Bombay High Court
Sarva Shramik Sanghatana, Pune vs The Director, M/S. Deccan Paper Mills ... on 29 August, 2018
Author: A. K. Menon
Bench: A. K. Menon
*1* WP-6338.01 & 939.02.odt
sbw
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.6338 OF 2001
Sarva Shramik Sanghatana, Pune
through : The Divisional Secretary,
Trade Union Centre,
101, Shivajinagar,
Pune-411 006. .. Petitioner
V/s.
The Director,
M/s. Deccan Paper Mills Co. Ltd.
Mundhawa,
Pune-411 036. .. Respondent
WITH
WRIT PETITION NO.939 OF 2002
The Director,
M/s. Deccan Paper Mills Co. Ltd.
Mundhawa,
Pune-411 036. .. Petitioner
V/s.
1) Sarva Shramik Sanghatana, Pune
through : The Divisional Secretary,
Trade Union Centre,
101, Shivajinagar,
Pune-411 006.
2) The Collector,
District Pune,
Pune-411 001. .. Respondents
*2* WP-6338.01 & 939.02.odt
............
Ms. Seema Sarnaik I/b. Mr. Amey Tamhane for the petitioner in WP/6338/01
and for respondent no.1 in WP/939/02.
Mrs. Meena H. Doshi for respondent no.1 in WP/6338/01 and for the petitioner
in WP/939/02.
...........
CORAM : A. K. MENON, J.
RESERVED ON : 11 th APRIL, 2018.
PRONOUNCED ON : 29 th AUGUST 2018.
JUDGMENT:-
1. This order disposes two petitions. The parties to the petition are common. The first of these petitions was filed on 26 th February, 1998. It challenges an order passed by the Industrial Court, Pune, in Complaint (ULP)no.95 of 1998 dated 14th September, 1999. The petitioner is a registered trade union. (For the sake of convenience in this judgment Sarva Shramik Sanghatana, Pune is referred to as the "Union" and the M/s. Deccan Paper Mills Co. Ltd. the employer as the "Company"). The Company was in the business of manufacturing paper at its premises at Mundhawa, Pune. It owned about 20 acres of land. It is the Union's case that in order to develop the land into residential/commercial complex, the company started harassing the employees so that they would give up employment. The Union filed six complaints alleging unfair labour practices which were allowed by directing the Company *3* WP-6338.01 & 939.02.odt to pay minimum wages but the Company did not comply. The Union then filed three applications for recovery under Section 50 of the Industrial Disputes Act. Recovery certificates came to be issued but the Company did not pay.
2. The company challenged the orders passed in the six complaints in this Court by filing Writ Petition no.171 of 1995 which came to be rejected on 1 st July, 1996. Despite rejection of the writ petition, the company failed and neglected to comply this resulted in the union filing a writ petition in this Court seeking a direction to the District Collector, Pune, to recover the amount due as arrears of land revenue in which a consent order came to be passed on 30 th June, 1997. The Company then paid the amounts due. Thereafter the union filed a second application for recovery of wages for the period 1 st April, 1992 to 31st June, 1994 bearing Misc. Application (ULP)no.21 of 1994. A third Complaint was filed for recovery of wages for the period 1 st July, 1994 to 31st December, 1997 claiming that the company is deemed to have closed only in 1997 and therefore the employees were entitled to Rs.1,23,57,242.84 towards terminal dues, gratuity and closure compensation. The Union called upon the Company to restart manufacturing activity (which had halted by then) but there was no response. Complaint (ULP)No.95 of 1998 was therefore filed under Section 28(1) read with items 5, 7, 9 and 10 of Schedule IV of the MRTU & PULP Act, 1971 seeking recovery of terminal dues.
*4* WP-6338.01 & 939.02.odt
3. In the complaint, the Union contended that there were about 1000 employees in the company but due to mismanagement only about 150 employees remained in the year 1987. The relationship between the Union and company was not cordial and resulted in various disputes. The union contended that in order to deprive the employees of the benefits of the award the company stopped manufacturing activities. Although the employees regularly reported for duty the company was determined to develop its premises into a township after stopping manufacturing activities. The company stopped payment of wages with effect from August 1987. The union computed the terminal benefits and claimed the aforesaid sum of Rs.1,23,57,242.84. These figures were later revised and for the period 1 st April, 1992 to 30th June, 1994, the revised figure is Rs.25,08,126/- (Misc.Application(ULP)no.21 of 1994) and for the period 1st July, 1994 to 31st December, 1997 the revised figure is Rs.38,28,721/- (Misc. Application(ULP)no.7 of 1998). The terminal benefits including closure compensation and gratuity was revised to Rs.26,89,840.85.
4. The company denied liability in toto. In fact it denied that it had closed permanently. The company had also approached the BIFR seeking revival of its business. The company admitted that it had sought permission for development of its land. It was also contended that about 22 employees had attained the age *5* WP-6338.01 & 939.02.odt of superannuation. It was submitted that the company did not inform the union or any of their members about termination of the contractual employment on attaining the age of superannuation. It was also contended that the claim was imaginary and baseless. Finally, after hearing the parties, the Industrial Court, Pune, passed the impugned order dated 14 th September, 1999 holding that the Company had indulged in unfair labour practices under item 9 of schedule IV, directed it to cease and desist from doing so and directing payment of closure compensation to 23 persons. 16 persons were held to have superannuated and not eligible for closure compensation.
