Calcutta High Court
Mayurakshi Cotton Mills (1990) Ltd. And ... vs The Ninth Industrial Tribunal And Ors. on 2 September, 2002
Equivalent citations: (2003)1CALLT190(HC), [2003(97)FLR856], [2002]256ITR471(CAL)
Author: J.K. Biswas
Bench: Ashok Kumar Mathur, Jayanta Kumar Biswas
JUDGMENT J.K. Biswas, J.
1. Since the subject-matter of challenge in both the writ petitions is same, the award dated 14th November 2000 passed by the Ninth Industrial Tribunal, West Bengal at Durgapur (hereinafter referred to as 'the Tribunal'), they have been heard together ; and we propose to dispose of them by this common judgment.
2. A company known by the name of 'Mayurakshi Cotton Mills Ltd.' having its factory at Panchra, Birbhum, in West Bengal was wound up in terms of the BIFR's order dated 20th September 1989. Its assets were purchased by the Government of West Bengal for Rs. 108,80,092.00. To reopen and run the said factory, on 4th January 1990 the Government constituted a 'committee-of-management' (hereinafter referred to as 'the committee'). On 18th February 1990 the factory was re-opened. Most of the employees/workmen of the erstwhile company were engaged afresh by the committee on temporary basis.
3. Three unions, namely, (1) Mayurakshi Cotton Mills Mazdoor Union, (2) Mayurakshi Cotton Mills Employees' Union, and (3) Mayurakshi Cotton Mills Shramick Union (hereinafter referred to as 'the Mazdoor Union', the Employees' Union, and the Shramick Union respectively) became active in the said factory.
4. Two unions: The Employees' Union and the Shramick Union demanded introduction of new wage structure and benefits of provident funds, leave, etc. They filed a writ petitions in this Court for those benefits. By an order of a learned single Judge dated 27th September 1991 it was disposed of; the Government was directed to settle the disputes within six months from the date of communication of the said order.
5. However, numerous labour troubles started enveloping the said factory. Ultimately, alleging continuous unlawful, illegal, riotous, and disorderly activities and wanton indiscipline indulged in by a section of the workmen claimed to be members of the Employees' Union and the Shramick Union, the committee declared a lock out with effect from 5th August 1992.
6. The Employees' Union and the Shramick Union challenged the lock out notice dated 5th August 1992 by filing a writ petition (C.O.No. 13796 (W) of 1992). During pendency of this writ petition the committee and the Mazdoor Union entered into a bipartite settlement dated 27th February 1993. Terms and conditions as agreed by the parties were incorporated in the said settlement for the purpose of lifting the lock out. Pursuant to the said settlement the lock out was lifted with effect from 14th March 1993.
7. By a judgment and order of a learned single Judge dated 16th August 1993 the said writ petition - filed challenging the lock out notice - was dismissed with liberty given to petitioners therein to approach the forum establish under the Industrial Disputes Act, 1947. On appeal (MAT No. 2905 of 1993), a Division Bench of this Court by a judgment and order dated 20th March 1995 set aside the said judgment and order of the learned single Judge. The Appeal Court directed the committee to re-engage all the member employees/workmen of the Employees' Union and the Shramick Union, without insisting on the compliance with the terms of conditions of the said bipartite settlement by such employees/workmen.
8. The committee's appeal (Civil Appeal No. 6552 of 1995) therefrom was disposed of by the Supreme Court by the judgment and order dated 8th March 2000; the relevant portion whereof is as follows :
"We have given our anxious consideration to rival submissions made by the learned counsel on either side. Whether a settlement is fair or unfair or valid cannot be examined in the absence of factual background on which the same was entered into. If really the mills was in financial doldrums and retrenchment had to take place in some form or the other and if a method was to be worked out by the management and the workmen, which is fair, it cannot easily be said that the mills should not work with lesser number of workmen and provide a scheme for retrenchment or otherwise. It may not be easy to state that such settlement is unfair or amounts to victimization. The option was between closure of the mills itself or opening of the mills with lesser number of workmen. Sometimes hard choices have to be made and sacrifices are expected to be made by either side. These aspects have to be borne in mind in deciding such questions. Therefore, we cannot in the abstract, in the absence of material before the Court, state the High Court could have come to the conclusion one way or the other and particularly based on the theoretical approach to Sections 25F and 25G of the Act or Article 21 of the Constitution. We are of the view that the order made by the Division Bench deserves to be set aside and that of the learned single Judge be restored, however, with the modification that a reference shall be made, as stated by Shri Dipankar Gupta, in respect of all matters arising in this case as to the employment, non-employment, the validity of the settlement and all other allied issues and the reliefs to be granted to the parties, do (sic) an appropriate industrial Tribunal within a period of six weeks from today and such Tribunal shall enter upon the reference for adjudication as early as possible and decide the same within a period of six months from the date of reference to it."
