Punjab-Haryana High Court
Punjab Spinning And Weaving Mills ... vs Workman Sohan Lal And Others on 30 March, 2009
Author: Augustine George Masih
Bench: Augustine George Masih
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
Date of Decision : March 30, 2009.
C.W.P. NO. 17331 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Workman Sohan Lal and others. ...... Respondents.
C.W.P. NO. 8883 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Jawahar Lal and others. ...... Respondents.
C.W.P. NO. 10483 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Krishan Dev Charosia and others. ...... Respondents.
C.W.P. NO. 12848 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Sua Singh and others. ...... Respondents.
C.W.P. NO. 15420 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Shri Pal and others. ...... Respondents.
C.W.P. NO. 15466 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Nirmal Singh and others. ...... Respondents.
C.W.P. No. 17331 of 1999 and others. -2-
C.W.P. NO. 15544 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Workman Bachan Parsad and others. ...... Respondents.
C.W.P. NO. 16105 of 1999.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Workman Gurdev Singh and others. ...... Respondents.
C.W.P. NO. 411 of 2000.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Workman Sumer Shah and others. ...... Respondents.
C.W.P. NO. 16802 of 2000.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Workman Mahi Pal and others. ...... Respondents.
C.W.P. NO. 16845 of 2000.
Punjab Spinning and Weaving Mills Limited, Bathinda. ...... Petitioner.
Versus.
Workman Sahdev Sahu and others. ...... Respondents.
CORAM:HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH.
Present: Mr. Puneet Kansal, Advocate,
for the petitioner.
Mr. S.K. Sharma Budhladewala, Advocate,
for the respondent No. 1.
AUGUSTINE GEORGE MASIH, J.
By this order, I propose to decide C.W.P. Nos. 17331 of 1999, 8883 of 1999, 10483 of 1999, 12848 of 1999, 15420 of 1999, C.W.P. No. 17331 of 1999 and others. -3- 15466 of 1999, 15544 of 1999, 16105 of 1999, 411 of 2000, 16802 of 2000, and 16845 of 2000. These writ petitions have been preferred by the petitioner-management against its workmen wherein the Labour Court has answered the references in their favour holding them entitled to reinstatement in service with continuity thereof and full back wages. In C.W.P. Nos. 17331 of 1999, 8883 of 1999, 10483 of 1999, 12848 of 1999, 15420 of 1999, 15544 of 1999, and 411 of 2000, the petitioner-management had issued chargesheets to the workmen to which the workmen had filed their replies but thereafter without holding any inquiry, the services of the workmen were terminated. In C.W.P. Nos. 15466 of 1999, 16105 of 1999, 16802 of 2000 and 16845 of 2000, the assertion of the petitioner-management was that the workmen had abandoned their jobs and there was no termination of services of the workmen by the petitioner-management.
As these writ petitions have been preferred by the petitioner- management and the issues involved in these writ petitions are common, therefore, they are being taken up together for final disposal as counsel for the parties have submitted their arguments in two sets, namely, cases relating to chargesheet and cases relating to abandonment.
Counsel for the petitioner-management who represents the official liquidator submitted that the petitioner-management Punjab Spinning and Weaving Mills Limited, was declared a Sick Industrial Company within the meaning of Section 3(1)(o) of the Sick Industries Companies (Special Provisions) Act, 1985. The Board of Industrial Financial Re-construction (for short "the B.I.F.R.") took proceedings under Sections 16, 17, 18, and 19 of the Act and vide its order dated 24.04.1996 C.W.P. No. 17331 of 1999 and others. -4- sanctioned a scheme for rehabilitation of the petitioner-company. The said scheme was in the process of implementation when the present writ petitions were preferred by the petitioner-company before this Court and in view of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, the impugned award to the extent of payment of back wages to the workmen could not be executed. He, further, submits that thereafter on the recommendations of the B.I.F.R., the petitioner-company was put into liquidation. Company Petition No. 34 of 2001 came up for hearing before this Court wherein winding up order dated 05.07.2001 was passed by this Court. The official liquidator invited claims on 11.08.2005. 856 workmen put forth their claims and there were three secured creditors (Banks) who had also put forth their claims. Out of the total amount available i.e. Rs. 19 crores with the official liquidator, Rs. 13 crores as an interim measures stands disbursed to the three secured creditors (Banks) and Rs. 6 crores is still lying with the official liquidator which is available for disbursement. On an application moved in the present writ petitions, the official liquidator was impleaded as a party to these writ petitions.
