Andhra Pradesh High Court - Amravati
Kurapati Steeven, S/O.. Kurapati John, vs The Managing Director on 19 February, 2025
APHC010209252014
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3457]
(Special Original Jurisdiction)
WEDNESDAY, THE NINETEENTH DAY OF FEBRUARY
TWO THOUSAND AND TWENTY FIVE
PRESENT
THE HONOURABLE SRI JUSTICE HARINATH.N
WRIT PETITION NO: 37034/2014
Between:
Kurapati Steeven and Others ...Petitioners
AND
The Managing Director and Others ...Respondents
Counsel for the Petitioners :
1. M PITCHAIAH
Counsel for the Respondents :
1. G.Sudha
2. PASALA PONNA RAO (DEPUTY SOLICITOR GENERAL OF
INDIA)
The Court made the following:
//2//
WP.No.37034 of 2014
THE HON'BLE SRI JUSTICE HARINATH. N
WRIT PETITION No.37034 of 2014
ORDER :
1. The petitioners are challenging the common order dated 28.08.2014 passed in MP.No.70 of 2002 and batch passed by the Central Government Industrial Tribunal-Cum-Labour Court, Hyderabad, to the extent of dismissing the petitioners' claim against the 1st respondent only and also seeking a consequential direction to direct the 1st respondent also to pay the amounts as claimed in the MPs.
2. The petitioners joined the 1st respondent-company in various posts on various dates. The service of the petitioners in the 1st respondent-company was not in dispute, as such, it is suffice to mention that the petitioners were employees of the 1st respondent from the date of their joining till 16.12.1989, the date on which an agreement of sale was entered by the 1st respondent with M/s.Fraser Investment Limited (HMP Group). The said agreement related to purchase of the Cement Factory at Tadepalli and Mines at Seetaramapuram. The 1st respondent was transferred to Fraser Investment Limited. The name of Kistna Cement Works was changed as HMP Cements Limited.
//3// WP.No.37034 of 2014 The factory at Tadepalli was transferred to Kistna Cements Limited.
3. A lockout was declared by the 3rd respondent on 29.05.1993. The Government of Andhra Pradesh issued GORt.No.1178, dated 25.06.1993, prohibiting the continuance of lockout and referred the matters for adjudication to the Labour Court - Cum - Industrial Tribunal. The 3rd respondent filed WP.No.9101 of 1993, which was allowed on 22.02.1995. The Government issued GORt.No.722, dated 22.07.1995, prohibiting the continuance of lockout in the 3rd respondent-factory. The 3rd respondent filed WP.No.19847 of 1995 before this Court challenging the issuance of GORt.No.722, dated 22.07.1995. This Court declined to interfere with the issue, and the writ petition was closed.
4. The learned counsel for the petitioners submits that the lockout declared by the 3rd respondent is in violation of Section 25(O) of the ID Act. The petitioners sought wages from the date of lockout, and a batch of MPs came to be filed, which were adjudicated by the 4th respondent.
5. The respondents 2 and 3 filed IA.No.46 of 2004 before the 4th respondent challenging the maintainability of the claim of the petitioners under Section 33(2) of the ID Act. The Central //4// WP.No.37034 of 2014 Industrial Tribunal allowed the IA.No.46 of 2004 dismissed the claims of the petitioners.
6. The petitioners filed WP.No.22999 of 2006, challenging the dismissal of claim petitions. This Court vide order dated 24.07.2008 directed the Central Industrial Tribunal to adjudicate the issue on merits and pass necessary orders. The 4th respondent allowed the claim of the petitioners; however, dismissed the claim of the petitioners against the 1st respondent and fastened the liability of payment on respondent Nos.2 and 3. The learned counsel for the petitioners submits that the 1st respondent is also equally, jointly and severally liable along with respondents 2 and 3 for payment of wages to the petitioners.
7. The learned counsel appearing for the petitioners submits that the manner in which the property of the 1 st respondent was transferred is completely alien to the provisions of the Transfer of Property Act. It is submitted that the said transaction is a sham transaction and that the respondents 1 to 3 have connived with each other to ensure the petitioners do not get their dues from the respondent No.1.
