Karnataka High Court
Pharmaceutical Chemical @ Allied vs The Management Of M/S J L Morrison on 20 June, 2018
Author: A.S.Bopanna
Bench: A S Bopanna
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF JUNE 2018
BEFORE
THE HON'BLE MR. JUSTICE A S BOPANNA
WRIT PETITION No.10738/2005 (L-RES)
BETWEEN:
PHARMACEUTICAL CHEMICAL &
ALLIED EMPLOYEES UNION
94-4, LAKSHMINARASIMHA SWAMY NILAYA
MARUTHI TEMPLE STREET
SREEKANTAPURA (ANCHEPALYA)
NAGASANDRA POST
BANGALORE-560 073
REP. BY ITS GENERAL SECRETARY
T NARASIMHA MURTHY
... PETITIONER
(BY SRI SHREYAS JAYASIMHA, ADV.)
AND:
THE MANAGEMENT OF M/S. J.L. MORRISON
(INDIA) LIMITED
9TH MILE TUMKUR ROAD
BANGALORE-560 073
... RESPONDENT
(BY SRI K KASTURI, SR.COUNSEL A/W
SRI K MOHAN KUMAR, ADV.)
THIS PETITION IS FILED UNDER ARTICLES 226 & 227 OF
THE CONSTITUTION OF INDIA, WITH A PRAYER TO QUASH THE
IMPUGNED AWARD DATED 28.09.2004 IN REF.NO.10/96 ANX.A
AND DECLARE THAT THE LAY OFF OF 66 WORKMEN BY THE
RESPONDENT VIDE ORDER DATED 27.11.1995 (TRUE COPY AT
ANX-C) AS BEING ILLEGAL AND UNJUSTIFIED AND ETC.
2
THIS WRIT PETITION HAVING BEEN RESERVED FOR
ORDERS ON 15.06.2018, COMING ON FOR PRONOUNCEMENT
THIS DAY, THE COURT PRONOUNCED THE FOLLOWING :
ORDER
The petitioner-employees' Union is before this Court assailing the award dated 28.09.2004 passed by the Additional Labour Court, Bangalore in Ref No.10/1996. By the said award the Labour Court has rejected the reference. It is in that view the petitioner claiming to be aggrieved is before this Court in this petition.
2. This Court at the first instance had dismissed this petition through the order dated 09.09.2009, which in effect was an ex parte decision since the learned counsel for the petitioner had not been heard. The petitioner accordingly filed an appeal in W.A.No.3948/2009. The Hon'ble Division Bench on noticing this aspect has set aside the order without adverting to the merits of the rival contentions and has 3 restored this petition for reconsideration on merits after hearing both the parties.
3. In the above background, I have heard Sri. Shreyas Jayasimha, learned counsel for the petitioner and Sri. K.Kasturi, learned senior counsel for the resondent. Perused the petition papers including the records received from the Labour Court.
4. Though initially the reference made to the Labour Court was a composite one, which included the dispute relating to laying off of the workmen and the suspension of operation, the said dispute does not remain open for adjudication at this point in time. This is due to the fact that issue relating to the closure also fell into focus and has concluded in W.A.No.1924/1998 disposed of on 19.04.2006, subsequent to the impugned award dated 28.09.2004. Hence the consideration remains confined to the dispute No.2 which had been referred to the Labour Court for adjudication. The said referred dispute reads as hereunder;
4
"Are the workmen of M/s.J.L.Morrison (I) Ltd., represented by Pharmaceutical Chemicals and Allied Employees' Union, justified in demanding (a) Customary Bonus @ 16.66% for the years 1993-94 & 1994-95.