After giving the latest position with regard to the petitioner- company, counsel for the petitioner-company submits that in view of Section 22 of the Sick Industries Company (Special Provisions) Act, 1985, these writ petitions cannot be proceeded with any further. He contends that as per Section 22 of the Sick Industries Company (Special Provisions) Act, 1985, no proceedings for execution, distress or the like against any of the properties of the industrial company lies or could be proceeded further and therefore, on this ground alone, the writ petitions deserve to be allowed. He relies upon the judgment of the learned Single Judge in Cement C.W.P. No. 17331 of 1999 and others. -5- Corporation of India Versus Presiding Officer, Central Government Industrial Tribunal-cum-Labour Court, 2002 (1) S.C.T. 355.
For consideration of this submission of counsel for the petitioner-company, Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, needs to be referred to which reads as follows :-
"Section 22(1).
Suspension of legal proceedings, contracts, etc. (1) Where in respect of an industrial company, an inquiry under Section 16 is pending or any scheme referred to under Section 17 is under preparation or consideration or a sanctioned scheme is under implementation or where an appeal under Section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other law or the memorandum and articles of association of the industrial company or any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof [and no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company] shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority."
A look at the heading of the Section itself clarifies the position with regard to the ambit and operation of this Section. It says suspension of legal proceedings, contracts etc. On further going through the text of this Section, it is apparent that during the pendency of an inquiry under C.W.P. No. 17331 of 1999 and others. -6- Section 16 or when any scheme referred to under Section 17, is under preparation or consideration or sanctioned scheme is under implementation or wherein an appeal under Section 25 of the Sick Industrial Companies (Special Provisions) Act, 1985 relating to an industrial company is pending then the proceedings cannot be initiated as it would not lie or if the proceedings are pending cannot be proceeded with further under any other law except with the consent of the Board or the appellate authority as the case may be. The effect, therefore, of this Section is the suspension of the legal proceedings and the contracts etc. when the proceedings under Sick Industrial Companies (Special Provisions) Act, 1985, is initiated or pending under the provisions mentioned in Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985.
The facts as submitted by counsel for the petitioner clearly indicate that no such proceedings under the Sick Industrial Company (Special Provisions) Act, 1985, is pending as of date as B.I.F.R. had already recommended the winding up of the company in the year, 2001, and as a matter of fact, in Company Petition No. 34 of 2001, winding up orders have been passed by this High Court on 05.07.2001. Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, is no more applicable and cannot be pressed into services by the petitioner-company to stop the enforcement of the impugned awards passed against the petitioner- company and in favour of the workmen. The judgment relied upon by counsel for the petitioner-company i.e. Cement Corporation of India (Supra), also deals with the situation where the order has been passed against the petitioner-management and states that Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, has the effect of C.W.P. No. 17331 of 1999 and others. -7- suspending the proceedings with regard to the claims which relates to recovery of money. The said cases relate to the proceedings initiated under Section 33-C(2) of the Industrial Disputes Act. Therefore, in the light of the present situation, this judgment has no effect. As a matter of fact while issuing notices, this Court had only stayed the recovery of back wages as the petitioner-company had clearly stated that they were ready and willing to take back the workmen in service but because of the company being declared as sick industry, the financial position was grim and therefore, was unable to pay the back wages and also in the light of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, the awards could not be enforced as far as the back wages were concerned. That situation not being prevalent as of date, the legal bar with regard to the enforcement and execution of the awards having been not in existence, the awards could be adjudicated upon and given effect to including with regard to the back wages. In this view of the matter, the contention of counsel for the petitioner-company with regard to his submission in the light of the provisions of Section 22 of the Sick Industrial Company (Special Provisions) Act, 1985, cannot be accepted.
