Gujarat High Court
Vijay Fire Vehicles And Pumps Limited vs Amarnath Mahavirsing & 4 on 17 April, 2017
Author: G.R.Udhwani
Bench: G.R.Udhwani
C/SCA/6211/2016 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 6211 of 2016
With
SPECIAL CIVIL APPLICATION NO. 6212 of 2016
TO
SPECIAL CIVIL APPLICATION NO. 6262 of 2016
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE G.R.UDHWANI
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1 Whether Reporters of Local Papers may be allowed to see YES
the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the fair copy of the NO
judgment ?
4 Whether this case involves a substantial question of law NO
as to the interpretation of the Constitution of India or any
order made thereunder ?
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VIJAY FIRE VEHICLES AND PUMPS LIMITED....Petitioner(s)
Versus
AMARNATH MAHAVIRSING & 4....Respondent(s)
==========================================================
Appearance:
MR DIPAK R DAVE, ADVOCATE for the Petitioner(s) No. 1
ADVOCATE NOTICE SERVED for the Respondent(s) No. 1
MR BIPIN BHATT, AGP for the Respondent(s) No. 3 - 5 in SCA Nos.6211 of 2016 to 6230 of
2016.
MR BHARGAV PANDYA, AGP for the Respondent(s) No.3 - 5 in SCA Nos.6231 of 2016 to
6262 of 2016.
RULE SERVED BY DS for the Respondent(s) No. 2
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CORAM: HONOURABLE MR.JUSTICE G.R.UDHWANI
Date : 17/04/2017
ORAL JUDGMENT
1. In this group of petitions the petitioner challenges the order dated 27.3.2015 passed below Exh.11 in various Page 1 of 9 HC-NIC Page 1 of 9 Created On Mon Aug 14 07:27:47 IST 2017 C/SCA/6211/2016 JUDGMENT references. Vide said application Exh.11 a preliminary objection was raised against the maintainability of the reference principally on the ground that the workmen had earlier settled the dispute and accepted the specified amount during the pendency of the proceedings under Payment of Wages Act. The said contention of the petitioner came to be rejected while distinguishing the two proceedings i.e. one under the Payment of Wages Act and the other for breach of Section 25F of the Industrial Disputes Act (for short "I.D. Act").
2. When the petition came up for hearing before this Court, the following facts were noticed from the submissions made by the learned counsel for the petitioner.
"2. By the impugned order, the Labour Court has dismissed the application filed by the present petitioner, which was to the effect that the Reference in question be rejected in view of the following facts.
2.1 Earlier, dispute was raised by the concerned workmen, claiming all benefits, including closure compensation and gratuity. The said dispute was resolved amicably and all the workmen had accepted the amount.
2.2 Pursuant to the above settlement, the Labour Court had disposed of the Payment of Wages Application No.3 of 2006 on 02.10.2006.
2.3 Subsequently, dispute is Referred to the Labour Court for adjudication, by the Appropriate Authority vide order dated 06.032007.
2.4 It is the case of the petitioner that, in view of
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the earlier proceedings and the settlement, the Reference itself was incompetent, which was also challenged before this Court in the group of petitions being Special Civil Application No.7432 of 2008 and cognate matters. In the said petition, this Court had, vide order dated 15.05.2008 reserved liberty to the petitioner to raise the preliminary issue before the Labour Court, which the petitioner had done in the application Exh.11 which is rejected by the Labour Court.
3. Having heard learned advocate for the petitioner and having gone through the material on record, this Court finds prima facie that, the Labour Court has committed error by entertaining the Reference on merits, by rejecting the application Exh.11. The receipt of the concerned workman dated 07.09.2006 is on record (Annexure-C at page14). The same was towards full and final settlement of the dispute in Payment of Wages Application No.3 of 2006, wherein the alleged date of termination was shown to be 05.05.2006. The said application was dated 10.05.2006. The receipt is dated 07.09.2006. The statement of claim in the Reference in question is dated 11.03.2008 wherein also the alleged date of termination is shown to be 05.05.2006. From the above, it transpires that for the alleged date of termination being 05.05.2006, after having accepted gratuity and closure compensation way back in the year 2006, the proceedings in the year 2008 claiming reinstatement, prima facie is not only for non-existent dispute but also shows lack of bona fide on the part of the workman."
3. Rule alongwith the notice for interim relief was issued which was made returnable on 13.6.2016 and in the meanwhile the proceedings before the Labour Court qua the reference in question came to be stayed. It appears that pursuance to the service of the notice the workmen appeared through learned counsel Mr. P. C. Chaudhari. Adjournment was sought and matter was adjourned from time to time.
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Eventually on 8.3.2017 the learned counsel Mr. Chaudhari pleaded no instructions and stated that the notice of retirement from the matter to the union through Registered Post A.D. was served, and in view of the said development, notice was issued to the workmen to make alternative arrangement returnable on 5.4.2017. No appearance is made by the workmen so far.
4. Learned counsel for the petitioner has taken this Court through several documents annexed with the petition to inter- alia point out the claim of workmen by different designations under different heads including notice pay, closure compensation, gratuity, privileged leave, sick leave, bonus and contended that to each of the 53 workmen the amount has been paid during the pendency of the proceedings under the Payment of Wages Act in lieu of termination of their services as acknowledged by the workmen. The learned counsel submitted that even the notice pay and the closure compensation and gratuity indicating the cessation of the employer and the employee relationship were claimed by the workmen with open eyes and came to be paid by the employer without any demur. It was contended that by demanding the closure compensation and gratuity the workmen were alive to the fact that on acceptance of such a demands they would get compensated for the closure of the company as would get their retiral dues signifying snapping of employer employee relationship and thus having snapped such this upon full and final settlement of their dues, there existed no industrial dispute.
