Ashis Sen v. Steel Authority of India Ltd. — 1988 DIGILAW 400 (CAL)

JUDGMENT Ray, J. The subject matter of challenge in the writ petition out of which the instant appeal arises is the Bipartite Agreement dated 29th November, 1985 and the transfer and/or re-deployment order dated 17th December, 1986 and 29th December, 1986. 2. The Steel Authority of India Ltd. (hereinafter referred to as SAIL) came into existence as an integral company on and from 1st May, 1978 as a result of the Public Sector Iron and Steel Companies (Restructuring) and Miscellaneous Provisions Act, 1978. 3. On 10th March, 1979, a Tripartite Settlement was entered into between SAIL and All India Co-Ordination Committee (hereinafter referred to as AICC) regarding recruitment, promotion, Transfer policy etc. The said Settlement was signed by the AICC representing the vast majority of over 4000 employees of Central Marketing Organization (hereinafter referred to as CMO) out of 4700 employees. It may be noted in this connection that there is some dispute about the actual representation in the AICC of the employees of CMO and SAIL. But it is admitted position that AICC represents a vast majority of employees of CMO and SAIL. 4. To appreciate the respective contentions of the parties, clause 23 of the said Tripartite Settlement becomes relevant and as such set out hereunder :- “As regards cases of transfer of employees on account of the situation other than those mentioned in the above clause, if was agreed that cases of transfer will be discussed with AICC before the Management takes a decision in the matter.” 5. It is the case of the respondent SAIL that pursuant to the said clause 23 of the Tripartite Agreement, discussions took place between March 1983 and March 1984 with AICC at Calcutta and Jaipur which considered amongst others the transfer policy to effect redeployment of local surplus of man power especially in Transport and Shipping areas as also elsewhere. It is the further case of the said respondent that as a result of the Import Policy of 1985 which came into effect on 1st April, 1985, the canalysing agency work for import of steel was transferred to Minerals & Metals Trading Corporation (hereinafter referred to as MMTC, which is also a Government of India undertaking. The result of such transfer of canalysing agency work of MMTC and other reasons aggravated the situation of surplus man-power in certain areas. The result of such transfer of canalysing agency work of MMTC and other reasons aggravated the situation of surplus man-power in certain areas. There were surplus man-powers in many officers of the Export and Import Departments of CMO, the Branch Transport and Shipping Officer and Shipping and Transport Department of CMO at Calcutta as well as in some Bunch Sales Offices. The SAIL authorities contended that as a result of considerable shrinkage of work in the Transport and Shipping Department of CMO consequents upon transfer of the canalysing agency work for import of steel items to MMTC, the management at one points of time considered that retrenchment was necessary but it was felt that such step would be too harsh and as an alternative to retrenchment the management held discussion with AICC the cases of such transfer on account of employees being either without work and/or without sufficient work in various establishments of CMO. Such, discussions were also made in terms of clause 23 of the Tripartite Settlement. On conclusion of the discussions with AICC, Bipartite Memorandum of Settlement dated 29th November, 1985 was signed by the management of the CMO and AICC. If a reference is made to the said Bipartite Settlement, it will appear from clause 3.1 that there were employee without sufficient work and/or without work in various establishments of CMO and the SAIL proposed redeployment of such employees for effective utilization of human resources. Clause 3.2 of the said Settlement records that AICC was the only representative recognized All India Unit of employees of SAIL, CMO, baying its constituent units in almost all the States of the country and is was also recorded that the AICC endorsed the view that re-deployment had become necessary mainly because of transfer of canalysing agency work for import of Steel from CMO to other organizations by the Government. It was also noted in various clauses in the said Bipartite Agreement that re-deployment would be made considering the suitability of employees for the jobs against which they would be redeployed and the exact number of re-deployment should be determined after Organisation and Method Studies (hereinafter referred as O & M Studies). The views of the AICC would be taken into consideration before finalising decision on O & M studies. The views of the AICC would be taken into consideration before finalising decision on O & M studies. It was also agreed between the AICC and SAIL that merger of seniority of Home Sales and Transport & Shipping Department employees should take effect after re-deployment, O & M studies thereafter were undertaken and a report was given on the basis of such study identifying the employees who have been found to be without work and/or without sufficient work. The impugned order of re-deployment was thereafter passed by the SAIL authorities. 