Chhote Lal v. State of U. P — 1992 DIGILAW 1178 (ALL)

JUDGMENT M.L. Bhat, J. - Sixty nine petitioners have filed this writ petition and seek the relief of mandamus to the effect that the opposite parties be directed to keep them in service and not to evict them from the quarters in pursuance of the order dated 27-.-1989. They seek quashing of the order dated 27-5-1989. The facts relevant for the decision of this writ petition, as emerge from the pleadings, are set out. 2. The petitioners stated that they had been working in the Ratna Sugar Mills Co. Ltd., Shahganj, district Jaunpur in the capacity of permanent employees since August, 1946. By a notification dated 23-4-1989, the Ratna Sugar Mills Co. Ltd. Shahganj, district Jaunpur was acquired by the U. P. Rajya Chini Nigam Ltd., and its management was entrusted to the Administrator. The petitioners state that they were engaged for cleaning and repairing work of the mills which they continued till 10-5-1989 under the directions and supervision of the General Manager.. On 11-5-1989,77 employees of the mills were stopped at the rate and were not permitted to enter into the mills premises without any reason. The petitioners are included in the group of 77 employees, who were refused entry to the Mills. On enquiry the petitioners came to know that their birth records were not available in the office and it was presumed that they had completed 60 years of age, which is the age of superannuation under the Standing Orders governing the conditions of employment of workmen in the factories. The standing order on which reliance is placed is dated 3-10-1988 and detailed procedure is given in the standing orders with regard to the method of superannuation of a workman. Two months' notice is to be given to the workmen before their superannuation. The standing orders contemplate that a retiring workman shall be paid the amount of gratuity, as may be due to him on receipt of clearance slip from the workman. Clause 8 of the Standing Orders, on which the claim- of the petitioners is grounded, reads as under : "8. The management shall pay the amount of gratuity to a retiring workman as may be found due to him by the management on receipt of a clearance slip from the workman in respect of articles of stores, advances etc. and the workman shall simultaneously vacate his quarter and hand over its possession to the management. The management shall pay the amount of gratuity to a retiring workman as may be found due to him by the management on receipt of a clearance slip from the workman in respect of articles of stores, advances etc. and the workman shall simultaneously vacate his quarter and hand over its possession to the management. The retiring workman shall be deemed to be in service and shall be entitled to full wages and all range benefits as long as the employer does not tender the due amount of gratuity to him but receipt of payment of gratuity found due by the employer shall not prejudice the right of the workman to raise a dispute about it, if he considers the amount disputable even on vacation of the quarter and exit from the service. If a workman does not vacate his quarter and handover its possession to the management on the date of retirement despite tendering the amount of gratuity, he shall not be deemed to be in service after the date of retirement." 3. The standing order imposes a restriction on the right of management to evict a workman from the quarter till he continues to be a workman or his amount of gratuity etc. is paid to him. The workman is deemed to be in service and entitled to full wages and all fringe benefits as long as the employer does not tender his dues and gratuity to him. The petitioners Union is said to have made a representation to the Chief Minister protesting against the refusal of the management to allow them entry in the factory premises. No show cause notice was given to the petitioners nor was any reason given to them for the action of the respondents. A notice is said to have been pasted on 27-5-1989 calling upon the petitioners to vacate the their premises as they were treated retired employees of the factory. In view of Clause 8 of the Standing Orders the petitioners cannot be asked to vacate the premises or thrown out of the services unless the amount of gratuity is paid to them. The petitioners challenge the impugned order on some grounds, which include that they were not paid the retirement benefits and they were not given any notice before the proposed action is taken. 4. The respondent No. 2 has filed counter affidavit. The petitioners challenge the impugned order on some grounds, which include that they were not paid the retirement benefits and they were not given any notice before the proposed action is taken. 