Madras High Court
The Management Of Dcm Hyundai Limited vs The Presiding Officer on 22 April, 2010
Author: K.Chandru
Bench: K.Chandru
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 22.4.2010
CORAM:
THE HONOURABLE MR.JUSTICE K.CHANDRU
W.P.Nos.318 to 331 of 2009
and 6437 to 6445 of 2010
The Management of DCM Hyundai Limited
No.2, Sri Ram Nagar, Prakash Nagar
Main Road, Thiruninravur 602 024.
Tiruvallur District. .. Petitioner in
WPs:318 to 331/2009
and 2nd respondent in
WPs:6437 to 6445/2010
Vs.
1. The Presiding Officer
Principal Labour Court, Chennai. .. 1st respondent in
WPs:318 to 331/2009
and WPs:6437 to 6445/2010
2. Senthilnathan .. 2nd respondent in
WP:318/2009 and
petitioner in WP:6443/2010
3. K.Murugan .. 2nd respondent in
WP:319/2009
4. T.Mohanraj .. 2nd respondent in
WP:320/2009 and
petitioner in WP:6442/2010
5. K.Elumalai .. 2nd respondent in
WP:321/2009 and
petitioner in WP:6445/2010
6. V.Suresh .. 2nd respondent in
WP:322/2009 and
petitioner in WP:6438/2010
7. Arunmozhidevan .. 2nd respondent in
WP:323/2009
8. A.Vijaya Kumar .. 2nd respondent in
WP:324/2009
9. D.Soundarrajan .. 2nd respondent in
WP:325/2009 and
petitioner in WP:6440/2010
10. P.Thangaivasu .. 2nd respondent in
WP:326/2009 and
petitioner in WP:6444/2010
11. P.R.Rajendran .. 2nd respondent in
WP:327/2009 and
petitioner in WP:6437/10
12. C.Jyothi Prakash .. 2nd respondent in
WP:328/2009 and
petitioner in WP:6441/2010
13. N.Murugadoss .. 2nd respondent in
WP:329/2009
14. Jeevanandan .. 2nd respondent in
WP:330/2009
15. S.Jagannathan .. 2nd respondent in
WP:331/2009 and
petitioner in WP:6439/2010
Prayer in W.P.Nos.318 to 331 of 2009: Petitions under Article 226 of the Constitution of India for issue of writ of Certiorari to call for the records of the first respondent herein made in I.D.Nos.548, 545, 544, 543, 555, 553, 552, 551, 550, 549, 547, 546, 556 and 554 of 2005 respectively, by order dated 31.7.2008 and quash the same.
Prayer in W.P.Nos.6437 to 6445 of 2010: Petitions under Article 226 of the Constitution of India for issue of writ of Certiorarified Mandamus to call for the records of the first respondent made in I.D.Nos.549, 555, 554, 551, 547, 544, 548, 550 and 543 of 2005, dated 31.7.2008 and quash that portion of the order granting compensation of Rs.1,00,000/- and order reinstatement with continuity of service back-wages with all attendant benefits.
For Petitioner : Mr.Srinath Sridevan
in WPs:318 to 331/2009
and 2nd respondent
in WPs:6437 to 6445/10
For 2nd respondents : Mr.K.V.Ananthakrushnan
in WPs:318 to 331/2009
and petitioners
in WPs:6437 to 6445/10
ORDER
These writ petitions came to be posted on specially being ordered by the Hon'ble Chief Justice vide order dated 13.4.2010.
2. For the sake of convenience, the parties are referred to as "management" and "workmen" appropriately.
3. Heard the arguments of Mr.Srinath Sridevan, learned counsel for the management and Mr.K.V.Ananthakrushnan, learned counsel for the workmen.
4. The first set of writ petitions (W.P.Nos.328 to 331 of 2009) is filed by the management challenging a common award passed by the Principal Labour Court, Chennai in I.D.Nos.548, 545, 544, 543, 555, 553, 552, 551, 550, 549, 547, 546, 556 and 554 of 2005 respectively, dated 31.7.2008. By the impugned award, the Labour Court directed the management to pay a sum of Rs.1,00,000/- to each of the workman covered by the various disputes as compensation in lieu of reinstatement.
