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1995 DIGILAW 85 (CAL)

PANCHA MAYURAKSHI COTTON MILLS EMPLOYEES UNION v. THE STATE OF WEST BENGAL

1995-03-20

BHAGABATI PRASAD BANERJEE

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BHAGABATI PROSAD BANERJEE, J. ( 1 ) IN this appeal, we have been called upon to decide the question whether the imposition of terms and conditions of service violating the provisions of the Industrial Disputes Act, 1947 by a company which is wholly and fully owned and controlled by the State Government comes under the public law domain or private law domain. ( 2 ) THE facts are not in dispute. The Mayurakshi Cotton Mills Ltd, was purchased by the Government of West Bengal in a court auction sale in a liquidation proceedings of the company. After the purchase of the company, a notification was issued on January 4, 1990 constituting a committee of Management. The said notification reads as follows:-"consequent upon the purchase of the assets of Mayurakshi Cotton Mills Ltd. , by the Government of West Bengal, the Governor is pleased, pending the formation of a new company, to constitute a Committee of Management with the following members" ( 3 ) THE said company started functioning on and from February, 1990 with 601 employees of the erstwhile Management which was taken back in a phased manner. The said 601 employees/workmen were allowed to join in the respective posts which they were holding prior to winding up of the erstwhile company. ( 4 ) IN the respondent-company, a lock-out was declared during the pendency of some conciliation proceedings in respect of certain disputes between the workmen and the Management. A draft memorandum of settlement was prepared and it is alleged that all the clauses of the settlement were contrary to the provisions of the various provisions of law and that it was alleged that by introducing the said settlement, the Management decided to deprive the employees the new 1991 wages structure for Cotton Mills Workers, Provident Fund benefits, other statutory benefits and workmen house rent allowance and that the Management intended to compel the labourers to enter into settlement which was contrary to the provisions of the Minimum Wages Act, 1948, New 1991 Wage structure for Cotton Mills Workers etc. The validity and/or legality of the said action of the respondents including the said lock-out notice was challenged in the writ application. During the pendency of the writ application, the said lock-out was lifted on March 13, 1993. The validity and/or legality of the said action of the respondents including the said lock-out notice was challenged in the writ application. During the pendency of the writ application, the said lock-out was lifted on March 13, 1993. The said notice of lifting of the said lock-out is as follows:-"further to notice dated August 5, 1992, the Management is pleased to notify that in pursuance of bipartite settlement entered upon by and between the Management and Union of the workmen it has been decided to lift the lock-out and recommend the work of the factory, situated at Panchra, District-Birbhum effective from 6 a. m. of March 14, 1993 in the manner narrated herein below: (i) That in-take of personnel/workmen win be made in phased manner and for which notification will be made by the Management from time to time in the factory notice board and main-gate. (ii) That the workers for cleaning Mill and Electrical maintenance will report at the first phase. (iii) The workmen in the production department will be notified within two weeks here-from when the Mill will be prepared to recover production. (iv) That the total intake will, however, be completed within 45 days from the lifting of lockout. (v) Be it clear that workmen notified to join their duties are required to sign a copy of bipartite settlement and should accept the work norms and work assignments at the time of entry which they should be otherwise duty bound to perform and/or to comply with without fail. (vi) That 15 days time will be allowed to the workmen for joining their duties from the date of notification for joining duties and in the event if they do not report their duties within the time stipulated it will be presumed that he is/they are not interested to continue his/their service and action as warranted shall be taken. (vii) The workmen attaining the age of superannuation will be notified separately and sent for medical examination for determination of their age within sixty days from the date of notification. The workmen are, therefore, advised to please attend the main- gate of the Mill every day; to observe the notification and to join their duties accordingly subject to observance of the formalities as referred to hereinabove. The workmen are, therefore, advised to please attend the main- gate of the Mill every day; to observe the notification and to join their duties accordingly subject to observance of the formalities as referred to hereinabove. It is expected that all workmen/personnel; shall make their best endeavour for smooth and peaceful running of the Unit with the object to revitalise (he unit at economic level without any hindrance and/or interference whatsoever. The Management assures all co-operation in reciprocation. This is for information of all concerned. Sd/- A. K. Kar Manager" ( 5 ) AFTER the lock-out was lilted, the respondents issued