Faced with this situation, counsel for the petitioner-company has now turned to the merits of the impugned award passed in cases relating to the workmen who were chargesheeted and had submitted their replies to the said chargesheets i.e. C.W.P. Nos. 17331 of 1999, 8883 of 1999, 10483 of 1999, 12848 of 1999, 15420 of 1999, 15544 of 1999, and 411 of 2000. He contends that the findings recorded by the Labour Court cannot be sustained as it is the categoric stand of the petitioner- management in its reply to the claim statement of the workmen that after C.W.P. No. 17331 of 1999 and others. -8- issuance of the chargesheets to the workmen and submission of the reply by them, the petitioner-management decided to conduct inquiry. As the situation was not conducive to the holding of an inquiry due to deterioration of the situation, it was not possible for the petitioner- management to conduct the inquiry as the workmen had committed grave mis-conduct. These workmen had instigated their co-workers to resort the production slow down and to sabotage the yarn in the process by cutting it by sharp edged material and also tampered with the machines to cause huge financial and production losses to the petitioner-company. Thereafter, these workmen instigated their co-workers to go on illegal strike and actively participated to ensure the strike. They abused and threatened the loyal and willing workers with dire consequences if they performed duties in the strike. Criminal proceedings were also initiated against these workmen. In this situation, he submitted that the order passed by the petitioner-management terminating the services of the workmen was fully justified and in accordance with law. He further submits that the awards, therefore, deserve to be set aside.
On the other hand, counsel for the respondents states that it is not in dispute that no inquiry was held against the workmen and under this situation, the petitioner-management was required to prove the charges before the Labour Court to justify its order of termination. Having produced no records, leading to the finding coming from the Labour Court to the effect that the charges have not been proved against the workmen due to lack of evidence, the assertions of the petitioner-management in their response to the claim statement does not have any legs to stand on. The findings, therefore, cannot be said to be perverse or due to non C.W.P. No. 17331 of 1999 and others. -9- consideration of the evidence produced by the petitioner-management which would call for interference by this Court.
Perusal of the awards justify the contention raised by counsel for the respondents. What has been proved by the petitioner-management before the Labour Court is the chargesheets which were served upon the workmen, thereafter, there is no evidence and material on records so as to come to a conclusion or draw an inference that the workmen instigated their co-workers to either resort to slow down production or to sabotage the yarn or to tamper with machines nor has any evidence been produced that they had instigated the co-workers to go on illegal strike or that they had threatened, abused or forced the loyal and willing workers to participate in the strike as alleged by the petitioner-management. Only management witness Shri Bachittar Singh M.W.1 in his statement has not even alleged about the charges against the workman. The onus being on the petitioner- management to prove the charges levelled against the workmen either during the domestic inquiry, which admittedly has not been held, or before the Labour Court which the petitioner-management has desperately failed in the absence of oral as well as documentary evidence with regard to the charges levelled against the workmen, there can be no conclusion but the one which has been arrived at by the Labout Court, vide its impugned awards. No illegality, therefore, can be said to have been committed by the Labour Court in the impugned awards with regard to the conclusion that the order of dismissal passed against the workmen, cannot be held to be either justified or in order. In view of the admitted fact that the workmen had completed 240 days in the 12 proceeding months prior to their termination and provisions of Section 25-F of the Industrial Disputes Act C.W.P. No. 17331 of 1999 and others. -10- having not been complied with, which fact is also admitted as no compensation was paid to the workmen, the findings as recorded by the Labour Court on this aspect cannot be faulted with.
Counsel for the petitioner with regard to C.W.P. Nos. 15466 of 1999, 16105 of 1999, 16802 of 2000 and 16845 of 2000, wherein the assertion of the petitioner-management is that the workmen had abandoned their jobs and were not terminated, he contends that the petitioner- management had produced letters written by the petitioner-management and sent under postal certificate to the workmen which were accepted calling upon them to join duty. He, therefore, contends that this evidence would clearly indicate that despite the petitioner-management having called upon the workmen to join duty, they have failed to do the same which would amount to abandonment, therefore, the provisions of Section 25-F of the Industrial Disputes Act would not be attracted as there is no termination of service of the workmen by the petitioner-management.