8. It is also submitted that the Labour Court has adone the role of a Civil Court in deciding the ownership and title of the parties over the assets of the industry. It is also submitted that there is no //5// WP.No.37034 of 2014 valid sale transaction between respondents 1 and 2 and that the 2nd respondent was only acting as an agent of the 1st respondent.
9. The learned counsel for the petitioners further submits that the Ex.M3 (the agreement of sale dated 16.12.1989) is marked subject to objection. As per the said agreement, 21.02.1990 is the date of the takeover. All the employees employed by the 1st respondent were taken over by the 3rd respondent and that the purchasers shall have full and unfettered right of management of the 3rd respondent.
10. The learned counsel for the petitioners further submits that as Ex.M3 was not adequately stamped, the same ought to have been impounded, and the Tribunal ought to have discarded Ex.M3. It is also submitted that Ex.M3 was brought into existence to evade the liability of the 1st respondent. The learned counsel for the petitioners submits that the 1st respondent is also liable for payment of wages of the petitioners. The learned counsel for the petitioners places reliance on Suraj Lamp & Industries Pvt.Ltd. Vs. State of Haryana & Anr.1, the Hon'ble Supreme Court held that transfer of immovable property has to be essentially by way of a registered sale deed. It is submitted that the manner in 1 AIR 2012 SC 206 //6// WP.No.37034 of 2014 which the 3rd respondent assets were taken over is completely alien to the law and also contrary to the law laid down by the Hon'ble Supreme Court in the matter of Suraj Lamp and Industries case. The learned counsel for the petitioners also places reliance on the judgment of Hon'ble Supreme Court in the matter of Sanjay Sharma Vs. Kotak Mahindra Bank Limited2, wherein the Hon'ble Supreme Court held that sale by public auction cannot be set aside until there is any material irregularity and/or illegality committed in holding the auction or if such auction was vitiated by any fraud or collusion. The learned counsel for the petitionrs also places reliance on Gurmail Singh and others Vs. State of Punjab and others3, the Hon'ble Supreme Court held that even before the insertion of Section 25FF of the ID Act the employees of predecessor had no right to claim reemployment by the successor in business in sale by the exceptional circumstances. The discretion given to Industrial Courts is no longer generally available because of the insertion of Section 25FF of the ID Act. But in a case where one of both the parties is a state instrumentality, having obligations under the constitution, the Court has a right of judicial review over all aspects of transfer of the undertaking. It is open to the Court to 2 Civil Appeal No.SLP(C) No.330 of 2017, decided on 10.12.2024 3 (1991) 1 SCC 189 //7// WP.No.37034 of 2014 give appropriate directions to ensure that no injustice results from the changeover. The learned counsel for the petitioners also places reliance on the judgment of this Court in the matter of Chintam Kantam Vs. Dhulipudi Venkateswara Rao 4, held that levy of stamp duty and penalty is always in relation to the document which is to be marked before the Court and as such levy cannot depend upon the pleadings of the parties.
11. The learned counsel for the petitioners submits that the 1st respondent is equally responsible for payment of the dues of the workmen and the manner in which the respondents 1 to 3 have connived with each other and created a document styling it as the agreement of sale cannot escape the liability of the workmen.
12. Ms. G.Sudha, learned counsel appearing for the 1st respondent virtually online, submits that the petitioner has arraigned several other petitioners without any basis and claims to be espousing the cause of other workmen without any authority. The 1st respondent transferred the unit being run as Kistna Cement Works to Fraser Investment Limited, and from 16.12.1999, under the sale agreement, the unit was transferred as a running factory along with all employees and also transferred the leasehold rights of Seetarampuram Mines.
