Delhi District Court
Mrs. Raj Arora vs Travel Corporation (India) Ltd on 7 October, 2016
IN THE COURT OF SHRI UMED SINGH GREWAL
PO:LCXVII, ROOM NO. 22 : KKD COURTS :DELHI
ID No.3781/16 (Old No. ID 101/10/08).
Unique ID No.02402C0800382008.
In the matter of:
Mrs. Raj Arora
R/o A2/12, Pankha Road, Janakpuri, New Delhi.
............. Workman
Versus
Travel Corporation (India) Ltd.
C35, Connaught Place, New Delhi110001.
..............Management
DATE OF INSTITUTION : 24.10.2008.
DATE ON WHICH AWARD RESERVED : 03.08.2016.
DATE ON WHICH AWARD PASSED : 07.10.2016.
A W A R D :
1. This is a direct industrial dispute filed by the workman
under the Industrial Disputes Act, 1947 (hereinafter referred as "the
Act") for reinstatement with continuity of service and back wages.
2. Claimant's case is that management is a company
incorporated under the provisions of Companies Act, 1956 in the
year 1961 as a Private Limited Company. It was later on converted
into a limited company. It has 25 offices in India and 11 offices
abroad having strength of about 2000 employees. She was employed
ID No.3781/16. 1/39
with it on 13.11.1978 as Stenographer. She was a permanent
employee and as per the terms and conditions of service, she was to
retire at the age of 55 years. Her services were terminated on
29.04.2008. At the time of illegal termination, she was made to do
clerical duties in contradiction to her conditions of employment.
In November, 2006, Thomas Cook India Limited, a public limited
company incorporated under the provisions of Companies Act, 1956,
purchased 100% equity shares of the management due to which the
management became a wholly owned subsidiary company of Thomas
Cook India Limited. The management is involved in the business of
Travel and Travel related services which includes booking of air
tickets, Railways tickets, road tickets, hotels, providing of transport
service, staff guidesin bound and out bound, and all other facilities
related to tours and travels to its domestic and international
customers. The management is a profit making company and has
been paying around 20% bonus every year to all its employees. It
has been regularly employing more and more employees in view of
the growth of its business. Various departments / divisions of the
management such as ticketing, railway, traveling, booking account
etc. were indispensably interrelated to each other and work of one
department was dependent on the work of other department and in
this way, all departments clubbed together work as a single unit i.e.
an Industrial Establishment. None of the department was severable
ID No.3781/16. 2/39
and all the departments put together were one integrated unit and
part and parcel of the same Industrial Establishment i.e. management.
There was a complete functional integrity amongst departments and
the terms and conditions of the service of different departments
throughout the country was uniform and they were governed by the
same service rules. There was no division whatsoever of any nature
in the entire Industrial Establishment. The employees of one
department can be transferred to another department and division of
the company and group company.
On 19.04.2005, the management through its Vice
President, Finance and Administration, entered into an undertaking,
terms and conditions of which were effective from 01.06.2004 and
the same was valid for a period of three years ending May, 2007.
The management and union / employees were bound to follow the
same. It was signed by the Chairman of the union Sh. N. Kapoor for
employees. When Thomas Cook India Limited purchased the
business of management in November, 2006, the entire ownership
and management of the management was transferred to it. But even
after change of ownership in its favour, the Thomas Cook India
Limited continued entire business in the name of management.
Nothing was changed by way of aforesaid business deal. There was
no change in the terms and conditions of service of the employees.
The understanding / agreement dated 19.04.2005 was also not
ID No.3781/16. 3/39
disturbed by both parties and hence, the settlement remained in force.
After purchase of 100% shares of the management, the acquirer,
Thomas Cook India Limited, assured employees that everything
would be very smooth and no prejudice would be caused to any of
them. It was assured by the acquirer that it would retain old work
force as it would help the company to make better growth and profits.
It had sought cooperation of the employees which was given to them
whole heartedly.
The workman was appointed as Stenographer in Travel
& Tours Department with Travel Corporation (India) Private Limited
(TCI) which was the biggest travel agency of India. In 2007, it was
acquired by Thomas Cook, the travel agency based in UK. After
serving TCI for nearly six years, she was illegally dismissed on
05.07.1984. After a long legal battle, an award was passed in her
favour on 06.10.1994 by POLCI, Tis Hazari Court, Delhi for her
reinstatement with full back wages. The writ petition against award
moved by management on 04.03.1998, was dismissed by Hon'ble
High Court on 13.05.1998. Thereafter she rejoined the management
on 28.02.1999. In order to circumvent the order passed by the
Labour Court, the management conspired against her to harass at
workplace so that she was left with no option but to leave the
management herself. She was demoted from Stenographer to Clerk.
On 10.03.2008, she was elected as a Vice President of TCI Workers
ID No.3781/16. 4/39
Union in annual elections held on 09.03.2008. On 29.04.2008, her
services were terminated with immediate effect on payment of some
closure compensation. The reason stated in termination letter was
that the Transport / Railway Divisions of the management were no
longer economically viable and that it had been decided to close
them. Ms. Maharukh M. Dosabai was not the competent person to
terminate her service as she was in the employment of Thomas Cook
India Limited, the holding company. The submission of company in
letter of termination dated 29.04.2008 that transport / railway
division was no longer economically viable was factually incorrect.
It was wrongly stated in letter that the said division has been closed
w.e.f. 29.04.2008.
3. Written statement is to the effect that termination of
service of workman was due to closure of Transport / Railway
Divisions / Departments. She was working with management as a
Steno (Grade1) in Railway Department.
