Delhi District Court
B) Air 1975 Sc 1745 Sahu Minerals ... vs Presiding on 16 November, 2009
BEFORE THE COURT OF SH A.S. JAYACHANDRA
PO : LABOUR COURT : KKD : DELHI
ID No.323/08/94
(Notification No. F.24(1263)/94-Lab. 33595-600 Dated
01.07.1994)
DATE OF RECEIPT :03.01.1995
FIRST DATE BEFORE THIS COURT : 13.12.2008
ARGUMENTS CONCLUDED ON : 27.10.2009
AWARD ON 16.11.2009
IN THE MATTER OF :
M/s Special Protection Services (P) Ltd.
Herald House, 5-A
Bahadurshah Zafar Marg
New Delhi ........... Management
versus
Delhi State Newspaper Employees Federation
Flat No. 29, Shankar Market, Connaught Circus
New Delhi-110001
(P.G. Unnikrishnan & Ors.) ................Workmen
AWARD
1. This reference dated 01.07.1994, was received from the
government vide No. F.24(1263)/94-Lab.33595-600 is as under :
Whether the services of S/Sh. P.G. Unnikrishnan, B.K. Mishra,
Mukesh Updadhay, Santosh Kumar, R.N. Tiwari, Satish Kumar and Y.N.
1/17
Tiwari, have been terminated illegally and / or unjustifiably by way of
retrenchment and if so, to what relief are they entitled and what
directions are necessary in this respect ?
2. CASE OF THE WORKMEN : The workmen claim that they
were working with the management and their details are as under :
S. Name Designation Appointment
No.
1 P.G. Unnikrishnan Asstt. Photographer 01/01/90
2 B.K. Mishra Paster 01/10/89
3 Mukesh Upadhyay DTP Operator 25/05/1992
4 Santosh Kumar Dark Room Asstt. 22/02/1990
5 R.N. Tiwari Paster 18/01/1990
6 Satish Kmar Camera Operator 01/01/89
7 Y.N. Tiwari Librarian Assistant 19/06/1990
They contend that they have completed more than a year of
continuous service with the establishment dealing in the publication of
'Daily Mid Day.' There were no complaints on the performance of their
work. All of them were terminated by a notice dated 12.01.1994.
workmen contend that the above notice of retrenchment is mala-fide
and there was no circumstance calling for retrenchment. Workmen
submit that one month notice or wages in lieu thereof was given to
them. The same is illegal. They filed a joint letter dated 14.01.1994,
protesting the illegal termination. The Daily Mid Day still continues its
publication and there was no reason to have terminated the workmen.
2/17
The management resorted to victimisation and unfair labour practice.
Juniors were retained. The management further employed other
workmen. Their families are shattered. Hence, the present reference.
3. CASE OF THE MANAGEMENT : The management contends that
it followed the relevant provisions of Section 25(F) and Section 25 (G)
of the ID Act and all the rules therein. The appropriate government
was also notified. There was no violation of any provision of law. The
management had tendered one month pay in lieu of notice. There was
no illegality. The workmen were terminated since the Hindi edition
was closed down. The pasteup and process camera departments came
to be replaced by the advance printing technology. Since the
retrenchment compensation was given to 16 people of which 9
willingly accepted, the case of the present workmen is highly
misconceived. The allegations made in the claim statement are
denied. The management further stated that the Hindi edition the
'Daily Mid Day' was closed down in January, 1993. As regards the
appointment of juniors, the management stated that no junior was
retained after retrenchment. The principle of last come first go was
adopted. The management seeks dismissal of the claim.
4. Rejoinder is filed by the workmen reiterating that the
retrenchment is not in conformity with law. The closure. The
3/17
introduction of new technology is also termed as mala-fide having no
relevance whatsoever. Based on the pleadings, my Ld. Predecessor
had framed the following two issues on 20.10.1995 :-
a) Whether the management did not comply with the conditions
precedent to valid retrenchment provided under Section 25F of the
Industrial Disputes Act, and the retrenchment is illegal ? OPW
b) Whether the workman or any of them is gainfully employed ?