5. The writ petitions filed by the management came to be admitted on 9.1.2009 and interim stay was granted on condition that the management deposits Rs.30,000/- to the credit of each of the industrial dispute. Subsequently when the matter came up on 17.8.2009, each of the workman were permitted to withdraw the amount.
6. In the meanwhile, nine workers filed W.P.Nos.6437 to 6445 of 2010 challenging that portion of the award denying them the benefit of reinstatement with back-wages and continuity of service. When those writ petitions came up for admission on 31.3.2010, the matters were directed to be tagged along with the earlier writ petitions filed by the management and accordingly, they were grouped together and finally came up before this Court for final disposal.
7. Before the arguments were addressed, this Court suggested the possibility of mutual compromise between the parties and adjourned the matter two times for arriving at compromise. Since the same failed, the matter was argued.
8.1. The brief facts leading to the filing of the writ petitions are as follows: Each of the workman were charge sheeted by charge memos dated 5.8.2000 containing series of charges. Subsequently, enquiry notices were sent to them. Despite enquiry notices, the workmen did not appear before the Enquiry Officer. The Enquiry Officer found each of the workman guilty and second show cause notices were issued to the workmen on 17.11.2000. Even for the second show cause notices, there was no reply from the workmen and therefore, orders of dismissal came to be passed on 26.12.2000. At the relevant time since a dispute was pending before the Conciliation Officer, the management intimated the workmen that they will be seeking approval from the Conciliation Officer under Section 33(2)(b) of the Industrial Disputes Act, 1947 (for brevity, "the Act"). The workmen also have been given one month pay, which is a statutory requirement for filing an application under Section 33(2)(b) of the Act.
8.2. The Conciliation Officer, namely the Assistant Commissioner of Labour (Conciliation), Chennai, by his order dated 13.9.2001, refused to grant approval and the approval petitions were dismissed. In view of the dismissal of the approval petitions, the workmen claimed that they are deemed to be in service and therefore, they filed an application under Section 33(C)(2) read with 33(C)(5) of the Act claiming the benefit of back-wages arising out of the dismissal of the approval petitions. The said petition was numbered as C.P.No.25 of 2001 and notice was ordered to the management.
8.3. As against the refusal to grant approval, the management filed a batch of writ petitions being W.P.Nos.32866 of 2002 and batch cases and challenged the order passed by the Assistant Commissioner of Labour (Conciliation), Chennai. After notice to the workmen, the matter was heard by this Court and the said batch of writ petitions came to be disposed of by a final order dated 11.9.2003. This Court held that the Conciliation Officer, who heard the approval petition, made an ipse dixit order and did not render any reasoning and since the Officer did not exercise the jurisdiction under Section 33(2)(b) of the Act, the orders passed by him were set aside and the matter was remanded for fresh disposal. Pending disposal of the approval petition, this Court also permitted each of the workman to withdraw a sum of Rs.25,000/- out of the amount of Rs.15 Lakhs which was directed to be deposited at the time of the filing of the said writ petitions. It is also claimed that the workmen were in receipt of Rs.25,000/- pursuant to the final order passed by this Court in the said batch of writ petitions.
8.4. After the remand order was made, the Conciliation Officer took up the dispute and after hearing the parties held that the enquiry conducted against the workmen was in consonance with the principles of natural justice and therefore, prima facie case is made out and approval was granted by the order dated 5.10.2004. Subsequent to the grant of approval, the workmen raised industrial disputes under Section 2-A of the Act before the Assistant Commissioner of Labour (Conciliation) II, Chennai. The Conciliation Officer could not bring about any mediation and therefore, he gave a failure report dated 24.6.2005 in respect of each of the dispute and on the strength of the said failure report each of the workman filed a claim statement dated 5.10.2005 before the Labour Court and the disputes were registered as I.D.Nos.543 to 556 of 2005 and notice was ordered to the management.
8.5. The contention of the workmen was that they never had an opportunity to appear for an enquiry and the letters sent to them by the management were not received. In one case,s the workman who was in receipt of the enquiry notice went to the place of enquiry and to the disappointment he found that enquiry venue was changed without notice.
