Bombay High Court
Mrs. Sarita S. Melwani, Proprietress ... vs Ms. Pallavi V. Talekar, Ms. Sheela P. ... on 12 June, 2008
Author: V.M. Kanade
Bench: Swatanter Kumar, V.M. Kanade
JUDGMENT V.M. Kanade, J.
1. Appellant has filed this appeal challenging the judgment and Order passed by the learned Single Judge in Writ Petition No. 3969 of 2007 dated 30/11 / 2007 whereby the learned Single Judge was pleased to dismiss the Writ Petition and confirm the order passed by the Industrial Court dated dated 12 /01 / 2007 passed in Revision Application (ULP) No. 267 of 2005 which, in turn, had confirmed the judgment and order of the 6th Labour Court, Mumabi dated 29 /10 / 2005 in Complaint (ULP) No. 838 of 2000.
2. Brief facts are as under:
3. Appellant is a Proprietress of the Establishment known as M /s Sarat India, registered under the Shops and Establishment Act and it was engaged in the manufacture of sale of melamine crockery.
Respondent No. 1 & 2 were working with the appellant. For the sake of convenience, the appellant shall be referred to as "management" and the respondents shall be referred to as "workmen". The workmen were issued notices on 16/08 / 2000, informing them that their services were being retrenched from 21/09 / 2000. Both the workmen sent letter of request dated 22 /09 / 2000 to permit them to continue in service for further period of one month. Accordingly, the management continued them in service for one month upto 31 /10 / 2000. Thereafter, on 01/11 / 2000, the management paid terminal dues of workmen which were accepted by them under protest.
4. The workmen filed Complaint (ULP) No. 838 of 2000 under Items 1(b), (d) and (f) of Schedule IV of MRTU & PULP Act, 1971. It was inter alia contended in the complaint that their services were terminated in breach of the provisions of Section 25F and 25G of the Industrial Disputes Act, 1947.
5. The management filed its Written Statement and contested the complaint. It was contended that the workmen were essentially employed in the production process and since the said work had reduced, they could not be continued in service more particularly because they were not capable of handling the other work such as handling raw material, delivery and changing of moulds on machines. It was further contended that the the employee who was junior to the workmen was continued as he was capable of doing the said work. The management also took a stand in their Written Statement that from 1993 to 2000 the workmen had not completed 240 days of work. It was contended that the workmen having not completed "continuous service" as defined under Section 25B of the I.D. Act, they were not entitled to retrenchment compensation for the years for which they had completed less than 240 days during the period of 12 calendar months.
6. Before the Labour Court the workmen filed their affidavit in lieu of evidence. They were crossexamined by the management. The management also filed an affidavit of the Constituted Attorney of the Proprietress, working in the Company when the retrenchment notices were issued to the workmen.
7. The Labour Court allowed the complaint. It held that the workmen had proved that the their termination was not in accordance with law. It further held that the Respondent had engaged in unfair labour practice in terminating the services of the workmen. It, therefore, directed the management to reinstate the workmen with continuity of service with full back wages with effect from 21 /11 / 2000.
8. This order was challenged by the management before the Industrial Court by filing a revision application under Section 44 of the MRTU & PULP Act. The Industrial Court confirmed the finding which was given by the Labour Court and dismissed the revision application. It held that it was an undisputed fact that the Respondent No. 1 was employed on 27 /1 / 1984 while Respondent No. 2 was employed in the month of August, 1986 and that they had rendered their services continuously and that their last drawn wages were @ Rs 91/ per day. The Industrial Court further confirmed that the management had not produced evidence to show that the production of the Company was partially reduced and that the workmen had become surplus employees. It also held that there was clear violation of the statutory provisions contained in Section 25G of the I.D. Act.
9. Against this order, the management preferred Writ Petition which came up before the learned Single Judge of this Court who, by a detailed judgment and order, was pleased to dismiss the Writ Petition.
10. We have heard Mr. Cama the learned Senior Counsel appearing on behalf of the appellant and Mr. D.M. Mandavia, the learned Counsel appearing on behalf of the Respondent Nos. 1 and 2 workmen.
