Karnataka High Court
M/S.Valliappa Textiles Ltd vs Valliappa Textiles & Allied on 28 April, 2025
W.P. No.25526 of 2010
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 28TH DAY OF APRIL, 2025
BEFORE
THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE
WRIT PETITION NO.25526 OF 2010 (L-RES)
BETWEEN:
M/S.VALLIAPPA TEXTILES LTD.,
HEJJALA HOBLI, BIDADI,
BANGALORE RURAL DISTRICT,
REP. BY ITS GENERAL MANAGER (ADMIN)
...PETITIONER
(BY SRI PRASHANTH B R, ADVOCATE FOR
SRI SUDHAKAR B, ADVOCATE)
AND:
VALLIAPPA TEXTILES & ALLIED
COMPANIES WORKERS UNION,
CITU OFFICE, KUMBALAGOODU,
BANGALORE - 560 074,
REP. BY ITS PRESIDENT.
...RESPONDENT
(BY SRI K S SUBRAHMANYA, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASH THE AWARD DT.7.5.2010, IN AID.NO.1/1996
PASSED BY THE ADDL. INDUSTRIAL TRIBUNAL,
BANGALORE VIDE ANNEXURE-'S', IN SO FAR AS THE
PETITIONER IS AGGRIEVED BY THE SAME I.E.,
DIRECTING THE PETITIONER TO PAY THE WORKMAN 15%
BONUS FOR THE YEAR 1993-94, GRANTING 10%
INCREASE IN THE BASIC WAGES FROM 1.7.1994 & ALSO
HOLDING THAT THE WORKMAN ARE JUSTIFIED IN NOT
REPORTING FOR DUTY TILL THE SETTLEMENT
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DT.18.2.1995 SINCE THEY WERE NOT CALLED TO REPORT
FOR DUTY IN PHASES WITH EFFECT FROM 13.12.1994 &
ENTITLED TO WAGES & FURTHER HOLDING THAT THE 63
APPRENTICES ARE ENTITLED TO WAGES FROM 3.11.1994,
TILL 20.2.1995 & SO ALSO FROM 20.2.1995 SINCE THEY
WERE NOT CALLED TO REPORT FOR DUTY ON THE
REJECTED PLEA THAT THEY ARE NOT WORKMEN AND ETC.
THIS WRIT PETITION PERTAINS TO PRINCIPAL
BENCH BENGALURU HAVING BEEN HEARD AND RESERVED
ON 28.02.2025 AND COMING ON FOR PRONOUNCEMENT
OF ORDERS AT KALABURAGI BENCH THROUGH VIDEO
CONFERENCING, THIS DAY, THE COURT MADE THE
FOLLOWING :
CORAM: HON'BLE MR JUSTICE ANANT RAMANATH HEGDE
C.A.V. ORDER
This Writ Petition is by the Establishment challenging
the part of the award in proceeding No.AID No.1/1996
before the Industrial Tribunal at Bangalore.
2. The dispute between the petitioner-
Establishment and the respondent-Union herein was
referred to the Industrial Tribunal under Section 10(1)(d)
of the Industrial Disputes Act, 1947 (for short 'Act of
1947') by the appropriate Government vide order dated
04.05.1996.
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3. The reference was to adjudicate 23 points
under one head, and 3 points under another head. 23
points under first head were with respect to Charter of
demands by the Union and 3 points referred to under
second head are;
(a) with respect to the legality of the lockout
declared on 21.08.1994;
(b) alleged willful abstinence from work by the
workmen after the petitioner-Establishment lifted the
lockout with effect from 13.12.1994, and
(c) wages payable for the period from 20.08.1994 to
13.12.1994 and upto 20.02.1995.
4. Though the point for reference speaks about
lifting of lockout with effect from 13.12.1994, in the
defence statement, the Management has contended that
the lifting of lockout was with effect from 13.11.1994.