The management is primarily and predominantly
engaged in the business of travel related service to its clients such as
Leisure Holidays, Outbound Holidays, Inbound Holidays, corporate
booking and ticketing services like Visas, Passports etc. The
claimant was working in Transport / Railway Department which did
not form part of core activities of the management. The Railway
ID No.3781/16. 5/39
Department used to cater to corporate railway booking requirements
and there was no significant business from other sources. The
Railway and Transport Departments were making huge losses and
were, thus, not economically viable. Due to that reason, the company
took a policy decision to close down those departments / divisions all
over India. Accordingly, the Transport Departments at Delhi, Agra
and Patna were closed on 29.04.2008. The Railway Departments
were also closed down at Delhi, Agra, Lucknow, Patna, Ahmadabad,
Baroda & Surat and services of the workers were terminated as a
result of closure of those departments in accordance with Section 25
FFF of the Act. The service of the claimant was also terminated
vide order dated 29.04.2008. While terminating her service, she was
informed that the Transport and Railway Divisions were no longer
economically viable and as such her service was being terminated
w.e.f. 29.04.2008. The management had offered her money
equivalent to one month salary in lieu of notice as well as closure
compensation at the rate of 15 days salary for each completed year of
service with management. Her other dues like gratuity etc. were
also paid to her which were duly accepted by her by way of cheque
handed over to her on 29.04.2008 itself. In this way, the claimant's
service was terminated as a result of closure of department after
paying her requisite compensation under Section 25FFF of the Act.
The Railway and Transport Departments were separate
ID No.3781/16. 6/39
and independent entities for other departments. There was no
functional integrity between them. The very fact that the company
continues to carry on its business even after closure of those
departments shows that there was no interdependence and functional
integrity. Those departments always constitute separate entity. All
the workers were exclusively employed in those departments. Those
workers including the claimant were never transferred to any other
department during tenure of their service.
The management was having cordial relations with the
union. It used to help union to resolve all the grievances and issues
of the workers by entering into amicable settlement with union. It
had no ill will against union or its members. The claimant's
membership with the union had nothing to do with termination of
her service. Ms. Maharukh Dosabhai was duly empowered by the
Board to terminate service of the workman on the closure of two
departments.
The management had not engaged any employee upon
termination of service of claimant. It did not outsource any work and
so, performance of that work under the direct control and supervision
of the company, does not arise.
4. Following issues were framed on 06.01.2009:
1. Whether the services of the workman were terminated
illegally and unjustifiably?
ID No.3781/16. 7/39
2. As per terms of reference.
5. In order to substantiate the case, the claimant tendered
here affidavit in evidence as Ex. WW1/A mentioning all the facts
stated in the statement of claim. She relied upon following
documents:
1. Ex.WW1/1 is appointment letter dated 13.11.1978.
2. Ex. WW1/2 is award dated 06.10.1994 passed by Sh. J.P.S.
Malik, the then POLCI.
3. Ex. WW1/3 is order dated 13.05.1998 passed by Sh. S.K.
Sarvaria, the then POLCII.
4. Ex.WW1/4 is joining letter dated 25.02.1999 sent by
management to claimant.
5. Ex. WW1/5 is list of workers of management showing their
designation.
6. Ex. WW1/6 dated 31.08.2004 is offer letter of management.
7. Ex. WW1/7 dated 08.12.1999 is letter of management.
8. Ex. WW1/8 dated 12.08.2000 is another letter of management.
9. Ex. WW1/9 dated 17.07.2000 is transfer letter of management.
10. Ex. WW/10 dated 20.07.2004 is acceptance letter by claimant.
11. Ex. WW1/11 dated 21.07.2004 is reply of the management to
Ex. WW1/10.
12. Ex. WW1/12 dated 16.08.2004 is advisory letter.
13. Ex. WW1/13 dated 20.08.2004 is a warning letter.
14. Ex. WW1/14 dated 23.08.2004 is reply to letter dated
21.07.2004.
ID No.3781/16. 8/39
15. Ex. WW1/15 dated 27.09.2004 is reply by claimant to the
management.
16. Ex. WW1/16 dated 08.10.2004 is reply of management.
17. Ex. WW1/17 dated 23.11.2004 is reply of management.
18. Ex. WW1/18 dated 28.11.2005 is letter written by claimant to
Vice President of management.
19. Ex. WW1/19 dated 22.12.2005 is reminder by claimant to Vice
President of management.
20. Ex. WW1/20 dated 27.02.2006 is reply of management.
\
21. Ex. WW1/21 dated 18.03.2006 legal notice.
22. Ex. WW1/22 dated 24.03.2006 is reply of management.
23. Ex. WW1/23 dated 01.05.2006 is another demand notice.
24. Ex. WW1/24 dated 04.12.2006 is letter by Labour Office to
claimant.
25. Ex. WW1/25 dated 29.04.08 is her termination letter.
6. WW2 Sh. Jagdish Narayan deposed that Travel
Corporation (India) Pvt. Ltd. Workers Union was formed in 2004 and
was registered on 21.04.2004 under Trade Union Act, 1926.
Initially, there were only 20 members but its strength increased to 67
later. He was Chairman of the union and claimant was its member.
That union was the sole union recognized by the management. The
management entered into settlement / agreement with that union on
19.04.2005 and 03.01.2008. The terms and conditions entered into
the settlement are binding not only upon the workers but also upon
ID No.3781/16. 9/39
the management. The union had submitted a general demand notice
to the management on 21.06.2004 and when the management did not
file reply to the notice, it was constrained to file a claim petition
under Section 10 of the Act before Assistant Labour Commissioner,
Kasturba Gandhi Marg on 19.07.2004. The management called a
meeting of the staff members on 17.07.2004 vide notice dated
16.07.2004 regarding wage revision. No discussion was held in the
meeting but the management started putting pressure on the members
to sign blank sheets and due to that reason, the union had filed a
complaint in that regard with the police on 21.07.2004. After a lot of
discussion and negotiations held between the management and union
on the advise of Assistant Labour Commissioner, both parties
hammered out a settlement effective for three years from 01.06.2004
to 31.05.2007. After settlement, a joint application was filed before
Assistant Labour Commissioner for recording settlement and closure
of dispute.