8.6. In response to the claim statement, the management filed brief counter statement dated Nil (October, 2006). In the counter statement, in paragraph [4] it is stated as follows:
"4. it is submitted that the workman is not giving any legally valid and justifiable reason to set aside the dismissal order dated 26.12.2000 passed by the Management. It is false to state that the Petitioner came to know about the dismissal order dated 26.12.2000, only when the Management filed Application under section 33(2)(b) for approval. The disciplinary proceedings have been initiated by the Management after observing the principles of natural justice like issuance of charge memo, show cause Notice, Enquiry Notice and Second Show Cause Notice and then the final order of dismissal and the Management is also having proof for having conducted the enquiry in accordance with law. Therefore it is utter falsehood to state that the petitioner did not aware of disciplinary proceedings initiated against him. It is submitted that the Learned Assistant Commissioner of Labour also gave approval only after scrutinizing the above documents and after satisfied that the enquiry has been conducted in a just and equitable manner."
8.7. Except stating that approval has been obtained from the Approving Authority, the management did not deal with any of the objections raised by the workmen. There is also no plea to the effect that in case the Labour Court held that the enquiry was not fair and proper they should be given an opportunity to lead further evidence.
8.8. The Labour Court conducted a joint trial. Before the Labour Court, on the side of the workmen, one P.Thanigaivasu was examined as W.W.1 and on the side of the management, one P.Ramani was examined as M.W.1. The workmen filed 14 documents and they were marked as Exs.W1 to W14 and on the side of the management, 26 documents were filed and they were marked as Exs.M1 to M26.
8.9. The Labour Court, on the analysis of the materials let in before it, came to the conclusion that the enquiry conducted by the management was illegal and no opportunity was given to the workmen to defend themselves. In paragraph [9], the Labour Court recorded that even the venue of the enquiry was changed without notice to the workmen. After holding that the enquiry was not fair and proper, and since there was no alternative plea by the management to lead fresh evidence, the Labour Court proceeded to pass final order. Though the Labour Court in such circumstances is bound to order reinstatement with the normal relief of back-wages, without further materials it came to the conclusion that the management establishment became a sick unit covered by the BIFR and also there was a strained relationship between the workmen and management and considering the serious nature of the charges had held that in lieu of reinstatement if the workmen are paid Rs.1,00,000/- each towards compensation it may be sufficient. With this direction, the award came to be passed.
9.1. The contentions of the learned counsel for the management are as follows:
(i) that the impugned award suffers from non application of mind, as the Labour Court did not see that in some of the letters sent to the workmen there was an endorsement that the letter was refused to be received and therefore, there was a justification to conduct an ex parte enquiry;
(ii) that on remand from this Court, the Conciliation Officer has granted approval considering the prima facie case for their dismissal and therefore, the issued cannot be once again raked up before the Labour Court; and
(iii) that, in any event, the workmen have been paid Rs.25,000/- during the proceedings before the Conciliation Officer at the time of remand and in addition the Labour Court has granted Rs.1,00,000/- each and therefore, there is no need to give any further amount and hence, he prayed for setting aside the award.
9.2. In support of his contention, the learned counsel for the management relied upon the judgments of the Supreme Court in:
(i) O.P.Bhandari v. Indian Tourism Development Corporation Ltd. and others, AIR 1987 SC 111;
(ii) Sita Ram and others v. Moti Lal Nehru Farmers Training Institute, AIR 2008 SC 1955;
(iii) K.C.Sharma v. Delhi Stock Exchange and others, AIR 2005 SC 2884; and
(iv) Jagbir Singh v. Haryana State Agriculture Marketing Board and another, AIR 2009 SC 3004.
9.3. He further contended that if this Court is not inclined to set aside the award, then on the basis of the compensation payable, he pointed out the parameters under which the Court can fix the compensation in lieu of reinstatement. Though the ruling in O.P.Bhandari v. Indian Tourism Development Corporation Ltd. and others, AIR 1987 SC 111 may not have a direct bearing because the Supreme Court in that case considered the case of "gold collar" employee and also warned that the same concept may not apply to "blue collar", in principle, he submitted that in no case Courts have granted beyond three years salary and considering each of the workman were getting Rs.2,500/- as last drawn wage, they are not eligible to pay beyond the amount already paid to them.