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5. During the pendency of the proceeding before
the Tribunal, the petitioner - Establishment was closed
vide order dated 26.02.1999 and the said order has
attained finality as the challenge by the respondent-Union
to the closure order remained unsuccessful.
6. Since the petitioner - Establishment was closed
during the pendency of the proceeding before the
Industrial Tribunal, the respondent-Union restricted their
claim to certain points that survived post closure and gave
up certain claims qua Charter of demands.
7. Accordingly, the Tribunal passed the award
granting certain reliefs to the Union and the reliefs which
are under challenge are as under:
a) 15% bonus for the financial year 1993-94 as
against claim of 30% bonus.
b) 10% increase in the basic wage against the
demand for 30% increase.
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c) Reinstatement/Absorption of 63 apprentices
discharged in 1994, with backwages from
03.11.1994.
d) Award of wages after lifting of lockout on the
premise that the Establishment did not ask the
workmen to report to duty.
8. The contention of the Union that lockout
declared on 20.08.1994 is illegal is rejected and lockout is
declared to be valid from 20.08.1994 till 02.11.1994.
9. As noticed, the Tribunal has also held that the
workmen were not called upon to report to duty from
13.12.1994 till 18.02.1995, the date of settlement
between the petitioner - Establishment and respondent -
Union.
10. The petitioner - Establishment is aggrieved by
the part of the award granting certain reliefs to the
respondent - Union. The respondent - Union has accepted
the award and the extent of the rejection of claim of the
respondent - Union has attained finality.
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11. Contention relating to grant of 15%
bonus:
Learned Senior counsel appearing for the petitioner
would contend that the award of bonus in excess of 8.33%
for the year 1993-94 is untenable and would refer to the
Certificate dated 13.02.1998 issued by the Chartered
Accountant which reveals that the provision is made for
payment of 8.33% bonus for the year ended 31.03.1994.
It is urged that the award for payment of 15% bonus for
the financial year 1993-94 by referring to the previous
year's bonus at 12% and 10% exgratia is unjustified.
12. It is urged that declaration of 12% bonus and
10% exgratia declared earlier cannot be the basis to
award 15% bonus as the circumstances in 1993-94 were
not similar. In addition, the declaration of bonus and
exgratia was subject to the rider that there will be a
disciplined work and higher production. In the absence of
any proof relating to higher production, 15% bonus could
not have been awarded.
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13. It is also urged that under the Payment of
Bonus Act, 1965, was applicable to only those employees
who were drawing salary of less than Rs.1,600/- per
month and the impugned award is unsustainable as almost
all employees were earning more than Rs.1,600/- per
month in the year 1993-94.
14. Learned counsel appearing for the respondent -
Union on the other hand would contend that the Tribunal
is justified in awarding 15% bonus for the financial year
1993-94 and it has taken into account, the amount
available for distribution. The Tribunal has noticed that
when 12% bonus was awarded for the year 1992-93, the
income available for distribution was Rs.52.79 lakhs and
for the year 1993-94, it was Rs.99.55 lakhs.
15. It is noticed that as against the claim of 30%
bonus, the Tribunal awarded 15% of bonus for the
financial year 1993-94. The Tribunal has noticed 12%
bonus awarded for the previous year. However, did not
base its award on 10% exgratia granted earlier.
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16. The petitioner - Establishment referring to the
Certificate dated 13.02.1998 issued by the Chartered
Accountant urged that only 8.33% of Basic and D.A. could
have been awarded as a bonus. The Certificate issued by
Chartered Accountant would reveal that the petitioner has
made provision for payment of 8.33% of Basic and D.A as
the bonus for the financial year ending 31.03.1994.
