Madras High Court
S. Duraisamy vs The Managing Director on 27 June, 2008
Author: Elipe Dharma Rao
Bench: Elipe Dharma Rao, M.Venugopal
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 27.6.2008
CORAM:
THE HONOURABLE MR.JUSTICE ELIPE DHARMA RAO
AND
THE HONOURABLE MR.JUSTICE M.VENUGOPAL
Writ Appeal No.1734 of 2001
1. S. Duraisamy
2. B.Ramalingam
3. K.G.Simon
4. P.Chellian
5. T. Muthusamy
6. K.Sivaraman
7. J. Thirumurthy ... Appellants
Vs.
1. The Managing Director
Anglo French Textiles
Cuddalore Road,
Mudaliarpet, Pondicherry-605 004.
2. Suryamurthi .. Respondents
* * *
Writ Appeal preferred under Clause 15 of the Letters Patent as against the order of the learned single Judge of this Court in W.P.No.9019 of 1993 dated 20.6.2000.
For appellants ... Mr.N.G.R. Prasad for
M/s Row and Reddy
For R.1 ... Mrs. N. Mala
R.2. .... Died
JUDGMENT
ELIPE DHARMA RAO, J.
The first respondent Anglo French Textiles is a Unit of Pondicherry Textile Corporation Limited, Pondicherry, a Company created under the Companies Act and it is a Government of Pondicherry Undertaking. Originally, the Anglo French Textiles Limited was a private concern and was owning a Mill, which was one of the largest Mills in the Union Territory of Pondicherry and it was functioning till July,1983 and thereafter, there was no manufacturing process. Since the efforts of the Government of Pondicherry to reopen the Mill by negotiations with the private management and the trade Union Leaders failed, it has promulgated the Anglo French Textiles Limited (Acquisition and transfer of Textile Undertaking) Act, 1986 and the Mill was taken over by the Government of Pondicherry with effect from 24.12.1985 by promoting a Government company in the name and style of Pondicherry Textile Corporation Limited. It is seen from the materials placed on record that the appellants herein, who were the employees of the Anglo French Textiles Limited, were removed from their services on some charges of instigation of strike, misbehaviour etc. and the particulars regarding their removal are as follows:
Sl.No. Name of the employee Code No. Reason for discharge 1 Duraisamy 3100 Name removed on 14.6.1976 2 Sivaraman 5745 Instigation of strike on 5.5.1978 3 Ramalingam AL5239 Misbehaved with his immediate superior on 25.5.1976 4 Thirumoorthy 8484 Instigation of strike on 5.5.1976 5 Simon 4874 Instigation of strike on 5.5.1976 6 Chellaian 1180 Committing theft on 22.8.1975 7 Muthusamy
-
Misbehaved with security Commander in 1977
2. Aggrieved over their removal, the appellants have raised industrial disputes before the Labour Court, which has ordered for their reinstatement with half/full wages and subsequently by virtue of the orders passed in various forums, they have also received their compensation. In this backdrop, the appellants herein have filed W.P.No.9019 of 1993, praying to issue a Writ of Mandamus, directing the first respondent to provide them re-employment with effect from the date when their juniors and freshers were appointed. The appellants would contend that since the present Corporation is a successor in interest to the erstwhile Anglo French Textiles Limited, they will have to discharge those obligations which the previous employer has to discharge, had the undertaking not been transferred and on such obligation, there is right to reemployment under Section 25-H of the Industrial Disputes Act. They would further submit that the Mill is under statutory obligation to give re-employment because they have taken over the assets and liabilities of the previous Mill Anglo French Textiles Limited.
