Karnataka High Court
The Management Of Valliappa Textiles ... vs S. Rajanna And Ors. on 17 January, 2007
Equivalent citations: 2007(5)KARLJ48, 2007 LAB. I. C. 1555, 2007 (3) AJHAR (NOC) 835 (KAR.) = 2007 LAB. I. C. 1555, 2007 (2) AIR KAR R 558, (2007) 5 KANT LJ 48, (2007) 3 CURLR 485, (2008) 1 SERVLR 136
Author: Subhash B. Adi
Bench: Subhash B. Adi
ORDER Subhash B. Adi, J.
Page 0473
1. The petitioner in this writ petition has called in question Annexure "G" by which the Labour Commissioner and specified authority Under Section 33C(1) of the Industrial Disputes Act, 1947 has directed the petitioner to pay Rs. 2,62,929.88 paise as closure compensation and an amount of Rs. 83,108/- for the difference amount in terms of closure compensation.
2. The case of the workmen is that the petitioner-Industry was closed w.e.f. 16.6.1999. Despite of the closure, the workman have not been paid any retrenchment compensation and in this regard they filed an application Under Section 33C(1). Interalia, seeking for issue of a Certificate for recovering the said amount as arrears. In their application they claimed total amount of Rs. 2,84,644.88 paisa. similarly they also claimed the difference of the amount in respect of another applicant to the tune of Rs. 83,108/-.
3. In response to the said application, the Labour Commissioner called upon the Management by his letter dated. 9.6.2000 requesting them to furnish their reply. The Management sent a preliminary reply dated Page 0474 3.8.2000 stating therein that it has paid the closure compensation to all the workmen as required Under Section 25(o) Sub-section 8 of the Industrial Disputes Act, 1947 by duly calculating the compensation and contended that the allegation of the Union that the workmen have not been duly paid is one without any basis. The Management filed one more explanation on 12.2.2001. Interalia, contending that the union has no locus standi to file an application claiming the balance of the amount due to the workmen in respect of the period for which the workers were on illegal strike and lockout and indiscipline and violence resorted to by the workmen and suspension of manufacturing operations. It is also contended that Section 25(O)(6) of the Industrial Disputes Act, 1947 is not applicable. It is also contended that the apprentice scheme was discontinued w.e.f. 6.10.1994. On these allegations, the Management contested the claim of the workman.
4. The Labour Commissioner on consideration of the claim petition as well as the objections of the Management found that the workmen, who are in continuous service in terms of Sub-section (1) of Section 25B and they are entitled for closure compensation in terms of Section 25FFF i.e., in terms of Section 25F. The Labour Commissioner also considered the allegation of the Management that for the period during which the workmen, who are on strike and found that they are entitled for the closure compensation Under Section 25F by interpreting the provisions of Section 25B(1) as regards to the continuous service and found that workmen who were employed for continuous period of one year or 240 days preceding the closure of the factory are entitled for closure compensation. Labour commissioner also found that the allegation of illegal strike is required to prove by an enquiry and mere allegation is not sufficient. In such event, an enquiry ought to have been held and an order ought to have been passed against the concerned employees. On these findings and others, the Labour commissioner found that the workmen are entitled for an amount of Rs. 2,62,929.88 paise and also the difference of amount of Rs. 83,108/-
5. Sri M.R.C. Ravi, learned Counsel appearing for the petitioner-Management contended that the Industry admittedly has engaged the services of more than 100 workmen and it falls under chapter V-B of the Industrial Disputes Act, 1947. It is submitted that under Chapter VB, the closure compensation has to be determined in terms of Section 25O and in this regard he relied of Section 25O Sub-section 8, which reads as under:
(8) Where an undertaking is permitted to be closed down under Sub-section (2) or where permission for closure is deemed to be granted under Sub-section (3), every workman who is employed in that undertaking Immediately before the date of application for permission under this section, shall be entitled to receive compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.