5. Being aggrieved by the said order, the Union have approached this Court under Article 226 and 227 of the Constitution of India, inter alia, on the ground that the trial Court was in error in allowing the complaint only in part and that the impugned order after considering the fact that there were only about 150 employees remaining in the company took note of the award declared in favour of the petitioners and the fact that applications under Section 50 were also filed resulting in recovery certificates being issued. It is urged that the complaint proceeded on behalf of 39 employees. It is contended that they were all entitled to get closure compensation and not just 23 of them.
6. In Writ Petition no.939 of 2002, the company has challenged the order *6* WP-6338.01 & 939.02.odt dated 14th September, 1999 passed in Complaint (ULP)no.95 of 1998 to the extent that it is adverse to the company. The other orders impugned in this petition are (a) order dated 2nd March, 2001 by which the Industrial Court partly allowed a review application crediting the amount mentioned in the recovery certificate and enhancing the amount mentioned in the recovery certificate of Rs.25,08,126/- instead of Rs.20,76,551/-. (b) Order in Misc. Application no.21 of 1994 whereby a sum of Rs.20,76,551/- was certified for recovery under Section 50 of the Act and (c) Recovery Certificate in Misc. Application (ULP)no.7 of 1998 in a sum of Rs.38,28,721/- all of which are as described in prayer clause (a) to the petition.
7. The case of the company is that it was facing severe problems in its business from 1980 onwards. As a result of which the manufacturing activity was discontinued from October 1987. The company then claimed to be a sick industrial company and made a reference to the Board of Industrial and Financial Reconstruction (BIFR) which came to be rejected. An appeal was filed before the appellate authority which remanded the matter to the BIFR was also rejected the application. The company then filed a writ petition challenging the orders passed by the Industrial Court granting Recovery Certificate set out above. The company contends that the orders dated 14 th September, 1999 and 2nd March, 2001 were perverse inasmuch as although, admittedly, no *7* WP-6338.01 & 939.02.odt manufacturing activity was carried out from October 1987, the Court erroneously proceeded to award wages for the period 1992 till 1997 when there was no factual basis for granting wages for the aforesaid period. Submissions of Counsel
8. According to Ms. Sarnaik, the learned counsel for the Union, the Company discriminated between groups of employees and acted in a manner so as to interfere with the unity amongst workmen. It paid large sums of money to those who gave up membership of the union and such acts of discrimination continued and as a result the union continued to be agitated. The company entered into arrangements to establish a township on the land belonging to the company. A recovery application was filed by about 50 employees of whom 11 settled directly to the company and out of Court. This left about 39 employees who continued to be members of the respondent union and who did not find favour with the management. In other words, these 39 persons who were discriminated against realized that the company had no intention of starting manufacturing activities since they were interesting in developing a township. Ms. Sarnaik submitted that a letter came to be addressed on 13 th October, 1997, seeking clarity from the company as to whether the company should consider the industrial establishment closed permanently to which the company failed to respond. As a result, vide subsequent letter dated 3 rd January, *8* WP-6338.01 & 939.02.odt 1998 the union recorded that it presumed that the industrial establishment of company is permanently closed with effect from 31 st December, 1997 and employees would become entitled to terminal benefits.
9. Ms. Sarnaik submitted that attempts were made by the company to deprive the employees of the terminal dues and at the material time it was necessary to restrain the company from creating any rights over the premises by either selling or transferring the rights to third parties. The Union sought an enquiry into the allegations of unfair labour practices and a declaration that the company engaged in unfair labour practices under item 9 of Schedule IV. The union also sought a direction to desist from indulging in unfair labour practices and a direction to pay the amounts claimed.
10. It was contended that three settlements had been entered into between the parties dated 13th September, 1991, 21st February, 1993 and 21st December, 1993 which provided that if the dues were not paid by a cut off date, the employees would be considered as being employed by the company. In support of her contention, Ms. Sarnaik relied upon the three settlements referred to above. According to her, by virtue of these settlements the company agreed to pay gratuity as well. In particular she made reference to clause 14 of the settlement dated 21st February, 1993 which reads as follows:-
*9* WP-6338.01 & 939.02.odt "It is agreed by the company management that if the Management fail to pay the amounts, benefits under this settlement on or before 30.10.1993, it will be presumed that as if this agreement is not entered into and all the employees shall remain in continuous employment and shall be entitled for full wages continuously."
(emphasis supplied)
11. Relying upon the said provision, it was submitted by Ms. Sarnaik that the company had already agreed that all the amounts are payable before 30 th October, 1993 failing which the employees would be deemed to remain in continuous employment. In view of the aforesaid settlement it is Ms. Sarnaik's case that the amounts claimed should have been paid over to all the employees concerned. Ms. Sarnaik relied upon the judgment in the case of Carona Ltd. V/s. Sitaram Atmaram Ghag & Ors. 1, in which the Court had considered the scope of the MRTU & PULP Act to the extent it concerned recovery of gratuity. In the order impugned therein, while allowing the complaint the Industrial Court gave consequential directions regarding payment of gratuity. It was contended that recovery of gratuity cannot be claimed in an action alleging unfair labour practices. The submission was rejected by observing that once the Court comes to the conclusion that unfair labour practices has been committed, it was entitled to issue directions under Section 30 of the Act to 1 2000 II CLR 295 *10* WP-6338.01 & 939.02.odt award the unfair labour practices. In conclusion Ms.Sarnaik submitted that the order impugned in the Union's petition is liable to be allowed.
