA/20492/2006 JUDGMENT binding to respondents nos. 3 to 6 cannot be sustained.
4.3. Shri Parikh, learned advocate appearing on behalf of the petitioner has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Herbertsons Ltd. Vs. The Workmen of Herbertsons Ltd and Ors reported in (1976) 4 SCC 736 in support of his submission that even the settlement entered into between the Union for and on behalf of the employees and the Members of the Association is binding to the concerned workmen though he is not signatory to the settlement.
4.4. Shri Parikh, learned advocate appearing on behalf of the petitioner has submitted that even on merits also the Labour Court has materially erred in directing the petitioner to reinstate respondents nos. 3 to 6. It is submitted that as such respondents nos. 3 to 6 were appointed as Apprentice under the Apprentice Act and their apprenticeship period was not extended and, thereafter, when their services were continued, there is no violation of Section 25(F) of the Industrial Disputes Act and, therefore, on merits, the Labour Court has materially erred in directing the petitioner to reinstate respondents nos. 3 to 6 on the ground that there was breach of Section 25(F) of the Industrial Disputes Act. Making the above submissions, it is requested to allow the present Special Civil Application.
5. Shri Mehul Mehta, learned advocate has appeared on behalf of the respondents nos. 3 to 6. It is reported that respondent no. 5 has expired during pendency of the petition and his heir, widow, is brought on record as respondent no. 5/1 (pursuant to the order passed by this Court today in Civil Page 8 of 14 C/SCA/20492/2006 JUDGMENT Application No. 557/2007).
5.1. Shri Mehta, learned advocate appearing on behalf of the respondents has tried to support the impugned judgment and award passed by the Labour Court confirmed by the Industrial Court. He has submitted that as it has been found that respondents nos. 3 to 6 were not even the members of the Union, who preferred Special Civil Application No. 2541/1987 and when they were not signatory to the settlement and it was found that termination of respondents nos. 1 to 6 was in breach of Section 25(F) of the Industrial Disputes Act, the tribunal has rightly believed and held that the settlement entered into in the aforesaid Special Civil Application is not binding to respondents nos. 3 to 6 and, therefore, the Labour Court has rightly allowed the aforesaid T Applications and has rightly passed the order to reinstate respondents nos. 3 to 6. No other submissions have been made. Making the above submissions, it is requested to dismiss the present Special Civil Application.
6. Heard the learned advocates appearing on behalf of the respective parties at length. At the outset, it is required to be noted that respondents nos. 3 to 6 alongwith 22 persons were serving as Apprentice under the Apprentiship Act with the petitioner-Company. On completion of their apprenticeship period all of them were to be relieved and at that stage all of them preferred Special Civil Application No. 2541/1987 before this Court through Shoshit Kamdar Sangh, Kalol (North Gujarat) and in the said petition initially this Court granted interim relief and directed the petitioner to continue all the aforesaid 26 persons, inclusive of respondents nos. 3 to 6, pending hearing Page 9 of 14 C/SCA/20492/2006 JUDGMENT and final disposal of the said petition. Consequently, respondents nos. 3 to 6 and other employees, who were serving as Apprentices came to be continued in service. Thus, respondents nos. 3 to 6 got the benefit of the interim relief passed by this Court in Special Civil Application No. 2541/1987 and were continued in service. It appears that thereafter settlement dated 01/09/1987 was entered into between Shoshit Kamdar Sangh, Kalol (North Gujarat) and the petitioner of Special Civil Application No. 2541/1987 under which it was agreed that 20 employees, out of 26 employees enlisted in Annexure - A (inclusive of respondents nos. 3 to 6 herein), are resigning from the petitioner-Company with effect from 01/09/1987 and it was agreed that the above employees shall be paid by the petitioner-Company the following amounts;
(a) one month's wages in lieu of notice;
(b) compensation equivalent to retrenchment
compensation;
(c) gratuity as per the provisions of the payment
of Gratuity Act;
(d) amount equivalent to 80% difference in wages
payable to the employee concerned for the period after one year of the apprenticeship service in the company till 31/08/1987;
(e) difference in payment of bonus payable to the
employee concerned for the period after the
apprenticeship of one year in the company till 31/08/1987 (for the period January, 1987 to 31/08/1987) on pro-rata basis;
(f) for the purpose of computing compensation
equivalent to retrenchment compensation and
Page 10 of 14
C/SCA/20492/2006 JUDGMENT
gratuity, the wages payable to the employees
concerned after the period of one year apprenticeship in the company will be the same after giving normal annual increments in their respective grades and as become payable under the terms of the awards/settlements with the representative union;
(g) in respect of the difference in wages payable as per Clause (d), the company will contribute its share of the provident fund and ESI while the employees will contribute their share of provident fund and ESI
(h) two employees, one amongst the clerks and one amongst the technicians concerned alongwith the representative of the Union had sit together with the representative of the Union had sit together with the representative of the Company in the time keeping office of the Company and have worked out the exact amount payable to each employee concerned. The Annexure - A shows the total amount payable to each employee concerned in terms of this settlement.