3. For this claim of the appellants, a detailed counter-affidavit was filed before the learned single Judge. In the counter, inter alia, it has been submitted that the unique character of the Anglo French Textiles Limited (Acquisition and Transfer of Textile Undertaking) Act,1986 is that the right, title and interest of the owner in relation to the Textile Undertaking got vested in the Pondicherry Textile Corporation Limited, freed and discharged from any trust, obligation, mortgage, charge, lien and all other encumbrances, affecting it as per Section 4(2) of the said Act and the liabilities and obligations of the erstwhile owner were not taken over by the Corporation and it is also provided therein that any attachment, injunction or decree or order of any Court restricting the use of such property in any manner shall be deemed to have been withdrawn and therefore, under the abovesaid provisions of Law, by force of such vesting under Section 3(1) of the said Act, the Awards of the Labour Court should be deemed to have been withdrawn and the Pondicherry Textile Corporation Limited should also be deemed to have been discharged from the obligation of implementing the said Awards.
4. It is their specific case that the reliance on Section 25-H of the Industrial Disputes Act by the appellants/petitioners for seeking reemployment is untenable in view of the express provisions contemplated under Section 11(3)(b) of the Act, which says that "a person whose services stand terminated under sub-clause (1) of clause (a) shall not be entitled to claim employment in the Corporation as of right" and therefore, the persons who have not been employed by the Pondicherry Textiles Corporation Limited before the designated date i.e. 25.6.1986 are not entitled for employment by way of right subsequently. It is also submitted that the provisions of the said Act, clearly reveal that neither the Government nor the Corporation viz., the first respondent herein shall be liable for any liability of the owner of textile undertaking in respect of any liability for the period prior to the appointed date and as such claim cannot at all be enforced against the Government or the respondent Corporation.
5. An additional affidavit was filed by the appellants/petitioners before the learned single Judge, furnishing the list of names of their juniors who were given employment by the first respondent and it is also stated that some other workers who were sent out were also taken back by the first respondent management. It is further submitted by the appellants/petitioners that they were not taken back and were sent out by paying a paltry sum as compensation, which is in violation of Section 25-H of the Industrial Disputes Act.
6. The learned single Judge, having observed that there is no dispute with regard to the fact that the retrenchment compensation was received by the petitioners, has held that they are not entitled to claim any right for further appointment either in respondents unit or any other subsidised unit. However, the learned single Judge has observed that the petitioners can seek for the relief of sympathetic consideration, but not as a matter of right, and it is for the authority concerned to consider the petitioners claim for future appointment on merits. This order of the learned single Judge is under challenge in this appeal by the appellants/petitioners.
7. A detailed counter affidavit has been filed by the first respondent in this appeal wherein they have submitted that the services of the appellants were terminated during the years 1975-1978 i.e. during the erstwhile management period for certain misconducts and they had raised Industrial disputes which came up before the Labour Court, Pondicherry and Awards were passed in their favour as against the erstwhile management and the petitioners did not offer themselves for employment before the designated date i.e. 25.6.1986 as notified in spite of the fact that wide publication was given by way of newspapers, notice boards etc. calling for applications from interested ex-employees and accordingly, based on the applications received , call letters were sent to the concerned ex-employees and as the appellants did not respond before the designated date, call letters were not sent to them and thus they are not entitled to claim re-employment and the management has re-employed only such workers, who were required for the re-construction and re-organisation of the textile undertaking; that Section 25-H of the Industrial Disputes Act provides for re-employment of retrenched employees, only if they offer themselves for re-employment which the petitioners have not done.