10.1. Per contra, Mr.K.V.Ananthakrushnan, learned counsel for the workmen contended that the decision of the Conciliation Officer in granting approval will have no bearing. An authority exercising jurisdiction under Section 33(2)(b) of the Act exercises a very narrow jurisdiction, namely he has to find out only the prima facie case in an enquiry, whereas while considering a dispute under Section 10(1) read with Section 2-A of the Act, the Labour Court has the power of an Appellate Authority and in a given case it can not only disagree with the findings recorded by the employer, but also if the charges were found to be proved, it can modify the penalty imposed on the workman. Therefore, there is no estoppel or res judicata on the basis of the order passed by the Conciliation Officer.
10.2. He further submitted that the Labour Court having found that the enquiry was unfair and no opportunity was given to the workmen, ought to have ordered the reinstatement with full back-wages, but as the same were not ordered the workmen were forced to file the cross writ petitions.
10.3. He also submitted alternatively that the amount of Rs.1,00,000/- is not based upon any scientific calculation and therefore, this Court, if it is not convinced of reinstatement, should enhance the compensation. However, this is without prejudice to his original contentions.
11. In the light of the rival contentions, it is to be seen whether the impugned common award calls for any interference?
12. In the present case, the contention that the findings rendered by the Approving Authority under Section 33(2)(b) of the Act will have a bearing on the subsequent reference has no legal validity. The Courts have negatived such a plea basing upon the object behind the exercise of power between the two provisions. After the introduction of Section 11-A of the Act, the power of an industrial adjudication has been widened, as held by the Supreme Court in The Workmen of M/s.Firestone Tyre and Rubber Co. of India (Pvt.) Ltd. v. The Management and others, [1973] 1 SCC 813. Therefore, the Labour Court has a power to re-appreciate the evidence and come to a different conclusion and in a given case can also interfere with the proportionality of punishment.
13. In the case on hand, as set out, the management did not make any alternative plea in their counter statement filed before the Labour Court seeking permission to lead fresh evidence. A Constitution Bench of the Supreme Court in Karnataka State Road Transport Corporation vs. Lakhsmidevamma (Smt.) and another, [2001] 5 SCC 433 has held that in the absence of an alternative plea being made as a part of the pleadings before the Labour Court, the Labour Court has no duty to give permission to the management to lead fresh evidence. Therefore, the management has lost an opportunity to lead further evidence to satisfy the Labour Court about the alleged misconduct committed by the workmen. On that score no fault can be found over the impugned award.
14. Though the learned counsel for the management attempted to point out that certain covers have bearing "refused", that endorsement has been made by the postman. But the Labour Court, on evidence, found that the workmen were not served and even where a workman who was served went to the enquiry spot, there was no enquiry and without notice to the workmen the enquiry venue has been shifted. Such finding of fact cannot be interfered with by this Court in exercise of jurisdiction under Article 226 of the Constitution of India.
15. Therefore, finally the issue boils down to the question as to the validity of the relief granted to the workmen in all the industrial disputes. A feeble attempt was made by the workmen that the unit at Chennai is no longer in existence and activity is now confined to Faridabad unit near New Delhi. It is also not denied that the management establishment has become sick and at some point of time it had been brought under BIFR. Therefore, no fault can be found with the Labour Court in ordering compensation in lieu of reinstatement, even though it found that the workmen's dismissal was illegal.
16. Then the further question arises whether the compensation of Rs.1,00,000/- ordered is liable for enhancement. In the decisions cited by the learned counsel for the management there is no principle of law set out and in each of the case the Supreme Court had enhanced the compensation than what was ordered by the Court below. But there is no formula arrived at in those cases.