17. The decision to pay the bonus has to be taken
by the Establishment and the decision should not be
contrary to the provisions of law governing payment of
bonus. The bonus to be paid cannot be decided by the
Chartered Accountant. The Certificate at Annexure - D
does not speak about any limitation to declare/pay bonus
higher than 8.33% of the Basic Pay and D.A. The
Chartered Accountant has only certified that the provision
is made for payment of 8.33% of Basic Pay and D.A as
bonus for the year 1993-94. The Chartered Accountant
has only ensured/certified that the minimum bonus that is
required to be paid under the Payment of Bonus Act is
declared by the Establishment. That however does not
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W.P. No.25526 of 2010
need that in appropriate cases, there can be a higher
bonus than the minimum of 8.33% prescribed.
18. From the impugned award, it is noticed that,
the Tribunal has taken into account 12% bonus paid in the
previous year. The Tribunal also noticed that 10% exgratia
payment cannot be the basis to determine the bonus
payable for the financial year 1993- 94. Thus, 12% bonus
paid in the previous year is taken as a basis in addition to
the income for the year 1993-94 to consider the bonus for
the year 1993-94. The Tribunal has also noticed that
payment of bonus depends on the profit of the industry
subject to minimum mandated in law.
19. MW-2 in his evidence has stated that profit
before tax was Rs.22.53 lakhs for the year 1992-93 and
Rs.52.79 lakhs was available for appropriation and profit
before tax for the year 1993-94 was Rs.81.53 lakhs and
99.55 lakhs was available for appropriation. Noticing
higher profit and higher amount available for
appropriation, the Tribunal awarded 15% bonus for the
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W.P. No.25526 of 2010
financial year 1993-94. Though it is urged that the
employees were earning more than Rs.3500/per month
and not entitled to bonus, no records are produced to
ascertain the salary.
20. The award in so far as payment of bonus of
15% p.a. taking into consideration, the profit and amount
available for distribution cannot be said to be erroneous so
as to interfere in exercise of jurisdiction under Article 227
of the Constitution of India as the award cannot be said to
be arbitrary, capricious and perverse or without any
evidence in so far as awarding 15% bonus for the year
1993-94.
21. Contention relating to award of reinstating
apprentices:
Learned Senior counsel appearing for the petitioner -
Establishment would urge that the apprentices were from
a remote village and did not possess the skill to work in
the textile industry as the petitioner had installed highly
sophisticated and expensive imported machineries. And
the apprentices were required to be trained to handle the
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W.P. No.25526 of 2010
machineries. Thus, the unskilled persons were enrolled as
the apprentices under the Apprentices Training Scheme
marked at Annexure-P which was approved by the Labour
Department and Provident Fund Commissioner. One of the
terms of the scheme enabled the petitioner to terminate /
discharge the apprentice if their learning skill / character /
or conduct was not satisfactory.
22. It is urged that the lockout was declared on
21.08.1994, and situation did not improve for considerable
period, and the apprentices were removed vide order
dated 06.10.1994 and 17.10.1994 from the training
program. Referring to these circumstances, it is urged that
the apprentices are not the workmen under the petitioner,
and are not entitled to reinstatement and the benefits
conferred under the impugned award.
23. Learned Senior counsel would urge that on
18.02.1995, there was a settlement between petitioner-
Establishment and the respondent - Union and it was
agreed that the apprentices, casual/temporary workers will
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W.P. No.25526 of 2010
be allowed to resume work as per the requirement. 35
trainees were called upon to report to the training in a
phased manner, and the provision made for the
resumption of training scheme was also recorded in the
settlement dated 23.11.1995. Referring to the terms of
the settlement dated 18.02.1995, it is urged that workmen
had agreed to resume work from 21.02.1995 and the
award granting wages to trainees from 03.11.1994 is
untenable.
24. Learned Senior counsel would also urge that
the finding of the Industrial Tribunal that the apprentices
were workmen as they were not engaged under the
Apprentices Act, 1961, is contrary to the judgment of the
Co-ordinate Bench of this Court in Tungabhadra Sugar
Works vs. Presiding Officer, Labour Court1. Reliance is
also placed on the judgment of the Division Bench of this
Court in General Secretary Hindustan Latex vs.