8. It is further submitted that the Government of Puducherry by way of Notification had extended the Tamil Nadu Relief Undertaking (Special Provisions) Act, 1969 to Anglo French Textiles after the take over, whereby the Mill was exempted from the application of the Industrial Disputes Act, 1947, Industrial Employment (Standing Orders) Act, 1946, for the period from 22.5.1986 to 22.5.1990 and therefore, the appellants did not have any right under the Industrial Disputes Act or Standing Orders; that as this was a special enactment to take over a closed undertaking, the provisions of retrenchment could not be directly applied to the employees; that the appellants having elected to receive the compensation, pursuant to the Labour Court Award, cannot approbate and reprobate and claim employment and the appellants are estopped by their conduct from seeking employment and hence, once they have received the entire payments from the Commissioner of Payments which constitutes terminal benefits, they are not entitled to claim re-employment as of right; that the writ petition itself is barred by limitation and latches in view of the enormous and unexplained delay in filing the writ petition only in the year 1993; that the management had made several publications and advertisements in the dailies calling for applications for employment on or before the designated date; that the persons who applied before the designated date alone were registered and considered for re-employment; that on enquiry from the Senior staff and officers of the Corporation and from the available records, it is understood that around 7500 ex-employees applied for employment and approximately over 85% of the same i.e. 6000 employees were given employment under the Corporation; that with reference to the employment of the 19 persons stated to have been employed after the designated date, though employment was later to the designated date, they were given employment on the basis of their applications filed before the designated date; that as no application was received from the appellants before the designated date, they were neither considered nor given employment; that out of such registered employees, who had applied, initially only such workers were employed depending upon the reconstruction and requirement of the Units i.e. before the designated date and thus the appellants cannot be equated with the 19 persons who were employed pursuant to the designated date as the petitioners had never applied prior to the designated date and only applied during the year 1987.
9. Heard Mr.N.G.R. Prasad, learned counsel for the appellants and Mrs.Mala for the first respondent.
10. Mr.N.G.R.Prasad, learned counsel appearing for the appellants would submit that Section 25-H of the Industrial Disputes Act specifically mandates that preference in re-employment should be given to employees who have been retrenched and therefore, the case of the appellants should be considered by the first respondent. This argument of the learned counsel for the appellants has been countenanced by the learned counsel for the first respondent saying that no such vested right has been accrued on the appellants, since they have already received their compensation, as has been fixed by various legal forums.
11. There is no dispute regarding the fact that all the appellants were the employees of the erstwhile management of the first respondent and they all were removed from service for certain alleged misconducts,as has been tabulated supra. The appellants have successfully challenged their removal and the orders of reinstatement with full/half backwages were passed and since by that time, the first respondent has taken over the Management, it is seen that all the appellants have received their compensation. It has been vehemently argued on the part of the respondents that since the appellants have already received their compensation, they cannot claim re-employment as of right.
12. The undisputed fact is that the erstwhile Anglo French Textiles Limited, Pondicherry, which was a private concern was owning a Mill,and it was functioning till July,1983 and thereafter since there was no manufacturing process, and since the efforts of the Government of Pondicherry to reopen the Mill also failed, the Mill was taken over by the Government of Pondicherry, with effect from 24.12.1985 by promoting a Government Company in the name and style of Pondicherry Textile Corporation Limited, by promulgating the Anglo French Textiles Limited(Acquisition and Transfer of Textile Undertaking) Act, 1986. This Act has made several protective clauses in favour of the present Management. Section 5 of the said Act reads:
"Every liability of the owner of the textile undertaking in respect of any period prior to the appointed day shall be the liability of such owner and shall be enforceable against him and not against the Government or the Corporation. For the removal of doubt, it is hereby declared that-
(a) save as otherwise expressly provided in this Section or in any other Sections of this Act, no liability in relation to the textile undertaking in respect of any period prior to the appointed day shall be enforceable against the Government or the Corporation".
Section 14(2) of the said Act provides that:
"Save as otherwise provided in this Act, the liabilities in relation to the textile undertaking in respect of any period prior to the appointed day shall be the liabilities of the owner of the textile undertaking"
13. Under Section 23 of the said Act, this power of the Pondicherry Textile Corporation is protected even as against any decree or order of any Court, Tribunal or Authority. It is also provided that any attachment, injunction or decree or order of any Court restricting the use of such property in any manner shall be deemed to have been withdrawn.
14. On a perusal of the provisions of this Act, it is clear that neither the Government of Pondicherry nor the first respondent Corporation shall be liable for any liability of the owner of textile undertaking in respect of any liability for the period prior to the appointed date. But, we are not concerned of this aspect in this writ appeal.
