Gujarat High Court
Iron Rolling Mills Pvt. Ltd. vs Vinodkumar R. Singh on 26 March, 2008
Author: H.K. Rathod
Bench: H.K. Rathod
ORDER H.K. Rathod, J.
1. Civil Application No. 9203 of 2007 is filed with a prayer to fix the matter for final hearing and Civil Application No. 14435 of 2006 is filed by original petitioner with a prayer to discontinue the benefit under Section 17B of the Industrial Disputes Act, 1947 (for short "the Act") w.e.f. 18.11.2005 from the date on which the applicant employer has closed down its undertaking.
2. Heard learned advocate Mr. D.G. Shukla for the workman and learned advocate Mr. Dipak R. Dave for the employer.
3. SCA No. 7850 of 2001 is filed by employer and SCA No. 10295 of 2001 is filed by the workman. In SCA No. 7850 of 2001, the employer has challenged the award passed by the Labour Court in Reference No. 1880 of 1991 dated 18.5.2001 wherein the Labour Court has granted reinstatement without continuity of service and without back wages of interim period. The service of workman was terminated on 21.12.1990 which order was set aside by the Labour Court.
4. On 14.9.2001, this Court (Coram : K.M. Mehta) has passed the following order:
1. Iron Rolling Mills Pvt. Ltd. the petitioner herein has filed this petition challenging the award of the Labour Court, Ahmedabad passed in Ref.(LCA) No. 1880 of 1991 dated 18.5.2001.
2. The Labour Court has granted reinstatement to the employee in this behalf having exercised the jurisdiction of Section 11A of the I.D. Act inspite of holding that there is misconduct against the respondent and in the inquiry the misconduct alleged against the employee was proved.
3. Mr. Dave learned Counsel for the petitioner has relied upon the judgment of the Apex Court in the case of Janatha Bazar (South Kanara Central Co-operative Wholesale Stores Ltd) and Ors. reported in (2000) 1 SC 517 in support of his contention. Hence Rule.
Notice as to interim relief returnable on 5.10.2001. In the meanwhile, ad-interim relief in terms of para 17(B).
5. The petition filed by workman being SCA No. 10295 of 2001 wherein this Court has issued Rule and it was ordered to be heard along with SCA NO.7850 of 2001 on 2.11.2001.
6. It is necessary to note that while granting the ad-interim relief in terms of Para. 17(B), reinstatement has been stayed by this Court. During the pendency of this petition, Civil Application No. 14435 of 2006 has been filed by employer with a prayer to vacate the relief granted under Section 17B of the Act. The averments made in this application that because of the stay granted against the reinstatement in Civil Application No. 7220 of 2002, this Court has directed to original petitioner to comply with the provisions of Section 17B of the Act by order dated 28.10.2002 which is quoted as under:
1. Pursuant to order dated 22.10.2002 it is reported that the amount of Rs. 10,000/- is paid by way of cheque. Mr. D.R. Dave, the learned advocate appearing for the establishment is directed to comply with the provisions of Section 17B of the Industrial Disputes Act, 1947 (hereinafter referred to as "the Act") by making payment of the remaining amount payable under the said section and also directed to continue to make payment under Section 17B of the Act.
2. With the above directions, the Civil Application is disposed of. No order as to costs.
7. According to employer, all throughout during the pendency of this petition, payment was made which comes to Rs. 76,385/- to the workman upto 17.11.2006. According to employer, establishment is totally closed and its manufacturing activities have been totally stopped w.e.f. 1.4.2005. Even the H.T. power connection was disconnected from 30.6.2005 and at present, no employees have been engaged in applicant's company and in fact, shades have been dismantled, machineries and Factory Land have been disposed of. The factory license was also surrendered to the Chief Factory Inspector. The Environment Engineer was also requested to cancel the consent order and appropriate authorities were informed by petitioner with regard to the closure of undertaking of the applicant under Section 25FFA of the Act. The reasons for closure was also mentioned in the said form. According to applicant, not a single employee has been employed with the applicant and even the opponent is also not entitled for wages under Section 17B of the Act because of subsequent event, reinstatement of the opponent is not possible because of closure of the applicant's undertaking. Therefore, the workman is not entitled the benefit under Section 17B of the Act. On the basis of aforesaid averments, prayer is made in terms of Para. 6(B) to discontinue the benefit under Section 17B of the Act. No reply was filed by the workman against this application.