letters to the workmen, inter alia, to the extent that -"you are hereby again directed to report to the undersigned at Mill premises at Panchra, Birbhum during office hours immediately on receipt of this letter failing which it will be presumed that you are not interested to continue your service with this organisation anymore and the company reserves the right to take disciplinary action against you including termination of your temporary service with the unit. " ( 6 ) THE matter was heard on affidavit by the learned Trial Judge/ and at the hearing before the learned Trial Judge it was submitted by both the parties before the learned Trial Judge that the lock-out had since been lifted and the entire records should be produced-before the learned Trial Judge by both the parties showing that the said lock-out stood lifted from March 14, 1993. The learned Trial Judge considered the matter at length including the question of lifting of the lock-out but dismissed the writ application on this ground that the Writ Court could not interfere in the matter of domestic dispute between the employer and the employees which partakes the nature of an industrial dispute and unless the matter comes before the Writ Court through the channel of the scheme of the Industrial Disputes Act, 1947. The learned Trial Judge was clearly of the view that such a decision taken by (he respondents does not come within the purview of the public law domain in view of the fact that the terms and conditions of services were not regulated and/or controlled by a statute and (hat as such (he said employment did not involve in duties of public nature and was not amenable to the writ jurisdiction. ( 7 ) MR. ( 7 ) MR. Partha Sarathi Sen Gupta, learned Counsel appearing on behalf of the appellants, submitted in the first place that the learned Trial Judge was wrong in dismissing the writ application on the ground that the subject matter of (he dispute does not come within the public law domain in view of the fact mat the appellants had not filed the writ application for the purpose of adjudicating mere contractual rights and/or obligation. But, it is the positive case of the appellants that the State cannot act in contravention of the provisions of the Industrial Disputes Act which protects the service conditions of the workmen and that in the facts and circumstances of this case, it was submitted that certainly a workman can move a writ application for the purpose of enforcing and/or protecting the right of such an employee which is specifically provided under the Industrial Disputes Act, 1947. It was submitted that the action of the respondents in directing the appellants to accept the termination of their regular and continuous employment by entering into an agreement under compulsion wherein they had not only to forego their past service for a temporary service for 59 days only. Reference was made to the provisions of 2 (oo) of the Industrial Disputes Act, 1947 which is as follows:"2 (oo)- 'retrenchment' means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include- (a) voluntary retirement of the workman or (b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf""25-6: Definition of continuous service - For the purpose of this chapter, 1. a workman shall be said to be in continuous service for a period if he is, for that period, in uninterrupted service, including service which may be interrupted on account of sickness or authorised leave or an accident or a strike which is not illegal, or a lock out or a cessation of work which is not due to any fault on the part of the workman2. Where a workman is not in continuous service within the meaning of clause (1) for a period of one year or six months, he shall be deemed to be in continuous service under an employer- (a) for a period of one year, if the workman, during a period of twelve calender months preceding the date with reference to which calculation is to be made has actually worked under the employer for not less than- (i) one hundred and ninety days, in the case of a workman employed below ground in a mine; and (ii) two hundred and forty days, in any other case; (b) for a period of six months, if the workman during a period of six calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than- (i) ninety-five days, in the case of a workman employed below ground in a mine; and (ii) on hundred and twenty days, in any other case Explanation - For the purposes of clause (2), the number of days on which a workman has actually worked under an employer shall include the days on which - (i) he has been laid off under an agreement or as permitted by Standing Orders made under me industrial Employment (Standing Orders) Act, 1946 (20 to 1946) or under this Act or under any other law applicable to the industrial establishment: (ii) he has been on leave with full wages, earned in the previous year; (iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment. (iv) in the case of female, she has been on maternity leave so, however, that the total period of such maternity leave does not exceed twelve weeks. "25-G Procedure for retrenchment - Where any workman in an industrial establishment, who is a citizen on India, is to be retrenched and he belongs to a particular category of workman in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman. " ( 8 ) RELYING upon the aforesaid provisions of he Industrial Disputes