Page 0475
6. By referring to this provision, the learned Counsel for the petitioner submitted that the closure compensation has to be determined, which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months. By relying on this, the learned Counsel for the petitioner submitted that the period during which the workers were on strike or period during which there is suspension of manufacturing. The workmen is not entitled for the closure compensation as Section 25(O)(8) requires that a compensation has to be determined for every completed year of continuous service. in support of this, he also relied on Section 25A under Chapter VA and submitted that the Chapter VA is applicable to Industries, which have engaged the workmen less than 100. Section 25FF and 25FFF fall within Chapter VA and identical provision in analogous to Section 25FFF is 25(O) and in respect of an Industry having workmen more than 100, should falls under Chapter VB. The closure compensation is required to be determined only Under Section 25(O) and not any other provision. In support of this argument, he also relied on the provision of Section 25(S) and submitted that certain provisions of Chapter VA & VB are applicable to part Chapter VB and referred to the provisions. He mentions that Section 25(S) only refers to the provisions i.e., 25B, 25D and 25FF, 25G, 25H, 25J of the Chapter VA and not 25F or 25FFF. By referring to these provisions, he further submitted that Section 25FFF and Section 25F have not been mentioned Under Section 25(S) as similar provision, is available under Chapter VB i.e., Section 25(O). He also referred to Section 25N and submitted that a separate procedure is contemplated, by referring to these provisions and also referring to Section 25FFF and Section 25F, he submitted that the workmen would be entitled for the closure compensation only in respect of every completed year of continuous service and not just completion of 240 days continuous service in the proceeding year. On interpretation of these provisions he submitted that the Labour commissioner was not justified in awarding the compensation or on interpretation that 240 days continuous service in the preceding year of the closure of the Industry. In this regard, he referred to a decision of the Learned Single Judge of this Court in WP No. 1963/2002 decided on 14.6.2006 and submitted in respect of the period of illegal layoff or lockout, the workmen is not entitled for closure compensation or compensation Under Section 33C(1) of the Industrial Disputes Act and further submitted that granting of such compensation, the Labour Commissioner would exceed in his jurisdiction. He also relied on a Judgment reported in 1992 (2) LLJ 760 and submitted that the Labour Commissioner has no jurisdiction to determine the closure compensation Under Section 33C(1) as his power is only administrative act and does not confer any jurisdiction for adjudicating the dispute. He also relied on a Judgment reported in 1995 (1) LLJ 395 and submitted that the Labour Commissioner cannot determine the dispute regarding the closure compensation, when there is serious dispute. He further submitted that when there is a serious dispute regarding the entitlement of the workmen for the closure compensation in respect of the period for which they were on strike/layoff, Page 0476 the Labour Commissioner had no authority to adjudicate the same and award the compensation.
7. On the other hand, Sri K.S. Subramanya, learned Counsel appearing for the workman submitted that the provisions of Sections 25FFF and 25F are applicable to the facts of this case. Provision of Section 25(O) are in addition to Section 25FFF are not in derogation of the said provision. Under Section 25FFF for the purpose of determining the closure compensation what is required is if the workman, who is in continuous service, for not less than one year and immediately before such closure will be entitled for the compensation in accordance with the provisions of Section 25F. He referred Section 25F and submitted that if a workman had been in employment for continuous period of 240 days in the preceding year of the closure of the Industry, such workers is entitled for closure of compensation. He referred to Section 25A of Chapter VA and submitted that only those provisions, which ore mentioned therein are not applicable to Chapter VB, he further submitted that Section 25C to 25E both inclusive will not be applicable to chapter VB excluding these provision, other provisions are applicable to chapter VB. He also further submitted that Section 25(O) cannot be read in isolation for the purpose of considering as to whether the workmen is entitled for closure compensation in terms of Section 25FFF or not. The procedure is contemplated in chapter VB but as far as the compensation is concerned, the workmen is entitled Under Section 25FFF. He further submitted that though Section 25(O) also relates to determination of closure compensation, it has to be read in consonance with Section 25FFF and not in isolation. By referring to Section 25(S), the learned Counsel submitted that Section 25(S) does not forbid the applications of Section 25FFF.