12. In support of company's challenge, Ms. Doshi submitted that the impugned orders passed in Misc. Application (ULP)no.21 of 1994, 7 of 1998, Complaint (ULP)no.95 of 1998 which are subject matter of challenge require to be set aside since there are errors apparent on the face of the record, besides the orders are grossly perverse, bad in law and a result of non-application of mind. In the course of her submissions, it was contended that on the aspect of liability the issues before the Industrial Court were as follows:-
"(i) Whether, if at all, workmen who were members of the union were entitled to wages, bonus and interest for the period of 27 months from 1st April, 1992 to 30th June, 1994 and for the period 1 st July, 1994 to 31st December, 1997 and the number of workers workers who would be denied to the benefit?
(ii) Whether the date of closure of the unit was to be taken as 31 st December, 1995 or 31st December, 1997? and
(iii) Whether closure compensation was at all payable to any employee?
If yes the amounts payable and the dates from which they were paid?
(iv) Lastly whether gratuity could be claimed in proceedings under the MRTU & PULP Act, 1971?] *11* WP-6338.01 & 939.02.odt
13. Ms. Doshi further contended that the company had entered into an agreement with Rajkotia Securities Limited for the purpose of the development of the property and by virtue of the said agreement the land housing the factory premises was to be developed and as a result manufacturing activities had been discontinued since the year 1987. She submitted that Court had omitted to take this vital fact into consideration while passing the impugned orders. She further submitted that the order passed pursuant to Recovery Certificate dated 29th September, 1999 in Misc. Application (ULP)no.7 of 1998 as corrected by the order dated 19th March, 2001 and order passed in Misc. Application (ULP)no.21 of 1994 were required to be set aside.
14. Ms. Doshi invited my attention to the order dated 1 st July, 1996 passed in Writ Petition no.171 of 1995 wherein the Court had initially stayed proceeding under Section 50 to enable the company to sell its lands and scrap to pay the workers and debtors their dues. They were directed to provide names of the buyers and the price that the company was likely to receive. Thereafter the Labour Commissioner was directed to pass appropriate orders. By another order dated 25th March, 1997 the Industrial Court after considering an application made by the Union on the Recovery Certificate and seeking enforcement of the same observed that the company had filed an application (Exhibit C-12) contending that payment made to 5 employees mentioned in the *12* WP-6338.01 & 939.02.odt calculation application were required to be deducted from the amount mentioned in the Recovery Certificate which had by then been sent to the Collector for recovery. The company also filed a further application (Exhibit C-14).
15. The Court came to the conclusion after examining all documents that before issuing Recovery Certificate, the Collector had heard all the parties at length and the certificate was issued only thereafter. A writ petition then came to be filed in this Court challenging the Recovery Certificate which came to be dismissed. The Court found that the company's application Exhibit C-14 seeking adjustment of amounts was also not required to be considered at that stage. In conclusion, the Court found that the company's application for adjustment could not be considered and it is held that amount of Rs.20,12,458.33 was then due from the company to the union.
16. The company then filed a review application for reviewing the said order dated 25th March, 1997. It was contended that the company had paid advances towards wages from time to time and the advances having been paid, the company should not have been asked to pay interest. Further it was contended that certain employees had expired. In respect of those persons it was not necessary to deposit their claims in the Court. Furthermore, if the *13* WP-6338.01 & 939.02.odt company was required to pay as directed to the employees who have not received full and final payments, it could have been treated as wages. If the same is treated as wages, then deductions from PF towards professional tax are also required to be made. The company therefore sought a set off of Rs.60,142.84 from the total sum of Rs.20,12,458.33. The union consented to the said set off and as a result the Labour Court directed to refund the amount as soon as it is deposited in a sum of Rs.60,142.84. These orders were relied upon to demonstrate that at every stage the contention involved reference to the particular workman and the nature of amounts that could have been recovered.
17. Meanwhile, in Writ Petition no.4816 of 1997 challenging the order passed by the Industrial Court on 30 th July, 1997 in Misc. Application Review (ULP)no.13 of 1997 and Misc. Application (ULP)no.5 of 1992, inter alia, seeking cancellation of the Recovery Certificates, this Court observed that certain amounts had already been paid to the workmen and a sum of Rs.10,92,997.24 was due and payable on account of the impugned orders. In the circumstances, the said amount was directed to be paid to the union after adjustment of Rs.4,68,971/- already deposited in the Industrial Court. The union was permitted to withdraw the amounts deposited in the Industrial Court, Pune. Thus, Ms. Doshi contended that amounts claimed vide Misc. Application (ULP) no.5 of 1992 had been paid over and no other payments *14* WP-6338.01 & 939.02.odt were due to the Company.