It was also contended that as such the compensation Page 4 of 9 HC-NIC Page 4 of 9 Created On Mon Aug 14 07:27:47 IST 2017 C/SCA/6211/2016 JUDGMENT contemplated under Section 25F and Section 25FFF is provided under the law for retrenchment and closure of the establishment respectively. It was argued that Section 25FFF contemplates compensation and under Section 25F for the `same' termination, there cannot be double compensation; one under Section 25FFF and another under Section 25F. It was contended that thus the industrial dispute raised by the workmen before the Labour Court was apparently a dishonest dispute, and ought not to have been referred to the Labour Court by the appropriate government without verifying the facts and without ascertaining as to whether the live industrial dispute existed on the date of reference. In the submission of the learned counsel for the petitioner, as such, no live industrial dispute existed once the workmen had accepted with open eyes the specified amount towards full and final settlement. It was argued that the workmen had eventually acknowledged the said receipt by consciously stating that no other proceedings are now pending against the employer.
5. While no appearance is made by the workmen, as indicated above, the learned AGP would urge to sustain the reference, as, in his submission, reference was properly made by the appropriate government after noticing the complaint as regards breach of Section 25F of the I.D. Act.
6. Having considered the rival contentions and having perused the averments made in the petition and the relevant documents, it is evident that full and final settlement was arrived at between the petitioner and the 53 workmen during the pendency of the proceedings under the Payment of Wages Act. The amounts under various heads came to be paid to the Page 5 of 9 HC-NIC Page 5 of 9 Created On Mon Aug 14 07:27:47 IST 2017 C/SCA/6211/2016 JUDGMENT said workmen which included closure compensation. On closure of the undertaking employing less than 100 workmen the compensation is payable under Section 25FFF of the I.D. Act. The provision, inter-alia, contemplates the compensation in accordance with the provisions of Section 25F as if the workmen had been retrenched. There cannot be simultaneous claim under Section 25F and Section 25FFF for the same action of termination as the workmen can be compensated for termination of service either for retrenchment if the undertaking continues or for closure on the closure of the undertaking. Be it closure compensation under Section 25FFF of the I.D. Act, or retrenchment compensation under Section 25F compliance of one of the two provisions would result into legal snapping of ties of employer and employee. Effect of acceptance of either of the compensation is termination of employment. By making a demand for the closure compensation and accepting the demand thereof, it cannot be disputed that they have been compensated either for closure under Section 25FFF or for retrenchment under Section 25F of the I.D. Act. Therefore the claim by the workmen in the reference in question for the compensation under Section 25F of the I.D. Act was nothing but a dishonest claim. The Labour Court seems to have fallen into a serious error in entertaining the claim under Section 25F while ignoring that the workmen were already compensation for the `same' termination under Section 25FFF. The Labour Court could have informed itself by reading the two provisions which clearly indicate that the closure compensation is nothing but the compensation akin to retrenchment of the workmen.
7. The learned AGP, however, strenuously relied upon the averments made by the workmen in its statement of claim Page 6 of 9 HC-NIC Page 6 of 9 Created On Mon Aug 14 07:27:47 IST 2017 C/SCA/6211/2016 JUDGMENT wherein a reference has been made to the proceedings under the Payment of Wages Act and assertions are made that the said payment is illegally made to the workmen and that even after making such payment, the fresh employees are employed and the factory is functioning.
Learned AGP contended that in view of the averments made in the claims settlement, the case is required to be established by evidence by both the sides before the Labour Court.
8. As against that, the learned counsel for the petitioner invited attention of this Court to the intimation given by the petitioner under Gujarat Factory Rules, 1963. Learned counsel for the petitioner contended that this was nothing but an intimation in compliance with Section 25FFF of the I.D. Act.
9. There is an evidence on record indicating that the intimation for closure in compliance of Section 25FFF of the I.D. Act was given by the petitioner to the competent authority. The case of the workmen in the statement of claim, inter-alia, was that the payment made to them during the pendency of the proceedings under the Payment of Wages Act was made to them to discourage the union from continuing the union activities and that the said action of payment was illegal and unjustified. If that was so, as rightly argued by the learned counsel for the petitioner, the workmen ought to have refunded the amount received by them by settlement in the Lok Adalat during the pendency of the payment of wages application. That was not done and thus the industrial dispute raised by them was nothing but a dishonest dispute. The Page 7 of 9 HC-NIC Page 7 of 9 Created On Mon Aug 14 07:27:47 IST 2017 C/SCA/6211/2016 JUDGMENT workmen also claimed in the statement of claim that after termination of their services, the manufacturing activity was continued by the petitioner and new employment has been made. While the said fact is belied by documentary evidence in the nature of intimation under Section 25FFF of the I.D. Act; even if that was so, the workmen ought to have approached the petitioner with refund of amount paid to them under various heads and ought to have raised the demand of their reinstatement. That apart, the appropriate government as well as the labour court failed to take into consideration the relevant material signifying the payment under various heads including the closure compensation. The documents indicated the non-existence of the industrial dispute. This was therefore a fit case where the appropriate government and the labour court ought to have addressed themselves about the existence of the industrial dispute on the lines indicated in Prabhakar v. Joint Director, Sericulture Department and another [(2015) 15 SCC 1].
10. Thus when the facts suggest that the industrial dispute does not exist and the exercise of the powers by the labour forum would be futile, this Court under Article 227 of the Constitution of India would curtail the jurisdiction of the Labour Court for correcting the serious jurisdictional error.
11. In the above circumstances, the petitions deserve to be allowed. Accordingly the petitions are allowed. The impugned order aforestated is quashed and set aside and the application moved by the petitioner raising preliminary objection is accepted, and in each of the cases the reference is ordered to be dismissed. Rule is made absolute with no order as to costs.
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