b) Restoration of VDA. (c) Negotiation of the Charter of Demands ? If so, to what quantum of relief are the workmen entitled to ? "
5. In that view of the matter, while adverting to take note as to whether the Labour Court has taken into consideration the material on record to arrive at its conclusion, what requires attention is only to the portion of the award in which the issue No.2 has been considered. On the aspect relating to the claim for restoration of the Variable Dearness Allowance ('VDA' for short), the Labour Court has taken into consideration the oral evidence tendered by Sri. T. Narasimha Murthy, General Secretary of the petitioner Union (WW-1) and the evidence tendered by Sri. K. Ayappan, the authorised representative of the respondent management (MW-1) and the relevant 5 document. In fact the relevant portion of their evidence has been extracted by the Labour Court in the award. As such it is not necessary to duplicate the same. However it is seen that WW-1 seeks to justify the claim while MW-1 explains the circumstance under which the VDA was frozen and the financial position due to which de-freezing was not permissible.
6. In that circumstance, it is appropriate to notice the Memorandum of Settlement dated 19.11.1992 (Ex- W6) wherein under clause 3 this aspect has been agreed and the restoration was to be discussed and settled after 15 months of the recommencement of operations. The subsequent Memorandum of settlement dated 17.08.1994 (Ex -M14 also a copy as Ex -M15) though entered the same does not indicate the agreement regarding restoration, nor is there any other document. On the other hand there is no material relating to restoration of production and the subsequent position is also that there was closure. If that be the position, the decision in the case of Christine Hoden (I) Pvt. Ltd. -vs- State of Goa and others (2001 (91) FLR 1233) relied 6 upon by the learned counsel for the petitioner will not be of assistance in the light of the above consideration relating to the settlement entered into between the parties herein. In that view, when the Labour Court has appreciated the evidence available on record and has recorded its conclusion, the same cannot be held as perverse.
7. The next aspect of the matter relates to the claim for payment of Bonus at 16.66% for the years 1993-94 and 1994-95. Though that was the dispute referred to the Labour Court, the learned counsel for the petitioner has filed the application in IA No.1/17 to amend the prayer seeking for Bonus at 16.66 % for the years 1993-94 to 22.06.2000. Hence the period for which the Bonus is sought is till the year 2000 when the respondent factory declared closure and was concluded in the Writ Appeal on 19.04.2006. The respondent has filed detailed objection statement to the application. Apart contending with regard to the disentitlement for payment of Bonus, it is also contended that such application to amend the prayer 7 seeking relief beyond the point of reference so as to expand the scope of the writ petition is not maintainable.
8. In the light of the contention on IA No.1/17, I am of the opinion that the amendment sought to incorporate the prayer and seek for Bonus for the period beyond the period 1994-95 will be expanding the scope of this petition though not permissible. This is for the reason that the same will amount to a fresh demand which will have to be raised before the competent authority and the competent authority after holding conciliation, if it ends in failure will have to take a decision as to whether a dispute exists and on application of mind decide as to whether the same is to be referred for adjudication. No doubt if the said demand was raised before the Labour Court, it would have been open for it to examine whether it is incidental to the dispute already referred and on securing evidence it could have been considered. In that view if the decision referred by the learned senior counsel for the respondent in the case of The Delhi Cloth and 8 General Mills Co. Ltd. -vs- The Workmen and others (AIR 1967 SC 469) is taken note, when this Court is examining the award passed by the Labour Court in the limited jurisdiction to be exercised under Articles 226 or 227 of the Constitution, certainly it will not be permissible to advert to the aspect which was not even an issue and was not considered on the evidence available before the Labour Court. Hence the prayer in the application cannot be allowed herein, but liberty is left open to the petitioner to avail their remedy in accordance with law. All contentions in that regard are left open.