18. It is further contended and as canvassed by Ms. Doshi that the claim for gratuity can only be made under the payment of Gratuity Act. Ms. Doshi also invited my attention to the order passed in Writ Petition no.2995 of 2001 dated 17th June, 2002. Writ Petition no.2995 of 2001 filed by the Union had sought a direction to the Collector of Pune to attach to sell the company's property but that writ petition was disposed in view of the present writ petitions being filed. She therefore submitted that for all the aforesaid reasons the impugned orders are required to be quashed.
19. In support of her contentions, Ms. Doshi relied upon the following judgments:-
(1) Vaibhav Laxman Suravkar, Raigad & Anr. V/s. Ultra Drytech Engineering Ltd., Raigad & Anr.; 2 (2)Ultra Drytech Engineering Ltd. & Anr. V/s. Vaibhav Laxman Suravkar & Anr.; 3 (3) Central Inland Water Transport Corporation Ltd. V/s. The Workmen and another; 4 2 2004 I CLR 145 3 2005 I CLR 26 4 AIR 1974 Supreme Court 1604 *15* WP-6338.01 & 939.02.odt (4) State of Punjab v/s. The Labour Court, Jullundur and others; 5 (5) U. P. State Brassware Corpn. Ltd. and another V/s. Uday Narain Pandey; 6 (6) Regional Manager, SBI V/s. Rakesh Kumar Tewari; 7 (7) Narang Telex and Dispersions Pvt. Ltd. V/s. Mrs. S. V. Suvarna and another; 8
19. I have heard the learned counsel at length. The impugned order framed the following issues:
"(1) Whether the complainant proves that the respondent company is engaged in the unfair labour practices, as alleged in the complaint?
(2) Whether the employees who have attained the age of superannuation are entitled to get the closure compensation? (3) Whether the respondent company has proved that the employees listed in Annexure-A to the complaint are gainfully employed?
(4) Whether the complainant is entitled for the reliefs asked for?
(5) What order?"
5 AIR 1979 Supreme Court 1981 6 (2006) 1 SCC 479 7 (2006) 1 SCC 530 8 1994 (68) F.L.R. 1028 *16* WP-6338.01 & 939.02.odt
20. The Court held that the Union had proved unfair labour practices only under item 9 of Schedule IV of the Act. It held that the employees who had attained the age of superannuation were not entitled to closure compensation. It also held that company failed to prove that some of the employees were gainfully employed. The petitioner union being aggrieved with these findings have filed their petition, inter alia, on the ground that the company ought to have paid closure compensation in respect of all 39 members. Furthermore, the petitioner union is aggrieved by the fact that the Industrial Court held that 16 employees who had attained the age of superannuation could not be treated as employees as on the date of closure. The union is also aggrieved by the fact that 16 employees were not informed in writing about the fact of their employment having been terminated on attaining age of superannuation. That they continued to be in the employment of the respondent company till 1 st January, 1998 and therefore became entitled to closure compensation and gratuity.
21. Perusal of the impugned order reveals that in arriving at the decision the Court considers whether the establishment had been permanently closed. Findings recorded are to the effect that since August, 1987 manufacturing activities had ceased and that despite the Union having called upon the company to confirm closure of the factory they had not done so in writing. The *17* WP-6338.01 & 939.02.odt witness on behalf of the company admitted that due to losses they have closed down manufacturing activities permanently. He admitted that the company had got the housing scheme sanctioned after dismantling the machinery in the factory premises. Relying on the said deposition, the Court held that the manufacturing activities had not been carried out since August 1987. The dismantling of machinery installed in the premises itself led to the conclusion that the respondent has no intention to restart manufacturing activities. That apart, the Industrial Court found that there was no evidence to show that in the past 10 years the company had purchased any raw material for carrying out manufacturing activities. The Court found in favour of the petitioner union that since 1st January, 1998 the company had permanently shut down.
22. The Court considered whether the 16 employees were entitled to claim compensation and gratuity. It was contended on behalf of the company that there were 14 persons from among the 39 who were employed elsewhere but the company failed to establish by cogent evidence that these 14 persons were employed elsewhere. The contention of the company that these employees were employed elsewhere came to be rejected. The Court further found that 16 employees who were born in the year 1937 and prior thereto would have retired from the services as on 1 st January, 1998 on attaining the age of 60 and therefore these employees could not be treated as employees of the respondent *18* WP-6338.01 & 939.02.odt as on the date of closure.
23. In paragraph 16 of the impugned order, the Industrial Court dealt with the allegations of unfair labour practices under items 5, 7, 9 and 10 of Schedule IV of the Act but held that only item 9 stood proved i.e. failing to provide closure compensation to persons in employment of the company as of date of closure. As far as other items of Schedule IV are concerned, the Industrial Court held that merely because some of the workmen had settled disputes out of Court did not mean that the company had discriminated against some employees. On the other hand, the Industrial Court recorded that an offer was made by the company through counsel that they were ready and willing to settle the disputes with those who were agreeable to accept the settlement terms offered to others. No evidence that the respondent company had compelled the workmen concerned to settle out of Court was found. After due consideration of all these aspects, the Court held that the 16 employees were not entitled to get compensation but the remaining 23 were so entitled and that the company should pay future interest at the rate of 10% p.a. Thus, the complaint came to be partly allowed holding that these 23 employees were entitled to closure compensation and directing the company to pay closure compensation to them.