11. Mr. Cama, the learned Senior Counsel appearing on behalf of the appellant submitted that the learned Single Judge, Industrial Court as also the Labour Court have clearly committed an error of law by holding that the workmen were in continuous service within the meaning of Section 25B(1). He submitted that it was pleaded in the complaint that the workmen were working for a period of 17 years and 14 years respectively. No evidence has been led by the workmen to substantiate the said averment. He submitted that the management had specifically denied the said averment and had averred that the workmen had not continuously worked for 240 working days for each of the 17 years and it was contended that the workmen had worked for 9 years if 240 days per year work was taken as determinative factor. It was further contended in the Written Statement that the two workmen had not completed 240 days in 12 months preceding the date of their termination in 2000. It was submitted that in the absence of any material being produced on record, the learned Single Judge, Industrial Court as also the Labour Court have given a finding that the case of the workmen fell within the provisions of Section 25B(1). The second submission made by Mr. Cama, the learned Senior Counsel appearing on behalf of the management is that even if it was held that payment of retrenchment compensation was due for the entire period of 17 and 14 years respectively even then the compensation paid by the management together with the exgratia and gratuity would exceed the claim of the workmen for the entire period and that the Labour Court or Industrial Court did not consider this aspect at all and the learned Single Judge had erroneously held that the Gratuity Act was applicable in the case of the appellant management. Mr. Cama then thirdly submitted that no evidence was led by the workmen in respect of the alleged violation of Section 25B. It was further submitted that the rule of last come first go applies categorywise and not workwise. It was further submitted that the workmen had not established that one "junior" who remained in service was in the same category and doing the same work as the workmen. It was lastly contended that even if the retrenchment or termination of service was held to be illegal, the workmen do not have an automatic right to claim full back wages. In support of his submissions Mr. Cama has relied upon the following judgments: (1) Mohan Lal v. Management of Bharat Electronics Ltd. .
(2) Karnataka State Road Transport Corporation and Anr. v. S.G. Kotturappa and Anr. 2005 II CLR 59 (3) U.P. Drugs and Pharmaceuticals Co. Ltd. v. Ramanuj Yadav and Ors.
(4) Sriram Industrial Enterprises Ltd. v. Mahak Singh and Ors. 2007 II CLR 744 (5) Sadanand Patamkar v. New Prabhat Silk Mills 1974 (2) LLJ 52.
(6) Allahabad Jal Sansthan v. Daya Shankar Raj and Anr.
(7) Municipal Council, Sujanpur v. Surinder Kumar (8) Haryana Urban Development Authority v. Devi Dayal
12. The learned Counsel appearing on behalf of respondents workmen on the other hand submitted that the Labour Court as also the Industrial Court have recorded a finding which is confirmed by the learned Single Judge and the record clearly indicated that the workmen had worked for 17 years and 14 years respectively. He submitted that the case of the workmen clearly fell within the ambit of Section 25B(1) and the the learned Single Judge had correctly so held and, therefore, there was no reason to interfere with the said order.
13. We have given our anxious consideration to the submissions made by the learned Counsel appearing on behalf of the appellant and the respondents workmen.
14. So far as the first submission of the learned Counsel appearing on behalf of the appellant is concerned, much emphasis has been led by him on the finding recorded by the learned Single Judge wherein it has been stated that, admittedly, the case of the management fell under the provisions of Section 25B(1). It was submitted that the management had specifically denied that the workmen had worked continuously from 1984 and 1986 respectively and that in the Written Statement it was specified by the management by way of Chart disclosing number of days each workman had worked over the disputed period of time and secondly it was urged that in view of the said position the case of the workmen was clearly covered by provisions of Section 25B(2) and, therefore, they were not entitled to get retrenchment compensation for continuous service from 1984 and 1986 respectively. In order to appreciate the said contention, it will be first necessary to see the pleadings of the parties. In the complaint, a specific averment has been made in para 3(c), stating therein that the Respondent No. 1 was employed on 27/01 / 1984 and the Respondent No. 2 was appointed in the middle of the month of May 1986. The said Clause (c) of para 3 of the complaint reads as under:
(c) The complainant No. 1 submits that she was employed by the company on 27.1.1984, but she was not give the appointment letter at any point of time even though it was demanded. Similarly the complainant No. 2 was appointed in the job in middle of the year in the month of May 1986, but she was also not given the appointment letter to that effect. The last salary of the complainant No. 1 was Rs 89 / per day and the last drawn salary of the second complainant was Rs 89 per day. Thus the first complainant submits that she has rendered the continuous service near about 17 years with the Respondent Company, but the Respondent has not paid her even the minimum wages during the tenure of her employment so also the 2nd complainant has also rendered the services of 14 years and she was also not paid the minimum wages during the tenure of her employment. The complainant therefore submit that the Respondent has thus exploited both the complainants during their tenure of service. The complainants submit that the Respondent was not paying them the overtime wages at the rate of double though the Respondent used to take the overtime work as and when required. No. special allowances as prescribed by the State Govt. was paid to the complainants during the tenure of their employment.