4. The respondent No. 2 has filed counter affidavit. It is stated that the Ratna Sugar Mills was acquired with effect from 24-4-1989, which was the appointed date in the Act. At the time of taking over of the Mills by the respondent No. 2 the relevant records, such as Muster rolls, registers etc. were not available with the Corporation. The Mill in question was closed for a long period. The employees had left the service of the Mill. In these circumstances publicity was given and notice dated 25-4-1989 was circulated that all permanent employees, who had not completed the age of superannuation on 24-4-1989 when the factory was taken over by the Corporation shall have option to resume their duties. A copy of this notice is annexed to the counter affidavit. The petitioners are said to have completed 60 years of age before 24-4-1989, as such their continuance in service and re-employment did not arise. It is denied that the petitioners were working after 1989. The notification dated 27-9-1988 provided the age of superannuation to be 60 years but in case of the petitioners they had completed the said age much before the taking over of the Mill by the respondent No. 2. The present management had not retired the petitioners and they had been retired before hand. Therefore, the question of giving two months' notice before retirement did not arise. It is stated that all liabilities before the appointed date relating to the wages etc. are the liabilities of the previous employer. Therefore, any liability prior to 24-4-1989 would be on the shoulders of the management of the Ratna Sugar Mills. The Act also lays down exhaustive procedure for filing the claim by the workers before the officers appointed by the State Government. On verification of the claim it can be settled and the payment can be made to the workers, which payment is to be adjusted with the amount of compensation payable to the erstwhile employer. The Act also lays down exhaustive procedure for filing the claim by the workers before the officers appointed by the State Government. On verification of the claim it can be settled and the payment can be made to the workers, which payment is to be adjusted with the amount of compensation payable to the erstwhile employer. The petitioners' right to hold the residential quarter is also disputed, it is also stated that the respondent No. 2 is not responsible for payment of gratuity amount because the undertaking has vested in him free from any debt, mortgage or charge. The petitioners can claim gratuity against the old employer. The wages and other dues are to be claimed under various sections of the said Act. 5. In their rejoinder affidavit the petitioners have stated that they were neither retired by the erst-while Mill nor paid any gratuity. Their case is that they have worked with the respondent No. 2 for about 17 days and it is the liability of the respondent No. 2 to continue them in service because their gratuity has not been paid. 6. The respondent No. 2 has filed a supplementary affidavit by which he has asserted that the petitioners have filed claim petitioner before the prescribed authority constituted under Section 10 of the U. P. Sugar Undertaking (Acquisition) Act, 1971 and the matter is pending there. The petitioners have filed another affidavit by which they state that the Government has decided their representations in their favour by an order dated 2-6-1990, which is contained in Annexure-1 to the affidavit. However, the copy of the order is said to be not the copy of an order issued by the State Government but this is a copy of an order issued by the Labour Commissioner. The petitioners have filed a supplementary rejoinder affidavit. It is stated that none of the petitioners has filed any claim petition before the prescribed authority under Section 10 of the Act individually. One Jagannath, who is said to have been won over by the Corporation, is said to have filed some claim petition without authority of the petitioners. The claim petition filed by Sri Jagannath under pressure has not been decided and no payment of gratuity has been paid to the petitioners. The assertion of the respondent No. 2 that workers were given notice to report for duty is absolutely wrong. The claim petition filed by Sri Jagannath under pressure has not been decided and no payment of gratuity has been paid to the petitioners. The assertion of the respondent No. 2 that workers were given notice to report for duty is absolutely wrong. No such notice was given. 7. At one stage the learned counsel for the respondent was asked to inform the Court whether the petitioners had filed any claim petition before the prescribed authority constituted under Section 10 of the Act and what was the relief claimed by the petitioner. He was also asked to inform the Court whether any claim petition was filed for payment of gratuity and whether the authority has determined any amount in favour of the petitioners and whether it has made any declaration in this regard. The Court also wanted to know what was the amount of gratuity payable to the petitioners and whether any payment of gratuity was paid to the petitioner. If so, on what ground. In response to this order the learned counsel for the respondent did file a counter affidavit, but that was not detailed and did not give full information, as required by the Court. 