Act, 1947, Mr. " ( 8 ) RELYING upon the aforesaid provisions of he Industrial Disputes Act, 1947, Mr. Sengupta, learned counsel submitted that the services of the workmen were sought to be terminated by the Management in gross violation of the provisions of the Industrial Disputes Act and it was further submitted that when the terms and conditions of service of the workmen are controlled and regulated by the aforesaid provisions of the Industrial Disputes Act, certainly the workmen can come to the Writ Court to enforce their rights conferred by the statute and accordingly it comes within the scope of public law remedy amenable to writ jurisdiction. It was further submitted that the writ petitioner or its members were not a party to the said bipartite agreement and accordingly bipartite agreement entered into by some other unions of their choice was not binding upon the petitioner union or its members. Further, it was submitted even assuming that the petitioner was a party to bipartite agreement still the same is unenforceable in the view of the fact that the paties by an agreement cannot override the provision of law and the agreement entered into by the paries in clear contravention of law, must be held to be illegal and a nullity. Accordingly, the writ lies again. it the State Government and it is not in dispute that the company is fully and wholly owned by the State Government. Question is whether the Writ Court can interfere in a case where the State had virtually terminated the services of all employees in clear contravention of the provisions of the Industrial Disputes Act, 1947 which not only the State Government but all authorities, are bound to comply. It is a case where it was the duty of the respondents-company which is sought to be enforced was imposed by the statute. In Sri Anadi Mukta Sadguru Shree Muktajee Vandasji swami Su-varna Jayanti Mahotsav Smarak Trust and Ors. v. V. R. Rudani and others, reported in (1989-11-LU-324) (SC), it was held that Article 226 confers wide powers on the High Courts to issue writs in the nature of prerogative writs. The terms 'authority' used in Article 226, in the context, must receive a liberal meaning unlike the terms in Article 12. The words 'any person or authority' used in Article 226 are, therefore, not to be confined to statutory authorities and instrumentalities of the State. The terms 'authority' used in Article 226, in the context, must receive a liberal meaning unlike the terms in Article 12. The words 'any person or authority' used in Article 226 are, therefore, not to be confined to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owned by the person or authority to the affected party. No matter by what means the duty is imposed. If a positive obligation exists mandamus cannot be denied. The Supreme Court, in that case, considered whether a trust which was managing the affiliated college to which public money is paid as Government aid, are amenable to writ. In that case, public money paid as Government aid played a major role in the control, maintenance and working of educational institutions, in that case, it was held that the service conditions of the academic staff were not purely of a private character. It has super added protection by University decisions creating a legal right duty relationship between the staff and the management, and where there is in existence of that relationship mandamus could not be refused to the aggrieved party. The Supreme Court, ultimately held that the trust could be compelled to pay all the amount due to teaching staff by writ of mandamus. In our view, principle laid down by the Supreme Court, in this case, is fully applicable in the facts and circumstances of this case and accordingly, a company which is wholly and fully owned and controlled and managed by the Government if acts in clear contravention of the provisions of Section 25f and S. 25g of the Industrial Disputes Act, 1947. It is well-settled that the service condition of a workman in any industry who has been in continuous service for not only one year under employer could not be retrenched unless notice of retrenchment is served in accordance with the provision of Section 25f paid the retrenchment compensation after following the procedure laid down in Section 25g of the Industrial Disputes Act, 1947. Termination of service of a workman who had been in service for more than one year in contravention of provisions of Section 25f and Section 25g of the Industrial Disputes Act, 1947 is on the fact of it illegal and inoperative. The learned Judge have held that, in the facts and circumstances of this case, writ would not lie as the terms and conditions of employment of an employee in private law domain could not be enforced under Article 226 of the Constitution of India. It is not a case to enforce private rights or purely contractual rights or obligation or to avoid it. The workmen concerned have a right to I enforce the statutory rights conferred under Section 25f and Section 25g of the Industrial Disputes Act, 1947 which are purely statutory. Accordingly, we disagree with the view expressed by the learned Trial Judge in this regard. The State Government in dealing with public cannot act arbitrarily at its sweet will. The State cannot act as it pleases. ( 9 ) IN R v. Barnsley Metropolitan Borough Council ex. p. Hook (1976) 1 WLR 1052 (CA): in which the Court