To this averment, in the Written Statement, the appellant has admitted that the Respondent No. 1 was employed on 27/01 /1984. So far as Respondent No. 2 is concerned, it is stated that she was not appointed in May, 1986 but she was joined in August, 1986 and that the last drawn salary of Respondent Nos. 1 and 2 was Rs 91/ per day and not Rs 89/ per day as claimed by the workmen. A categorical defence has been taken in the Written Statement that the word 'continuous service' for not less than one year as defined under Section 25B of the Industrial Disputes Act was to be interpreted that the only workman who put into 240 days in service during the period of 12 calendar months, he should be deemed to have completed one years service with the employer. The said averments in Clause (c) of para 3 of the Written Statement reads as under:
(c) It is true that complainant No. 1 was employed on 27.1.1984. It is not out practice to give appointment letters. It is not true that the same was demanded by the complainant. I issue attendance cards and monthly pay slips to all my employees. It is not true that the complainant No. 2 joined in May 1986. She has joined in August 1986. It is not true that the last drawn salary of complainant No. 1 and complainant No. 2 was Rs 89 / per day. Their last drawn salary was Rs 91 / per day. It is not true that complainant No. 1 has completed near about 17 years of continuous service. The word 'continuous service' for not less than one year as defined by Section 25B of the Industrial Disputes Act is to be interpreted that if a workman has put in 240 days in service during a period of 12 calendar months, he shall be deemed to have completed one years service with the employer. She has completed only 9 years continuous service. It is not true that she has not been paid the minimum wages during the tenure of her employment. It is observed from the records that both the complainants have not even been able to complete normal working hours, hence the question of overtime and evertime pay does not arise in their case." From the aforesaid pleadings in the complaint and Written Statement, it is therefore obvious that the management did not dispute the fact that the respondents workmen were working from 27 /01 / 1984 and August, 1986 respectively. It was a specific case of the management that the word ' continuous service' had to be interpreted to mean that the workman worked for a period of 240 days during the period of 12 calendar months and if so calculated the period of continuous service of the workmen would be 9 years. The submission of the Mr. Cama, the learned Senior Counsel appearing on behalf of the appellant that only a vague and bald allegation was made by the workmen that they were working from 1984 and 1986 respectively and that this fact was not proved by leading evidence, cannot be accepted because the management having admitted in para 3(c) of their Written Statement, it was not necessary for the workmen to prove the said fact since it was specifically admitted by the management. The emphasis which was laid by the management in the Written Statement and thereafter in its evidence was on the interpretation of the word 'continuous service' as defined in Section 25B which is evident from the averment made in para 2 (e) and 3(c) of the Written Statement. It would be relevant to note the averment made by the management in Clause (e) of para 2 of the Written Statement which reads as under:
(e) Attendance record of complainant No. 1 for the last 8 years is as follows:
Year No. of days Paid Holidays worked 1993 206 10 1994 118 6 1995 188 8 1996 171 6 1997 188 9 1998 181 8 1999 158 7 2000 155 5 Over a period of 17 years of her employment, she has not completed 240 days in the last 8 years of service.
The attendance record of Complainant No. 2 for the last few years is as follows : Year No. of days Paid Holidays worked 1994 207 10 1995 205 8 1996 166 6 1997 150 6 1998 187 10 1999 176 8 2000 185 7 Over a period of 14 years of her employment, she has not completed 240 days in the last 7 years of service.
The question which was therefore required to be decided by the Labour Court was whether the case of the workman was covered under Section 25B (1) or Section 25B(2). In the light of the pleadings of the parties and the evidence which has been led by both the parties, it will have to be seen whether the case of the workmen was covered under Section 25B(1) or 25B (2).