6. The appellant have contended that the said Bipartite Agreement on the basis of which redeployment orders were issued is contrary to the Tripartite Agreement and such Bipartite Agreement between the AICC and the SAIL authorities cannot override the provisions of the Tripartite Agreement. The appellants has contended that the said Bipartite Agreement between the AICC and the SAIL administration is an independent settlement under Section 18(1) of the Industrial Disputes Act and the intention of such Agreement is much wider than the scope under clause 23 of the said Tripartite Agreement. The transfer policy as contained in the Tripartite Agreement was sought to be modified by the said Bipartite Agreement as such any such modification must be held to be bad. The appellants contended that the impugned agreement between the SAIL and the AICC is intended for the purpose of transferring the employees of CTSO in super-session of the transfer policy so long followed and embodied in the Tripartite Agreement. Although under the Tripartite Agreement, in terms of clause 23, a consultation is required to be made with the AICC, the said clause 23 must be understood in its proper perspective. Clause 23 is not meant to reverse and override the transfer policy as contained in the Tripartite Agreement but the said clause was incorporated only to cover unanticipated individual cases. Clause 23 is almost like the residuary clause and such clause cannot authorise the management and the AICC to enter into any agreement which is wholly opposed to the transfer policy in the Tripartite Agreement. The appellants also contended that transfer of canalysing work to MMTC on and from April 1985 does not affect effect the Transport and Shipping Department at Calcutta very much and the employees of the said department was not without any work as sought to be contended. The appellants also contended that transfer of canalysing work to MMTC on and from April 1985 does not affect effect the Transport and Shipping Department at Calcutta very much and the employees of the said department was not without any work as sought to be contended. The appellants also contender that the transfer of canalysing work mainly affected the Home Sales Department and not the Transport and Shipping Department in view of the fact that no extra man-power was provided for doing the jobs in relation to canalysing work and the entire man-power of the erstwhile SAIL International Limited was transferred to and merged with the Home Sales Department, The appellants have contended that the impugned Bipartite Settlement dated 29th November, 1985 was entered into between the SAIL and AICC for the mutual benefit of the management and the members of the AICC at the cost of employees of the Transport and Shipping Department. The said Bipartite Agreement is mala fide discriminatory, unjust, unfair and unreasonable and in any event they cannot affect the Transport and Shipping Departments and particularly the appellants who are not the members of the AICC. The appellants have contended that new transfer policy as introduced by the said Bipartite Agreement dated 29th November, 1985 specifically provides that the transfer will be effected first and thereafter there will be merger of seniority. As a result, the senior employees of Transport and Shipping Department would be sent out first though much juniors in the Home Sales Department would remain in Calcutta. Toe appellants have contended that O & M study after the agreement does not indicate anything that the employees of the Home Sales are without sufficient work and those in the Central Shipping and Transport Organisation (CSTO) are absolutely, without work. The appellants have also contended that O & M Study has also not been made properly and it did not make any distinction between the alleged no work or alleged sufficient work and no reason was indicated for which the surplus persons in the Home Sales Department were to be treated differently from those of the Transport and Shipping Department. 7. 7. The respondents, however, disputed the contention that O & M Study had not been properly made and it also disputed the contention that the said Bipartite Agreement was entered into between the SAIL AND AICC only to benefit the members of the AICC and to create prejudice against the employees of Transport and Shipping Department. The said respondent has contended that the petitioners in the writ petition belong to the Home Sales Department and only 2.5% employees have challenged the Bipartite Agreement. It has been contended that the settlement cannot be judged on the touchstone of the principle applicable to adjudicate disputes by the Tribunal. It is not possible to scan the settlement in bits and pieces. A settlement cannot be weighed in any golden scales and the question as to whether it is just and fair has to be answered on the basis of principles different from those which come into play when an industrial dispute is under adjudication. For the aforesaid contentions a reference was made to the decision of the Supreme Court made in the cases of (1) M/s. Tata Engineering & Locomotive Co. Ltd. v. Their Workmen reported in AIR 1981 SC 2163 and (2) Herbertsons Ltd. v. The Workmen of Herbertsons Ltd. & Ors. reported in AIR 1971 SC 322. The learned Counsel for the SAIL respondents contended that even if few employees are not members of majority union and if the settlement is made with the majority Union, it would be presumed that the settlement has been made for the greater interest of industrial peace and such settlement cannot be judged in the court in the golden scales. The learned Counsel has further contended that the Settlement provides that re-deployment would be made considering the suitability of the jobs against which they are to be re-deployed. Such condition implies that if the post of an Accountant is found to be surplus in one office, the person cannot be re-deployed in another office where the appointment for the post of Stenographer is required. Similarly, if a stenographer is required in one office a typist who is found to be surplus cannot be re-deployed in the other office. The learned Counsel for the SAIL respondents has further contended that the orders of transfer have not been challenged as mala fide or without jurisdiction. Similarly, if a stenographer is required in one office a typist who is found to be surplus cannot be re-deployed in the other office. The learned Counsel for the SAIL respondents has further contended that the orders of transfer have not been challenged as mala fide or without jurisdiction. Such orders of transfer