9. The learned counsel for the petitioner in support of the claim for Bonus has relied on the decisions in the case of The Graham Trading Co. (India) Ltd. -vs- Its Workmen (AIR 1959 SC 1151) wherein the manner of consideration of customary bonus was taken note and the parameters were stated, so as to examine whether the payment was over an unbroken period of years, which period may depend on each case, the circumstance relating to profit and 9 details relating to loss during the years and the uniform payment if any, throughout. Hence, in the instant case the examination will be limited to the aspect of the claim for Bonus at 16.66% for 1993-94 and 1994-95 regarding which an adjudication has been made by the Labour Court. The very same principle was applied in the decision in the case of Ispahani Ltd., Calcutta -vs- Ispahani Employees Union (AIR 1959 SC 1147) relied on by the learned counsel for the petitioner. The decision in the case of Workmen of Kettlewell Bullen and Co. Ltd. -vs- Kettlewell Bullen and Co. Ltd. (AIR 1994 SC 1550) relied on by the learned counsel for the petitioner is only to the effect wherein the principles stated in the earlier referred and other decisions have been applied and on finding that in the particular case which was being dealt the customary Bonus was being paid for nine years which was sufficiently long period, as such upheld the order directing to pay.
10. The learned senior counsel for the respondent on the other hand has relied on the decision in the case of Churakulam Tea Estate (Private) Ltd. -vs- Its 10 Workmen and another ( 1969 II LLJ 407-SC) wherein also the very same principles as laid down by the Hon'ble Supreme Court in the decisions relied upon supra by the learned counsel for the petitioner is referred and a consideration on facts is made. The learned senior counsel for the respondent has also relied on the decision in the case of Hamdard (Wakf) Laboratories -vs- Dy. Labour Commissioner and others [(2007) 5 SCC 281] to point out that it has been held therein that bonus is not included in wages. In that view it is contended that in order to seek for customary bonus, it cannot be automatic but the evidence should disclose that such extent of bonus, beyond the statutory requirement was being paid and that too, for at least a reasonably long period and thereafter it is discontinued giving rise for the claim.
11. In the above backdrop, to put the matter in perspective, the distinction between the statutory bonus payable under Section 11 of the Payment of Bonus Act, 1965 ('PB Act' for short) at 8.33% and the Bonus if any being paid by the employer at a percentage more than 11 the said statutory Bonus over a sufficiently long period of time which had become a custom or practice need to be noted and understood. In the instant case the dispute is not with regard to the statutory bonus at 8.33% which has been paid but is a claim made by the petitioner Union that it is to be paid at 16.66%. If that be the position, it will have to be established by the petitioner, the Bonus at 16.66% was being paid to them over a long period of time earlier which had become a custom and the same has been withdrawn or the payment at that percentage is discontinued.
12. The learned counsel for the petitioner has referred to the Annual Report of the respondent company for the years 1992-93, 1993-94 and 1994-95 marked as Exhs. W.11, 12 and 13 to point out that it reflects the amount towards payment of Bonus. The lumpsum amount depicted therein in my opinion will not clinch the issue when the payment of statutory Bonus is not in issue and also when the annual report containing the financial statement does not relate only to the Bengaluru factory but the entire activity of the 12 respondent as the company as a whole. Further, the Labour Court on referring to the rival pleadings has concluded that the statutory rate of Bonus at 8.33% has been paid and the practice prevalent in Mumbai would not apply. Therefore the amount indicated in the annual report is towards the bonus amount which is not in dispute. The point therefore is whether the Bonus at the rate of 16.66% as claimed is established to be paid as a customary Bonus to the Bengaluru factory as well and whether such Bonus had been paid for a long period earlier.
13. To examine this aspect of the matter, as already noticed the legal position is that it should be shown to be a customary practice if prevalent for a reasonably long period. Though the salary slips at Exhs- W4 and W5 are marked, the contents and the relevance of the same is not shown to be proved. On the other hand as pointed out from the cross examination of WW- 1, he has stated that except the judgment of Bombay High Court he has not produced any documents to show that the management was paying 16.66% of 13 Bonus before 1993-94. He further denies the suggestion that the said judgment is not relevant to the branches of the management at Bengaluru. The judgement is marked as Ex -W10 which needs to be examined.