He further deposed that the management is a profit
making company and despite it, it sold 100% shares in 2006 to M/s.
Thomas Cook India Ltd. at a very high premium of Rs.200/ crores.
Initially, the relationship between new management and workers /
union was cordial, but slowly and gradually, the management, under
the instruction of holding company i.e. Thomas Cook India Limited,
started discriminating members of the union. The unionized
ID No.3781/16. 10/39
employees were initially advised to leave the membership of the
union for better future in the company. When they did not budge,
the management started coercing and putting pressure on them.
WW2 further deposed that the union, through its executive members,
submitted charter of demands to the management on 25.02.2007 for
the next term and requested to initiate discussions, but the
management did not respond. In the meantime, the management,
with a view to dislodge the union, increased the wages of large
number of employees leaving aside all active members of the union.
In this way, the management had shown favour and partiality to one
set of workers regardless of merit. There was a lot of resentment
amongst members of the union due to discriminatory approach of the
management. They wanted to go on strike. After conciliation
proceedings, a memorandum of settlement was entered into between
the workers represented by him through union as Chairman and the
management on 03.01.2008 which was signed by Sh. Suryanarayan
and Ms. Mahrukh M. Dosabai on behalf of management as
authorized representatives. The memorandum of settlement was
registered in Settlement Register at serial No. 2 on 16.01.2008. The
salary of unionized employees was made at par with nonunionized
employees on the strength of the settlement dated 03.01.2008. Prior
to entering into memorandum of settlement on 03.01.2008, many
proposals put forth by the management were discussed. There was
ID No.3781/16. 11/39
no proposal by the management to reduce the workforce or to close
any department. During the whole discussion, there was never any
murmur that the management was contemplating to reduce the
existing workforce or it was intending to close any department. He
further deposed that the management started threatening workers for
termination of their job. They were left with no alternative than to
knock at the door of labour department. Accordingly a complaint in
that regard was made before Assistant Labour Commissioner, K.G.
Marg, New Delhi on 25.04.2008. During the pendency of that
complaint, several workers were terminated by the management on
29.04.2008 at around 5 p.m by Ms. Maharukh M. Dosabai claiming
herself to be the authorized signatory of management. No employee
was in excess in any of the department. No department was running
into losses. In fact, after removal of employees, the management
outsourced the Railway and Transport Department to private vendors
and contract employees.
7. The management examined only one witness, namely,
Sh. Sanjay Dhruga, Associate Vice President, Leisure Travel
(inbound).
He deposed that claimant was working with the
management as a Steno (Grade 1) in the Railway Department.
He further deposed that the company was engaged
ID No.3781/16. 12/39
primarily and predominantly in the business of travel related service
to its clients such as Leisure Holidays, Outbound Holidays, Inbound
Holidays etc. The Railway and Transport Departments were making
huge losses and were, thus, not economically viable. The company
took a policy decision to close down those departments all over
India. Accordingly, the Transport Departments at Delhi, Agra and
Patna were closed on 29.04.2008. The Railway Departments situated
at Delhi, Agra, Lucknow, Patna, Ahmadabad, Baroda & Surat were
also closed down and services of the employees working in those
departments were terminated due to closure in accordance with
Section 25FFF of the Act.
He further deposed that claimant was duly paid one
month's salary in lieu of notice as well as closure compensation at the
rate of 15 days salary for each completed year of service with
management in accordance with Section 25FFF of the Act. All legal
dues including gratuity etc. were also paid to her.
MW1 further deposed that the claimant had duly
accepted the demand draft of Rs.4,55,475.00 towards notice pay,
closure compensation and other dues in full and final settlement. That
demand draft was handed over to her alongwith letter of termination
dated 29.04.2008.
MW1 further deposed that after closure of the
department, it did not engage any of the employees whose services
ID No.3781/16. 13/39
stood terminated as a result of closure. The closure of the
departments was not actuated by any mala fide or extraneous
considerations. The management is legally entitled to organize / re
organize its business. It was also entitled in law to reduce the surplus
workforce and to retrench the workers working in excess numbers.
The management never made any commitment that it would not
close down its any of the department or that it would not retrench the
surplus workforce. The profitability of the company has no
relevance. The issue of reduction of workforce or closure of any
department was neither raised nor discussed in the meeting held with
the union and due to that reason even no passing remark was made in
the settlement. Settlement dated 03.01.2008 is no bar against closure
or retrenchment. About the complaint dated 25.04.2008 by the
union, he deposed that such complaint was never filed in the Labour
Department. Due to that reason, no dispute between the workers and
the management was pending when the services of the claimant came
to an end. Ms. Maharukh M. Dosabhai was fully competent to sign
the termination letter as the Board of Directors of Travel Corporation
(India) Limited had duly empowered her to issue termination letter.
The Resolution Ex. MW1/1 dated 01.04.2008 proves that fact.