15. Before we consider the factual position, it would be relevant to consider the relevant provisions more particularly Section 25B which defines the word 'continuous service'. The said provision reads as under: 25B. Definition of continuous service. For the purposes of this Chapter, (1) a workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorised leave or an accident or a strike which is not illegal, or a lock out or a cessation of work which is not due to any fault on the part of the workman;
(2) where a workman is not in continuous service within the meaning of Clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer
(a) for a period of one year, if the workman, during a period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than (i) one hundred and ninety days in the case of a workman employed below ground in a mine; and (ii) two hundred and forty days, in any other case;
(b) for a period of six months, if the workman, during a period of six calendar months, preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than (i) ninetyfive days, in the case of workman employed below ground in a mine; and
(ii) one hundred and twenty days, in any other case. Explanation. For the purposes of Clause (2), the number of days on which a workman has actually worked under an employer shall include the days on which
(i) he has been laidoff under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Act or under any other law applicable to the industrial establishment;
(ii) he has been on leave with full wages, earned in the previous years;
(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and
(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.
16. The term 'continuous service' is used in Section 25F lays down the circumstances and the manner in which retrenchment compensation has to be paid to the workmen. Similarly Section 2(oo) defines the term "retrenchment" and also lays down the classes of cases which do not fall under the term "retrenchment". Therefore, it will be relevant to consider the language used in Section 25F and Section 2(oo) which are reproduced hereinbelow: 25F. Conditions precedent to retrenchment of workmen. No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until
(a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;
(b) the workman has been paid, at the time of retrenchment, 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; and
(c) notice in the prescribed manner is served on the appropriate Government [for such authority as may be specified by the appropriate Government by notification in the Official Gazette].
2(oo) "retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than a punishment inflicted by way of disciplinary action but does not include
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or [(bb) termination of the service of the workman as a result of the nonrenewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or]
(c) termination of the service of a workman on the ground of continued illhealth;]
17. The conjoint reading of the aforesaid three provisions, therefore, clearly reveals that the legislature has considered the instances of interruption in 'continuous service' in an industrial undertaking on account of various circumstances such as sickness or authorized leave or an accident or a strike or a lockout or a cessation of work which is not due to any fault on the part of the workman and if there is interruption in service on account of these factors, by a deeming fiction, the said service is treated to be continuous service under Section 25B(1). If a workman does not fall in the first category, he can still claim to be in continuous service if he falls under category in Section 25B(2)(a). These two contingencies, therefore, operate in two different fields and are, therefore, mutually exclusive. If a workman establishes his case under Section 25B(1) then it is not necessary for him to prove that he has worked for a period of 240 days in the preceding year as contemplated under Section 25B(2)(a).
18. So far as the facts of the present case are concerned, they clearly reveal a situation where both the workmen have worked since 1984 and 1986 respectively which fact has not been denied by the management as is revealed from their Written Statement in para 3(c). What is disputed by the management is the interpretation which is to be given to the provisions of Section 25B(1) and 25B(2) which has been specifically averred in Written Statement in para 3 (c) wherein a categorical stand is taken by the management that since in the last preceding year before termination, the workmen had not worked for a period of 240 days they were not entitled to claim retrenchment compensation for the entire period and that they were entitled only to claim compensation for 9 years during which the workmen had worked for 240 days. In our view, such an interpretation cannot be given to the provisions of Section 25B(1) and 25B(2)(a) of the I.D. Act and if such an interpretation is given, the entire section would be rendered otiose. As observed above, Section 25B(1) and 25B(2) operate in different fields and if it is established that the workman was working continuously, his case would fall under Section 25B(1). Once the workman establishes that his case falls under Section 25B(1), it would not be necessary for him to prove that he worked for 240 days in a year preceding his termination as contemplated under Section 25B(2)(a). The submission made by the learned Senior Counsel Mr. Cama, therefore, cannot be accepted and we do not see any reason to interfere with the finding recorded by the learned Single Judge who was pleased to confirm the order passed by the Industrial Court and the Labour Court.