17. In matters relating to converting reinstatement into one of compensation, the issue is no longer res integra. The Supreme Court in its earliest ruling in Shetty v. Bharat Nidhi Ltd., 1957 II LLJ 696 held that the monetary value of the benefit of such reinstatement is to be computed not on the basis of a breach of contract of employment nor on the basis of a tort alleged to have been committed by the employer by reason of non implementation of the direction contained in the award and the money value of such benefit and the amount at which such benefit should be computed is to be determined by the Industrial Tribunal to which reference would be made by the appropriate Government for the purpose. After holding so, the Supreme Court held that computation has relation only to the date from which reinstatement of the workman has been ordered under the award and the Industrial Tribunal will have to take into account the terms and conditions of the employment, the tenure of service, the possibility of termination of employment at the instance of either party, the possibility of retrenchment by the employer or resignation or retirement by the workman, and even of the employer himself ceasing to exist. Thereafter, after quoting certain English decisions, the Supreme Court held that there cannot be any mathematical exactitude and the best that any Tribunal can do under the circumstances would be to make as correct an estimate as is possible taking into account all relevant factors.
18. Subsequent to the ruling by the Supreme Court, a Division Bench of the Patna High Court in B.Choudhury v. Presiding Officer, Labour Court, Jamshedpur, 1982 Lab. I.C. 1755 had an occasion to delve on the subject. One of the learned Judge who was party to the Division Bench order, in paragraph [22] laid down the parameters under which such compensation can be calculated, which is as follows:
"22. All the same, certain guidelines could be found out from the judicial pronouncement, which has to be borne in mind while computing compensation in lieu of reinstatement. It is needless to say that the question of compensation in lieu of reinstatement ordinarily arises in case of loss of trust/mistrust, incompetence, inefficiency. Reinstatement normally entitles the workman, the entire back wages plus service with benefit of seniority & fitment and revised scales, if any. Very seldom, the court reduces the back wages whil granting reinstatement. In the case of G.T.Lad v. Chemical & Fibres India Ltd. (AIR 1979 SC 582) : (1979 Lab IC 290) Supreme Court in view of long delay allowed back wages of 75 per cent from the date of termination till reinstatement, with benefit of revised scales as obtainable from time to time. The broad guidelines which have to be borne in mind while computing compensation in lieu of reinstatement, to my mind, are:-
(a) the backwages receivable;
(b) Compensation for deprivation of the job with future prospect and obtainability of alternative employment;
(c) Employee's age;
(d) Length of service in the establishment;
(e) Capacity of the employer to pay and the nature of the employer's business;
(f) Gainful employment and mitigation of damages; and
(g) Circumstances leading to the disengagement and past conduct.
I must state that the aforesaid factors are only illustrative and not exhaustive."
19. The Supreme Court in the Management of Monghyr Factory of I.T.C. Ltd., Monghyr, Bihar v. The Presiding Officer, Labour Court, Patna (Bihar), 1978 Lab.I.C. 1256 : AIR 1978 SC 1428 had an occasion to consider a similar question. In paragraph [20], after referring to the decision in Punjab National Bank Ltd. v. All India Punjab National Bank Employees' Federation, AIR 1960 SC 160, it was held as follows:
"20. The High Court while affirming the order of the Labour Court in this regard did refer to some of the relevant decisions of this Court and correctly enunciated the principles. But it seems to us that it felt fettered in treating the facts referred to in those cases as if they were exhaustive examples of the circumstances under which reinstatement could be ordered. In that view of the matter the High Court, on comparison of the facts of the present case did not feel persuaded to travel outside the limits of those facts. But it should be remembered, as observed in the Punjab National Bank case (AIR 1960 SC 160), that every case has to be judged on its special facts."