He next deposed that in case of inbound customers who
come from outside India to visit India, the company offers them
services like hotel accommodation, sight seeing facility and local
ID No.3781/16. 14/39
travel. These services are provided based on the customer's
individual requirements. The transport department had a fleet of
buses, mini coaches and multi utility vehicles for servicing the
customers as and when required. When the requirement exceeded
the capacity of servicing internally, the management used to hire
vehicles from various service providers. As most of the customers
were from outside India, the bus, mini coaches etc. which were more
than 3 years old, were not used for serving as they used to demand
brand new vehicles. Due to that reason, the vehicles which were
more than 3 years old become unusable leading to loss on account of
obsolescence and higher depreciation. In this background, it was
decided to close the transport department as the accumulated losses
for the last three years was very high which the company could not
afford to take. After closing down of the transport department, the
management started arranging vehicles from service providers. Such
service is provided by former drivers of the management whose
services were also terminated as a result of closure of transport
department. Those drivers became entrepreneurs had started their
own independent business of transportation after purchasing old
vehicles from the company.
About Railway Tickets, MW1 deposed that the company
used to provide tickets to customers on their request. Whenever
there was request, the Railway Department employee would go to the
ID No.3781/16. 15/39
reservation counter of the Railway Station, would stand physically in
queue and book the tickets. The Railway Department used to take
help of outside vendors for booking of railway tickets whenever it
was not able to manage booking on account of high volumes of
booking. However, due to advancement in technology, the Indian
Railways has opened the website www.irct.co.inn where one can
book railway ticket anywhere in India by sitting in front of a
computer. Due to that reason, the earlier system of physically
booking railway tickets one was rendered commercially unviable and
redundant. Due to technical advancement, the customers started
booking tickets themselves instead of asking the management to do
so. Moreover, rail travel by the corporate customers is very low now
a days on account of low cost airlines. In case, a low cost airlines
does not fly to a particular destination, the management encourages
its customers to book rail tickets themselves by using IRCTC portal
(www.irctc.co.in). If any of the customer is unable to book ticket
from the site of Indian Railway, the management helps him by
booking his tickets from outside vendor
Issue No. 1
8. Ld. ARW argued that service of the claimant was
terminated by management vide letter dated 29.04.2008 mentioning
the reason as closure of Railway / Transport Departments. There
ID No.3781/16. 16/39
was a settlement between the management and union on 03.01.2008.
At the time of entering into that settlement, there was no whisper or
discussion from the side of the management that it was going to close
any of its department. In fact, the Railway and Transport
Departments have not been closed. The claimant and other workers
have been dismissed from service because they were members of the
union. He further submitted that as per settlement Ex. WW1/1 dated
03.01.2008 valid upto 30.04.2010, the management was duty bound
to protect the interest of the workers. There was no clause in
settlement deed regarding closure of any department and hence the
management cannot close any of its activity. Moreover, there was no
reason to close the department as the management was running in
huge profits in December, 2007. He next argued that termination
letters have been signed by Ms. Maharukh M. Dosabai who was not
employee of management. Rather, she was employee of M/s. Thomas
Cook India Ltd. and hence she was not competent to terminate the
service of the claimant. The last argument is that even if it is
presumed that the management has closed down the Transport and
Railway Departments, it should have absorbed the claimant and other
employee in other departments as their job, as per settlement dated
03.01.2008, was transferable.
Ld. ARM admitted that there was no discussion from the
side of the management about closure while entering into settlement
ID No.3781/16. 17/39
with the union on 03.01.2008, but absence of discussion cannot
prevent the management from closing any of its department. The
Railway and Transport Departments have been closed not in Delhi
but all over India. Earlier, the management used to book Rail Tickets
of its customers by sending its employees to the booking counters of
Indian Railways. The employees would physically stand in the
queue for booking tickets. After technical advancement, tickets can
be booked from Internet by one person. Moreover, now a days, there
are several low cost airlines carriers due to which the customers
prefer to travel by air and not by rail. About Transport Department,
he argued that the inbound customers (travelling from abroad to
India) do not prefer vehicles which were more than three years old.
Due to that reason, the vehicles which were more than 3 years old,
became surplus and with them, their drivers also became surplus.
Now a day, the management provides taxis to the customers by
hiring from open market. He next argued that the Court cannot
question the motive behind closure. About Ms. Maharukh M.
Dosabai, he submitted that the lady was authorized vide authorization
letter Ex.MW1/1 to take action against any employee of the
management. He admitted that the job of the employees was
transferable from one department to other department, but that clause
in the service condition cannot bind management to transfer the
employee, whose service has been terminated due to closure of his
ID No.3781/16. 18/39
Department, to some other department. He next argued that the
vehicles which had become surplus / three years old, were sold to the
drivers whose services had come to an end. By acquiring those
vehicles, said drivers have become independent entrepreneurs by
starting their own business. Profit making is no ground to bar the
management from closing down any department.
9. In J.K. Synthetics Vs. Rajasthan Trade Union Kendra
& Ors., AIR 2001 SC 531, the Hon'ble Apex Court held that closure
need not to be of entire plant. The closure can also be of a part of the
plant.
In Workmen of the Indian Leaf Tobacco Development
Col, Ltd., Guntur Vs. The Management of Indian Leaf Tobacco
Development Co. Ltd., Guntur, AIR 1970 SC 860, the Apex Court
held that the Industrial Tribunal cannot interfere with the discretion
exercised by a company in a matter of closing down of some of its
branches or depots. It further held that even if such closure may not
amount to closure of business of the company, the Tribunal has no
power to issue orders directing a company to reopen a closed depot
or branch, if the company in fact closes it down and that closure is
genuine and real. Stoppage of part of a business is an act of the
management which is entirely in the discretion of the company
carrying on the business.
