Bombay High Court
M/S. Bombay Film Enterprises Private ... vs Shri. S.B. Bhagat & Ors on 15 February, 2017
Author: G. S. Kulkarni
Bench: G. S. Kulkarni
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.6235 OF 1997
M/s. Bombay Film Enterprises Private Limited. ] ... Petitioner
Versus
Shri S. B. Bhagat & Ors. ] ... Respondents
Mr. Rohan Cama a/w Ms. Radha Ved i/b Sanjay Udeshi & Co. for
Petitioner.
Mr. K. S. Bapat for Respondent Nos.1 to 11, 15, 16, 20, 23, 24, 25, 28,
31, 32, 36, 39 & 42.
CORAM :- G. S. KULKARNI, J.
RESERVED ON : 09 FEBRUARY 2017
PRONOUNCED ON :- 15 FEBRUARY 2017
JUDGMENT :-
1. This petition challenges an award of the Industrial Tribunal dated 27/08/1997 in Reference (IT) No.68 of 1985, so far as it directs the petitioner to pay interest on the retrenchment compensation.
2. In nutshell, the facts are :-
The petitioner was engaged in the business of film processing in the city of Mumbai and had a film laboratory for this purpose situated at Dadar. Respondent nos.1 to 43 are the workmen who were employed by the petitioner and who claimed to be in the category of permanent workmen doing technical job.
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3. The case of the workers was that in the year 1989, they had joined the Maharashtra General Kamgar Union, a registered trade union. In June 1983, the existing settlements had come to an end as also the same came to be terminated by the union by its letter dated 24/06/1983 and a fresh charter of demand came to be submitted to the petitioner in or around July 1983. This charter of demand was not accepted by the petitioner for the reason of poor financial condition of the company. The petitioner had informed the workmen that it was going through a financial crisis. The petitioner eventually began to abolish posts without notice to the union under Section 9A of the Industrial Disputes Act, 1947 (for short, 'ID Act'), as alleged by the workmen. On 02/05/1984, the petitioner put up on the notice board a seniority list of the workmen. The workmen apprehended retrenchment and protested by their letter dated 28/05/1984. Thereafter on 14/06/1984, after end of each shift, certain group of workmen were called by the respective Department Heads and in the presence of another officer of the petitioner, were given certain amounts of money and asked to sign a receipt for the same. At that time, the workmen were told by the Heads of the respective departments that their services were no longer required and they ought not to report for duty from the following day. In all 60 workmen were called and asked not to report for duties from the following day.
4. The respondents - workmen, in the above situation, approached the Deputy Commissioner of Labour in conciliation proceedings, before whom the petitioner stated that it had retrenched 60 workmen. Out of the said 60 workmen, 17 had settled their claims and left their services. The remaining 43 workmen alleged illegal termination of their services. Consequently, as an industrial dispute had URS 2 of 12 ::: Uploaded on - 15/02/2017 ::: Downloaded on - 16/02/2017 01:10:29 :::
3 WP 6235-97.doc-902 arisen, a reference came to be made by the appropriate Government to the Industrial Tribunal.
5. Accordingly, a statement of claim dated 03/12/1985 was filed by the workmen which was numbered as Reference (IT) No.68 of 1985, inter alia, praying that the termination of the services of the respondents - workmen was illegal and ab initio void and for a further relief of reinstatement with full back wages and continuity of service with all other benefits with effect from 14/06/1984.
6. The petitioner - employer appeared by filing its written statement contesting the claim of the respondent - workmen. In para 12 of the written statement, the petitioner submitted that on 13/06/1984, 60 of the junior most workmen were called by their department Heads and individually offered their legal dues arising out of their retrenchment along with a retrenchment notice. However, none of the said workmen had accepted the same. Therefore, the said workmen were informed that their services were retrenched with effect from closing of working hours of 14/06/1984. Thereafter, 17 of the retrenched workmen realized that the retrenchment was forced upon the management and it was proper and justified and therefore they accepted the notices and collected their legal dues from the petitioner. In para 14 of the written statement, the petitioner stated that the reason for termination was mentioned in the retrenchment notice which was offered to each of the retrenched workmen with their legal dues. In short, the case of the petitioner in the written statement was that the petitioners had followed a lawful procedure, as also paid the workmen their legal dues and the action of retrenchment, according to them, was justified.