were made by the competent authority in implementation of the transfer policy. The learned Counsel has contended that if a transfer order is made pursuant to a policy decision evolved by a competent authority such transfer order must be presumed to be in the public interest and the same cannot be challenged either as mala fide or without jurisdiction. For this contention, reference was made to a Bench decision of this Court made in the case of (3) Dr. C.C. Kar v. State of West Bengal and Ors. reported in (1985) 2 CHN 470 Mr. Justice Chittatosh Mookherjee (as his Lordship then was) speaking for the Division Bench observed :- “When such transfer is based upon a policy decision of the Government, the Court may not review the propriety of formulation of such an executive policy. The Court may substitute its own views in place of those of the executive, where public interest would be served by transferring the appellant from the present post.” 8. The learned counsel has also contended that the management is the best judge as to how its employees are to be utilised. The learned counsel has also contended that it is not factually correct that in order to give benefits to the employees of the Home Sales Department, the re-deployment order was passed. By such re-deployment order, large number of employees in the Home Sales Department have also been transferred. The learned counsel has contended that the Bipartite Agreement between the SAIL administration and the AICC also provides opportunity to the employees of Transport and Shipping Department for promotion along with employees of the Home Sales Department. If the employees of the Transport and Shipping Department would not have been merged with the employees of the Home Sales Department, the employees of the Transport and Shipping Department would not have got the benefit of availing of the chance of promotion for the promotional posts available in the Home Sales Department. If the employees of the Transport and Shipping Department would not have been merged with the employees of the Home Sales Department, the employees of the Transport and Shipping Department would not have got the benefit of availing of the chance of promotion for the promotional posts available in the Home Sales Department. The said transfer by way of re-deployment of the employees of the Transport and Shipping Department will not affect the seniority of the said employees. It has been contended by the learned counsel that the contention of the appellant that even after the transfer of canalisation work, the Transport and Shipping Department has sufficient work is not factually correct and the report of the O & M Study also does not justify such contention. It has been contended by the respondents that the impugned order of transfer by way of re-deployment has been made bona fide and to tide over exigency created by shrinkage of work in some departments and such order of transfer by way of redeployment, therefore, should not be interfered with and the appeal should be dismissed. 9. After considering the respective contentions of the parties, it appears to us that as a result of Import Policy of 1985 which came into force with effect from 1st April, 1985, the canalysing agency work for import of steel was transferred from the Steel Authority of India Limited to Minerals & Metals Trading Corporation which is also a Government of India Undertaking. For various reasons including transfer of canalysing work to MMTC, there has been surplus of the man-power in certain areas particularly in many offices of the export and import departments of Central Marketing Organisation (C.M.O.) of the SAIL, the Branch Transport and Shipping Office (BTSO) and Shipping and Transport Department of CMO at Calcutta and also in some branch Sales Offices. It is the case of the management of SAIL that as a result of considerable shrinking of work in the Transport and Shipping Department of CMO, the management had considered that retrenchment necessitated as a result of the said situation would be too harsh and as an alternative to retrenchment, the management discussed with AICC the cases of transfer on account of employees being without work or without sufficient work in various establishment of CMO. It appears to us that such discussion has been made by the management with AICC in terms of clause 23 of the Tripartite to Settlement dated 10th March, 1979. On such discussions with AICC, Bipartite Memorandum of Settlement 29th November, 1985 was signed by the management of the C.M.O. and AICC, Clause 3.1 of such settlement records that there are employees without work or without sufficient work and SAIL proposes re-deployment of such employees as per requirements for more effective utilization of human resources. It is an admitted position that AICC is the only representative recognised All India Unit of employees of SAIL having its constituent units in almost all the States and AICC represents the vast majority of employee in CMO and Shipping and Transport Organization of SAIL. It, therefore, appears to us that the management thought it expedient to hold discussions with AICC in the matter of proposed re-deployment and such discussions are also in conformity of clause 23 of the aforesaid Tripartite Agreement. Clause 3.2 of the said Bipartite Settlement also records that AICC had also accepted the position that re-deployment had become necessary due to transfer of canalysing agency work for import of steel from C.M.O. to other agency of the Government. Clause 4.3 of the said Bipartite Agreement records that exact number to be re-deployed would be determined after organization and method studies (O & M Studies) and views of the AICC would be taken into consideration before finalizing decisions in O & M studies. It appears that O & M Studies had in fact been undertaken and report on such studies reveals and identifies the employees found to be without work or without sufficient work. It