ID No.3781/16. 19/39
10. In District Red Cross Society Vs. Babita Arora and
Others, (2007) 7 SC 2879 referring to Straw Board Manufacturing
Company Ltd. Vs. Straw Board Manufacturing Company Limited
(1974) 1 LLJ 499, the Apex Court held that the test of closure of a
unit is whether one unit had such componental relation that closing
of one must lead to the closing of the other or the one cannot
reasonably exist without the other. It further held that functional
integrity assumes an added significance in the case of closure. The
Court clarified that the closure means permanent closing down of a
place of employment or part thereof. If a unit or part of an
undertaking which has no functional integrity with other units is
closed, it will amount to closure within the meaning of Section 25
FFF.
Regarding rights of the employees of the closed unit, the
Hon'ble Apex Court concluded in J.K. Synthetic Vs. Rajasthan
Trade Union Kendra & Ors. (supra) that such employees are entitled
only to closure compensation as per Section 25F of the Act. It
clarified that the employees get only compensation under that Section
with the help of Section 25FFF, but both sections are not
comparable because in the case of violation of Section 25F, the
employee can get reinstatement etc. but if the case falls under Section
25FFF and retrenchment compensation is not paid, he cannot be
ID No.3781/16. 20/39
granted reinstatement etc. He is entitled to get only compensation.
11. In Workmen of Sur Iron and Steel Co. (P) Ltd. Vs. Sur
Iron and Steel Co. (P) Ltd. and Anr. (1970) SCC 618, the
management had closed down its factory which used to manufacture
articles. It started purchasing such articles from other manufacturer
and started putting its own trademarks on those articles. Hon'ble
Apex Court held that manufacturing units were closed. Stamping of
trademark on purchased articles did not amount to manufacturing.
In Massod Ahmed Khan & Ors. Vs. Hamdard
Dawakhana (Wakf)/ Hamdard (Wakf) Laboratories & Ors. 2012
LLR 792, the Hon'ble High Court of Delhi held that right reserved
by an employer to transfer an employee to other concern, does not
confer any right in employee to seek continuity of employment in
that concern after closure of business of its employer.
12. Hon'ble Supreme Court clarified the rights of employees
sacked due to closure of their units, in Hatisingh Mfg. Co. Ltd. and
Anr. Vs. Union of India (UOI) and Ors., AIR 1960 SC 923 in
following words :
"There is between the text of s. 25F and s.
25FFF(1) a significant difference in
phraseology. Whereas by s. 25F - the
constitutional validity whereof does not fall to
ID No.3781/16. 21/39
be determined in these petitions - certain
conditions precedent to retrenchment of
workmen are prescribed, s. 25FFF(1) merely
imposes liability to give notice and to pay
compensation on closure of an undertaking
which results in termination of employment of
workmen. Under s. 25F, no workman employed
in an industrial undertaking can be retrenched
by the employer until (a) the workman has been
given one month's notice in writing indicating
the reasons for retrenchment and the period has
expired or the workman has been paid salary in
lieu of such notice, (b) the workman has been
paid retrenchment compensation equivalent to
15 days' average salary for every completed
year of service and (c) notice in the prescribed
manner is served on the appropriate
Government. Section 25FFF(1) however
enacts that the workman shall be entitled to
notice and compensation in accordance with
the provision of s. 25F if the undertaking is
closed for any reason, as if the workman has
been retrenched. By the plain intendment of s.
25FFF(1), the right to notice and compensation
for termination of employment flows from
closure of the undertaking; the clause doe not
seek to make closure effective upon payment of
compensation and upon service of notice or
payments of wages in lieu of notice. An
employer proposing to close his undertaking
may serve notice of termination of employment
and if he fails to do so, he becomes liable to pay
wages for the period of notice. On closure of
an undertaking, the workmen are undoubtedly
entitled to notice and compensation in
ID No.3781/16. 22/39
accordance with s. 25F as if they had been
retrenched i.e., the workmen are entitled
besides compensation to a month's notice or
wages in lieu of such notice, but by the use of
words "as if the workman had been
retrenched" the legislature has not sought to
place closure of an undertaking on the same
footing as retrenchment under s. 25F. By s.
25F, a prohibition against retrenchment until
the conditions prescribed by that sections are
fulfilled is imposed; by s. 25FFF(1),
termination of employment on closure of the
undertaking without payment of compensation
and without either serving notice or paying
wages in lieu of notice, is, not prohibited.
Payment of compensation and payment of
wages for the period of notice are not therefore
conditions precedent to closure."
In Indian Hume Pipe Co. Ltd. Vs. Their Workmen, AIR 1968
SC 1002, the Hon'ble Apex Court held that the Court cannot question
the motive behind closure of a unit.
13. Following principles are deducible from above case
laws:
1. It is not necessary that the management should close
down its entire business. Closure of a unit / division /
department / part of undertaking is closure in law.
2. There should be actual closure.
3. The court cannot go behind the motive of closure.
4. The closed unit should not have functional integrity with
ID No.3781/16. 23/39
the other units.
5. The employees of a closed unit, with the help of Section
25FFF and Section 25F, are entitled to only closure
compensation. If such compensation has not been
given, that would not lead to reinstatement. Notice of
closure and compensation can be given after termination
of service. Prior notice and prior tender of closure
compensation is not a condition precedent for closure of
a unit.
6. Even if a right has been reserved by employer to transfer
an employee to another concern, such right does not
confer any right on the employee to seek continuity of
employment in another concern, in case of closure.
14. It is correct that Court cannot go behind the motive of
closure but there is a difference between motive and reason though
both are used interchangeably. For example, a murderer driven by
jealous and rage has a motive: to cause harm to what he conceives as
the source of his pain: his cheating wife. He is driven by his
emotions to take an irrational action which he does not validate with
logic. His motive is jealousy, but he has no reason to commit murder.
If one takes an umbrella on a sunny day, the reason may
be that it would rain later in the day. His decision is conscious and
based upon facts which he has considered. In that case, the motive
and reason are that he should not get wet. But the reason is the
conscious thought and the motive is accompanying emotion.