8. It is made clear by this Court to both the learned advocates that hearing of main matter is not possible today, though application is filed by the workman with a prayer to fix the matter for final hearing. With consent of both the learned advocates, civil application No. 14435 of 2006 is taken up for hearing. [See : (1) Navinchandra Laxmidas Mandavia v. State of Gujarat and Ors. reported in 1999 Lab. IC 3730, para 6 and 8;(2)Standard Chartered Grindlays Bank Ltd. and Govind Phopale and Anr. reported in 2003 (96) FLR 14;(3) Mehsana District Coop. Milk Producers Union Ltd. v. Ganeshbhai M. Chaudhary reported in 2001 (1) GLH (UJ) page 14;(4) Dena Bank v. Kiritkumar T. Patel reported in 1997 (2) SCC 996; (5) Regional Authority, Dena Bank, and Anr. v. Ghanshyam reported in 2001 AIR SCW 2150;(6)Workmen employed under it by Shramik Sena v. Raptakos Breet & Co. Ltd. reported in 2007 III CLR 354, the Bombay High Court observed as under in para 4,5,8 and 9;(7) Food Craft Instt. v. Rameshwar Sharma and Anr. reported in 2007-II-LLJ Delhi, page 351; (8)Confederation of Ex-Servicemen Association and Ors. v. Union of India and Ors. reported in (2006) 8 SCC 399].
9. It is necessary to note that at the time of closure in prescribed form, two workmen were affected by the closure. What benefits have been given to these two workmen, the employer remained silent in his civil application. The contention which has been raised by employer in filing present application that because of the closure of the undertaking, workman is not entitled the benefit of Section 17B of the Act. Section 17B operates against petitioner so long proceeding is pending before this Court challenging the award of reinstatement by the employer. This Section is having mandatory provision in case when workman is unemployed during the pendency of petition. The Section also provides that in case when the Labour Court by its award directs reinstatement of any workman and the employer prefers any proceedings against such award in the High Court, the employer shall be liable to pay such workman during the pendency of such proceedings in the High Court, full wages last drawn by him inclusive of maintenance allowance admissible to him under any Rule if the workman had not been employed in any establishment during such period and affidavit of such workman had been filed to that effect in such Court.
9.1 It is the contention of the employer that in view of closure of the establishment, reinstatement of the workman is not possible. If that is so, then, the employer may not challenge the award of reinstatement and implement the award and make the payment whatever is available to the workman concerned. But merely having inability to reinstate the workman cannot give any right to the employer to claim discontinuation of benefit under Section 17B of the Act. Said prayer itself is contrary to the object of Section 17B of the Act. So long the challenge against reinstatement and award remains continued or pending, then, it is the legal obligation of the employer to comply with the provisions of Section 17B of the Act as directed by this Court in civil application as referred above.