8. Learned counsel for the parties were heard a number of times and they were given adequate opportunity to file their pleadings. Mr. V.B. Singh, appearing for the respondent No. 2 has submitted that the writ petition is not maintainable. It is submitted that liability of the Corporation will accrue in respect of any claim only from the date the sugar mill was taken over and that liability is specified in Section 3 of the Act of 1971. Under Section 3 of the said Act the sugar mill is said to have vested in the Corporation free from any debt, mortgage, charge or other encumbrances or lien, trust or similar obligations (excepting any lien or other obligations in respect of any advance of the security of any sugar stock or other stock in trade). It is stated that proviso to Section 3 of the Act makes it clear that any debt, mortgage, charge or other encumbrances or lien etc. shall attach to the compensation referred to in Section 7 of the Act in accordance with the provisions of that section. Section 7 prescribes determination and mode of payment of compensation in respect of various things specified therein. shall attach to the compensation referred to in Section 7 of the Act in accordance with the provisions of that section. Section 7 prescribes determination and mode of payment of compensation in respect of various things specified therein. The compensation is payable for acquisition of the properties and assets, referred to in various sub-clauses of Section 7 and besides the payment of compensation for assets and properties of the Mill the State Government is obliged to deposit and amount specified in Schedules I and II in Column 3 thereto before the prescribed authority in accordance with the provisions of sub-sections (6) and (9) of Section 7 and the same has to be paid to the persons entitled to receive the same in accordance with the decision of that authority or -of the Tribunal, as the case may be, under Section 8 of the Act certain claims are to be satisfied out of compensation amount. Mr. V. B. Singh has placed reliance on Section 8 (5) of the Act, which reads as under : "8. (5). Any person who was employed exclusively in connection with the scheduled undertaking immediately before the appointed day, whether he does or does not become an employee of the Corporation under Section 16, or ceases to be in such employment, or any trade union of which such person was member may prefer to the prescribed authority any claim relating to any salary, wages, retaining allowance, leave salary, bonus, pension, provident fund, gratuity or other payment due to him, or the proportionate amount thereof, in respect of any service rendered by him in connection with the undertaking before the said day." 9. Reference is made to Section 10 of the Act which empowers the Government to appoint an officer not below the rank of a Commissioner or a District Judge to perform the functions of the prescribed authority under this Act. Section 16 (3) of the Act lays down that if any question arises as to whether any person was exclusively employed in connection with the scheduled undertaking immediately before the appointed day, it shall be decided by the prescribed, authority. It is submitted that the petitioners' remedy is under the U. P. Industrial Dispute Act and they cannot claim any relief in the present writ petition. It is submitted that the petitioners' remedy is under the U. P. Industrial Dispute Act and they cannot claim any relief in the present writ petition. The standing order, which provides payment of gratuity and enables an employee to remain in service till the same is paid is said to applicable prospective and not retrospectively. It is submitted that before the undertaking was acquired the petitioner had ceased to be employees of the Mill and they could not be, therefore, treated employees of the respondent No. 2. If the petitioners claim that they were in service on the appointed date, they should approach the appropriate forum and that question cannot be decided in the writ petition be cause determination of that question requires investigation of the disputed facts inasmuch as the respondent No. 2 has denied that the petitioners were employees of the Mill on the appointed date. If so advised, the petitioners could go before the appropriate authority and seek remedy in respect of payment of gratuity against the person from whom such gratuity is payable to them. 10. The petitioners have relied on an order purported to have been issued by the Labour Commissioner U. P., who is said to be the Secretary to the Government of L). P. also. In the said order a finding was given in favour of the petitioners by the Labour Commissioner with regard to the liability of the respondent No. 2 for payment of gratuity and it was held that the same was not paid to the petitioners. However, this order is the subject matter of another writ petition, V. P. Sugar Corporation Ltd. v. The Labour Commissioner and others, (Writ Petition No. 20512 of 1990). In that case the Corporation has challenged the validity of the order of the Labour Commissioner and it is stated that the said order is without jurisdiction. Therefore, it will not be proper to rely on the said communication. This Court would refrain from making any comments on the validity or otherwise of the said Communication because that may affect the petitioners or the Corporation and may prejudge the claim of the parties raised in Writ Petition No. 20512 of 1990. 