If a person robs a bank and forces everyone to stay on
ID No.3781/16. 24/39
the floor. His reason is that if those persons are not on the floor, they
would be in a better position to resist him or to activate the alarm.
The action of robbing a bank may be irrational but the immediate
decision to force people to stay on the floor is grounded in a
conscious decision guided by facts. The reason to force people to
stay on the floor, therefore, is to prevent resistance.
In other words, the motive refers to emotional propelling
force for an action while reason is referring to the conscious thinking
process and conscious goal behind an action.
15. In the case in hand, the motive alleged by the claimant
behind the closure of departments is his membership of union. The
management wanted to teach such persons a lesson and that is why
his service was terminated. Such a plea is thwarted by Indian
Hume Pipe Co. Ltd. Vs. Their Workmen (supra). In that case, the
Apex Court had clearly held that the Tribunal cannot go into the
question as to the motive of the appellant in closing down its factory
at Barakar and to enquire whether it was bona fide or mala fide with
some oblique purpose, namely, to punish the workman for the union
activities in fighting the appellant.
As has been observed above, there is a difference
between motive and reason. The Court can definitely examine
reasons behind closure. The reason stated by the management is that
ID No.3781/16. 25/39
Railway and Transport Departments were not economically viable as
those were running in losses. Such plea of the management has been
thwarted by the cross examination of MW1 who admitted it correct
that as per Ex. WW1/29, the profit of the management for the year
ending 3.12.2006 was Rs.63739429/ and for the year ending
31.12.2007, the same was Rs.209703674/. He further admitted that
it was mentioned in Ex. WW1/29 that the management had made
good profit during financial year ending 31.12.2007. The
management did not place on record the balancesheet / accounts of
Railway and Transport Departments to justify that they were running
into losses. So, reason behind closure is quite bad.
16. Moreover, there was functional integrity between
various departments of the management. MW1 admitted it correct
that management provides end to end services to its customers
depending upon their requests such as booking their tickets, air
tickets, railway tickets, bus transport as per their itinerary, booking of
hotels at the respective places of their visits, providing them vehicles
for their tours / travel within the local areas, picking them up from
the airport and drop them to the hotels, regularly picking up and
dropping them as per the schedule, providing them with guides, local
staffs and taking care of all other miscellaneous needs as demanded
by the customers. He next admitted that the revenues of the
ID No.3781/16. 26/39
management are generated by selling individual and corporate
holiday packages, (outbound and inbound), by ticketing services like
Visas, Passports, Tickets - Air and Rail. Due to providing of end to
end services, the Railway and Transport Departments were integral
parts of other departments.
17. The contention of the management is that it has closed
down Railway and Transport Departments but it is the case of the
claimant that those departments are still working as there is no
closure.
MW1 admitted that http://www.tcindia.com/faq.html
was the official website of the management. He further admitted that
in that website, the management had provided with the details of the
services offered by the management in relation to inbound and
outbound travels, booking of tickets, mode of taking the services,
mode of making the payments. He further admitted that Ex
MW1/W2 (25 pages) were the printed downloaded pages from the
official website of the management and their contents were true and
correct. As per page No. 6 of Ex. MW1/W2, tour package from
Delhi to Agra was of 13 days. The tariff of the management included
all transfers to or from hotels, city tours, excursions, drives by air
conditioned transport. It is further mentioned that tariff includes train
fare as per the itinerary. As per page No. 9 of Ex. MW1/W2, holiday
ID No.3781/16. 27/39
tour from Delhi to Jaipur, Jaisalmer, Jodhpur, Sawai Madhhopur,
Udaipur, Bharatpur and Agra was of 8 days and tariff charged by the
management included cost of travel also. As per page No. 17 of Ex.
MW1/W2, the holiday tour package from Chennai to Mysore,
Hassan, Bangalore, Kovalam, Periyar, Madurai, Trichy, Pondicherry,
Mahabalipuram was of 14 days. It is further mentioned that tariff
charged by the management included all transfers to or from hotels,
city tours, excursions, drives by an airconditioned transport. It
included train fares as per the itinerary also. To the same effect are
the pages No. 23 & 24 of Ex. MW1/W2. It becomes clear from Ex.
MW1/W2 that the management was charging from its customers for
airconditioned transport travelling and for train fare also. It means
that the management had not closed down Railway and Transport
Departments.
The claimant has placed on record documents from Ex.
MW1/W4 to Ex. MW1/W11 to establish that the management used
to book rail tickets for its customers. For booking rail tickets for
journey to be performed on 10.12.2008 and 12.12.2008 from Delhi to
Bhopal and from Delhi to Ajmer respectively, the management had
booked tickets for two passengers on 06.12.2008 vide invoice Ex.
MW1/W3 and Ex. MW1/W4. After booking the tickets, the
management had sent intimation letter Ex. MW1/W5 to its customer
by placing the letter in envelopes Ex. WW1/M6 and Ex. WW1/M7.
ID No.3781/16. 28/39
Ultimately, those tickets were booked and such tickets are Ex.
MW1/M8 and Ex. MW1/M9 but the management got those tickets
cancelled as reflected by Ex. MW1/M10 and Ex. MW1/M11. All
these documents have been admitted by MW1 his cross examination.
These documents establish that the management was definitely
providing rail tickets reservation facility to its customers.