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7. The learned Member of the Industrial Tribunal, by the impugned Judgment and Order dated 27/08/1997, after taking into consideration the rival pleas, partly allowed the Reference in the following terms :-
"1. Ref.(IT) No.68 of 1985 is partly allowed.
2. It is hereby directed to the First Party Company to pay the Retrenchment Compensation alongwith interest from the date of the retrenchment at the rate of 12% to the 27 workers who have not collected the dues and the workers who have collected the dues will not be entitled to get any compensation from the First Party Company.
3. It is hereby directed to the Second Party workmen that they should go to the Company and collect their legal dues within 1 month from the date of publication of the Award.
4. It is hereby declared that the First Party Company has complied with the provisions of Sec.25-F, 25-G and 25-H of the Industrial Disputes Act, 1947 and the claim of the workmen of reinstatement and continuity of service with back wages is rejected.
5. The First Party Company is allowed to take back the registers filed by it before this Tribunal and if directed & needed the same be filed before this Tribunal.
6. This Award will take effect after a period of one month.
7. Reference is hereby disposed of."
8. The challenge of the petitioner is limited to the extent of the direction in para 2 of the Award to pay interest at the rate of 12% from the date of retrenchment to the respondents (27 workers) who had not collected their dues. It may be noted that the respondent - workers are not aggrieved by the impugned award and the same is accepted by them.
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9. Mr. Cama, learned Counsel appearing for petitioner, in support of the challenge as raised in the petition, would submit that the respondent workmen, in the statement of claim in para 6, had admitted that, at the outset on 14/06/1984 after each shift-end, certain group of workers were called by the relevant Department Heads of the petitioner and in presence of another officer of the petitioner, were given certain amounts of money and asked to sign a receipt for the same. He, therefore, contends that the payment of retrenchment compensation was offered by the petitioner at the very threshold. He has further drawn the attention of the Court to the specific averments as made by the petitioner in the written statement, in para nos.12 and 14. In para 12, the petitioner referred to the fact of offering legal dues to the workmen for the retrenchment along with the retrenchment notice. In para 14, the petitioner stated that the reason for retrenchment was mentioned in the retrenchment notice which was offered to each of the retrenched workmen along with their legal dues. Mr. Cama would submit that the bona fides of the petitioner were thus clear, namely, to pay the legal dues, that is the retrenchment compensation and that it was some of the workmen who did not accept this compensation.
10. Mr. Cama would then submit that as the amount of compensation which was offered by the petitioner was not accepted by the workmen, the petitioner Company had procured Demand Drafts in favour of the workmen which were forwarded in an envelope, by Registered Post Acknowledgment Due ('R.P.A.D.'). The Demand Drafts were forwarded to each of these workmen. The envelopes, however, were returned with the remark 'not found at the delivery time' and that 27 envelopes with such acknowledgment came to be returned. The same were placed on the record of the Tribunal by the petitioner, to URS 5 of 12 ::: Uploaded on - 15/02/2017 ::: Downloaded on - 16/02/2017 01:10:29 ::: 6 WP 6235-97.doc-902 support its contention, that the petitioner had complied with the legal provisions by offering compensation. Mr. Cama submitted that these facts stand proved in the evidence as recorded before the Tribunal. he refers to the cross-examination of Shri S. H. Naik, the respondents' witness, who admits the fact of return of the envelopes which contained the Demand Drafts. Mr. Cama has drawn attention of the Court to the relevant observations made in the Judgment which records that the petitioner was fair in paying the retrenchment compensation and the observations of the Industrial Tribunal that the petitioner Company had complied with the provisions of Section 25-F, 25-G and 25-H of the ID Act, as also the observations of the Tribunal holding that it was the workmen who had refused to accept the retrenchment compensation as offered by the petitioner as also the petitioner's willingness to deposit the amount of shortfall. Mr. Cama submits that, however, despite all these observations though accepting the contention of the petitioner that the petitioner Company had complied with all the legal provisions namely 25-F, 25-G and 25-H of the ID Act, the Industrial Tribunal made the following observations :-
"...... Being an old reference of 1985 and the amount of compensation was lying with the company, the workmen are entitled to get the interest on the said retrenchment compensation @ 12% and workers are not entitled to any other relief." (Emphasis supplied) It is submitted that these observations consequently form part of paragraph 2 of the operative order of the Industrial Tribunal partly allowing the reference in question. Mr. Cama submits that the observations of the Industrial Tribunal that the amount of compensation was lying with the company, and therefore the petitioner shall pay interest thereon, is factually incorrect, not borne out by the record, inasmuch as, the petitioner had parted with the amount when the URS 6 of 12 ::: Uploaded on - 15/02/2017 ::: Downloaded on - 16/02/2017 01:10:29 :::
7 WP 6235-97.doc-902 Demand Drafts came to be procured for payment ot be made to the concerned workmen and the same were dispatched to the workmen in envelopes sent by R.P.A.D. which were returned by postal authorities, and ultimately placed on the record of the Tribunal. It is submitted that the petitioner thus had parted with the amount on the day the Demand Drafts were drawn for making payment to the workmen, and expended by the Company. It is submitted that having done so, the impugned observation that the amounts are lying with the petitioner and therefore interest is required to be paid thereon, is erroneous and unfounded.