A perusal of the award would show that although the letters have been produced by the petitioner-management as exhibits and is alleged to have been sent under the postal certificate to the workmen but the petitioner-management has failed to produce any postal receipts on the records to prove the fact that these letters were actually posted. That being the position, the assertion as put forth by the petitioner-management, cannot be accepted as the onus of proving assertions which were made by the petitioner-management was on it. Having not discharge that onus, the petitioner-management cannot merely by producing certain letters claim benefit thereof. The findings as recorded by the Labour Court being based on correct interpretation of the evidence and law, cannot be interfered with. C.W.P. No. 17331 of 1999 and others. -11-
Faced with this situation, counsel for the petitioner- management contends that the back wages granted to the workmen by the Labour Court are not justified as the onus to prove that the workmen were not gainfully employed during the period for which back wages have been claimed is on the workmen. He further contends that full back wages cannot be allowed automatically or mechanically only because order of termination is found to be unsustainable. While granting the relief with regard to the back wages, the Labour Court was required to apply its mind with regard to the financial position of the petitioner-company and also with regard to the fact whether the onus which was heavily on the workman to prove that he was gainfully employed have been discharged or not. For this assertion, he relied upon the judgment of Hon'ble the Supreme Court in the case of U.P. State Brassware Corporation Limited and another Versus Uday Narain Pandey,2006(1) S.C.C. 479.
Counsel for the respondents submits that the workmen had so pleaded before the Labour Court in their claim statements that they have not been gainfully employed after the termination and have also stated before the Labour Court in this regard. He, therefore, submits that onus having been discharged, the relief granted by the Labour Court with regard to back wages does not call for any interference by this Court.
I have given my thoughtful consideration to the submissions made by counsel for the parties. The factual aspect with regard to the petitioner-company having been declared sick industry and ultimately leading to the winding up of the company, has not been disputed. It is also not in dispute that after passing of the award, the award as a whole was not stayed by this Court but only back wages were stayed that too taking into C.W.P. No. 17331 of 1999 and others. -12- consideration the financial constraints being faced by the petitioner- company. Hon'ble the Supreme Court in U.P. State Brassware Corporation Limited's case (supra), has held that a person is not entitled to get something only because it would be lawful to do so. The industrial courts while adjudicating on disputes between the management and the workmen must take into consideration the purpose, the law seeks to achieve. The Industrial Disputes Act was principally enacted for the purpose of pre-empting industrial tensions, providing mechanics of dispute resolutions and setting up of necessary infrastructure so that the partners in production may work together to create a climate of goodwill. Rendition of justice would bring within its purview giving a person what is due to him and not what can be given to him in the law. Earlier the payment of full back wages on a declaration of the order of termination being invalid was usual result, but now with the passage of time, a pragmatic view of the matter is being taken by the Court realising that an industry may not be compelled to pay the workman for the period during which he apparently contributed little or nothing at all to it and/or for a period that was spent unproductively as a result whereof the employer would be compelled to go back to a situation which prevailed many years ago, namely, when the workman was retrenched.
The changes brought about by the subsequent decisions of Hon'ble the Supreme Court, therefore, emphasis upon doing the justice between the parties. No precise formula can be laid down and it would not be correct to contend that the payment of entire back wages should be allowed automatically. It should not be granted mechanically and payment of full back wages, cannot be a natural consequence. Keeping these C.W.P. No. 17331 of 1999 and others. -13- principles in mind and looking at the financial position of the petitioner- company and the peculiar facts and circumstances of this case, it would be just and equitable that the workmen be held entitled to 40 per cent of the back wages in all the abovementioned writ petitions.
A direction is issued to release the back wages to the workmen within a period of three months from the date of receipt of copy of this order.
These writ petitions stand disposed of in the above terms.
(AUGUSTINE GEORGE MASIH) JUDGE March 30,2009.
sjks.
Whether referred to the Reporter - Yes.
C.W.P. No. 17331 of 1999 and others. -14-