18. Regarding Transport Department, MW1 admitted it
correct in cross examination that on the date of termination of service
of the claimant, the management had about 15 - 20 buses and 15 - 20
cars. Immediately preceding the date of termination, in view of
huge demand in the business, the management had to take vehicles
on rent from private vendors also. He next admitted it correct that
during the one year after termination, the management had hired
some vehicles from outside. He further deposed that management
had been hiring vehicles from outside regularly. He admitted it
correct that on the date of termination of workmen, the Transport
Department used to prepare a daily movement chart showing details
of reporting time of the drivers, the details of the customers, the
name of the hotels, the name of the guide, name of the transporters.
He further admitted that at the time of termination, duty slip / bill of
the individual driver with the details of the vehicle, etc. were
prepared by the transport department of the management. He added
ID No.3781/16. 29/39
that after termination, these duties are performed by Inbound Tours
Department. He next deposed that duty slips of the drivers with their
respective duties and daily movement orders are maintained on day
to day basis.
He next deposed that nature of the business of the
management has not been changed even after termination of the
claimant. He was asked whether he could produce the daily
movement and duty slips of the management from April, 2008 to
August, 2008, but he refused saying that the same were misplaced in
the course of shifting from Connaught Place to Gurgaon in August,
2010. Had MW1 produced those slips, it would have exposed
management that it was still engaged in travelling business. MW1
did not place on record any document to show that management had
filed any complaint in police or elsewhere regarding missing of those
documents. He did not file any document to show that management
had made any effort to locate such documents.
Regarding Railway Division, MW1 admitted that for
railway ticketing work, the management had a Rail Travel Agent
registration number at the time of termination of the workmen. He
could not admit or deny that the registration number was
AAACT4050CST045. He could not tell whether the registration
number has been surrendered or cancelled by the management from
railway authorities. He admitted that without registration number,
ID No.3781/16. 30/39
the management cannot book or purchase railway tickets
commercially. Retaining of registration number for purchasing the
rail tickets commercially definitely indicates that the management is
still engaged in purchasing of rail tickets of its customers.
Management's plea is that three years old vehicles had
become surplus as the inbound customers used to demand new
vehicles. Those vehicles were sold to drivers whose service was
terminated due to closure of Railway Department. Such drivers
became entrepreneurs by supplying those vehicles to management.
The management did not examine any former driver or place on
record any document that it had sold any vehicle to a former driver.
Plea itself is contradictory. If the customers were not accepting three
years old vehicles from management, why they would accept those
vehicles from drivers.
In view of above discussion, it is held that the
management has not closed down Railway and Transport
Departments.
19. It is correct that Ms. Maharukh M. Dosabai was not
employee of the management when service of the claimant was
terminated on 29.04.08. At that time, she was employee of M/s.
Thomas Cook India Limited. But she had been authorized by the
management vide authorization letter Ex. MW1/1 to take action
ID No.3781/16. 31/39
against the claimant. Moreover, it was Ms. Maharukh M. Dosabai
who had signed on behalf of the management on settlement Ex.
MW1/1 executed between management and union. At one place, the
claimant is trying to take benefit of Ex. MW1/1 but at the other place
she is disputing the competency of Ms. Maharukh M. Dosabai. She
can not be allowed to pick one and leave other. It is held that the
lady was competent to take action against the claimant.
It is correct that job of the claimant was transferable to
any other division or department. After holding that management
had not closed down Transport / Railway Departments, it is not
necessary to decide whether she is entitled to be transferred to some
other department, in case of closing of his own department. But for
the sake of settling the dust, it is held that in view of Massod Ahmed
Khan & Ors. Vs. Hamdard Dawakhana (Wakf)/ Hamdard (Wakf)
Laboratories & Ors (supra), she is not entitled to be absorbed in any
other department if his department was closed down by the
management.
20. In view of above discussion, it is held that termination of
service by the management is illegal.
Relief.
21. Ld. ARW argued that claimant is jobless since
ID No.3781/16. 32/39
termination of her service and so, reinstatement with continuity of
services and full back wages be granted to the workman.
Ld. ARM argued that claimant did not place on record
any application etc. which may suggest that she had approached any
other management for employment. In fact, she is gainfully
employed.
22. Even if, service of a workman has been terminated
illegally, that would not automatically lead to reinstatement with
100% back wages. In Nehru Yuva Kendra Sangathan Vs. Union of
India & Ors. 2000 IV AD (Delhi) 709, Hon'ble Delhi High Court
dealt with the question of reinstatement and back wages and
observed in paragraphs 27 and 28 as under :
"27. We find from the decision of the
Supreme Court rendered in the 1970s and
1980s that reinstatement with back wages was
the norm in cases where the termination of the
services of the workman was held inoperative.
The decisions rendered in the 1990s, including
the decision of the Constitution Bench in the
Punjab Land Development and Reclamation
Corporation Ltd., Chandigarh seem to suggest
that compensation in lieu of reinstatement and
back wages is now the norm. In any case,
since we are bound to follow the decision of
the Constitution Bench, we, therefore,
conclude that reinstatement is not the
inevitable consequence of quashing an order
ID No.3781/16. 33/39
of termination; compensation can be awarded
in lieu of reinstatement and back wages.
28. Considering the facts of this case, we
are persuaded to award compensation in lieu
of reinstatement and back wages to the
workman"
23. In Municipal Council, Sujanpur Vs. Surinder Kumar
2006 LLR 662, Hon'ble Supreme Court observed that the relief of
reinstatement is not automatic but is in the discretion of the court. In
paragraph 16, it was observed as under :
"Apart from the aforementioned error of law,
in our considered opinion, the Labour Court
and consequently the High Court completely
misdirected themselves insofar as they failed
to take into consideration that relief to be
granted in terms of section 11A of the said Act
being discretionary in nature, a Labour Court
was required to consider the facts of each
case therefor. Only because relief by way of
reinstatement with full back wages would be
lawful, it would not mean that the same would
be granted automatically".