General Manager2.
1
ILR 1983 KAR 1
2
2022 LLR 400
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W.P. No.25526 of 2010
25. Learned counsel for the respondent - Union on
the other hand would contend that the apprentices were
employed to work in the petitioner - Establishment and
they were not admitted only for the purpose of training.
The Tribunal has referred to the Judgment in
M/s. Tannory and Footware Corporation of India
Ltd., and Labour Court, Kanpur3 distinguishing an
apprentice appointed under the Apprentices Act, 1961 and
the apprentice recognized under Section 2(s) of Act of
1947.
26. It is further urged that in the settlement arrived
at between petitioner - Establishment and the Union, the
Establishment agreed to absorb the apprentices as regular
employees and further assured that in their place, no new
appointment would be made without consulting the
apprentices. Thus, it is urged that apprentices were the
workmen as defined under Section 2(s) of the Act of 1947.
3
1994 II LLJ 1986
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W.P. No.25526 of 2010
27. Learned counsel also relied on the judgment of
the Apex Court in Trambak rubber industries vs.
Nashik workers Union4 and also the judgment in UP
State Electricity Board Khanpur vs. Presiding Officer,
Labour Court5.
28. The document at Annexure - P reveals that the
petitioner - Establishment came out with a scheme to
train the personnel to suit the avocation in Textile
Industry. The scheme does provide for terminating any
apprentice or learner at any time if it is found that the
learner has not made any progress in his learning/
training, or that his character or conduct is not up to the
mark. However, what is required to be noticed is that the
petitioner - Establishment has not removed or discharged
the apprentices on the grounds mentioned in the scheme.
The petitioner - Establishment asserted that the
apprentices have been terminated on account of lockout in
the year 1994. Thus, the contention that the apprentices
4
2003 III LLJ 226
5
2003 III LLJ Allahabad 88
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W.P. No.25526 of 2010
have been terminated invoking the Clauses in the scheme
is not available in the petitioner- Establishment.
29. The Industrial Tribunal has also noticed that the
petitioner - Establishment has not produced the records
relating to the names of apprentices, the date of
enrollment to the training program, and duration for which
the apprentices have undergone training. The scheme
provides for three years training. It is not specifically
stated with acceptable evidence to hold that the
apprentices were still in the training period when they
were discharged in 1994 on account of lockout. Under
these circumstances, it is not possible to conclude with
certainty that 63 apprentices were enrolled only for the
purpose of training and not for the purpose of employment
in the petitioner - Establishment.
30. The contention whether the apprentices were
working as workmen or whether there was an assurance
to absorb them as workmen is to be considered not only
as per the training scheme but also in the light of two
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W.P. No.25526 of 2010
settlements arrived at between the Establishment and the
Union.
31. The first settlement is dated 18.02.1995. The
second settlement is dated 23.11.1995. In both
settlements, the Establishment has agreed to allow the
apprentices and casual / temporary workers to resume the
work in due course as per the requirement, and also
assured not to recruit any fresh employees without giving
opportunity to the employees referred to in Clause No.4 of
the said settlement.
32. The second settlement dated 26.11.1995 also
provides to absorb 45 apprentices before 27.11.1995. In
respect of remaining apprentices, the Establishment
assured to review the decision before the Labour
Commissioner subject to improvement in power
generation.
33. From the combined reading of aforementioned
two settlements, it can be concluded that the apprentices
were also working as regular workers in the Establishment
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W.P. No.25526 of 2010
and there was an assurance to allow the apprentices to
resume their work and further assurance not to employ
outsiders without giving opportunity to the said persons.