*19* WP-6338.01 & 939.02.odt 24. Ms. Sarnaik had pointed out that the Union's witness in the cross
examination had deposed that he has been working with Secretary of the union since 1963 and that the manufacturing activities in the respondent company closed from 1997-98. This is contrary to the company's case that the manufacturing activities stopped in the year 1987. He deposed that the workmen go to the factory gate and record their presence. Further cross examination however, revealed and as pointed out by Mr. Doshi that the union did not have any correspondence with the company recording that these workmen were in attendance at the factory premises and that they were entitled to wages. The witness was asked whether the workmen gainfully employed elsewhere which suggestion was denied. However, the witness admitted that the company did not offer any dues by way of settlement that would offered to other workers in effect reference was being made out of Court settlements that the company had entered into with the other workmen.
25. The second witness of the Union Mr. Deokar contended that since 1987 they were attending the factory gate for work and that the company never informed them that they were retired from service. It was contended by all workmen who were members of the union who had not been paid wages from 1987 nor were they paid closure compensation. Even in the cross examination, he deposed that since 1987 till 1997 they were attending the factory gate for *20* WP-6338.01 & 939.02.odt work and that the wages have been paid till 1992. No document is seen to have been produced at that time. Ms. Doshi pointed out that evidence of the witness of the company clearly established that about 140 workers were shown on the muster roll when the company closed down the manufacturing activities in the year 1987 and at no point this evidence had been disturbed in the cross examination. Ms. Doshi submitted that there is nothing to show that the employees had been attending the factory gate from August 1987 till 1997 and that the claim of the union is unsustainable.
26. The Court apparently disregarded the fact that the deposition of the Union's witness Shri Paigude had revealed that there was no documentary evidence on record to show that employees had reported for work. Moreover, since the machinery was dismantled during the intervening period, the question of employees reporting for work did not arise. The evidence of the company's witness had clearly established that no manufacturing activity had been undertaken since 1997 and that the union had not cross examined the said witness on this aspect. The liability to pay wages only arises in the case if the employees had actually worked during the said period. Moreover, there is no question of awarding interest from these amounts. The Court had also ignored the fact that 14 employees were gainfully employed elsewhere and there was no evidence produced by the employees to show that they were not *21* WP-6338.01 & 939.02.odt so employed. The company also contended that the evidence produced established that the employees who were engaged in demolition work etc. and that the amounts actually paid should be set off against the amounts claimed by the union. The company therefore contended that assuming the date of closure was 31st December, 1997 was without any basis, there was sufficient evidence on record to establish that company was effectively closed from August 1987.
27. In the course of hearing, the company filed an additional affidavit in Writ Petition no.6338 of 2001. In this affidavit, Mr. Nainesh Kantilal Mehta, Director of the company has stated that the Industrial Court had rejected the claim of 16 employees who had crossed the age of superannuation and granted relief to 23 employees as set out in paragraph 20 of the impugned order. It is stated that in the meanwhile some of these employees have settled their dues with the company whereas some others have expired. Those who were gainfully employed were not entitled to any relief and that the Industrial Court while granting the claim of 23 employees relied upon in Annexure D to the complaint to identify the said persons. The claims made was only for gratuity and for closure compensation. The Court had not granted the amounts claimed in Misc. Application(ULP)nos.21 of 1994 and 7 of 1998. These Misc. Applications were disposed on 14 th September, 1999 which order was assailed on 9th September, 2000. It is pointed out that the Industrial Court did not *22* WP-6338.01 & 939.02.odt considered the claim for difference in wages and in any event the claim did not survive since the company had already made full and final payment. Out of 16 persons, 8 persons named in the affidavit had settled their claims. It was further submitted that out of 16 employees, six persons had expired but the dates of demise were not known.
28. Furthermore, two of the employees Shiva Mahadu Gaikwad and Sadashiv Bhiwa Jagtap had not settled their claim with the company. Further four employees Shankar Gangaram Gaikwad , Smt. Janabai Piraji Jadhav, Smt. Sonabai Dondiba Bhosale and Smt. Yamuna Shripati Shinde had shifted their residence to their villages since they had agricultural properties there. Employees Shri Shivdas Bajirao Pawar, Dagadu Vithal Kamble, Nivrutti Babu Dede, Smt. Suja Amir Shaikh, Tanaji Dhondiba Kale (deceased) and Manik Eknath Ingale (deceased) had settled their claim and six employees had retired. The affidavit reiterates that 13 other employees were gainfully employed and out of these two persons Murlidhar Bhagwan Relkar and Karim Ramzan Shaikh had continued to use their service quarters allotted to them. They have refused to vacate as a result the company had adopted proceedings under Section 630 of the Companies Act against these persons. That the Industrial Court had accepted the company's contention that employees who were born prior to 1937 would be treated as having superannuated and out of 4 names referred to *23* WP-6338.01 & 939.02.odt in the impugned award two persons G. S. Pawar and G. R. Shendge had expired whereas Mr. Dedhe and Relkar were gainfully employed. Mr.Relkar was born prior 1937 and hence was not entitled to claim any relief. The affidavit also contains the prayer to direct the union to furnish details of gainful employment. These factual assertions have not been disputed by the Union.