19. Mr. Cama, the learned Senior Counsel appearing on behalf of the management has relied upon the four judgments in support of his submissions. Firstly, he relied upon the judgment in the case of Mohan Lal (supra). In our view, the ratio laid down by the Apex Court in Mohan Lal's case would not be of any assistance to the management since, in that case, the question before the Court was whether the Petitioner in the said case fell within the purview of Section 25B(2)(a) and in the light of the facts of that case, the Apex Court has examined the said case. The second case on which reliance has been placed by the learned Counsel for the management is Karnataka State Raod Transport Corporation (supra). The ratio of the said case is also not applicable to the facts of the present case. In the said case, the respondents were badli workers and their services were terminated and in the light of the facts of the said case, the Apex Court held that since the badli worker does not acquire any legal right to continue in service, he is not entitled to protection under I.D. Act and the mandatory requirements of Section 25F were not required to be complied with by the management. The ratio of the said case, therefore, would not apply to the facts of this case. The third judgment on which reliance has been placed by the learned Counsel for the management is in the case of M/s U.P Drugs and Pharmaceuticals (supra). The ratio of the said judgment also, in our view, would not apply to the facts of the present case more particularly because in the case of U.P. Industrial Disputes Act, Section 2(g) which defines the term ' continuous service' does not contain the word 'preceding' and, therefore, the ratio of the said judgment would not apply to the facts of the present case. The Apex Court has taken the same view in the case of Sriram Industrial Enterprises Ltd. (supra).
20. Therefore, considering the factual and legal position, we are of the view that the case of the workmen, therefore, clearly falls under the provisions of Section 25B(1) and it is not necessary for the workmen to separately prove that they had worked for a period of 240 days in the preceding year before their termination.
21. The second submission made by the learned Senior Counsel appearing on behalf of the management was that there was an excess payment in awarding the retrenchment compensation for 17 and 14 years respectively. The learned Single Judge has correctly observed that this case was never raised before the Labour Court or the Industrial Court that the amount of gratuity was not payable and it is for the first time in the High Court an additional affidavit was filed and it is stated therein that the provisions of Payment of Gratuity Act are not applicable and, therefore, the amount paid under the head "Gratuity" should be treated as retrenchment compensation. The learned Single Judge has correctly observed that the workmen had specifically pleaded that there were 20 employees whose names were shown in two different registers for the purposes of evading the labour legislation and that there were no pleadings in the Written Statement to indicate that 10 or more persons were not employed by the management. No evidence has been led by the management on that aspect and, therefore, the learned Single Judge has correctly discarded the second submission which was made by the learned Counsel appearing on behalf of the management. The last submission made by the learned Counsel appearing on behalf of the management was that there was no ipso facto right on the part of the workmen to get back wages even if the retrenchment is held to be illegal and in support of the said submissions, the learned Counsel appearing on behalf of the management has relied upon the case of Sadanand Patamkar (supra) and two other judgments reported in 2006 (5) SCC 173 and 2002 (3) SCC 473. In view of the recent judgment of the Apex Court, it is no doubt true that merely because the order of retrenchment is held to be illegal, the workmen ipso facto are not entitled to get back wages. Perusal of the material on record indicates that the workmen, in their cross examination, reiterated that they had taken efforts to secure the employment. However, they were not able to get employment. There is no reason to discard or disbelieve the statement made by the workmen. On the other hand, the case of the management has been totally disbelieved by the Labour Court, Industrial Court and the learned Single Judge of this Court. The management has taken a plea that the workman who is junior to Respondent Nos. 1 and 2 herein was not retrenched because the work which was undertaken by Respondent Nos. 1 and 2 herein was in the production department and they were unable to do the work which was being done by the workman who was junior to them. No material has been placed by the management to establish this fact. The Labour Court has disbelieved the case of the management that their production had gone down and, therefore, work was not available. This finding has been confirmed by the Industrial Court. The management has admitted in the Written Statement that no notice of retrenchment was given to the Labour Commissioner, though the record clearly shows that the Respondent Nos. 1 and 2 had completed continuous service of 17 years and 14 years respectively. The appellant paid retrenchment compensation partly for 9 years and 7 years respectively to Respondent Nos. 1 and 2 herein. Even the management had not followed the principle of last come first go and the management had admitted that the junior employee was retained in service. The management also has neither maintained the seniority list nor displayed the seniority list 7 days prior to the issuance of termination letter. The management has raised a false plea that no work was available where, in fact, it was admitted by the witness who appeared on behalf of the management that the Company was still functioning. Considering all these factors, therefore, in our view, the Labour Court was justified in awarding full back wages to the workmen. In view of these factors mentioned hereinabove, the ratio of the judgments on which reliance is placed by the learned Counsel appearing on behalf of the appellant would not apply to the facts of the present case. There is, therefore, no reason to interfere with the order passed by the learned Single Judge. Appeal is, therefore, dismissed.