34. This Court has noticed that the petitioner -
Establishment has not furnished the details of 45
apprentices agreed to be absorbed immediately and the
details of other apprentices who were agreed to be
absorbed subject to improvement in power situation,
pursuant to the settlement. It is noticed by the Tribunal
that the petitioner - Establishment has not produced any
details relating to the stipend paid to the apprentices and
has not produced the details of date of admission of
apprentices for training scheme.
35. The training program provides for three years
training. Non-production of details relating to date of
admission of trainees and details relating to the stipend
paid to the trainees, this Court is of the view that adverse
inference is to be drawn against the petitioner -
Establishment. Said documents would have thrown the
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W.P. No.25526 of 2010
light on the nature of duty carried out by 63 apprentices
and the duration of their training.
36. In addition to the aforementioned
circumstances, the very fact that the petitioner-
Establishment agreed to allow 45 apprentices to resume
the work (not training) and agreed to absorb remaining
apprentices subject to improvement in power generation
would strongly suggest that those apprentices were
working as workmen for more than 240 days after gaining
sufficient training to discharge the duty in the petitioner -
Establishment.
37. As far as contention raised referring to the
judgment of Tungabadra Sugar supra is concerned, it is
noticed that in the said judgment, the Division Bench of
this Court referring to the definition of workman in Section
2(s) of the Act of 1947 has held that the apprentice employed
for the purpose of training cannot be termed as workman.
The definition of Workman under Section 2(s) of the Act of
1947 would also include an apprentice. However, to
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W.P. No.25526 of 2010
contend that the apprentice is not a workman, same is to be
demonstrated through materials relating to nature of
appointment and nature of work. If it is established that
the apprentice was only a trainee then such apprentice
cannot be termed as a workman. Likewise the law
declared in S.S. Mukunda and The Management of
Volvo is not applicable for the reasons recorded above.
38. Though the apprentice scheme produced by the
petitioner- Establishment would indicate that the unskilled
persons were taken for training, the terms of the
settlement would demonstrate that they were working as
workmen as the petitioner-Establishment agreed to
reinstate them after lifting the lockout.
39. Moreover, irrespective of the fact that 63
persons were taken as apprentices under the training
scheme, the petitioner - Establishment had assured not to
employ the workmen without notice to 63 apprentices.
These facts would clearly demonstrate that the apprentices
were indeed working as workmen to do skilled work. This
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W.P. No.25526 of 2010
Court is of the view that said apprentices were not just
undergoing training. Hence, the aforementioned judgment
does not come to the aid of the petitioner.
40. Likewise, the ratio in the judgment in the case
of Hindustan Latex supra does not apply to the facts of
the case. In the said case, the Division Bench of this Court
by referring to the evidence obtained in the said case has
concluded that the trainees are not entitled to
regularization. In the instant case, apart from nature of
work done by the apprentices, in terms of the settlement,
the Establishment agreed to absorb the apprentices to do
the regular work. Hence the ratio in the said judgment
cannot be made applicable to uphold the petitioner's
contention.
41. Considering the reasons assigned by the
Tribunal in this behalf, this Court is of the view that, the
award passed by the Tribunal in so far as direction to
reinstate the apprentices who have been discharged on
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account of lockout in 1994 does not call for interference in
exercise of Article 227 of the Constitution of India.
42. Regarding financial benefits conferred
with effect from 03.11.1994:
On the question relating to the legality of the lockout
declared on 21.08.1994, the Tribunal has held that the
lockout is valid from 21.08.1994 to 02.11.1994. The
contention of the respondent-Union that the lockout is
illegal is rejected. And the Tribunal has further held that
the petitioner - Establishment did not ask the workmen to
report for the duty with effect from 03.11.1994 i.e., a day
after the lockout is declared to be lifted. The Tribunal has
concluded that the workmen were allowed to resume the
work as per the settlement arrived at on 18.02.1995
wherein the workmen were allowed to resume work with
effect from 20.02.1995. In this background, the Tribunal
awarded wages from 03.11.1994 to 20.02.1995 and
thereafter, on the premise that even after 20.02.1995, the
workmen were not allowed to work.