OPM
5. EVIDENCE : Four workmen were examined on behalf of the
workmen. Workmen P.G. Unnikrishnan, Mukesh Upadhay and Santosh
Kumar, did not enter into the witness box. On behalf of the
management one Yogesh Kumar, Senior Executive was examined.
6. Arguments were heard.
7. CONTENTIONS : On behalf of the workmen, it was
contended that the very intention of the management is mala-fide.
The retrenchment of these workmen is not only illegal but also a policy
of victimisation. It was argued that the Daily Mid Day publication is sill
in vogue and therefore, the terms of reference be answered in favour
of the workmen. Ld. AR for the workmen relied on the following rulings
:
4/17
a) 1999 (2) LLJ 600 SC Lokmat Newspapers Pvt. Ltd. V/s
Shankarpasad ;
b) AIR 1975 SC 1745 Sahu Minerals Properties Ltd. V/s Presiding
Officer, Labour Court and Others ;
c) AIR 1960 SC 923 M/s Hathisingh Manufacturing Co. v/s Union of
India AIR 1960 SC 923 (V 47 C 164) ;
d) AIR 1967 SC 420 (V 54 C 84) Workmen of Subong Tea Estate v/s
Outgoing Management of Subong Tea Estate & Anr. ;
e) AIR 1966 Mad. 416 M/s R.L. Sahani & C. v/s Union of India ;
f) AIR 1964 SC 1746 S(V 51 C 242) Hochtief Gammon v/s Industrial
Tribunal, Bhbanehswar, Orissa and Others ;
g) Kerala State Electricity Board v/s Labor Court 1995 (1) LLJ 411 ;
It was also argued that the publication is in existence. The plea
that the publication was sold can not be a ground to cure the illegality.
No workmen can be dismissed just because the workmen can not be
employed. He argued that it is not 'indeterminate closure.' On the
other hand, it was argued by the Ld. AR for the management that
retrenchment can not be treated as tainted since the Hindi edition
suffered the loss. It was pointed out to me that the workmen could not
demolish the case of the management regarding the compliance of
Section 25F of the ID Act. In rebuttal, the AR for the workmen submits
5/17
that switching over to the advance technology can not be allowed
since there was no notice U/s 9A of the ID Act. The change of
ownership does not amount to closure.
8. Having kept the arguments of both the sides in mind and after
the perusal of the evidence available on record, I am to answer the
issues as under.
9. ISSUE NUMBER - 1 : The onus to prove this issue is on the
workmen. The four workmen who examined themselves have filed
their similar affidavits. The manner in which the affidavits are filed in
the court is seriously objected by the Ld. ARM. Even the name and
description of the deponent is filled up later apart from filling up the
blanks at para 3 of the affidavit. I have taken note of the affidavits
which do not contain the number of corrections duly attested, added
thereto. However, it is common prudence that the technicalities
should not outweigh the course of justice. Apart from the above
technical defects in the affidavits, I find that all the workmen had
sworn to similar facts where they stated that the management started
harassing the workmen and terminated the services of the workmen
on 12.01.1994. They have been retrenched w.e.f. 12.01.1994. They
protested the retrenchment. They contend that the termination is
mala-fide and there is no basis for retrenchment. All the workmen
6/17
were cross-examined. In the cross-examination, it is suggested to that
all the workmen were working in the Hindi edition & that the Hindi
edition was closed down. They admit having received the cheque
under protest. WWW 2 in the cross-examination volunteers that he
worked for English edition. WW 3 Ravinder Nath, deposed in the cross-
examination that he was working with both Hindi as well as English
edition. WW 4 Satish Kumar deposed that he was working for English
edition. There is no positive evidence by the workman that they
worked for English edition except their bald statement. A suggestion
was made to this workman that the rights and liabilities of the
management were assigned in favour of the Mid Day Multimedia Ltd.
Mumbai on 21.12.2006, for which the witness have express their
ignorance. They claimed that their removal is illegal.
