Allahabad High Court
M/S Lml Limited vs State Of U.P. & Ors. on 12 July, 2010
Court No. - 28 Case :- WRIT - C No. - 39146 of 2010 Petitioner :- M/S Lml Limited Respondent :- State Of U.P. & Ors. Petitioner Counsel :- Vijay Sinha,Shashi Tandon Respondent Counsel :- C.S.C. Hon'ble Rajesh Dayal Khare,J.
Heard Sri Shashi Nandan, learned Senior Advocate assisted by Sri Vijay Sinha, learned counsel appearing for the petitioner and learned Standing Counsel appearing for the respondents.
It is submitted on behalf of the petitioner that petitioner company was engaged in the manufacturing of geared scooters and for the said purpose, had employed more than six thousand employees. However, due to certain reasons, beyond the control of the petitioner and adverse market conditions, petitioner's company suffered huge losses of approximately Rs.468 crores. It is also submitted that the company's net worth was fully eroded, which resulted in reference of the company before the Board of Industrial and Financial Reconstruction under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985. It is further submitted that on account of strike and other subversive activities by the workmen, which led to such situation which was beyond control of petitioner's company, the petitioner's company was constrained to declare lockout with effect from 7.3.2006. However, after protracted discussions between the Management of the company and the sole registered union of company, namely, Lohia Machine Karmachari Sangh, a settlement/agreement was entered into between the company and union on 13.4.2007 before the Additional Labour Commissioner, Kanpur Region Kanpur and Additional Labour Commissioner (IR) U.P. Head Office, Kanpur and copy of the agreement/settlement dated 13.4.2007 has been filed as annexure-3 to the writ 2 petition. Reference has been drawn to clause 2 of the said settlement/agreement dated 13.04.2007, which is as follows:
"That since work and production of scooters is to be started in a phased manner depending on the market requirement and orders, it has been agreed and decided that only such number of workmen shall be taken on work and employment, in phases, as per requirement of work and production and as far as departmental seniority basis. That all other workmen, save and except those who are required to resume work and production and whose names shall be displayed at the notice board of the Company from time to time, shall stand Laid Off. The workmen so Laid Off shall be entitled to receive Lay Off Compensation ("LOC") in terms of the UP Industrial Disputes Act 1947 in the manner as discussed and decided hereunder:
It is further submitted on behalf of the petitioner that a small splinter group of workmen describing themselves as LML Mazdoor Sangthan, who received all the benefits under the agreement dated 13.04.2007, tried to disturb the peaceful functioning of the company by getting themselves registered under the Trade Union Act. However, inspite of the objections being filed by the petitioner's company, registration was granted to them which was challenged before this Court and this Court was pleased to quash the same vide order dated 23.04.2008 by making following observations:
"For the reasons above, this petition succeeds and is allowed and the impugned registration certificate dated 18.01.2008 is hereby quashed. In the circumstances of the case, no order as to costs."
It has, therefore, been submitted that apart from Lohia Machines Karmchari Sangh, which was recognized registered union of company, no other registered 3 union existed and after agreement/settlement dated 13.04.2007, which was also acted upon, and manufacturing of the petitioner's company started, there existed no industrial dispute whatsoever. It has further been submitted that in order to disturb the industrial peace and inspite of the fact that such splinter group received all the benefits under the agreement dated 13.4.2007, they tried to raise industrial dispute under section 4 K of the U.P. Industrial Dispute Act at their behest i.e. LML Mazdoor Ekta Sangthan, which was an unregistered and unrecognised union and on 21.5.2008 respondent no. 1 passed an order in a most mechanical manner, without application of mind, by which reference was made, copy of which has been filed as annexure-7 to the writ petition. Thereafter consequential notice dated 28.05.2008 was also received by the petitioner, which has been filed as annexure
-10 to the writ petition and which are impugned in the present writ petition. Learned counsel for the petitioner has placed reliance of the judgement of Hon'ble Supreme Court in the matter of National Engineering Industries Ltd. Vs. State of Rajasthan and others, reported in 2000-I-LLJ 247 wherein Hon'ble Supreme Court has observed that there can be many splinter groups each forming a separate trade union. If every trade union, having few members, is to go on raising a dispute and the State Government making reference again and again the very purpose of settlement is defeated. Also referring of the case of Ram Pukar Singh and others Vs. Heavy Engineering Corporation and others, reported in 1995-I- LLJ 214, the Hon'ble Supreme Court further held that where a settlement was arrived at between the management and sole recognized union of workmen under Section 12(3) read with Section 18 of the Act it would be binding on all the workmen whether they are members of the union or not.
The order of reference and the consequential notice dated 28.05.2008 was challenged by the petitioner by way of filing Civil Misc. Writ Petition No. 33896 of 2008 in this Court. This Court vide order dated 16.07.2008 stayed the operation of 4 order dated 21.05.2008 passed by Industrial Tribunal (III), Kanpur and the proceedings based on notice dated 28.05.2008 till the next date of listing, which order has been filed as Annexure 9 to the Writ Petition.
Sri Shashi Nandan, learned senior counsel appearing for the petitioner has contended that same unregistered union namely respondent no. 3 has now initiated proceedings under section 6-H(1) of Industrial Disputes Act for recovery of 50 per cent of the remaining lay off amount, which was to be paid of to the workmen only after rehabilitation of the petitioner company and which can not be done inasmuch as the respondent number 3 is an unregistered union, the members of which have taken benefit of the settlement/agreement dated 13.04.2007 and also on account of the fact that reference under section 4(k) of Industrial Disputes Act made before the Industrial Tribunal (III) Kanpur has also been stayed by this Court. It is contended on behalf of the petitioner that such proceedings have only been drawn with the sole intention to adversely affect the company and its rehabilitation process. Learned counsel for the petitioner has again drawn the attention of this Court to the fact that the petitioner has also moved an application/reference before the Board for Industrial and Financial Re- construction (BIFR), which has been referred as case no. 80 of 2006 and it is, therefore, argued that no recovery pursuant to the impugned proceedings now initiated at the behest of the respondent no. 3 in RD case no. 6 of 2009 can be initiated.
Issue notice to the opposite party no. 3 returnable within four weeks. Steps be taken within a week.
Learned A.G.A. prays for and is granted four weeks' time for filing counter affidavit. Respondent no. 3 may also file counter affidavit within the same period. As prayed by learned counsel for the petitioner, two weeks' time thereafter, is granted for filing rejoinder affidavit.
5List thereafter.
Till the next date of listing, further proceedings of RD Case no. 06/2009 under section 6-H (1) of U.P. Industrial Dispute Act pending before the respondent no. 2 shall be kept in abeyance.
Order Date :- 12.7.2010 yachna