15. From the materials placed on record, it is seen that the Central Government has extended to the Union Territory of Pondicherry, the Tamil Nadu Relief Undertakings (Special Provisions) Act, 1969 by notification No. G.S.R.33(E), dated 13.1.1984. As a result, the Government of Pondicherry, by G.O.Ms.No.34/Ind, dated 22.5.1986, had declared the Anglo French Textiles Mill, a Unit of the Pondicherry Textiles Corporation Limited, as a "Relief Undertaking" for a period of one year with effect from 22.5.1986, which was time and again extended till 22.5.1990, during which period the following enactments shall not apply in relation to the said Anglo French Textiles:
"1. Industrial Employment (Standing Orders) Act,1946.
2. The Industrial Disputes Act, 1947.
3. The Minimum Wages Act, 1948,
4. The Pondicherry Shops and Establishments Act, 1964"
16. As could be seen from the materials placed on record, neither the Anglo French Textiles Limited (Acquisition and Transfer of Textile Undertaking) Act, 1986 nor the above Notifications were challenged by the petitioners. While such is the position, admittedly, the appellants raised disputes in the Labour Court, as against the erstwhile management, without impleading the present management, even after the specified date i.e. 2.6.1986. Now, we are not on the point of legality or otherwise of the various orders passed by various forums and the only question that is required to be answered in this appeal is whether the appellants are entitled for re-employment , that too on preference over others. The undisputed fact is that the appellants have received compensation from the first respondent and after receiving the same, they are claiming preference in appointment under Section 25-H of the Industrial Disputes Act.
17. Since the issue pertains to Section 25-H of the Industrial Disputes Act, it is proper to quote the same, which reads as follows:
"25-H. Re-employment of retrenched workmen-Where any workmen are retrenched, and the employer proposes to take into his employ any persons, he shall in such manner as may be prescribed, give an opportunity to the retrenched workmen who are citizens of India to offer themselves for re-employment, and such retrenched workmen who offer themselves for re-employment shall have preference over other persons."
18. As per this Section, the employer, who proposes to employ any person, shall give an opportunity to the retrenched workmen to offer themselves for re-employment and on that if the retrenched workmen offer themselves for re-employment, undoubtedly, they shall have preference over other persons. In the case on hand, the strong assertion of the first respondent that in spite of wide publicity, these appellants have not offered themselves for re-employment and have thus not complied with the mandatory requirement of Section 25-H of the Industrial Disputes Act, was not at all questioned or challenged by the appellants, making it clear that the mandatory requirement of this Section that the retrenched employee must offer himself for re-employment has not been complied with.
19. Further more, as per Section 11(3)(b) of the Anglo French Textiles Limited ( Acquisition and Transfer of Textile Undertaking) Act, 1986, "a person whose services stand terminated under sub-clause (1) of clause (a) shall not be entitled to claim employment in the Corporation as of right". Therefore, there is no vested right on the appellants for re-employment in the first respondent Corporation. As has already been adverted to supra, none of the provisions of the Anglo French Textiles (Acquisition and Transfer of Textile Undertaking) Act and the Notifications issued by the Government of Pondicherry extending the provisions of Tamil Nadu Relief Undertakings (Special Provisions) Act,1969 to the first respondent, were under challenge from any corner, particularly by the appellants. Therefore, in the considered opinion of this Court, the appellants cannot claim re-employment as of right.
20. The learned counsel for the appellants would rely on a judgment of the Honourable Supreme Court Court in N.T.C. (SOUTH MAHARASHTRA LIMITED VS. RASHTRIYA MILL MAZDOOR SANGH AND OTHERS [(1993) I SCC 217]. In this case, the managements of textile undertakings were taken over by the National Textile Corporation Limited and while discussing the power of the National Textile Corporation Limited to terminate employment of workmen of the undertakings and while dealing with the provisions of Textile Undertakings (Taking Over of Management) Act, 1983, the Apex Court has held that "neither the custodian nor the appellants who stepped into his shoes had at any time put an end to the contract of employment of any of the workmen involved in the present dispute pursuant to the provisions of Section 13 of the Textile Undertakings (Taking Over of Management) Act,1983). Hence the contention that there was no obligation on the appellants to continue the services of the workmen after the take over of the management cannot be accepted".