8. He further submitted that even continuous service means a workmen, who is in continuous service of 240 days in the preceding year of the closure is deemed to have been in continuous service and he is entitled for the closure compensation for the entire service. He further submitted that the strike period or any other periods cannot be excluded for the purpose of determining the closure compensation. Apart from this, he also submitted that Section 25B, which defines the continuous service excludes strikes/lock outs or a cassation of work, which are illegal and not otherwise. He also pointed out from the findings of the Labour commissioner, no material was produced before the Labour Commissioner to show that the alleged strike or the period for which the manufacturing is suspended etc., are not born out from any record or supported by documents. Apart from this, he also submitted that mere mention of strike by itself would not exclude the period unless it is proved that the strike is illegal. In this case, the Labour commissioner having found that there was no proof of Illegal strike and no material evidence produced. It is not open to the Management to say that the period vas required to be excluded. In so far as the contention of the learned Counsel for the petitioner that the compensation has to be determined for every completed year of continuous service as referred Under Section 25(O) Sub-section 8. Page 0477 The Learned Counsel for the respondents-workmen submitted that every completed year of continuous service means the workman, who has completed 240 days continuous service in the preceding year of the closure of the industry and in this regard he relied on a judgment in the matter of Ramakrishara Ramnath v. The Presidence officer, Labour Court, Nagpur and Anr. and pointed out that on interpretation of Section 25F, the Apex Court in paragraph 20 has not accepted the contention of the Management that the workmen is required to establish that ha had worked for 240 days in all the years. For each year compensation was to be claimed and it is held that the workmen is only called upon to prove that he had been in continuous service in the petitioner-Industry for not less than 240 days immediately before the closure. If that is done, the workman is entitled for the benefit Under Section 25FFF. He also referred to Section 25B as to what constitutes continuous service for not less than one year and submitted that in 12 calendar months, the workmen had actually worked for not lass than 240 days, is deemed to be a complete year of service in the said Industry and in this regard, there is no dispute by the petitioner-Management. He also relied on the Judgment of the Bombay High Court reported in 1958 (1) LLJ 28 in the matter of Jairam Sonu Shogale v. New India Rayon Mill Company, Ltd. and submit tad that combined reading of Section 25B and 25F makes it clear that the workmen once he admits that he has put in continuous service of not less than one year, he would be entitled to claim the retrenchment compensation for every completed year of service and this would be so notwithstanding the fact any particular calendar year he has worked for only 240 days. He further submitted taking part in illegal strike amounts to misconduct on the part of the employee and for misconduct an employee invites dismissal. It is not open to the Management to submit that the period for which the alleged strike was conducted by the workman cannot be excluded or the continuous service could be determined based on every year workmen has put in 240 days.
9. As regards to the contention of the learned Counsel for the petitioner that the Labour Commissioner has no jurisdiction. The learned Counsel for the respondents relied on the Judgment reported is 1966 (1) LLJ 41 in the matter of Sanatram Ramprasad Mills Company, Ltd. Akola v. Baliram Ukandaji and Anr. (Babu Lal-Intervemer) and submitted that the application for recovery of lay off compensation or claim Under Section 31-C and Sub-section (1) of the Industrial Disputes Act, 1947. The power is delegated by the State Government Under Section 31-C(1) and the authority is competent to calculate and determine the question as to whether there was a layoff of not? He relied on another decision reported in 1963(1) LLJ 429 in the matter of Kayb Construction Company (Private), Ltd. v. State of Uttar Pradesh and Ors. and submitted that it is only a verification of the claim of the money within the meaning of Section 33C(1) and not a determination in terms of money or the value of the benefits. By relying on these provisions, the learned Counsel submitted that the Labour Commissioner was only required to determine the compensation for which the workman was entitled. Ha also submit tad that there is no dispute as regards to the workmen in continuous Page 0478 service for more than 240 days in the preceding year of the closure and if that is proved calculation for the period for which the workman is employed and this aspect does not required any adjudication by the Labour commissioner and for the purpose of determination of the compensation Under Section 33C(1), the Labour Commissioner has jurisdiction and he has rightly exercise that power and as directed the petitioner to pay the said amount.