29. Apropos the case law cited, Ultra Drytech (supra), this Court held that the provisions of Section 33C(1) of the Industrial Disputes Act are in pari materia of the Section 50 of the MRTU & PULP Act and that the law laid down by the Supreme Court in the cases pertaining to Industrial Disputes Act would be applicable to cases under the MRTU & PULP Act. The issue was whether under Section 50 of the MRTU & PULP Act it is necessary that the amounts should have been computed and determined and that the Industrial Court did not have jurisdiction to arithmetically compute the amount. The Division Bench after dealing with the provisions of the different statutes held that the jurisdiction of the Industrial Court under Section 50 permits a simple arithmetical calculation for granting interim relief and that under Section 50 of the MRTU & PULP Act authorities are not permitted to determine rights of parties. Once the rights are determined by adjudication then it is open to Industrial Court to grant relief and that section 50 was intended to provide expeditious remedies. The Court upheld the view of a single Judge of this Court *24* WP-6338.01 & 939.02.odt as he then was, in line with the decision of the Supreme Court which also held that the ratio in the case of V. Ramanathan (supra) had been wrongly decided and the same was expressly overruled.
30. In paragraph 16 of Vaibhav Laxman (supra), the single Judge observed that under Section 50, it would not be open to the Labour and Industrial Court to adjudicate upon an entitlement for the first time. Reference was made to the case of V. Ramanathan v/s. Hindustan Lever Ltd.9 in that respect. It is further observed that Section 50 refers to a situation where money is due to an employee from the employer under an order passed by the Court under Chapter VI. If the entitlement of the employees has already been adjudicated upon and a simple arithmetical calculation was required to be made, the workmen were entitled to move the Industrial Court under Section 50. The workmen do not lose their remedy under Section 50 merely because the arithmetical computation remained to be made and was not made in the order of which the enforcement is sought. The Court further held that it is not possible to hold that merely because the original order did not contain a final computation provisions of Section 50 could not be availed of.
31. In the case of Central Inland Water Transport Corporation Ltd. (supra), the Supreme Court dealt with the scope of proceedings in execution. It held that 9 2002 I CLR 231 *25* WP-6338.01 & 939.02.odt a proceeding under Section 33 C(2) is one in execution wherein the Labour Court calculates the amount of money due to a workman and therefore investigation for determining the entitlement is outside its scope under Section 33C(2). The Court could not determine anything beyond that. The function of the Industrial Tribunal is to adjudicate and determine liability. In that case, the company had closed its business in May 1967 and the undertaking was transferred. The transferee corporation appointed many employees by issuing fresh letters of appointment but could not observe all of them. Reference under Section 33 C(2) was made on behalf of the employees since Section 25FF of the Industrial Disputes Act declared the rights of a workmen of an undertaking which is transferred. The right of the workmen who were retrenched to receive compensation under Section 25FF and that is available only against owners of the undertaking i.e. transferees. The former employees could not make a claim against the transferors. The focus of the said judgment is on the fact that no determination could be made under Section 50.
32. In State of Punjab (supra) in which Supreme Court held that payment of gratuity is due on retrenchment of an employee and that the act is a complete code in itself and that for claiming gratuity, proceedings for payment of gratuity due under the Payment of Gratuity Act must be adopted under that Act and not under any other Acts. Misc. Applications under Section 33C(2) of the *26* WP-6338.01 & 939.02.odt Industrial Disputes Act did not lie and that the Labour Court had no jurisdiction to entertain and dispose them.
33. In the case of U.P. State Brassware Corpn. Ltd. (supra), the Supreme Court held that inherent powers of the Court to mould the relief and pleas to the effect that workmen were not gainfully employed during the period for which back wages were claimed was clearly on the workmen and they were required to establish that they were not employed. Reference was made to Section 106 of the Evidence Act, 1872 which entailed that when a fact is especially within the knowledge of any person, the burden of proving it is upon him. In the instant case, Ms. Doshi submitted that the burden of proving that the persons were not gainfully employed was clearly upon the workman.
34. In Regional Manager, SBI (supra), my attention was invited to paragraph 14 which inter alia dealt with Section 25G of the Industrial Disputes Act. The section required the employer, ordinarily, to retrench a workman who was the last person to be employed in a particular category unless for reasons recorded the employer retrenches any other workmen. The "last come first go" rule applied where aspects on which evidence is required to be led and this would entail that there must be foundation for such case in the pleadings. No amount of evidence can be looked into unless the plea has been raised. In the *27* WP-6338.01 & 939.02.odt instant case it is contended that the claim had no basis in pleadings.
35. The three settlements relied upon by the Union were not pressed into service in any of the proceedings before the Industrial Court nor were they introduced in evidence. Moreover, no submissions were made in that behalf and therefore the members of the union cannot claim to be continued in employment on the basis of the provisions of the settlement. Moreover, the validity of the settlement would have expired in one year from the date of settlement and hence the inclusion of a provision that the employees would be deemed to be continued in employment is of no avail. I am therefore unable to accept Ms. Sarnaik's contentions based on the three settlements which Industrial Court had no occasion to consider.