21. In the case before the Honourable Supreme Court, the provisions of the Textile Undertakings (Taking Over of Management) Act ,1983, which entitled the National Textile Corporation Limited to take over the management of textile undertakings were under challenge. But, in the case on hand, as has been held supra, none of the provisions of the Anglo French Textiles Limited(Acquisition and Transfer of Textile Undertaking ) Act and the Notifications issued by the Government of Pondicherry extending the provisions of Tamil Nadu Relief Undertakings (Special Provisions) Act, 1969 to the first respondent were under challenge from any corner, particularly by the appellants. It is also not in dispute that the appellants have already received their compensation, as has been fixed by the authorities concerned. Therefore, this judgment of the Honourable Supreme Court has no application to the case of the appellants.
22. The learned counsel for the appellants has also relied on the judgment of the Honourable Apex Court in CENTRAL BANK OF INDIA vs. S.SATYAM AND OTHERS [(1996) 5 SCC 419] wherein it has been held that "the retrenched workmen are entitled to priority in re-employment over retrenched workmen not so covered." There is no dispute with regard to the proposition laid down by the Honourable Apex Court. But, in the case on hand, the appellants, in spite of wide publicity, have not offered themselves for re-employment, which is mandatory under Section 25-H of the Industrial Disputes Act. Therefore, this judgment also does not come to the rescue of the appellants.
23. The learned counsel for the appellants would also rely on a judgment of the Honourable Apex Court in NAR SINGH PAL VS UNION OF INDIA AND OTHERS [(2000) 3 SCC 588), wherein it has been held that "acceptance of retrenchment compensation cannot validate an invalid order of termination". In the said case, the order of termination was passed by way of punishment, without conducting any enquiry. Only in such circumstances, the Honourable Apex Court has gone into the rescue of the workman there, which is not the case herein. The appellants have not complied with the mandatory requirement of Section 25-H of the Industrial Disputes Act. Therefore, this judgment also does not come to the rescue of the appellants.
24. The learned counsel for the appellants has also relied on a judgment of the Division Bench of this Court in M.SEKARAN vs. GENERAL MANAGER, T.N. STATE TRANSPORT CORPORATION [2006(1) LLN 257]. It was a case wherein the appellants were appointed as trainee drivers on consolidated wages for two years and when they were sought to be relieved on completion of two years, they filed writ petitions and the learned single Judge granted relief in favour of the persons who had not been relieved till that time, but rejected the same in respect of the candidates who had been relieved. In the appeal the Division Bench of this Court has held that "as per Section 25-H of the Act, retrenched workers had a prior right of re-employment". There is no dispute with regard to this proposition. But, as has already been adverted to supra, the appellants have already received compensation fixed by the legal forums and have not complied with the mandatory requirement of Section 25-H of the Industrial Disputes Act, by offering themselves for re-employment when opportunity was afforded to him. Therefore, this judgment also does not come to the rescue of the appellants.
25. On the other hand, the learned counsel appearing for the first respondent would rely on a judgment of the Honourable Apex Court in ANAKAPAALLE COOPERATIVE AGRICULTURAL AND INDUSTRIAL SOCIETY LIMITED VS WORKMEN AND OTHERS [AIR 1963 SC 1489]. This judgment has been delivered by the Constitution Bench of the Honourable Supreme Court of India on 23.10.1962 i.e. well before the amendment of Section 25-H of the Industrial Disputes Act, w.e.f. 19.12.1964 by Act 36 of 1964. Therefore, we do not propose to refer to this judgment of the Honourable Apex Court.