He, therefore, submits that the Writ Petition deserves to be allowed to the extent of the challenge as raised. In support of his submissions, Mr. Cama has placed reliance on the decision of the Supreme Court in the case of The Management of Delhi Transport Undertaking Vs. The Industrial Tribunal, Delhi and another1.
11. On the other hand, Mr. Bapat, learned Counsel for respondents - workmen, does not dispute the factual matrix, that the envelopes containing Demand Drafts, came to be returned and were placed on record of the Tribunal. He, however, submits that nonetheless, the Tribunal is justified in making the observations as made in para 38 and as directed in para 2 of the operative order of the Industrial Court and accordingly supports the impugned order.
12. Before proceeding to consider the rival pleas, it may be stated that some of the respondent-workmen, stand deleted in view of the orders passed by this Court and this Writ Petition would survive only against respondent nos.1 to 11, 15, 16, 20, 23, 24, 25, 28, 31, 32 & 36.
1 AIR 1965 SUPREME COURT 1503
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13. On an anxious consideration of the arguments and perusal of the documents, as also the impugned Judgment, I am of the opinion that there is much substance in the contentions as urged on behalf of the petitioner. There is no dispute that the petitioner had resorted to retrenchment of the workmen and it appears that it was due to its deteriorating financial condition. The Tribunal has observed that the petitioner Company is not functioning and it has closed its operations and therefore, there was no question of considering reliefs, inter alia, of reinstatement of the workmen.
14. Be that as it may, the issue for consideration in this petition is limited as is clear from prayer clause (a) of the petition insofar as the Industrial Tribunal has directed the petitioner to pay interest at 12% on the retrenchment compensation. It appears to be an admitted position on record that the petitioner Company, at the threshold, had offered legal dues to the workmen on 14/06/1984 when the petitioner first initiated the action of retrenchment. However, the same was not accepted by the concerned workmen and ultimately the petitioner Company took steps to make payment of the retrenchment compensation, to these workmen by sending Demand Drafts in envelopes forwarded by registered post A.D. The observations in this regard are made in para 31 of the impugned judgment which reads thus:-
"In reply, it is stated on behalf of the First Party Company that the Company's Personal Officer had personally offered due to the concerned workers on 13.6.84 & the notice of retrenchment, mentioning the reasons for retrenchment alongwith notice-pay and retrenchment compensation in cash, but all of them have refused to accept the same and wereupon the remark to that effect on the reverse of the notice of retrenchment. Thereafter, the Company sent letters of retrenchment to all the concerned workmen alongwith URS 8 of 12 ::: Uploaded on - 15/02/2017 ::: Downloaded on - 16/02/2017 01:10:29 ::: 9 WP 6235-97.doc-902 Bank Drafts for the amounts mentioned in the respective letters by Registered A.D.Post again as a single transaction but the same were also returned back to the company and that has been filed on record Exh.C-12 on 29.6.1985. Ld. Advocate appearing for the Company has pointed out from the evidence of Shri S.H.Naik that Company called workmen of each shift and asked them to sign on paper and also asked them to accept the dues and they were told that their services were not required and Company has called 60 employees individually on 14th June 1984. On 14th June 1984, nobody has accepted the letter and dues. I have gone through the said evidence and I find that the UW-1 has accepted that the Company's officer had called and offered the dues. It is stated on behalf of the first party company that refusal to accept the amount would not possible to be due to the alleged short payment as now claimed, since he has admitted that the amount offered was not known to him. It has been further pointed out from the cross-examination of Shri S.H.Naik, on 13.6.1984, Company offered the money and told the workers do not report on duty from 16.6.84.