of Appeal quashed a decision to terminate a market traders licence for misconduct on the grounds of breach of natural justice. In this case, the argument of the council was that a relationship of a pure contract would not be subject to public law principles. It was found by the Court of appeal that there existed a sufficient 'public law' element to the case to remove it from the realm of purely contractual as from the fact it was found that the council's power affected rights to trade in the market which already existed under the common law. In this case, Lord Denning MR observed that 'i do not think that the right of a stall holder arises merely under a contract or licence determinable at will. ' ( 10 ) IN this case, Scarman LC observed that 'the decision is a direction to regulate the public's common law rights to buy and sell in the market. Although, therefore, there was a contractual element in this case, there is also an element of public law, viz, the enjoyment of rights conferred upon the subject by the common law. " ( 11 ) IN Delhi Transport Corporation v. D. T. C. Mazdoor Congress and Ors. Although, therefore, there was a contractual element in this case, there is also an element of public law, viz, the enjoyment of rights conferred upon the subject by the common law. " ( 11 ) IN Delhi Transport Corporation v. D. T. C. Mazdoor Congress and Ors. , reported in (1991-I-LLJ-395) the Supreme Court while considering the Regulation 9 (b) of the Regulations framed under Section 53 of the Road Transport Act, 1950 which provides termination of service of permanent employees on giving simple one month's notice of pay in lieu thereof without recording any reason therefor in the order of termination, held that the said regulation confer powers on the authority to terminate the services of permanent and confirmed employees by issuing a notice without assigning any reasons in the order and without giving any opportunity of hearing to the employee, the order of termination was wholly arbitrary, uncanalised and unrestricted, violating the principles of natural justice as well as Article 14 of the Constitution. The Service Regulations or Rules framed by them are to be decided by the touchstone of Article 14. Further, the procedure prescribed by their rules and regulations must be reasonable and fair and not arbitrary, fanciful and unjust. It was further held that employment under public undertaking is a public employment and a public property. It is not only the undertaking but also the society which is set in the proper and efficient working. Both discipline and devotion are necessary for efficiency to ensure both, service condition of those who worked for them must be encouraging, certain and secured and not vague and whimsical with capricious service conditions. Both discipline and devotion are endangered and efficiency is impaired. The right to life includes right to livelihood. The right to livelihood, therefore, cannot hang on the wishes of individual in authority. The employment is not a bounty from them nor can its survival be at their mercy. Income is the foundation of many fundamental rights and when work is the sole source of income, right to work become as much fundamental rights can ill afford to be consigned to be a limb or undefined promises and uncertain obligation, that would be a mockery of them. It was held that both the society and the individual employees, therefore, have an anxious interest in the service condition being well defined and explicit to the extent possible. It was held that both the society and the individual employees, therefore, have an anxious interest in the service condition being well defined and explicit to the extent possible. The arbitrary rules, which are sometimes described as in Henry VIII Rules, can have no place in any service conditions. There is nothing to support the so-called, "high Authority theory. This theory undoubtedly weighed with some authorities for some time in the past, but its unrealistic pretentions were seen noticed and it was buried, without even so much as an ode to it. ( 12 ) THAT apart, right to livelihood has now been considered in a number of cases, a right within the meaning of Article 21 of the Constitution of India. Accordingly, in the facts and circumstances of the case, we are clearly of the view that there are sufficient statutory or prerogative under-pinning for the matter to be regarded as public law matter and, accordingly, action of the respondents-company are clearly reviewable by the Writ Jurisdiction. Accordingly the respondents-Company which is fully owned and controlled by the State Government could not compel the workmen to enter into an agreement for voluntary termination of service and accept the temporary service for a period of 59 days which is, incur view, clearly arbitrary, unlawful and in clear contravention of the provisions of Sections. 25f and 25g of the Industrial Disputes Act, 1947. ( 13 ) FOR the foregoing reasons, we allow the appeal and set aside the judgment and order of the learned Trial Judge and we direct the respondents-company and/or authorities concerned not to compel the appellants to voluntarily enter into the said agreement in contravention of (he law and not to terminate the service of the workmen on that ground and we direct to treat the workmen concerned as employees under employment. Nikhel Nath Bhattacharjee J.