11. Therefore, it will not be proper to rely on the said communication. This Court would refrain from making any comments on the validity or otherwise of the said Communication because that may affect the petitioners or the Corporation and may prejudge the claim of the parties raised in Writ Petition No. 20512 of 1990. 11. The learned counsel for the petitioner has referred to the case of the Workmen v. The Bharat Coking Coal Ltd and other, reported in AIR 1978 SC 979 , wherein it was held that if during the pendency of industrial dispute regarding dismissal of workmen by the Colliery (2nd respondent) the colliery was nationalised and vested in the Central Government and thereafter in the 1st respondent company and thereafter the industrial Tribunal issued the award in favour of the workmen holding that this dismissal was unjustified the 1st respondent was made liable for back wages with effect from the date of nationalisation when the right, title and interest in the Colliery vested in it. A direction was also issued by the Supreme Court to reinstate the workman with continuity of service by the management of the 1st respondent i. e. Bharat Coking Coal Ltd. In M/s Bijli Cotton Mills, Hatras v. Labour Court Agra and others, reported in 1988 Labour Industrial Cases 659 it was held that the right of employment of workman continues notwithstanding the charge of hands in the management or even ownership of the undertaking without the aid of express statutory provisions contained in Section 14 of the Nationalisation Act. The said provision was held to confer a right to the employees to claim continuance of their employment and fastens upon the Corporation a corresponding duty to take back such employees and treat them as their own. The case reported in AIR 1978 SC 979 (Supra) was considered by the Court. 12. Mr. V.B. Singh, appearing for the opposite party has submitted that the petitioners have a remedy to claim gratuity if the same has remained unpaid from the authorities. According to him the non-payment of gratuity would be a dispute which can be appropriately dealt with under the U. P. Industrial Disputes Act or under the Acquisition Act itself. It was contended that the petitioners have made an application for payment of gratuity and they cannot get any relief from this Court with regard to the payment of gratuity. According to him the non-payment of gratuity would be a dispute which can be appropriately dealt with under the U. P. Industrial Disputes Act or under the Acquisition Act itself. It was contended that the petitioners have made an application for payment of gratuity and they cannot get any relief from this Court with regard to the payment of gratuity. He referred to various orders with regard to the industrial employees and contended that the remedy of the petitioners lies somewhere else. 13. It was next contended by Mr. V.B. Singh that this Court cannot give a finding with regard to the petitioners status as workmen of the erstwhile undertaking, which was taken over under the Acquisition Act itself. How many of the workers had already retired and ceased to be workmen of that undertaking is not known. There is a need for going into the facts in this writ petition with regard to the status of the petitioners and these facts are disputed by the respondents. Therefore the disputed question of fact cannot be decided by the High Court in its writ jurisdiction. 14. After careful analysis of the matter raised in this writ petition I am of the view that this writ petition does not relate to the payment of gratuity. It relates to the effect of non-payment of gratuity to the petitioners. The effect of non-payment of gratuity is given in the notification, which lays down that till gratuity is paid the workmen shall be deemed to be in the employment of the undertaking. If the workmen were employees of the previous undertaking on the date of its taking over by the Corporation under the Acquisition Act the workmen will be deemed to be the employees of the successor Corporation. If the workmen had ceased to be the employees of the undertaking and had received the payment of gratuity or claimed the same from any other forum, their right to continue in service in the