24. In Vinod Kumar & others vs Salwan Public School &
others WP(c)5820/2011 dt.17.11.2014 Hon,ble Justice V.
Kameshwar Rao has held as under:
11.Having considered the rival submissions of
ID No.3781/16. 34/39
the counsels for the parties, I do not find any
infirmity in the order of the Labour Court. It is
a settled position of law that even if
termination has been held to be illegal,
reinstatement with full back wages is not to be
granted automatically. The Labour Court is
within its right to mould the relief by granting
a lumpsum compensation. In fact, I note that
the Labour Court has relied upon three
judgments propounding the law that the
Labour Court can mould a relief by granting
lump sum compensation; the Labour Court is
entitled to grant relief having regard to facts
and circumstances of each case.
12. Further, the Supreme Court in the
following judgments held as under:
(a) In the matter reported as Jaipur
Development Authority v. Ramsahai, (2006)
11 SCC 684, the court has stated:
"However, even assuming that there had been
a violation of Sections 25G and 25H of the
Act, but, the same by itself, in our opinion,
would not mean that the Labour Court should
have passed an award of reinstatement with
entire back wages. This Court time and again
has held that the jurisdiction under Section
11A must be exercised judiciously. The
workman must be employed by State within the
meaning of Article 12 of the Constitution of
India, having regard to the doctrine of public
employment. It is also required to recruit
employees in terms of the provisions of the
rules for recruitment framed by it. The
respondent had not regularly served the
appellant. The job was not of perennial ID No.3781/16. 35/39 nature. There was nothing to show that he, when his services were terminated any person who was junior to him in the same category, had been retained. His services were dispensed with as early as in 1987. It would not be proper to direct his reinstatement with back wages. We, therefore, are of the opinion that interest of justice would be subserved if instead and in place of reinstatement of his services, a sum of Rs 75,000 is awarded to the respondent by way of compensation as has been done by this Court in a number of its judgments."
(b) In the matter reported as Nagar Mahapalika v. State of U.P., (2006) 5 SCC 127, the court has stated:
"23. Noncompliance with the provisions of Section 6N of the U.P. Industrial Disputes Act, although, may lead to the grant of a relief of reinstatement with full back wages and continuity of service in favour of the retrenched workmen, the same would not mean that such a relief is to be granted automatically or as a matter of course. 25 .....The appellant herein has clearly stated that the appointments of the respondents have been made in violation of the provisions of the Adhiniyam. An appointment made in violation of the provisions of the Adhiniyam is void. The same, however, although would not mean that the provisions of the Industrial Disputes Act are not required to be taken into consideration for the purpose of determination of the question as to whether the termination of ID No.3781/16. 36/39 workmen from services is legal or not but the same should have to be considered to be an important factor in the matter of grant of relief. The Municipal Corporation deals with public money. Appointments of the respondents were made for carrying out the work of assessment. Such assessments are done periodically. Their services, thus, should not have been directed to be continued despite the requirements therefor having come to an end. It, therefore, in our considered view, is not a case where the relief of reinstatement should have been granted."
(c) In the matter reported as Talwara Coop. Credit and Service Society Ltd. v. Sushil Kumar, (2008) 9 SCC 486, the court has stated:
"8. Grant of a relief of reinstatement, it is trite, is not automatic. Grant of back wages is also not automatic. The Industrial Courts while exercising their power under Section 11A of the Industrial Disputes Act, 1947 are required to strike a balance in a situation of this nature. For the said purpose, certain relevant factors, as for example, nature of service, the mode and manner of recruitment viz. whether the appointment had been made in accordance with the statutory rules so far as a public sector undertaking is concerned, etc., should be taken into consideration."
(d) In the matter reported as Jagbir Singh v. Haryana State Agriculture Mktg. Board, (2009) 15 SCC 327, the court has stated :
"7. It is true that the earlier view of this Court articulated in many decisions reflected the ID No.3781/16. 37/39 legal position that if the termination of an employee was found to be illegal, the relief of reinstatement with full back wages would ordinarily follow. However, in recent past, there has been a shift in the legal position and in a long line of cases, this Court has consistently taken the view that relief by way of reinstatement with back wages is not automatic and may be wholly inappropriate in a given fact situation even though the termination of an employee is in contravention of the prescribed procedure. ...
14. An order of retrenchment passed in violation of Section 25F although may be set aside but an award of reinstatement should not, however, be automatically passed. The award of reinstatement with full back wages in a case where the workman has completed 240 days of work in a year preceding the date of termination, particularly, daily wagers has not been found to be proper by this Court and instead compensation has been awarded. This Court has distinguished between a daily wager who does not hold a post and a permanent employee."
25. The claimant had worked with the management from 13.11.1978 to 29.04.08 i.e. for 27 & ½ years. She did not pin point any other management visited for reemployment. Had she tried seriously, she would have definitely got job of equal status and salary. It is the case of claimant herself that her retirement age was 55 years. Taking into account all these facts, the management is directed to pay 50% back wages to the claimant from the date of termination till the date of the award / superannuation, whichever is ID No.3781/16. 38/39 earlier plus 25% of the amount tendered to her. If the amount tendered has been paid, the paid amount shall be deducted from the total of 50% back wages and 25% tendered amount. The amount be paid to her within one month from the date of publication of this award, failing which it shall be liable to pay interest on it @ 9% per annum from today till its realization. Parties to bear their own costs. Award is passed accordingly.
26. The requisite number of copies of the award be sent to the Govt. of NCT of Delhi for its publication. File be consigned to Record Room.
Dictated to the Steno & announced (UMED SINGH GREWAL) in the open Court on 07.10.2016. POLCXVII/KKD, DELHI.
ID No.3781/16. 39/39