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43. At this juncture, it is necessary to refer to
terms of the settlement dated 18.02.1995 and
23.11.1995. Under the first settlement dated 18.02.1995,
in terms of Clause No.5, it was agreed that workmen shall
be paid Rs.1,250/- as advance to ameliorate the hardship
during the period of work stoppage. It is further noticed
that said Clause No.5 also provides for recovery of said
amount in 10 monthly installments commencing from April
1995. Except the aforementioned Clause relating to
payment of Rs.1,250/- as advance, there is no other
agreement relating to wages payable during the stoppage
of work.
44. In the second settlement dated 18.11.1995, in
terms of Clause No.5, it was agreed that the wage
deduction for the month of May, 1995, proposed based on
"no work no pay" principle shall not be given effect to. In
other words, the parties agreed for payment of wages for
the month of May, 1995 despite no work.
45. It is noticed from the terms of the second
settlement dated 23.11.1995, it was agreed to refer the
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W.P. No.25526 of 2010
dispute relating to wages payable from 01.07.1995 to
26.11.1995, for adjudication.
46. The combined reading of the Clauses in the
aforementioned due settlements would lead to the
conclusion that the parties agreed to refer the dispute
relating to payment of wages only for the period covering
from 01.07.1995 to 26.11.1995 and there was no demand
for the wages for the remaining period except for May
1995 where the Establishment gave up its time to deduct
the wages for the period May, 1995 and (indirectly)
agreed to pay the wages for May, 1995.
47. This being the position, this Court has to take a
view that the parties arrived at some consensus relating to
payment of wages during the period of lockout and
thereafter till the settlement dated 23.11.1995.
48. In terms of the impugned award, the Tribunal
has awarded wages from 03.11.1994 to 20.02.1995 and
thereafter. This Court is of the view that the agreements
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W.P. No.25526 of 2010
referred to above does not provide for the wages during
the entire period of stoppage of work.
49. In terms of the agreement dated 18.02.1995
and 23.11.1995, this Court is of the view that 63
apprentices, among them 40 who were discharged on
06.10.1994 and 23 discharged on 17.10.1994 are not
entitled to the wages from 03.11.1994 to 30.06.1995.
The apprentices are entitled to wages for the month of
May, 1995 as the decision to deduct wages for the month
May, 1995 was agreed to be not given effect to. And the
period from 03.11.1994 to 30.06.1995 stands excluded in
view of the settlement which provides for reference to
dispute relating to wages for the period covering from
01.07.1995 to 26.11.1995 only.
50. Likewise the workmen are also not entitled to
wages from 03.11.1994 to 23.11.1995 except for wages
for the month of May, as the period from 03.11.1994 to
30.06.1995 stands excluded in view of the settlement
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W.P. No.25526 of 2010
which provides for referring the dispute relating to wages
for the period covering from 01.07.1995 to 26.11.1995. To
the above said extent, the award of the Tribunal is
erroneous and requires to be interfered with.
51. For the aforementioned reasons, the Court is
required to consider whether the workmen are entitled to
wages from 01.07.1995 to 26.11.1995 based on their
contention that they were not asked to report to duty after
03.11.1994, the date on which the Establishment claims
that the lockout was lifted. Though, it is urged that the
petitioner - Establishment had issued notices to the
workmen to attend the work, the Tribunal has held that
the said contention is not established. The Tribunal
referring to the stand in the statement of objection has
concluded that the petitioner - Establishment is unable to
establish that the workmen did not report to duty even
after lifting of the lockout. The Tribunal has held that in
terms of order of reference, the lockout continued upto
13.12.1994 and not upto 03.11.1994 as contended in the
statement of objections. The Tribunal noticed that except
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W.P. No.25526 of 2010
memos issued to five workmen, document is not produced
to show that a general memo was published informing all
the workmen or documents relating to individual workmen
informing lifting of lockout and asking the workmen to
duty by mentioning a specific date.