10. Therefore, considering the order passed by this Court in CA No. 7220 of 2002 dated 20.10.2002 where direction issued by this Court to the establishment to comply with the provisions of Section 17B of the Act by making payment of the remaining amount payable under said Section and also directed to continue to make payment under Section 17B of the Act. So, there is a direction issued by this Court to comply with the provisions of Section 17B of the Act till the matter is finally decided by this Court. Looking to the prayer made in this application by the employer, same is contrary to the direction issued by this Court. The aforesaid order dated 28.10.2002 passed in CA No. 7220 of 2002 is not challenged by the applicant employer to the higher forum. Section 17B operates being a mandatory provision when proceeding is pending in the High Court. In this case, SCA No. 7850 of 2001 is pending before this Court and order of reinstatement is stayed by this Court. Therefore, there is no provision made in the Section that during the pendency of the petition, if the employer has closed down the undertaking then, the employer is not liable to make the payment to the concerned employee. Therefore, so long the petition is pending and workman is unemployed and not gainfully employed which was proved by the employer, the employer has no option but to continue the pay the benefit under Section 17B of the Act to the concerned workman. Mere closure of undertaking cannot be considered to be a ground which entitled the employer to discontinue the benefit of Section 17B of the Act. The closure of undertaking may be relevant at the time of final hearing but, for the purpose of benefit under Section 17B of the Act, this is not relevant which can dis-entitle the benefit of Section 17B of the Act.
11. This Court, in the case of Jayantilal Shanubhai Tailor v. Ralchem Ltd. , has taken the view that workman cannot be denied relief under Section 17B on the ground that manufacturing activities of employer company have come to a halt. This Court has also considered that High Court or the Supreme Court cannot deny the benefit of Section 17B of the Act to the workman because of closure of the company or undertaking but, it can be denied having the discretionary powers with the Court in case when employer prove gainful employment of the workman. Except that, the High Court has no power to deny the benefit of Section 17B of the Act to the concerned workman. The relevant observations made by this Court in the aforesaid decision are in Para. 4,5,6 and 7, which are quoted as under:
4. Mr. Hasmukh Thakker, learned Advocate appearing for the opponent, original petitioner, submitted that it is the case of the petitioner-Company that it is a `transferree company' and that the services of the applicant-workman were terminated by the `transferor company' and, therefore, when the matter is subjudice before this Court, the opponent-Company be not directed to pay the benefits accruing under Section 17(B) of the Act. Mr. Thakker submitted that besides this, the manufacturing activities of the opponent-Company have also come to a halt and taking into consideration that aspect also, the order for making payment under Section 17(B) be not passed. Mr. Thakker relied upon Order dated 19th August, 2003 of the Division Bench of this Court (Coram: R.K. Abichandani & K.M. Mehta, JJ.) in the matter of Akbarkhan M. Pathan v. General Manager in Civil Application No. 5486 of 2003 in Letters Patent Appeal No. 933 of 1999, wherein the Division Bench has observed in paragraph-5 as under:
5. In our opinion, in the present case, in view of the Undertaking having been declared sick and thereafter having been closed down, there is no scope for making any order under Section 17B of the Act. The application is, therefore, rejected, without prejudice to the applicant's other rights and remedies in respect of their dues.
5. In the considered opinion of this Court, none of the submissions made by the learned Advocate for the opponent, original petitioner-Company, can be the basis for not passing an order for complying Section 17(B) of the Act. The underlying concept of Section 17(B) is to provide subsistence allowance to a workman, who has the order of reinstatement in his favour, and against that order (award), an appeal is filed before the higher forum, in which such order is stayed. From the language of Section 17(B), it is very clear that the aforesaid two grounds cannot be the basis for denying the reliefs under Section 17(B). For the ready reference, Section 17(B) is reproduced here under:
Where in any case a Labour Court, Tribunal or National Tribunal by its award directs reinstatement of any workman and the employer prefers any proceedings against any such award in a High Court or the Supreme Court, the employer shall be liable to pay such workman, during the period of pendency of such proceedings in the High Court or the Supreme Court, full wages last drawn by him, inclusive of any maintenance allowance admissible to him under any rule if the workman had not been employed in any establishment during such period and an affidavit for such workman had been filed to that effect in such Court:
The only ground on which the High Court or the Supreme Court can deny the passing of an order for payment of benefits accrued under Section 17(B) is that, if the High Court or the Supreme Court is satisfied to the fact that such a workman is employed and is receiving adequate remuneration during any such period or part thereof.