appears from such report that surplus in the Transport & Shipping Department is very high. It has been strenuously contended by Mr. Mukherjee appearing for the appellants that the employees of Home Sales Department have been given a preferential treatment and unfortunate employees of Shipping and Transport Department have been picked up for transfer to various parts of the country on the score of re-deployment before merger of departments of C.M.O. and integration of common seniority list. Such contention have, however, been refused by the management of SAIL and AICC and our attention has been drawn to clause 3.0 of Annexure I at page 58 of the Paper Book of the appeal preferred by Samiran Guha Roy. Such contention have, however, been refused by the management of SAIL and AICC and our attention has been drawn to clause 3.0 of Annexure I at page 58 of the Paper Book of the appeal preferred by Samiran Guha Roy. The said clause 3.0 records that all employees of C.M.O. will be asked to indicate option in order of preference for parallel transfer within 21 days from the date of issue of the circular for three stations except Maders, Bombay, Cochin, Vizag and Calcutta. The employees of CMO consist of both the Shipping and Transport Department and Home Sales Department. If does not appear to us that the management of SAIL had deliberately followed a discriminatory policy to the employees of Shipping and Transport Department in the matter of re-deployment and consequential order of transfer. It appears to us that AICC represents the vast majority of employees of SAIL including employees in CMO and it does not appear to us that AICC represents the majority of the employees of Home Sales Department and in order to protect the interest of such employees the said Bipartite Agreement was made by the AICC. It may be noted in this connection that it is the case of the AICC and also of the management of SAIL that as a matter of fact most of the employees in CMO including Home Sales and Shipping and Transport belong to AICC and it appears that out of total of about 1292 employees in Shipping and Transport Department, about 1000 employees are members of the Union affiliated to AICC. It does not appear to us that in the facts and circumstances of the case, the management of SAIL had deliberately neglected to take into consideration the interest of the employees of the Shipping and Transport Department in the matter of re-deployment and consequential orders of transfer of employees of such department. We are also not inclined to hold that the management had acted arbitrarily and capriciously in following the re-deployment policy and consequential orders of transfer at the behaste or dictates of the AICC. It appears to us that AICC represents to the vast majority of the employees in SAIL and on discussion with AICC on a major policy like re-deployment cannot be held to be unjust. It appears to us that AICC represents to the vast majority of the employees in SAIL and on discussion with AICC on a major policy like re-deployment cannot be held to be unjust. A settlement made bonafide with an Union representing majority of the employees to lesser dissentions and industrial unrest cannot be judged on the touchstone of the principle applicable to adjudication of disputes by the Industrial Tribunal. A settlement cannot be weighed in any golden scales and the question as to whether it is just and fair has to be answered on the basis of the principles different from those which come into play when an industrial dispute is under adjudication. Dr. Pal, in our view, has rightly contended by referring the decisions of the Supreme Court reported in AIR 1981 S.C. 2163 (paragraph 6) and AIR 1977 SC 322 that the said Bipartite Settlement had been made to avert discontent of the most of the employees as far as practicable and even if a few members are not the members of the majority union a settlement made with the majority union should be presumed to be just and fair. It is not necessary for us to make an in-depth study as to whether or not the redeployment and consequential transfer policy has been followed very wisely and a better policy could have been evolved. We arc afraid such consideration is in the realm of administrative functions of the management of SAIL and not in the domain of judicial scrutiny. It is quite likely that many senior employees of Shipping and Transport Department have suffered by the impugned orders of transfers but as we cannot come to any finding that such transfer were not made for any administrative exigency but the same had been made malafide of arbitrarily or capriciously, we cannot interfere with the impugned orders of transfer. We may however reasonably except that the management of SAIL will give anxious considerations to individual hardship following the order of transfer in appropriate cases and try to give such relief as may be practicable. The Appeal, therefore, fails and is accordingly dismissed. There will be no order as to costs. In view of the ensuing Puja and Dewali festival, we, however, direct that the concerned employees will be entitled to join the place of posting on the basis of the impugned orders of transfer by 15th November, 1988. The Appeal, therefore, fails and is accordingly dismissed. There will be no order as to costs. In view of the ensuing Puja and Dewali festival, we, however, direct that the concerned employees will be entitled to join the place of posting on the basis of the impugned orders of transfer by 15th November, 1988. 10. The other two appeals viz. F.M.A.T. No. 867 of 1988 and F.M.A.T. No. 882 of 1988 have also been heard analogously with the appeal preferred by Samiran Guha Roy and others because facts and circumstances are similar. These appeals are also disposed of on similar terms. Liberty is given to the parties to mention for any clarification or direction which may be necessary for giving effect to this judgment. Yusuf, J. : I agree.