14. In fact the learned counsel for the petitioner has also cited the said decision (Ex.W-10), in the case of All India Pharmaceutical Employees Union -vs- J.L. Morison Son & Jones (India) Ltd. and another ( FJR Vol. 60 255). In the said case relating to the Bombay unit, in order to arrive at the conclusion the Court has taken into consideration the statement of payment of Bonus for the year 1944 to 1975 and determined that it was paid over an unbroken series of years and was at a uniform rate throughout, to justify an inference that the rate had become customary and traditional in the employer concern. Since the employer had not produced any documents to show that it was connected with trading result and not customary, an adverse inference was drawn. In addition, in that case a settlement entered in 1965 to pay Bonus at that rate was noticed and as such it was held that it had become a condition 14 of service. The question however is as to whether the said consideration can be claimed to be ipso facto applicable to the Bengaluru factory.
15. Firstly, what strikes at the root is that the said decision is dated 26.06.1981 and if the conclusion therein was applicable only because the employees of the Bengaluru factory are also the employees of the same company, the claim for the period 1993-94 and 1994-95 will seem logical only if it is shown that as per the decision it was paid for the earlier years and discontinued which is not shown to be so. Secondly, the settlement of 1965 which was noticed in that case which provided the right should have included the Bengaluru factory as well. On the other hand the settlements which are marked herein and produced at Exhs.W6 and M-15 though on other aspects, it indicates that the same is limited to the Bengaluru factory which points to the fact that all conditions and settlements were separate. Thirdly, in the instant case the stand of the employer was that the statutory Bonus had been paid and at no point in time an higher rate of Bonus 15 was paid and in that circumstance no other document was expected from the employer nor is there a circumstance to draw adverse inference. In fact it was for the petitioner Union to produce evidence in that regard.
16. The learned counsel for the petitioner no doubt seeks to contend that the petitioner Union has produced the salary slips at Annexures-K and L to this petition though it was not produced before the Labour Court. The document which is not a part of the consideration before the Labour Court cannot be looked into now. Even to take note of the same and provide an opportunity to prove it before the Labour Court by remanding the matter, it does not satisfy the requirement, which is because the documents sought to be relied on prima facie does not relate to a continuous period of time to assume it to be customary, apart from the percentage at which it is paid is also not clear. The said payslips are shown to be only of November 1990 and January 1993, though it relates to the same person 16 and it is written as Bonus-89 and Bonus-92 respectively which cannot be co-related.
17. In the above background, when the entire reliance is on the judgment of the Bombay High Court at Ex -W6 which is not applicable for the reasons stated supra and there is no other document to support the claim of the petitioner Union that Bonus had been paid earlier at 16.66% at any time or over a period of time, the decision of the Labour Court on the available material is justified and the award does not call for interference.
18. Having arrived at the above conclusion, one aspect of the matter which requires to be noticed is that the learned counsel for the petitioner with reference the Annual Reports at Exhs - W 11,12 and 13 would submit that the company had sufficient profits, had surplus funds due to which it has declared dividends and as such the Bonus ought to have been paid at a higher percentage. In this regard having already arrived at the conclusion relating to the dispute that was raised for 17 customary Bonus no relief could be granted in the instant proceedings. However, having taken note of the said contention and in that background since the statutory Bonus paid at present being as provided under Section 10 of the PB Act, the petitioners could still make a claim for the maximum Bonus payable under Section 11 of PB Act, subject to the satisfaction of the requirements as provided in that regard. To that extent, liberty is reserved to the petitioner-Union to make a representation and put forth such claim. If such representation is made by the petitioner, the same shall be examined and considered by the respondent, in accordance with law.
19. In the result, for all the afore stated reasons, the following:
O R D E R
(i) The writ petition and IA No. 1/2017 are accordingly dismissed.18
(ii) Liberty is however reserved to the petitioner to make a representation and the respondent is hereby directed to consider the same in terms of the observations in paragraph No.18 supra.
(iii) The parties to bear their own costs.
Sd/-
JUDGE akc/bms