7. It appears that the said settlement was signed by Shri L.P. Mishra, General Secretary, Soshit Kamdar Sangh, Kalol , Shri Bharat C. Tripathi, Shri Vipinchandra J. Desai, Factory Manager, Bharat Vijay Mills Ltd., Shri P.N Raval, representative of 26 employees and their respective advocates. The said settlement was placed before the Division Bench of this Court and by order dated 01/09/1987 the Division Bench disposed of the aforesaid Special Civil Application in terms of the settlement entered into between the parties and the respondents nos. 3 to 6 got the amount due and payable under the aforesaid settlement in view of the order passed by this Page 11 of 14 C/SCA/20492/2006 JUDGMENT Court. However, subsequently, all of them filed applications before the Labour Court, Kalol, being T Application Nos. 37/1987, 38/1987, 39/1987, 40/1987 and 41/1987 alleging interalia that their termination from services with effect from 01/06/1987 is bad in law and contrary to the provisions of the Industrial Disputes Act, more particularly, Section 25F of the Industrial Disputes Act. It appears from the statement of claim that incorrect/false statement was made that their earlier Special Civil Application No. 2541/1987 came to be dismissed as withdrawn on the ground that High Court would not have jurisdiction to entertain the dispute raised in the aforesaid Special Civil Application and liberty was reserved to raise the industrial dispute. However, it is required to be noted that as such the aforesaid Special Civil Application came to be disposed of in terms of the settlement dated 01/09/1987. Despite the specific order passed by this Court in Special Civil Application No. 2541/1987 disposing of the said Special Civil Application in terms of the settlement dated 01/09/1987 and though the settlement between the parties was not challenged before the Labour Court in the T Applications by the impugned judgment and order the learned Presiding Officer, Labour Court has gone into the legality and validity of the settlement dated 01/09/1987 and held that the same is not binding to respondents nos. 3 to 6 as they were not signatory to the settlement/consent terms and thereafter has held that their termination from services is in breach of Section 25F of the Industrial Disputes Act and by impugned judgment and order has directed the petitioner to reinstate respondents nos. 3 to 6 herein with 30% backwages. Once Special Civil Application No. 2541/1987 was disposed of by the Division Bench of this Court in terms of the settlement dated 01/09/1987 and as such Page 12 of 14 C/SCA/20492/2006 JUDGMENT respondents nos. 3 to 6 got the benefit under the aforesaid settlement and even got the benefit of the interim order passed in the aforesaid Special Civil Application, thereafter, it was not open for respondents nos. 3 to 6 to contend that the said settlement was not binding to them. Even the learned Single Judge has materially erred in going into and considering the legality and validity of the settlement dated 01/09/1987 and has materially erred in holding that the settlement dated 01/09/1987 is not binding upon respondents nos. 3 to 6, more particularly, when the settlement dated 01/09/1987 was not challenged. In any case, Labour Court could not have and ought not to have gone into the question with respect to legality and validity of the settlement dated 01/09/1987 when Division Bench of this Court disposed of the aforesaid Special Civil Application in terms of the settlement dated 01/09/1987 and the benefit was taken by respondents nos. 3 to 6. Even otherwise, on merits also considering the fact that respondents nos. 3 to 6 were serving as Apprentice under the Apprentiship Act and on completion of the apprenticeship period and without any further order of making them permanent, when they came to be relieved alongwith other apprentices, it cannot be said that the said action was in breach of Section 25F of the Industrial Disputes Act. Under the circumstances, on merits also, the Labour Court has materially erred in reinstating respondents nos. 3 to 6 with 30% backwages. As stated hereinabove, as such, in the statement of claim before the Labour Court an incorrect/false statement was made by the original applicant.
8. In view of the above and for the reasons stated hereinabove, the impugned judgment and award dated Page 13 of 14 C/SCA/20492/2006 JUDGMENT 01/07/2006 passed by the Industrial Court, Gujarat in Appeal (I.C.) Nos. 132/2002, 134/2002, 135/2002, 136/2002 and 137/2002 as well as the judgment and award dated 18/10/2002 passed by the Labour Court, Kalol in T Application Nos. 37/1987, 38/1987, 39/1987 , 40/1987 and 41/1987 deserves to be quashed and set aside. Rule is made absolute to the aforesaid extent. No order as to costs.
9. At this stage, Shri Darshan Parikh, learned advocate appearing on behalf of the petitioner has stated at the bar that irrespective of the outcome of the present Special Civil Application, the petitioner is ready and willing to pay a sum of Rs.15,000/- ex-gratia to concerned respondents nos. 3, 4, 5/1 and 6, which shall be paid to them by an account payee cheque. It is reported that as such respondent no. 4 is abroad and as and when he returns from abroad he may approach the Company to get the aforesaid amount. In view of the above, the petitioner may act as stated hereinabove and shall pay Rs.15,000/- to concerned respondents nos. 3 to 6 ex-gratia.
(M.R.SHAH, J.) Siji Page 14 of 14