9. Accordingly, by an order dated 12th April 2000 the Government of West Bengal in exercise of power conferred by Section 10 of the Industrial Disputes Act 1947 made a reference to the Tribunal.
10. In the mean time the committee was substituted by : Mayurakshi Cotton Mills (1990) Ltd., a new company (hereinafter referred to as 'the company') registered under the Companies Act, 1956. In the order of reference it was stated that an industrial dispute existed between the company and its workmen represented by the Employees' Union and Shramick Union.
11. The issues specified in the said order of reference were as follows:-
"(1) Whether the bipartite agreement dated 27.2.93 between the management of Mayurakshi Cotton Mills and one union operating in the mill is reasonable and valid ?
(2) Whether the refusal by the management to allow the workmen who did not sign the agreement dated 27.2.93, to join duty is justified and lawful?
(3) Whether the management is justified in lowering the age of superannuation from 60 to 50 years ?
(4) Whether the workmen are entitled to get the benefits of the cotton Textile industry-wise settlement dated 11.6.95?
(5) Whether the management is justified in not allowing the workmen to enjoy 15 day's sick leave with full pay and 6 (six) days casual leave with full pay which the workmen used to avail of in terms of the omnibus Award for cotton Textile Industry prior to taking over the unit by the new management?
(6) Whether the management is justified in accepting the old records of age of the workmen without verification ?
(7) What relief, if any, are the workmen entitled to in respect of issues No. (1) to (6) above."
12. The said order of reference was challenged by the Employees' Union and the Shramick Union by filing a writ petition (W.P. No. 2115 of 2000) in this Court. It was contended therein that the Government should have referred the issue of lock out. A learned single Judge by an order dated 5th September 2000 disposed of the said writ petition with the finding that the said petitioners' remedy, if any, lay only before the Supreme Court as the reference had been made in terms of order passed by the Supreme Court.
13. However, in response to notices issued by the Tribunal both the company and the Employees' Union and the Shramick Union (jointly) filed their respective written statements and documents; Both the parties in their written statements stated that the bipartite settlement had been entered into by and between the predecessor-in-office of the company and Mazdoor Union. The Employees' Union and the Shramick Union in their joint written statement contended that the said bipartite settlement was per se void, illegal, unreasonable, and invalid.
14. The Tribunal after recording evidence and adjudicating the points of dispute specified in the order referring the industrial dispute, submitted the award dated 14th November 2000 to Government. The Tribunal answered all the issues in the affirmative. Ordering portion of the said award is quoted below :-
"Ordered That the reference case is allowed between Mayurakshi Cotton Mills (1990) Ltd., P.O. Panchrahat, Dist. Birbhum and Mayurakshi Cotton Mills Employees Union and Mayurakshi Cotton Mills Shramick Union on contest. The award is passed to this effect that the Bipartite Agreement dated 27.2.93 between management of the Mayurakshi Cotton Mills on one side and one union operating in the mill is unreasonable and invalid. It is also declared that the management is not justified by refusing those workmen who do not sign Agreement dated 27.2.93 to join their duties. The Management is not allowed to reduce the age-of-superannuation from 60 to 58. Further it is not allowed to curtail the benefits of 15 days sick leave with full pay and 6 days casual leave with full pay.
The management is directed to reinstate the workers of the contesting unions forthwith and further directed to clear up their back wages for the period from 5.8.92. till their reinstatement at the rate of the scales given in the body of the Award. The Management is further directed to extend the benefits of the scales of pay at the following rates with effect from August 92 on-wards.
The basic wages with effect from 5.8.92 and the variable D.A. will be as follows :-
* * * * * * * * *
In all cases House rent Allowances and M.A. will be added as admissible as per rule in vogue in similar kind of industry for the above mentioned periods with effect from 5,8.92 till their period of services."
15. Challenging the said award the company filed the writ petition No. 20488(W) of 2000 dated 27th November 2000. The other petition, writ petition No.3547 (W) of 2001 dated 8th March 2001, challenging the very same award was filed by the Mazdoor Union. The Employees' Union and the Shramick Union were arrayed as respondents Nos. 3 and 4 in both the said writ petitions.
16. As by way of interim order stay of operation of the said award was not granted by a learned single Judge on the Mazdoor Union's writ petition (W.P. No. 3547 (W) of 2001); the petitioners therein preferred an appeal (MAT No. 1269 of 2001) before the Division Bench of this Court. By an order dated 21st September 2001 the said appeal was disposed of with an interim order that till the disposal of the said W.P. No. 3547 (W) of 2001 further implementation of the said award would remain stayed.