20. Once again the Supreme Court in Workmen of Bharat Fritz Werner (P) Ltd. v. Bharat Fritz Werner (P) Ltd. and another, 1990 II LLJ 226, after referring to all the previous case laws, directed in paragraph [23] as follows:
"23. In the instant case these five workmen were dismissed from service on April 7, 1978 and since then they arc without employment. In view of the judgment of the Appellate Bench of the High Court they are entitled to half of the back wages for the period from the date of the order of dismissal, i.e. April 7, 1978 till July 27, 1984, the date of the decision of the Appellate Bench of the High Court. Under the order of the Appellate Bench of the High Court they would have been entitled to full wages for the period subsequent to the said decision on their reinstatement. The operation of the said direction with regard to reinstatement has, however, been stayed during the pendency of the appeals in this Court. From the counter affidavit of V. Manoharan dated 10th November 1984 filed in S.L.P.(C) Nos. 10150 to 10153/84(C.A. NOS. 4780-4783(NL) of 1984) it appears that on the date of the said affidavit, except C.L. Rajanna who was aged 32 years, the age of other four workmen was in the range of 42-43 years and that the age of superannuation in the Company is 58 years. At the time of dismissal, the total salary of these workmen was in the range of Rs.925/- to Rs.1,200/- and at the time of filing of the affidavit in 1984 their salary would have been in the range of Rs.2,125/- to Rs.2,700/-. On that basis one half of the back wages of these workmen for the period from 1978 to 1984 would be about Rs.50,000/- to Rs.60,000/-. Taking into consideration the salary of the workmen at the time of the passing of the order of Appellate Bench in 1984 and applying the criterion laid down by this Court in O.P. Bhandari's Case (Supra) the amount of compensation in lieu of reinstatement for the loss of future employment that should be payable to each workman would be Rs.1,00,000/-. If that amount had been paid to the workmen in 1984, they would have earned Rs.15,000/- per year as interest on the same during the period the appeals have been pending in this Court since 1984. These workmen have received Rs.60,000/- awarded to them by the learned Single Judge under the interim order passed by this Court on December 3, 1984 and in addition to that they have received Rs.12,000/- by way of interim relief during the pendency of the appeals before the High Court. In other words these workmen have so far received Rs.72,000/- in all while they have been without employment since 1978. Taking into consideration the aforesaid facts and the circumstances we are of the opinion, that these workmen may be awarded Rs.1,50,000/- each towards back wages and compensation for loss of future employment in lieu of reinstatement in addition to the sum of Rs.72,000/-which has already been received by them."
Therefore, even after laying down law, the decision referred to above granted different relief ranging from three years salary to five years salary as compensation in lieu of reinstatement.
21. In the light of the above, this Court is of the view that while the Labour Court was correct in ordering compensation in lieu of reinstatement by taking into account all the relevant circumstances, the quantum of compensation fixed by it is very meagre. Considering the facts that (i) each of the workman have served for more than five years; (ii) their tenure has come to an end abruptly; (iii) the charges levelled against them have not been established before the Labour Court; and (iv) the workmen being in the age group of 35 years onwards, this Court is of the opinion that the compensation payable to the workmen must be modified and enhanced to Rs.2,50,000/- for each of the workman and therefore, in the present case, since the workmen have already been paid Rs.30,000/- by way of an interim order in these batch of writ petitions, this Court is of the opinion that the workmen should be paid in normal circumstances Rs.2,20,000/-, but considering that in the earlier round of litigation they had the benefit of Rs.25,000/- though not a recoverable amount, in spite of this Court putting the parties to terms, but contrary to the spirit of Section 17-B of the Act, this Court is of the view that the workmen should be paid Rs.2,00,000/- in each of the writ petitions filed by the workmen. This will not take into account the amounts already paid to the workmen in both the rounds of litigation. The amount of Rs.2,00,000/- shall be paid to each of the petitioners in W.P.Nos.6437 to 6445 of 2010 within a period of eight weeks from the date of receipt of a copy of this order. While the management has filed 14 writ petitions, only nine workers are before this Court by filing cross writ petitions and therefore, these directions will apply only to the workmen who have come before this Court. The management is also at liberty to withdraw the amounts lying in the Labour Court and disburse the same to the workmen. In the light of the orders passed by this Court, even to the workmen who have not filed writ petitions, the balance amount of Rs.70,000/- should be paid within a period of eight weeks from the date of receipt of a copy of this order. In all other aspects, all the writ petitions will stand dismissed.
In the result, all the writ petitions are disposed off with the above directions. However, there will be no order as to costs. Consequently, M.P.No.1 of 2010 in W.P.No.6438 of 2010, M.P.No.1 of 2010 in W.P.No.6439 of 2010, M.P.No.1 of 2010 in W.P.No.6440 of 2010, M.P.No.1 of 2010 in W.P.No.6441 of 2010, M.P.No.1 of 2010 in W.P.No.6442 of 2010, M.P.No.1 of 2010 in W.P.No.6443 of 2010, M.P.No.1 of 2010 in W.P.No.6444 of 2010 and M.P.No.1 of 2010 in W.P.No.6445 of 2010 are closed.
sasi To:
The Presiding Officer Principal Labour Court Chennai