52. The Tribunal has also taken a view that there is
no plea in the evidence relating to lifting of lockout on
13.12.1994 despite the point for reference is to consider
whether the lockout was lifted on 13.12.1994. The
Tribunal has also referred to the attempt on the part of the
petitioner - Establishment insisting the workmen to
execute the bond before reporting to duty and concluded
that the Management is not able to establish that
workmen did not report the duty despite lifting of lockout.
To prove the said contention, records for serving the
notices on the individual workmen are not produced before
the Tribunal and an attempt is made to produce the same
for the first time in the writ petition. The documents
relating to service of notice on workmen ought to have
been produced before the Tribunal. The workmen would
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W.P. No.25526 of 2010
have led evidence to rebut the contention. They are denied
such opportunity.
53. For the aforementioned reasons, this Court is of
the view that the finding of the Tribunal that the
Establishment failed to establish its contention that it
informed the workmen about lifting of lockout and
workmen refused to report to duty cannot be said to be
erroneous. However, in view of the discussions made
earlier, the workmen are entitled to the financial benefit
only for the period from 01.07.1995 to 26.11.1995 as the
claim for remaining period is deemed to have been given-
up in view of the settlement arrived at by the
Establishment and the Union. Hence, the Court is required
to consider the validity of the award in so far as 10% hike
in the basic pay.
54. In relation to 10% hike in the basic pay:
Learned Senior counsel for the petitioner assailing
the award providing for 10% hike in the basic pay would
contend that hike provided with effect from 01.07.1994 is
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W.P. No.25526 of 2010
illegal. It is urged that the Establishment suffered huge
loss on account of illegal and unjustified strike and
deliberate go slow attitude of the workmen. It is urged
that noticing the huge loss incurred by the petitioner -
Establishment, decision was taken to close the
Establishment and such decision is approved by the
competent officer under the Act of 1947 and closure order
dated 26.02.1999 and 14.06.1999 were questioned by
filing W.P.No.14907/2000 and the Writ Petition is
dismissed upholding the closure order. Writ Appeal
No.342/2006 challenging the order in the aforementioned
Writ Petition is also dismissed. Thus, the award for 10%
increase in the basic wages is untenable is the submission.
55. In support of his case, the learned Senior
counsel for the petitioner relied on the judgment in
Shakthi Offset Works Nagpur vs. The State Industrial
Port6.
6
(1978) 2 SCC 601
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56. The learned counsel for the respondent
defending the hike of 10% in the basic pay, would submit
that 10% hike is provided taking into consideration, the
capacity of the petitioner and the social commitments of
the workmen. It is also urged that hike is provided
noticing the fact that in the previous settlement dated
12.07.1989, there was no provision for annual increment
and the previous settlement had expired on 30.06.1994. It
is further urged the petitioner - Establishment earned
more profit during 1993-94 compared to previous years
and the workmen were entitled to revision of salary. It is
also urged that the subsequent event of closure of
industry is not a ground to deny the hike in the basic pay.
57. The judgment in Shakthi Offsets supra refers
to payment of fair wages and bonus. It is held in the
aforementioned judgment that the award for payment of
bonus and wages is dependent on the capacity of the
employer to pay such bonus and wages. The Apex Court
has also observed that there has to be close scrutiny of
the Establishment's working and in addition to the future
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prospect is to be taken into consideration while deciding
the dispute relating to the wages. It is also held that the
gross profit or net profit alone cannot be the basis to fix
the bonus and the wages.
58. This Court considered the contentions.
Admittedly, the previous wage settlement was in the year
1989. Said settlement expired on 30.06.1994. The
previous settlement did not provide for hike in the wage
during the subsistence of the said settlement which was in
force since 1989 to 30th June 1994. Thus, the wages
stagnated since 1989. The revision was due in July, 1994.