4 AndhWR - 2004 -1-142 //8// WP.No.37034 of 2014
13. It is further submitted that the petitioners were given continuous service by the 2nd respondent, and their service continued till the declaration of lockout. It is submitted that the 1st respondent is no way concerned with the payment of wages or extension of any service benefits to the petitioners from the date of agreement of sale i.e., 16.12.1989. The 2nd respondent has taken the responsibility of all workmen, including the petitioners. As such, the 1st respondent is a non-entity in so far as the claim of the petitioners is concerned. The 1st respondent is also equally not responsible or answerable for the events which transpired on account of the declaration of lockout. It is the respondent Nos.2 and 3 who have taken forward the subsequent proceedings in pursuance of the lockout before the various legal forums. The 1st respondent was neither made a party in such proceedings nor was called upon by any Court of law or any other statutory authority to submit their point of view on the validity or otherwise of the lockout declared by the 3rd respondent.
14. It is further submitted that the petitioners, having accepted the employment with the respondents 2 and 3 and worked at the beck and call of the respondents 2 and 3 cannot turn around and claim that the 1st respondent is responsible or liable for payment of wages from the date of declaration of lockout. It is submitted //9// WP.No.37034 of 2014 that the proceedings initiated by the petitioners for recovery of dues are underway and pending disposal. It is also submitted that the 1st respondent is no way concerned or responsible in any manner for addressing the grievance of the petitioners claiming their alleged dues. It is further submitted that the Labour Court has gone into all the issues and also considered the various documentary evidence and thus rightly dismissed the claim of the petitioners against the 1st respondent.
15. Heard the learned counsel for the petitioners and the learned counsel appearing for the 1st respondent and perused the material on record.
Consideration of the Court :
16. The Labour Court passed a common order and disposed off 520 miscellaneous petitioners filed under Section 33(c)(2) of the ID Act. The 2nd respondent filed an application challenging the maintainability of the petitions and the Labour Court vide order dated 18.09.2006 held that the petitions were not maintainable. The petitioners filed WP.Nos.27006 and 22999 of 2006 and this Court set aside the orders and restored the petition to file. The contentions of the petitioners and the respondents were considered by the Labour Court and gave a categorical finding that the petitioners are all workmen and that all the petitioners //10// WP.No.37034 of 2014 have the pre-existing right to claim wages and other benefits from their employer.
17. The Labour Court also dealt with the issue of who among the respondents 1 to 3 has to be considered as an employer of the petitioners at the relevant point of time, i.e., May, 1993. The Labour Court, after having gone into the evidence, has held that the petitioners willingly worked for the changed management, i.e., the 2nd respondent and the 2nd respondent transferred the industry to the 3rd respondent. The Labour Court has also considered the evidence on record, which disclosed that the VRS Scheme was introduced and some workmen opted for the said scheme and that some of the workmen, including some petitioners, got refund of their Employees Provident Fund amount and the representative of the 3rd respondent alone signed such forms. On this premise, the Labour Court has held that respondents 2 and 3 are employers of the petitioners. The Labour Court also held that in so far as the claim of the workmen is concerned, the same has to be considered in terms of Section 25FF of the ID Act, 1947. The Labour Court has also considered the proceedings before the Debt Recovery Tribunal, Calcutta, by judicial proceedings has sold away the assets of the Industry to the 3rd party in an auction held for recovering the dues to a //11// WP.No.37034 of 2014 banking organization from the respondents 2 and 3. It is also pertinent to mention that the 1st respondent had no claim, interest, right or lien over the assets which were put to auction and, as such, did not participate in the auction nor protested the auction. Thus, the 1st respondent remained aloof with the affairs of the respondents 2 and 3 after 16.12.1989. The finding of the Labour Court is based on well-considered grounds and also on a sound reasoning. The Labour Court has rightly protected the claim of the workmen and directed payment of the legitimate dues due payable to the petitioners from the appropriate and concerned respondents. This Court finds no infirmity or illegality in the impugned proceedings challenged in the writ petition, and accordingly, the writ petition is dismissed.
18. In the result, the writ petition is dismissed without costs.
19. As a sequel, pending miscellaneous petitions, if any, shall stand closed.
____________________ JUSTICE HARINATH.N Dated 19.02.2025 KGM //12// WP.No.37034 of 2014 THE HON'BLE SRI JUSTICE HARINATH. N WRIT PETITION No.37034 of 2014 Dated 19.02.2025 KGM