During the cross-examination, the UW-1 has also admitted the envelopes unopened and the said envelopes bears the residential address. There was a remark on the said envelope "not found" at delivery time". It is further stated that 27 envelopes with A.D. cards are placed on record and therefore Company has complied the legal provisions by offering the retrenchment compensation."
The above factual observations are not disputed by the respondents. It is thus clear that the petitioner, in procuring the Demand Drafts for making payment to the concerned workmen, had parted with the amounts. As the Demand Drafts were not accepted / encashed by the workmen, the returned envelopes containing the Demand Drafts were placed on record of the Industrial Tribunal. These facts clearly elicit that the petitioner had discharged its liability to make payment of the retrenchment compensation, that is when the petitioner parted with the amounts by drawing Demand Drafts in favour of the workmen and when those Demand Drafts were offered and were sought to be handed over to the workmen when the envelopes were forwarded by registered post URS 9 of 12 ::: Uploaded on - 15/02/2017 ::: Downloaded on - 16/02/2017 01:10:29 ::: 10 WP 6235-97.doc-902 A.D. On the happening of this incident, it can be indubitably inferred that the petitioner no more retained the said amounts. In view of this clear position, the observation of the Industrial Tribunal that the amount of compensation was lying with the Company, cannot be held to be correct and such observation would, in fact, lead to a perversity. Consequently, the observations of the Industrial Tribunal as contained in para 31 and as noted above to the extent that the respondents workmen are entitled to receive interest on the compensation, in my view, cannot be sustained. Thus, the impugned Award directing the petitioner Company to pay interest cannot be sustained.
15. The learned Counsel for petitioner is justified in placing reliance on the decision of the Supreme Court in the case of The Management of Delhi Transport Undertaking Vs. The Industrial Tribunal, Delhi and another (supra) in which the Supreme Court held that the employee Hari Chand did not purposely receive the wages offered to him by the memorandum informing him of his dismissal from service because he intended to make a complaint against the Undertaking. Their Lordships observed that the amounts being offered to him, the Tribunal was wrong in holding that there was no tender of wages as required by Section 33 of the ID Act. It was observed that as the tender of the amount was definitely made before the order of disposal became effective and the wages would certainly have been paid if Hari Chand shall had asked for them, there was no failure to comply with the provisions of Section 33 (2)(b) of the ID Act. The observations would certainly support the case of the petitioner as in present case, the petitioner had offered payment, which was initially refused by the respondents workmen and thereafter the Demand Drafts having been issued in favour of each of these workmen, again the same were not URS 10 of 12 ::: Uploaded on - 15/02/2017 ::: Downloaded on - 16/02/2017 01:10:29 ::: 11 WP 6235-97.doc-902 encashed by these workmen nor they intended to do so before the Industrial Tribunal.
16. Before concluding, I may observe that this is an unfortunate case where the workmen although thought it appropriate to litigate, the Demand Drafts which were drawn in favour of each of these workmen by the petitioner, remained unencashed and ultimately found their grave on the record of the Tribunal. Things appeared to be quite insensitive also to the basic human considerations of the monetary needs of the workmen. The workers, at no point of time, nor the Tribunal, felt it appropriate to do something about the amount when the issues were alive and that on some occasion, that could be utilized. Today we are in the year 2017, about 33 years after their Demand Drafts were drawn and made payable.
17. It is a wrench and an ordeal for a judicial eye to witness this sad situation. The amount at the relevant time was a substantial amount by which the workmen would have definitely benefited. However, today, after 33 years everyone has become helpless. The workers took recourse to litigation to achieve a benefit which, probably, on account of their resentful approach or misdirection, appear to have resulted into a disadvantage, for which they blame themselves.
18. Resultantly, though the principal amount itself was not claimed by the respondents workmen, the challenge of the petitioner to the direction to pay interest, however, needs to succeed and to that extent, the petition deserves to be allowed. It is accordingly allowed in terms of prayer clause (a) which reads thus :-
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"(a) that this Honourable Court be pleased to issue a
writ of certiorari or a writ in the nature of certiorari or any other writ, order or direction under Articles 226 and 227 of the Constitution calling for the record and proceedings of Reference (IT) No.68 of 1985 and after going through the same quash and/or set aside the impugned award of the Industrial Tribunal dated 27.8.1997 so far as it directs the petitioner to pay interest."
19. There shall be no order as to costs.
ig (G. S. KULKARNI, J.)
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