10. Management on the other hand, examined one Yogesh Kumar, as
MW 1. He is a Senior Executive of Daily Mid Day. He deposed that the
management has complied the relevant provisions of Section 25F and
25G and the rules. The appropriate government also notified. He
testified that the management paid one month notice pay to the
workmen in lieu of the notice, as a law abiding entity. The
management had retrenched 16 workmen & 9 readily accepted. All
the dues to the workmen were sent by the management under
7/17
registered post.
11. Issue number 1 is to deal with the compliance of the conditions
U/s 25F and also the legality of retrenchment. Ld. AR for the
management invited my attention to Ex. MW 1/3, the notice of
retrenchment dated 12.01.1994. I have gone through the same. The
list includes both the workmen and the journalists and other
newspaper employees. Ex. MW 1/4 is the notice given to the
appropriate government regarding the retrenchment. Reason for the
retrenchment as per the notice given to the appropriate government is
that due to poor circulation for the Hindi edition of Daily Mid Day, the
management decided to stop the publication. As sequal to the above
decision, it noted that Accounts and Administration department was to
be restructured and to abolish the pasteup and process camera
department of the publication. Hence, the retrenchment.
12. WW 1 B.K. Mishra, received a cheque for a sum of Rs. 3,368/- at
Ex. MW 1/13. Ex. MW 1/14 is the letter forwarding the cheque for a
sum of Rs. 7,911/- being the retrenchment compensation by registered
post. As regards the WW 2, retrenchment notice is at Ex. MW 1/17,
copy of the cheque at Ex. MW 1 /18 for a sum of Rs. 7,383/- towards
the retrenchment compensation and salary of Rs. 4,634/- at Ex. MW
1/20, which was received under protest.
8/17
13. WW 3 R.N. Tiwari, was also given the notice and the salary
received under protest at Ex. Mw 1/25 and there is a registered post
letter addressed to him enclosing a cheque for a sm of Rs. 6,492/-
being the retrenchment compensation.
14. WW 4 Satish Kmar, was issued with a letter enclosing the
retrenchment compensation at Ex. MW 1/26. The cheque for a sum of
Rs. 4,344/- at Ex. MW 1/30 which was received under protest. The
postal receipts are produced at Ex. MW 1/31 to 1/35.
15. The AR for the management in their written arguments
contended that the pasteup and camera department was closed and
the that the management has dealt with Section 25-F and 25-F of the
ID Act. I am in agreement with the arguments of the Ld. AR for the
management that the stand of the management regarding the
compliance of the provision U/s 25-F is never demolished as there is
nothing to disbelieve the say of MW 1. The management relied on the
full Bench decision of the Hon' Supreme Court in Banaras Ice
Factory, Ltd. V/s Their workmen, 1957 I LLJ 253. Hon' Supreme
Court in that case was dealing with the temporary closure of an ice
factory which went into the loss due to the trade depression. It was the
case of wrongful 'lay off.' The Hon' Supreme Court was not dealing
with the retrenchment in that case. Suffice it to say that the
9/17
management can not be faulted with, as regards compliance of Section
25F of the ID Act. The workmen have not laid any positive and cogent
evidence to prove the non compliance of Section 25F & 25G of the Act.
There is no evidence to believe that juniors were retained in the
service.
16. Issue number 1 is also to deal with the second part as framed by
my Ld. Predecessor. The second part of the issue number 1 is whether
the retrenchment is illegal ? On this point, Ld. ARW relied on the ruling
of Lokmat Newspapers (supra). In that case, the Hon' SC held that
before introducing any change in the technology, notice U/s 9A of the
ID Act, is a must. Though a plea was taken by the management that
the management had resorted to technology computers equipments
which held earlier by manual performance, as in part B of the
preliminary objections of the written statement, the plea for
retrenchment or the basis for retrenchment as per the notice given to
the appropriate government is that the Hindi edition suffered no
circulation and that the management decided to stop the Hindi edition.
From the pleadings, two grounds are urged by the management for
retrenchment.
17. The first ground i.e., the introduction of new technology resulting
in surplus staff, the notice U/s 9A of the ID Act, ought to have been
10/17
followed. The management has not issued such notice. The ruling in
Lokmat Newspapers (supra), the Hon' Supreme Court renders
retrenchment having no basis where such notice is not issued.