17. Against the said order of the Division Bench the Employees' Union and the Shramick Union filed a petition for special leave to appeal (Civil No. 1462 of 2002) before the Supreme Court. By an order dated 8th May 2002 the Supreme Court was pleased to dispose of the said special-leave-petition by directing that the interim order passed by the Division Bench of this Court on 21st September 2001 should remain operative till the disposal of the said two writ petitions. The Supreme Court further directed that the said two writ petitions should be disposed of by a Division Bench of this Court expeditiously by 30th September 2002.
18. In the afore stated facts and circumstances the said two writ petitions have been heard; and are now being disposed of by us.
19. Appearing for the petitioners in the company's writ petition (W.P. No.20488 (W) of 2000) Mr. Anindya Mitra, learned senior advocate, has contended as follows :-
The impugned award is vitiated by serious errors of law apparent on the face of it. Without making any discussion of the evidence on record and without assigning any reason whatsoever, the Tribunal mechanically answered the issues in the affirmative; and declared the bipartite settlement dated 27th February 1993 to unreasonable and invalid. The impugned award is absolutely unreasoned as far as the issue Nos. 1 (one) to 5 (five) are concerned. The directions given by the Tribunal regarding reinstatement and back wages are totally unwarranted on the face of the evidence and materials on record showing the wretched financial condition of the company. The finding of the Tribunal that the bipartite settlement is unreasonable and invalid is based on no evidence at all.
20. In support of his contentions Mr. Mitra has relied on the Supreme Court decision given in the case of Herbertsons Limited v. The Workmen etc. and Ors., AIR 1977 SC 322.
21. Appearing for the petitioners in the Mazdoor Union's writ petition (W.P. No.3547 (W) of 2001) Mr. B.R. Bhattacharya, learned senior advocate, has submitted as follows :-
22. The Tribunal was not competent to declare the bipartite settlement dated 27th February 1993 to be unreasonable and invalid without hearing the Mazdoor Union. In view of issue No. 1. - from which the remaining issues originated - specified in order referring the industrial dispute, the Tribunal should have issued notice to Mazdoor Union; for, in the bipartite settlement in question the Mazdoor Union was the only union representing the workmen. Had the Mazdoor union been afforded an opportunity to contest the case, this union would have established by adducing evidence that the bipartite settlement dated 27th February 1993 was just, reasonable, and valid as a whole.
23. To support his contentions Mr. Bhattacharya has cited the following decisions:-
Mocfoy v. United Africa Co. Ltd., [1961] 3 ALL ER 1169; Collector of Customs v. Biswanath Mukherjee, 1974 CLJ 251; and Union of India and Anr. v. Tulsiram Patel, AIR 1985 SC 1946 (pr. 95).
24. On the other hand appearing for the Employees' Union and the Shramick Union, the respondents Nos. 3 and 4, Mr. K.K. Bandopadhyay, learned advocate, has made the following submissions :-
The disputed bipartite settlement was not binding on the members of the said respondents; so the Tribunal was not required to serve any notice on the Mazdoor Union. The terms and conditions of the disputed settlement are utterly unconscionable; and members of the said respondents cannot be compelled to accept the said terms and conditions. The award, if necessary, may be modified by this Court by directing that it will not be binding on the Mazdoor Union. In ay event, the Mazdoor Union has failed to show the nature of prejudice it has suffered by the award; therefore the writ Court should not interfere with the same.
25. He has relied on the following decisions :-
Punjab National Bank Ltd. v. A.I.P.N.B.E. Federation & Anr., ; G.M. Security Paper Mill v. R.S. Sharma and Ors., ; National Engineering Industries Ltd. v. State of Rajasthan and Ors., ; and ITC Ltd. Workers' Welfare Assn. and Anr. v. Management of ITC Ltd. and Anr., .
26. After hearing the parties and considering the materials on record we are of the view that the award of the Tribunal cannot be sustained. Our reasons are as follows :-
We find that the reasonableness and validity of the bipartite settlement dated 27th February 1993 was the main issue and basic point of dispute specified in the order dated 12th April 2000 referring the industrial dispute to Tribunal. It was required to adjudicate the dispute in terms of provisions of the Industrial Disputes Act, 1947 and the West Bengal Industrial Disputes Rules, 1958 (hereinafter referred to as 'the Rules').
27. Rule 20A of the Rules provides for notice at the initial stage only to the parties named in the order of reference. The said Rule 20A reads as under :-
"R. 20A. Notice to the parties.