26. The learned counsel for the first respondent would also rely on another judgment of the Honourable Apex Court in RASHTRIYA MILL MAZDOOR SANGH vs. STATE OF MAHARASHTRA AND OTHERS [(1996) 5 SCC 542] , wherein while dealing with Maharashtra Central India Spinning, Weaving and Manufacturing company Limited, the Empress Mills, Nagpur (Acquisition and Transfer of Undertakings) Act, 1986, the Honourable Apex Court has held that 'the effect of the legislation which was to save as many employees as possible from unemployment since the only other option was liquidation which would result in all the employees being rendered unemployed and thus it was not a case of retrenchment and unemployment of those who could not be continued was not because of the nationalisation since the act of nationalisation saved majority of employees from unemployment.'
27. In the other judgment relied on by the learned counsel for the first respondent in M/s.MARUTI UDYOG LTD. vs. RAM LAL AND OTHERS [AIR 2005 SC 851], the Honourable Apex Court has held that 'workman despite having received amount of compensation would not again have to be offered job by person reviving industry.' It has also been held therein that 'sympathy has no role to play in such matters'.
28. Therefore, there is no doubt that the appellants cannot have any right to claim re-employment with the first respondent. Further more, the contention of the appellants that they were sent out by paying some paltry sum cannot be accepted since the compensation was fixed as per law and they never challenged the compensation amounts arrived at by various authorities. On a litigation, they were also paid bonus etc. The learned single Judge has properly appreciated the facts and circumstances of the case, wherein we find no reason to cause our interference.
29. To sum-up,
(i) None of the provisions of the Anglo French Textiles Limited (Acquisition and Transfer of Textile Undertaking) Act and the Notifications issued by the Government of Pondicherry extending the provisions of Tamil Nadu Relief Undertakings (Special Provisions) Act, 1969 to the first respondent were under challenge from any corner, particularly by the appellants and therefore, now, they cannot rake up all such pleas as against such enactments before us.
(ii) Admittedly, the appellants have received their compensation, as has been fixed by the legal forums and the quantum of such compensation was never challenged by them. Therefore, as per the judgment of the Honourable Apex Court in M/s.MARUTI UDYOG LTD. vs. RAM LAL AND OTHERS [AIR 2005 SC 851], such workmen who received amount of compensation need not again have to be offered job by person reviving industry and thus they do not have any priority over others.
(iii) There is no dispute regarding the fact that in spite of wide publicity, these appellants have not offered themselves for re-employment, as is mandated under Section 25-H of the Industrial Disputes Act, before the designated date and therefore, they cannot be equated with the other employees, who offered themselves for re-employment and got employment. No material has been placed before us by the appellants to show that they have offered themselves for re-employment and the same was not considered by the first respondent. Even regarding the employees, who were appointed after the designated date, it has been satisfactorily explained before us by the first respondent that they all have applied before the designated date, but were offered employment, subject to availability of vacancies, after the designated date. Therefore, even on this aspect, the appellants cannot succeed.
(iv) There is no plea of any mala fide or bias attitude on the part of the first respondent by the appellants so as to term the action of the first respondent as illegal or otherwise. The first respondent has scrupulously followed the rules and regulations and no flaw, much less a legal flaw, has been found by us in the entire process of the first respondent and therefore, it follows that the prayer of the appellants is misconceived and the same has been properly rejected by the learned single Judge.
For all the above reasons, this appeal is dismissed, confirming the order of the learned single Judge. It is made clear that the appellants are not entitled for re-employment as of right and it is for the first respondent to consider the claim of the appellants for appointment, purely on humanitarian considerations. No costs.
Index: Yes Internet: Yes (E.D.R., J.) (M.V., J.) Rao 27.6.2008 ELIPE DHARMA RAO, J. AND M.VENUGOPAL, J. (Rao) Judgment in W.A.No.1734/2001 27.6.2008