18. At the same time, the reasons cited for retrenchment by the
management in compliance of the notice under ID Act, and Rules is
that the circulation of Hindi edition having been fallen to the ground,
the retrenchment was invoked. There is no evidence to the contrary
by the workmen. I see the compliance of the Section 25-F of the ID
Act, by the management in retrenching the workmen. This renders
the retrenchment as not illegal.
19. Under the above peculiar circumstances, the retrenchment is
held as partially opposed to law.
20. ISSUE No. 2 : As regards issue number 2, the affidavits filed
by the workmen at Ex. WW 1/A, WW 3/A and the oral testimony of WW
3 Y.N. Tiwari are perused. All of them have stated that they are not
gainfully employed. In the cross-examination, a suggestion was made
to WW 1 that he is gainfully employed which is denied.
21. In the matter of granting back wages, the Hon' Supreme in
2009 LLR Page 1 titled as UP State Electricity Board Vs. Laxmi
Kant Gupta , Rajasthan Lalit Kala Academy Vs. Radhey Shyam ,
2008-III, LLJ 562, Talwara Co-op. Credit & Service Society Ltd.
11/17
vs. S. Kumar 2009-I-LLJ 328 SC, made it clear that the grant of back
wages is not automatic in every case of illegal termination. In the
present case, I am not able to grant back wages since the
retrenchment is not totally illegal.
22. Ld. AR for the workmen relied on Sahu Minerals and Properties
Ltd. (supra), it was held by Hon' Supreme Court that it was competent
to Labour Court to decide whether the retrenchment compensation or
the Proviso to Sub-Section 1 of Section 25-FFF ID Act, is attracted on
the closure of the establishment.
23. In Hathi Singh Manufacturing Co.(supra), the Hon' Supreme Court
held that loss of service due to closure stands on the same footing as
loss of service due to retrenchment, for in both the cases, the
employee is thrown out of the employment suddenly and for no fault of
his and the hardships which he has to face or the same. It held that
the true basis of Section 25-FFF of the ID Act, is the achievement of
social justice, it is immaterial to consider the motives of the employer
or to decide whether the closure is bona-fide or otherwise. Wages in
lieu of notice are normally inadequate compensation for loss of
employment in an industrial undertaking and therefore, the Parliament
has thought that it is proper to provide for payment of additional
compensation besides wages in lieu of notice (paras 14 and 15).
12/17
24. In the ruling of S.T. Estate (supra), Hon' SC had held that
expenses of retrenchment compensation accepted by some of the
workmen should held to create a bar can not be accepted. Further, in
that case there was a failure to comply with Section 25F of the ID Act.
In that case, there was a transfer of management and since the
managements have failed to comply with Section 25F and 25G, the
workmen were held entitled for reinstatement.
25. In R.L. Sahni & Co. (supra), the Madras High Court held that mere
change of hands would not clothe the establishment with newness.
The rights and liabilities of the employer can not be annihilated. It held
that mere fact that there is a new lessee or a new owner at different
point of time does not mean that the establishment comes into
existence at each stage again.
26. In Hochitief Gammon (supra), the Hon' Supreme Court was
dealing with Section 18(3)(b) & Section 11(3)(10)(1) of the ID Act. It
should be kept in mind that Section 18(3)(c) of the ID Act, binds heirs,
successors or assigns of an employer to which the dispute relates. The
ruling in Kerala Electricity Board (supra) also deals with the powers of
Labour Court to summon the parties and implead them which is of
persuasive value and particularly in view of Section 18(3)(c) ID Act, the
non-impleadment becomes immaterial.
13/17
27. Suffice it to say, from the discussion made above, the rulings
relied by the Ld. AR for workmen does not deal with the grant of back
wages.
28. In the ruling of District Red Cross Society v/s Babita Arora &
Ors. 2007 (7) SCC 366, the Hon' Supreme Court noted the ruling of
Workmen v/s Indian Leave Tobacco Development Co. Ltd. AIR 1970 SC
860 wherein it was held that even if such closure may not amount to
the closure of the business of the Co., the Tribunal has no powers to
issue orders directing a co. to reopen a closed depot or branch, if the
co., in fact closes it down and that the closure is genuine and real.