In 1994, admittedly the petitioner - Establishment had
declared profit. Though the material placed on record
indicated that the Establishment was ordered to be closed
in the year 1999, that cannot be the reason to deny the
hike as the revision of wages was due in the year 1994
itself and that too without any increase in wages since
1989. Had the wages been revised in 1994, probably it
would not have been reduced till 1999 when the industry
was ordered to be closed. This being the position, 10%
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hike in the wages awarded by the Tribunal cannot be said
to be one without basis for material.
59. The contention of the petitioner -
Establishment that workmen were paid variable Dearness
Allowance from 1993 to 1994 as such there shall not be
any hike in the wages is dealt by the Tribunal by observing
that increase in Dearness Allowance cannot be a ground to
increase the basic wages. The Tribunal noticing the profit
for the year 1993-94 has awarded 10% increase over the
existing basic pay with effect from 01.07.1994. The award
to the said extent is justified and no grounds are made out
to interfere with the said portion of award.
60. Learned Senior counsel appearing for the
petitioner has relied on the judgment of the Hon'ble Apex
Court in Surendra Kumar Verma vs. Central
Government Industrial Tribunal7. Said judgment deals
with the payment of backwages/compensation in case of
unjustified termination from service and compensation
7
(1980) 4 SCC 443
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payable in case of retrenchment order in violation of
Section 25F of the Industrial Disputes Act. In the said
case, the dispute is not relating to implementation of the
settlement arrived at between the parties. Hence, the ratio
in the said judgment does not come to the aid of the
petitioner.
61. The judgment in Mysore Structures vs.
Workmen of Mysore Structures 8, relied on by the
learned Senior counsel deals with the binding nature of
settlement arrived at between the Establishment and the
Union in the absence of plea and proof relating to fraud
and coercion. The parties to the proceeding have not
disputed the settlements arrived at between the parties.
Hence, the said judgment has no application to the facts of
the case on hand. In addition, the judgment of this Court
is also based on the terms and conditions agreed upon by
the Management at the Union.
8 1983 (1) LLN 441
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62. Reliance is placed on the judgment of
the Co-ordinate Bench of this Court in M/s P.V.Desai vs.
State of Karnataka9 to contend that industrial dispute
does not exist in view of the closure of the industry. In the
said case, it is noticed that the petitioner - Establishment
was closed on 12.03.1984 and some of the workmen
received closure compensation. Dispute was raised
challenging the decision to close the Establishment. The
Co-ordinate Bench of this Court has held that the
discretion to refer the matter for adjudication is not
unfettered and it can be exercised only in the event of an
industrial dispute existing between the parties. It is
relevant to note that in the instant case, the dispute was
referred in the year 1996 and the industry was closed in
the year 1999. The order referring the dispute to the
Tribunal for adjudication was never called in question.
Hence, the dispute referred to the Tribunal requires to be
adjudicated on the basis of the cause of action that arose
when the Establishment was running. The ratio in the
9
ILR 1991 KAR 665
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aforementioned judgment M/s P.V.Desai supra cannot be
made applicable to the present case.
63. Hence the following:
ORDER
(i) Petition is allowed in part.
(ii) The impugned award to the extent of awarding backwages/wages from 03.11.1994 is set aside.
(iii) The workmen including 63 apprentices are entitled to revised wages for the period 01.07.1995 to 26.11.1995 and also for the month of May 1995.
(iv) The award in so far as payment of 15% bonus for the year 1993-94 is confirmed.
(v) The award for increase in basic pay @ 10% with effect from 01.07.1994 is confirmed. However, the workmen including 63 apprentices are not entitled to the benefit
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(vi) The workmen including 63 apprentices are entitled to financial benefit confirmed by this Court till the closure of the industry, excluding the period referred to in paragraph (v).
Sd/-
(ANANT RAMANATH HEGDE) JUDGE GVP/THM