Upon receipt of a reference from the Government under Section 10 , the Industrial Tribunal/labour Court concerned shall issue notice in Form D-2 upon the parties to the dispute as mentioned in the order of reference, requiring them to appear before it on a specified date either by themselves or through their authorized representatives for necessary directions."
28. On the face of the order of reference, it was not apparent that the Mazdoor Union was in any way connected with the existing industrial dispute. So, there was no reason for the Tribunal to issue notice to the Mazdoor Union upon receipt of the reference.
29. But once the written statements were filed by the parties to the reference, it became manifestly clear that the Mazdoor Union was the only union which was party to the disputed bipartite settlement for representing the employees/workmen. The entire case of the two unions, naked in the order of reference, was based only on a challenge thrown to the validity of the said bipartite settlement.
30. This being the position, the first question arises; whether the Tribunal had the power to issue a notice suo moto for bringing the mazdoor Union the record.
31. We find that for dealing with such a situation the Tribunal has the necessary statutory power. The power has been conferred by Rule 20D(2) of the Rules. The said Rule 20D is quoted below :-
"Rule 20D. Addition of issues or parties to the proceedings.
(1) After the parties have filed their statements, the Industrial Tribunal/Labour Court may fix a date for framing, if necessary, issues relating to and arising out of the point or points in dispute, as referred, and matters incidental thereto, as well as additional or subsidiary issues, not enlarging in any way the scope of the points referred for adjudication on the merit, nor adding to their number but required for dealing with extrinsic contentions raised by the parties about reference and for its hearing.
(2) The Industrial Tribunal/Labour Court may at any stage of the proceedings, either upon or without the application of any party and on such terms as may appear to the Industrial Tribunal/Labour Court just, order that the name of any party who ought to have been joined in the reference or whose presence before the Industrial Tribunal/Labour Court may be necessary in order to enable the Industrial Tribunal/ Labour Court effectually and completely to adjudicate upon and settle all questions involved in the dispute, be brought on the record ;
Provided that no such party shall be brought on the record without being given an opportunity to show cause by proper notice why he should not be brought on the record. The notice to show cause shall be in Form D-3.
(3) The Industrial Tribunal/Labour Court shall have power, when circumstances so require, to bring on record in the place and instead of a party to reference, a party or parties to which the right or interest of the former has passed in the course of the proceeding before it."
32. So, it is clear that Tribunal had the necessary statutory power to add the Mazdoor Union as a party to the proceeding at any stage from after the stage of filing written statements by the parties to dispute as named in the order of reference.
33. Therefore, the next question arises: Whether on the facts appearing from the order of reference and the written statements filed by the parties to the reference the Tribunal was required to bring the said Mazdoor Union on record by exercising the power conferred by said Rule 20D(2) suo moto.
34. Admittedly, the settlement in question was arrived at by an agreement between the company and its employees/workmen represented by the Mazdoor Union only; and it was arrived at otherwise than in the course of a conciliation proceeding. Accordingly, such bipartite settlement was binding in terms of Section 18(1) of the Industrial Disputes Act, 1947 only on the parties to the said agreement.
35. From the issues referred, it is clear that the Tribunal was mainly required to determine the questions of reasonableness and validity of the said bipartite settlement; and not the question of its binding nature. All the issues referred were connected with the main question of reasonableness and validity of the said settlement; and of course the Mazdoor Union ought to have been named as a party to the dispute referred.
36. Since the answers by the Tribunal to issues in the affirmative were to render the said settlement invalid, the principles of justice, equity and good conscience demanded that the Tribunal exercised its power suo moto for bringing The Mazdoor Union on record. This union was not only likely to affected by the award, but had a right to participate in the proceeding and adduce evidence to show that its settlement was fair, reasonable, and valid.
37. As held by the Supreme Court in the case of Herbertsons (supra):
The question of adjudication has to be distinguished from a voluntary settlement. A settlement cannot be judged on the touchstone of the principles which are laid down for adjudication. A settlement has to be taken as a package deal. It is always based on the policy of give and take. Unless it can be demonstrated that any objectionable portion of a settlement is such that it completely outweighs all other advantage gained by the employees/ workmen, the Court will be slow to hold a settlement as unfair and unjust.
38. Again in the case of TELCO Ltd. v. Their Workmen, the Supreme Court said :
" A settlement cannot be weighed in any golden scales and the question whether it is just and fair has to be answered on the basis of principles different from those which come into play when an industrial dispute is under adjudication."
39. In the instant case itself while disposing of the appeal by the order dated 8th March 2000 the Supreme Court observed :
"Whether a settlement is fair or unfair or valid cannot be examined in the absence of factual background on which the same was entered into."