Corporation seems to be doubtful. In the interest of justice at one stage Mr. V. B. Singh was directed to file a detailed affidavit to indicate whether the petitioners had filed any claim petition before the prescribed authority constituted under Section 10 of the U. P. Sugar Undertakings (Acquisition) Act, 1971 and what is the relief claimed by them. In the interest of justice at one stage Mr. V. B. Singh was directed to file a detailed affidavit to indicate whether the petitioners had filed any claim petition before the prescribed authority constituted under Section 10 of the U. P. Sugar Undertakings (Acquisition) Act, 1971 and what is the relief claimed by them. Whether the said authority has determined any amount in their favour and whether the determined amount has been paid and whether the claim of any of the petitioners was rejected, if so, on what grounds. However, this information was not given in full. Only a few photostat copies of some applications are placed on record and it is not known what has happened to the fate of those applications. 15. The respondent No. 2 would be obliged to take over the employees of the previous undertaking, the Ratna Sugar Mills, if the said employees had not ceased to be the employees of the Ratna Sugar Mills on the appointed date. Such employees will continue to be in service employees of the respondent No. 2 till the amount of gratuity is paid to them notwithstanding the fact that they might have reached the age of superannuation. But if any workmen has ceased to be a workman and after the break in his service either on account of superannuation or on account of his voluntarily giving up his service or on account of his removal from service in accordance with law, Clause (8) of the Standing orders would not be attracted. Clause (8) of the Standing Orders would not oblige the respondent No. 2 to provide re-employment to the workman in such cases. It obliges the employer to continue the service of the workman if the workman's services have not already been discontinued and if the gratuity is not paid. He is to be continued in service with full wages so long the employer does not pay or tender the due amount of gratuity to him. 16. Clause (8) of the Standing Orders on which the petitioners case is founded has to be interpreted and construed in an objective manner. Any absurdity in its interpretation may negate the object underlying the said clause Under the said clause the workmen, whose gratuity is not paid or tendered, are to be continued in employment even after superannuation with full wages till they receive the amount of gratuity. Any absurdity in its interpretation may negate the object underlying the said clause Under the said clause the workmen, whose gratuity is not paid or tendered, are to be continued in employment even after superannuation with full wages till they receive the amount of gratuity. The expression in the Standing Orders `the retiring workman shall he deemed to be in service' would suggest that the service of the retiring workman is to be continued with full wages till the gratuity amount payable to him is paid. The workman, whose services have already been discontinued can, by no stretch of imagination, be deemed to be in service. If there is break in service, there is nothing, which can be continued. Continuity of service is not psynonimnus with re-employment. The break may occur due to variety of reasons. 17. If gratuity of such a workman, whose services have already been discontinued, has remained unpaid, he cannot claim re-employment by relying on the deeming provisions of Clause (8) of the Standing Orders and claim service till his gratuity is paid under the said provision. Such a workman has a remedy for enforcing his claim to recover gratuity under the ordinary law. Clause (8) does not suggest re-employment. It is a deeming provision and if under law a workman reaches the age of superannuation, he is not to be retired and he has to be continued in service till the amount of gratuity is paid to him. Therefore, a distinction is to be drawn between the continuity of service and in the reemployment to the service. Clause (8) of the Standing Orders applies only where there is continuity of service and in no other case. 18. It protects the right of those petitioners, who were in actual service with the Ratna Sugar Mills on the appointed date and in whose service where was not break by any reason whatsoever and they were workman of the Mill on 23-4-1989. They are to be treated the workmen of the respondent No. 2 and the respondent No. 2 is obliged to continue them in service even after they have reached the age of superannuation till the amount of gratuity due and payable to them under law is paid or tendered to them. This is the import of Clause (8) of the Standing Orders. 19. Mr. This is the import of Clause (8) of the Standing Orders. 