36. I find that in Carona Ltd. (supra) the single Judge, as he then was, had taken into account the decision of the Supreme Court in State of Punjab (supra) and after reproducing the observations of the Supreme Court the Court observed that the subject matter in that case was an application under Section 33C(2) of the Industrial Disputes Act for recovery of gratuity. The Apex Court had held that Section 33C(2) would not be attracted considering the scheme of payment of Gratuity Act. The ratio of that judgment it was held would not apply to the facts in Carona. The complainant had approached the Court with *28* WP-6338.01 & 939.02.odt a case that the petitioners had committed an unfair labour practice under item 9 of Schedule IV and, therefore, it was not a case of execution. The question was whether unfair labour practices had been committed. Once the Court concluded that unfair labour practices had been committed, it was entitled to issue direction under Section 33C(2) these directions could not be said to be proceedings for recovery and once this distinction is taken into account, the ratio of the Apex Court could not be applied. The ratio of State of Punjab will have to be restricted to cases where parties initiated proceedings for execution of recovery of gratuity. The challenge in Writ petition nos.6338 of 2001 to the impugned order dated 14th September, 1999 in Complaint (ULP)no.95 of 1998 must therefore be rejected.
37. I am in agreement with the submission made on behalf of the Company that only a simple arithmetical calculation is permissible by the Industrial Court under Section 50 and the rights of the parties could not be determined under Section 50 that stage would have been completed earlier. The Industrial Court has not made any arithmetical calculation of the amounts and the number of employees to whom such amounts were paid. The Court has failed to consider that there were no pleadings on behalf of the union as to workers being gainfully employed workers having attained superannuation or those who have passed away. In view of the company's contention that many of the employees *29* WP-6338.01 & 939.02.odt have settled their claims, the industrial Tribunal ought to have ascertained these facts. The union had in a rough and ready manner calculated dues of 39 employees having regarding wages , interest, gratuity and closure compensation. The witness on behalf of the union Mr. Paigude had admitted that the particulars of dates of work of employees who are said to have superannuated was correct. He has also admitted that he was not personally present at the factory gates to enable him to depose that the workers had been reporting for work at the gate. Mr. Paigude had denied that the employees were not gainfully employed but none of the employees concerned led evidence to establish that despite their best efforts they were not gainfully employed.
38. Mr. Deokar, witness on behalf of the union had deposed that it is not possible to state when employees had superannuated since there was no intimation from the company. The witness admitted that he cannot specify the dates when some persons had passed away during the pendency of the proceedings. Although the company's witness Mr. Mehta had been examined, his cross examination did not challenge any of his contentions. The company's witness had denied the suggestion that the employees were not gainfully employed but none of the employees deposed that they were unable to get employment. The company contended that the union had filed Civil Application no.6193 of 1995 in Writ Petition no.171 of 1995 in which it claimed that the *30* WP-6338.01 & 939.02.odt company had been closed from 1995. The company contended that in view of this admission, compensation could not be claimed till 1997. This submission on behalf of the Company merits acceptance.
39. The principal submissions on behalf of the Union are to the effect that the findings of the Industrial Court are perverse resulting in misdirection and failure to exercise the jurisdiction vested in the court resulting in errors apparent. The challenge particularly dealt with perversity inasmuch as the impugned order is passed on the basis that the contents of Annexure D to the complaint are undisputed, true and correct and Annexure D as we have seen consisting of a statement listing out 29 names of employees, their grades, dates of appointment total service in number of years, last drawn wages, rate and at which wages were paid, the amount of gratuity and amounts of closure compensation. In respect of these 39 persons diverse amounts have been computed and thereafter collectively gratuity is valued at Rs.14,66,492.10. Closure compensation is computed at Rs.12,23,348.75. These amounts have been unilaterally computed by the union and it is seen from the reply to the complaint dated 3rd March, 1998 that the company has disputed the contents of Annexure D in paragraph 3 of the complaint, it is contended that the union had not established that names of persons shown in Annexure are members of the complainant union and had locus to file the complaint. However, in paragraph *31* WP-6338.01 & 939.02.odt 7 the company states that it had paid the wages to employees whose names have been shown under Annexure D. Out of these employees, the impugned order holds in favour of 23 employees since according to the Industrial Court 16 employees who had superannuated even after considering this. It is the case of the company that the 14 employees out of 23 were gainfully employed elsewhere.
40. In this background, it is obvious that the burden of proving that the workmen were not gainfully employed was upon the union which has not made any effort to establish that efforts were made by its members to obtain employment during the period for which the claim was made but they had failed in doing so. Although as a general proportion it would be difficult to establish the negative i.e. to prove that he was not employed considering Section 106 of the Evidence Act and in view of the decision of the Court in Kendriya Vidyalaya Sanghatana v/s. S. C. Sharma 10 and as followed in U.P. State Brassware Corporation Ltd. (supra) it is evident that the employee concerned must try and establish his case that he could not secure employment despite of reasonable efforts. In that view of the matter, it must be held that the impugned order has failed to consider the requirements of law and has proceeded to hold against the company in respect of 23 persons merely on the basis of the statement contained in Annexure D without considering the fact 10 (2005) 2 SCC 363 *32* WP-6338.01 & 939.02.odt that no serious attempt was made by the Union to establish that 14 persons named by the company were not gainfully employed. It may be that the company did not respond to notices issued by the union prior to filing the complaint on 13th October, 1997 and on 3rd January, 1998 and that the notice dated 3rd January, 1998 did contain a claim for payment of terminal benefits including gratuity and closure compensation but the fact remains that during the trial no effort was made by the union to conclusively establish that the workmen named by the company were not gainfully employed elsewhere.