6. So far as the order of the Division Bench of this Court in the case of Akbarkhan M. Pathan (supra) is concerned, what weighed with the Division Bench is mentioned and that is, `the undertaking is declared sick and thereafter, it is closed down'. In the opinion of this Court, the fact of the undertaking being declared sick weighed with the Division Bench, hence, the said decision will not be of any help to the opponent-Company herein.
7. In view of the aforesaid discussion, the opponent, original petitioner, is directed to pay the benefits accrued under Section 17(B) of the Act from the date of the filing of the affidavit, a copy of which is produced at page-6 of the Civil Application. It is further directed that the opponent-original petitioner shall pay the benefits accrued under Section 17(B) of the Act for the month of October-2004, payable in November-2004 as early as possible i.e. on or before 10th November, 2004. Thereafter, it shall continue to pay the same regularly on or before tenth of every month. So far as the arrears from the month of February-2004 to September-2004 are concerned, the same be paid on or before 31st December, 2004.
12. No doubt, the decision of the Division Bench in CA No. 5486 of 2003 in LPA No. 933 of 1999 dated 19.8.2003 is relied by learned advocate Mr. Dave which has already been dealt with by this Court in aforesaid reported decision. The facts before the Division Bench where the respondent Corporation was declared as a sick unit and subsequently, by order dated 26.7.2002 passed by specified authority the undertaking has been closed. Therefore, the Division Bench has considered that when the undertaking has been closed down by order of specified authority under Section 25(o)(1) of the Act dated 26.7.2002. Therefore, there is no question of reinstating the applicant or paying any dues under Section 17B of the Act for the period subsequent to such closure. Moreover, the respondent Corporation was declared sick industrial company and therefore, no coercive measures can be taken by resorting to the provisions of Section 17B of the Act. The application for vacating the interim relief filed by the workman has been withdrawn and observed that advocate has fairly submitted that he will not approach the Court by way of fresh civil application for interim relief within reasonable time, then it would be open for the other side to execute the award passed in their favour. The Division Bench has also observed that undertaking is closed down, therefore, there is no scope for making any order under Section 17B of the Act. In this case, the facts are little bit different. Here, this Court has passed an order on 28.10.2002 in CA No. 7220 of 2002 with a direction to the applicant company to pay the benefit under Section 17B of the Act to the workman concerned. This direction continue to operate against the applicant. Therefore, in this case, undertaking is closed down being a subsequent event. At that occasion, whether this Court can allow the application filed by employer to discontinue the benefit which has already been granted by this Court on 28.10.2002. Therefore, the facts before the Division Bench and facts before this Court are altogether different and therefore, according to my opinion, the order which has been relied by learned advocate Mr. Dave of the Division Bench as referred above is not applicable to the facts of this case. Apart from that, there is no provision made in the Section which give such an option to the employer and this Court cannot re-write the Section when it is already legislated by parliament. Therefore, the closure of undertaking is not such an incident which employer can entitle to discontinue the benefit under Section 17B of the Act to the workman.
13. However, it is open for the employer first to implement the award; reinstate the workman and pay whatever the benefit is available as per the award, same may be considered and at the time of closure, whatever he may be entitled, they can dispense with service of the workman after implementing the award in question, otherwise they are not entitled to discontinue the benefit of Section 17B of the Act which has been granted by this Court. Both the things cannot go together; one side the challenge remained intact by the employer against the reinstatement and another side, employer wants discontinuation of the benefit under Section 17B of the Act to the workman, which cannot be permitted by this Court when this Court has no discretionary power to deny the benefit to the workman, if he satisfies the requirement under Section 17B of the Act. Therefore, according to my opinion, there is no substance in the present civil application and therefore, same is rejected with a direction to the employer to pay the remaining amount payable under Section 17B of the Act to the workman concerned if it is not paid by the petitioner. The applicant shall have to implement the order passed by this Court on 20.10.2002 in Civil Application No. 7220 of 2002.
14. In view of the order passed in CA No. 14435 of 2006, no order is required to be passed in CA No. 9203 of 2007. Accordingly, same is disposed of.