19. Mr. Tewari has relied on some order of the Labour Commissioner with regard to the claim of the petitioners. The order is impugned in another Writ Petition No. 20512 of 1990. Therefore, it is not proper to rely on that order in this writ petition. It is also not known in which proceedings the Labour Commissioner had given his findings in favour of the petitioners. The validity or otherwise of that order will be considered in Writ Petition No. 20512 of 1990. 20. It is difficult for this Court to hold an enquiry as to whether the petitioners were in the employment of the Ratna Sugar Mills on the appointed date i. e. 23-4-1989 and which of them had ceased to be the workman on the said date. Those who had ceased to be the employees cannot be re-employed by the respondent No. 2. But those petitioners, who were in service with the Ratna Sugar Mills on the appointed date would become the employees of the respondent No. 2 and if during the course of their service gratuity becomes payable to them, that is to be paid by the respondent No. 2 and till that is paid, they are to be continued in service even if they have reached the age of superannuation. 21. Mr. V.B. Singh submits that the petitioners had ceased to be the workmen of the Ratna Sugar Mills on the appointed date i. e. 23-4-1989 Mr. Tewari submits that the workman had worked with the Ratna Sugar Mills upto 23-4-1989 and thereafter with the respondent No. 2 for sometime. Thereafter they were not permitted to enter the premises of the respondent No. 2. This disputed question of fact need not be and cannot be decided by this Court in this writ petition. However, a suitable direction can always be issued by this Court to secure the ends of justice and to compel the parties before it to uphold the majesty of law'. The parties have to be fair to each other. While administering justice this Court has to take care that the action of the authorities, who are discharging public duties, is not tainted with in justice, arbitrariness and discrimination. 22. The parties have to be fair to each other. While administering justice this Court has to take care that the action of the authorities, who are discharging public duties, is not tainted with in justice, arbitrariness and discrimination. 22. Before the respondent No. 8 is asked to continue the petitioners in its employment it is necessary to ascertain as to which of the workmen among the petitioners have been continued by the respondent No. 2 and which of the petitioners have already ceased to be the workmen of the Ratna Sugar Mills. The respondent No. 2 shall refer this matter to the prescribed authority appointed under the U. P. Sugar Undertaking (Acquisition) Act, 1971 within one month from the date of presentation of a certified copy of this judgment before him. The Prescribed Authority thereafter shall determine the entitlement of the petitioners to remain in service till the amount of gratuity is paid to them in the light of the directions and observation made in this judgment. He shall determine these questions summarily after giving opportunity to both the sides of presenting their respective cases before him and conclude the proceedings within a period of four months. The recommendations so made by him in respect of the entitlement or dis-entitlement of the petitioners to be continued in service for non-payment of gratuity shall be forwarded by him to the respondent No. 2 within two weeks thereafter. 23. Accordingly it is directed that those petitioners, who were in the employment of the Ratna Sugar Mills on the appointed date i. e. 23-4-1989 and in whose favour the Prescribed Authority has given a report shall be continued in service by the respondent No. 2 with full wages even after having reached the age of superannuation till they are paid the amount of gratuity or till the same is tendered in accordance with Clause (8) of the Standing Orders. Those of the workmen, who are found by the Prescribed Authority to have ceased to be the workmen of the Ratna Sugar Mills on the appointed date i. e. 23-4-1989 either because they had reached the age of superannuation or they were retired or they had given up their employment voluntarily or they had been removed from service in accordance with law cannot be continued in service nor can they be taken back in service. Their claim in respect of the amount of gratuity, if any due, can be enforced by them, if so advised, in accordance with ordinary law. Clause (8) of the Standing Orders shall not apply to them. 24. The respondent No. 2 is further directed to continue those of the petitioners even after superannuation, who had not ceased to be the workmen on the appointed date i. e. 23-4-1989 and continue them as workmen till the amount of gratuity is paid to them or tendered to them in accordance with Clause (8) of the Standing Orders. These workmen shall not be evicted from the official quarters, if not already evicted. 25. The writ petition is allowed to the extent and with the directions indicated above. No order as to costs.