41. In this behalf, Ms. Doshi had produced before this Court statements containing names of persons who were gainfully employed viz. M. B. Relkar, H. M. Jadhav, K. R. Shaikh, G. B. Gaikwad, N. A. Gaikwad, B. S. Jagtap, R. T. Gavate, B. Y. Shaikh, D. S. Gaiekwad, P.P.Chavan, G. S. Pawar and S. S. Pawar. Ms. Doshi had produced a statement of superannuated employees who are 11 in number although the impugned order sets out 16 persons who were not entitled to make the claim since they had superannuated. None of these have been disputed bu the Union. Furthermore, Ms. Doshi submitted that the company had provided a bank guarantee of Rs.20 lakhs which has been renewed from time to time and was presently valid upto 15 th October, 2020. This bank guarantee was provided in terms of order dated 2 nd May, 2002 passed by this Court when the petitions were admitted. She submitted that the Bank *33* WP-6338.01 & 939.02.odt Guarantee was liable to be discharged.
42. The computation of closure compensation had also been disputed, yet, the Industrial Court has failed to make a proper arithmetical calculation with reference to the concerned reference, their grades , dates of appointment and rates of wages but has mechanically approved the contents of Annexure D. In the absence of consent of the company or express proof of contents Annexure D it was not open for the tribunal to proceed on the basis that Annexure D represented an agreed computation. Indeed the issue as to what amounts were due to the employees for the different periods towards bonus and interest, if any, and gratuity was open as also the issue whether the gratuity could have been claimed under the MRTU & PULP Act. In this respect, the company has relied upon the decision of the Supreme Court in State of Punjab (supra) which held that the Act was a code in itself gratuity can be claimed under that Act. In Carona Ltd. (supra) this Court has in the facts of that case observed that grant of gratuity in an application under the MRTU & PULP act, cannot be bad in law if the amounts were otherwise found to be due that a recovery application wherein claim for gratuity is incidental were always be made. However, in the facts of the present case I am of the view that we need not enter upon this controversy since the company since the company had not admitted the computation of gratuity. The question is whether the Industrial Court could have proceeded to award the amount albeit for 23 persons, merely on the basis *34* WP-6338.01 & 939.02.odt of the computation under Annexure D without having the same proved before it. The answer in my view must be in the negative.
43. In my view reliance placed on the three settlements between the parties dated 13th September, 1991, 21st February, 1993 and 21st December, 1993 is not of any assistance to the Union since the non-compliance if any would result breach of the terms of the settlement, inasmuch as, the difference vary existence as dispute. It is evident that provisions of the settlement which remain to be complied with cannot be enforced since the settlements would in any event not survive after the expiry of one year. Even otherwise if we were to give effect of clause 14, the result would be that the settlement could not be treated as operational. This is because the clause clearly provides that if payments are not made on time, the agreement would be treated as non existent (see portion emphasized in the quote in paragraph 9 above).
44. In the circumstances, I am of the view that the Industrial Court was in error in not having computed the amounts claimed especially in view of denial by the company . The fact that the evidence led before the Court on behalf of the union that of Mr. Baburao Paigude did not even attempt to prove the contents of Annexure D. In the cross examination, Mr. Paigude admitted that he was not present at the factory gate to depose that the workmen concerned were attending the factory. No attempt was made by the members to establish *35* WP-6338.01 & 939.02.odt that the workmen had attempted to gain employment elsewhere and apart from mere denial that the workmen concerned had gainfully employed elsewhere, there is no evidence forthcoming on the aspect either. For all the aforesaid reasons, I am of the view that the impugned order cannot be sustained and that the union has failed to establish their case. Even in the petition filed by the union bearing no.6338 of 2001 the only challenge is limited to the effect that relief was not granted to 16 employees on the basis of superannuation. In my view, the order dated 14 th September, 1999 passed in Complaint (ULP)no.95 of 1998 is not sustainable. Further the conclusion reached by the tribunal for allowing Misc. Application nos.21 of 1994 and 7 of 1994 in respect of all the employees but restricting the grant of relief of 23 persons in Complaint (ULP)no.95 of 1998 is demonstrative of non-application of mind. The challenge mounted by the Union fails and company must succeed and I pass the following order:-
(i) Rule made absolute in terms of prayer clause (a).
(ii) The bank guarantee furnished by the company pursuant to orders dated 2 nd May, 2002, 8th August, 2002 and 12th June, 2003 shall be kept valid for a period of six months from today.
(iii) No orders as to costs.
(A. K. MENON, J.) Sandhya Bhagu Wadhwa Digitally signed by Sandhya Bhagu Wadhwa Date: 2018.08.31 19:42:18 +0530