10. In similar circumstances, the Apex court in the judgment reported in 1986 (1) LLJ 34 in the Matter of The Management of Standard Motros Products Of India Ltd. v. Shri A Parthasarathy and Ors. it is held that if the workmen had worked for 240 days during the period of 12 calendar months preceding the date of closure excluding the period of illegal strike. The workmen would be entitled for the closure compensation in view of the provision under Section 25B(2). In such case, the workmen have to be held in continuous service for the period of one year immediately before the date of closure. He pointed out on interpretation of Sections 25B(1) & (2) : 25F and 25FFF, the compensation has been determined on the basis of workmen, proving that he is in continuous service for 240 days during the 12 calendar months preceding the closure. Once this is proved, the workmen would be entitled for the closure compensation irrespective of any allegation of strike or not being in continuous service in the earlier period. This is exactly the view of the Apex court in a Judgment in the matter of Ramakrishan Ramnath v. The Presiding officer, Labour Court, Nagpur and Anr. where the Apex Court has not accepted the contention that there is a requirement of continuous service for every completed year for the purpose of determination of the compensation. The Apex court found that, if the workman prove that ha is in continuous service for 240 days in the preceding year of the closure, they would be entitled for the closure compensation. Section 25(O) is in addition to the provision of Sections 25FFF and 25N is the procedure in respect to a closure of an Industry having workman more than 100, when a closure compensation is to be determined, the same has be determined only under the provisions of Section 25FFF and not any other provision. Chapter VA & VB are relating two kinds of Industry, one industry is having workmen lass than 50 on average par working day and another Industry having workmen more than 100 on average per working day and the procedure is contemplated in both the provisions, but as far as the determination of compensation whether it is under Section 25FFF or 25(O) is one and the same and all that the workmen is required to prove that he was in continuous service of 240 days before preceding the year of production. On this aspect, there is no dispute that the workmen were in continuous service for more than 240 days in the preceding year of closure.
11. In this case, except mere allegation of strike, there is no record or proof of such illegal strike to exclude that period in terms of Section 25B. This aspect is also considered by the Labour Court since there is no material before the Page 0479 Labour Commissioner, the Labour commissioner found that the mere submission of illegal strike, it does not exclude the period. The Judgment of this Court relied on by the learned Counsel for the petitioner is in respect of a illegal layoff and cannot made applicable to this case and, as Section 25B itself is clear, which exclude the illegal strike/layoff for the purpose of calculating of the closure compensation. In this case, it is nobody's case that there was illegal strike, unless it is proved that there was an illegal strike, the petitioner-management cannot exclude the period for the purpose of determination of the compensation. Apart from this, the Apex Court in identical circumstances has also held that 240 days completion in the preceding year of the closure is held to be sufficient for the purpose of granting retrenchment compensation Under Section 25F. If that is so, I do not find any justification in the contention raised by the petitioner, that every continuous year of service means that every year the workman he has to complete 240 days for the purpose of determining the closure compensation, this is not acceptable. The reading of Section 25(A) and 25(s), they do not exclude the application of Sections 25F and 25FFF to chapter VB. Even otherwise also, I do not find any difference between the closure compensation to determine Under Section 25(O) and 25FFF, even Under Section 25(O) every completed year of continuous service, cannot be that the workmen to prove that for every year he has worked for 240 days. This submission is not acceptable, in the light of the Judgment of the Apex Court and also on interpretation of Section 25B.
12 The other contention raised by the learned Counsel for the petitioner that the Labour Commissioner only functions as an executive authority and not as an adjudicative and in this regard as referred by me, it is clear that what is required to be determine Under Section 33C(2) is amount for which the workmen entitled based on his length of service, there is no dispute that the workmen had worked for 240 days as continuous in the preceding year of the closure. Once that is proved, he is entitled for the compensation and the entitlement of the compensation is to be calculated based on number of years of service. This aspect has been considered by the decision reported in 1965 (2) LLJ 429 in the matter of Kaye Construction Company (Private), Ltd. v. State of Uttar Pradesh and Ors. On interpretation of Section 25B and 25F found that it is a simple determination of compensation, which does not involve an adjudicatory function. As such the judgment relied on by the learned Counsel for the petitioner has no application to the facts, this case does not require an adjudication, except showing that the workmen has completed 240 days of continuous service in the preceding year and the number of year service he has put in. On an undisputed facts and in the light of the provisions of Sections 25FFF, 25F, 25(O), the workman are entitle for the closure compensation. As such, I do not find any justification in the contention raised by the learned Counsel for the petitioner. Hence, I do not find any merit in the writ petition. Accordingly, writ petition fails and dismissed.
13. Sri Jagadish Mundargi, Learned Counsel for respondent No. 89 is permitted to file his memo of appearance within four weeks.