40. In this context it may be mentioned that in the case of Janak Rqj v. Safai Mazdoor Union and Ors. U. J. (SC) 1982 Page 879 the Supreme Court observed as follows:-
"Included in the questions referred to Tribunal was the question whether the appointment of Shri Janak Raj as Sanitary Supervisor was not in order. Surely the Tribunal should have heard Shri Janak Raj before making an award, The Tribunal failed to do so. The Tribunal was clearly in error in not issuing notice to Shri Janak Raj and hearing him. The view taken by the High Court that it was not necessary to hear Shri Janak Raj as he had no locus is on the face of it incorrect. The Order of the High Court and the award of the Tribunal are set aside and the matter is remitted back to the Tribunal for fresh consideration of the question after issuing notice to Shri Janak Raj. The appellant will be reinstated in service pending disposal of the matter by the tribunal.
41. We are of the view that a purposive reading of the provisions contained in said Rule 20D(2) clearly indicates that they cast a duty on the Tribunal to look into the written statements filed by the parties named in the order of reference for ascertaining if there is any necessity of adding any party to the dispute. In the instant case the Tribunal did never apply its mind to the requirement of discharging its such statutory duty.
42. When an adjudicating agency, required to act in a quasi-judicial mode, is given a power to act in a particular situation for a particular propose either on application or suo moto, such adjudication agency - the Tribunal in the instant case - remains duty bound, whether there is application or no, to examine the question as to whether in the facts and circumstances of the situation it is required to exercise such power, The total indifference shown to the situation - as is the case here - causes a jurisdictional error which may in a given case render the ultimate decision of such agency bad in law. In the instant case the Tribunal's failure to act in terms of said Rule 20D(2), in our view, has rendered the award vitiated by jurisdictional error and hence unsustainable.
43. In the factual and legal positions as indicated hereinabove, in our considered view, the Tribunal ought to have exercised suo moto its power conferred on it by the said Rule 20(D) for bringing the Mazdoor Union on record. Since the sole question before the Tribunal was the reasonableness and validity of the said settlement, the only union which was party to the said settlement should have been given an opportunity by the Tribunal to contest the case by adducing evidence to show that on the factual background in which the said settlement had been entered into : it was just, fair, reasonable and valid. The question of validity of the said settlement should not have been decided in the absence of the Mazdoor Union.
44. The contention of the respondents that since the Tribunal was required to adjudicate only the question whether the said settlement was binding on them, there was no necessity of adding the Mazdoor Union as a party to proceeding - has no substance at all. We have seen that the Tribunal was basically required to determine the question of validity of the said settlement. There is also no merit in their contention that the Mazdoor Union has not suffered any prejudice by the award. Admittedly the very settlement which provided the benefits to the members of the Mazdoor Union has been declared by the Tribunal to be invalid; no greater prejudice is required to be suffered. Accordingly, we hold that the award of the Tribunal is vitiated by a jurisdictional error.
45. On behalf of respondents No. 3 and 4 it has been submitted that looking to the facts and circumstances of the case instead of remanding the matter, if necessary, the award may be suitable modified by this Court. We are unable to accede to the suggestion, because sitting in the extraordinary writ jurisdiction we are not supposed to substitute the Tribunal's award by that of ours.
46. Since we have come to the conclusion that the award cannot be sustained as the Mazdoor Union was not given any opportunity contest the case before the Tribunal, and we find it just an proper to direct the Tribunal to hear the Mazdoor Union and pass it award thereafter, we do not propose to go into the contentions raised by the learned counsel for the company.
47. We put it on record that the few decisions cited by Mr. Bhattacharya and Mr. Bandapadhyay in support of their respective contentions, in our view, have little relevance to the questions debated at the bar. Precisely for reason we do not find any necessity for dilating on the facts and principles involved in the said decisions.
48. In the result, we set aside the impugned award dated 14th November 2000, passed by the Tribunal. We direct the Tribunal to bring the Mazdoor Union on record of the reference case; and decide the dispute after giving the said union reasonable opportunity of contesting the case, if desired, by leading evidence on the issues mentioned in the order of reference. We make it clear that we are remanding the case only for this limited purpose. The Tribunal shall complete the entire exercise within a period of four months from the date of receipt of a copy of this judgment. Both the writ petitions are, accordingly, disposed of. There will be no order as to costs.
Later on 2.9.02.
If urgent xerox certified copies of this judgment and order are applied for the same may be made available to the learned counsel for the parties upon compliance of all the formalities expeditiously.
A.K. Mathur, C.J.
I Agree.