Further in the ruling, it clearly made out as under.
PARA : 16 - The position in law is,
therefore, well settled that if the entire
establishment of the employer is not closed
down but only a unit or undertaking is
closed down which has no functional
integrity with other units or undertaking,
the provisions of Section 25-FFF of the Act,
will get attracted and the workmen are
only entitled to compensation as provided in
Section 25-FFF of the Act, which has to be
calculated in accordance with Section 25-F
of the Act.
PARA : 17 - In view of the findings
recorded above, the respondent would be
entitled to compensation only in accordance with Section 25-FFF of the Act and the award of reinstatement in service with back wages passed by the Tribunal which has affirmed by the High Court cannot be 14/17 sustained and must be set aside.
29. In the wake of the above, I am to decide what would be the proper relief to the contesting workmen. Considering the long period of gap, no reinstatement can be ordered. More specifically in this case where the Hindi edition is closed down which is not demolished in the cross-examination. Therefore, the compensation is the only the viability.
WW 1 B.K. Mishra, worked for about 5 years. The retrenchment compensation worked out by the management is Rs. 7,911/-. He is entitled for gratuity for the like sum. Keeping the above in mind, the ends of justice would be met if a lump-sum compensation for a sum of Rs. 70,000/- (RUPEES SEVENTY THOUSANDS ONLY) is ordered to be paid by the management towards the compensation for loss of services in view of non compliance U/s 9A of the ID Act, by the management.
WW 2 Y.N. Tiwari, worked for about 4 years. The retrenchment compensation worked out by the management is Rs. 7,383/-. He is entitled for gratuity for the like sum. Keeping the above in mind, the ends of justice would be met if a lump-sum compensation for a sum of Rs. 60,000/- (RUPEES SIXTY THOUSANDS ONLY) is ordered to be paid by the management towards the compensation for loss of services in view of non compliance U/s 9A of the ID Act, by the management. 15/17
WW 3 R.N. Tiwari, worked as a paster for about 4 years. The retrenchment compensation worked out by the management is Rs. 6,492/-. He is entitled for gratuity for the like sum. Keeping the above in mind, the ends of justice would be met if a lump-sum compensation for a sum of Rs. 60,000/- (RUPEES SIXTY THOUSANDS ONLY) is ordered to be paid by the management towards the compensation for loss of services in view of non compliance U/s 9A of the ID Act, by the management.
WW 4 Satish Kumar, worked for about 4 years. The retrenchment compensation worked out by the management is Rs. 9,159/-. He is entitled for gratuity for the like sum. Keeping the above in mind, the ends of justice would be met if a lump-sum compensation for a sum of Rs. 70,000/- (RUPEES SEVENTY THOUSANDS ONLY) is ordered to be paid by the management towards the compensation for loss of services in view of non compliance U/s 9A of the ID Act, by the management. Hence, I pass the following award :
AWARD The claim statement is partly allowed. The claims of P.G. Unnikrishnan, Mukesh Upadahya, Santosh Kumar, are dismissed for want of evidence.
The dismissal/retrenchment of the workmen B.K. Mishra, Y.N. 16/17 Tiwari, R.N. Tiwari and Satish Kumar, is held as violative of Section 9A of the ID Act. However, the retrenchment is in accordance with the provisions of Section 25-F of the ID Act. In the result, the contesting workmen are entitled for compensation worked out above. Reference is answered accordingly.
The management is directed to pay the above compensation as worked out to the workmen B.K. Mishra, Y.N. Tiwari, R.N. Tiwari and Satish Kumar, within 30 days after the publication of this award.
In default, the management shall also pay interest @ 12 % p.a., from the date of award till realisation.
Let the requisite number of copies be sent to the appropriate government for publication.
File be consigned to RR.
16th November, 2009 (A.S. JAYACHANDRA) PO : LABOUR COURT - XVII, DELHI 17/17 18/17